Decarbonization of Buildings in Canadian Cities through PACE Financing
Buildings account for more than a third of total emissions in major Canadian cities. Reducing emissions from buildings, known as building decarbonization, is thus a key issue in municipal climate policy. Building decarbonization, which can include energy efficiency improvements and replacement of gas heating, has significant upfront costs. Consequently, achieving it on a large-scale requires both public and private investment.
A proven model to attract private investment for building decarbonization is Property Assessed Clean Energy (PACE) financing. PACE allows property owners to access long-term financing, secured through a lien on their property taxes. PACE is very common in the US, but less so in Canada. Where it does exist in Canada, PACE financing tends to come largely from public sources.
On June 20, 2023, Richard M. Bird post-doctoral fellow Robert Stewart outlined the methods used to encourage private capital to provide PACE financing in the US and discussed how similar arrangements can be adapted to Canada. He paid particular attention to the benefits for municipal climate strategies.
Robert Stewart is the 2022-2023 Richard M. Bird post-doctoral fellow. He received a PhD in Economic Development Policy from the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at the University of the West Indies, St Augustine, Trinidad and Tobago. His current research focuses on climate financing and, in particular, tools to bridge the financing gap needed to accelerate low-carbon economic development. Prior to joining the IMFG, Robert was a visiting research scholar at the University of New Brunswick in Fredericton. Robert has also spent several years working in the financial sector in Trinidad and Tobago, and holds a PRM (professional risk manager) designation.
June 20, 2022