Greening the Goods Opportunities for low-carbon goods movement in

Kathryn Grond, Eli Angen April 2014 photo: Paul Krueger, Flickr CC

Delivering the Goods: Opportunities for low-carbon goods movement in Toronto Kathryn Grond, Eli Angen April 2014

Production management: Bernard Rudny Editor: Roberta Franchuk Cover design: Steven Cretney Cover photo: Paul Krueger, Flickr CC ©2014 The Pembina Institute and Toronto Atmospheric Fund All rights reserved. Permission is granted to reproduce all or part of this publication for non- commercial purposes, as long as you cite the source. Recommended citation: Kathryn Grond, Eli Angen. Greening the Goods: Opportunities for low- carbon goods movement in Toronto. The Pembina Institute, 2014. The Pembina Institute 219 19 Street NW , AB T2N 2H9 Phone: 403-269-3344 Additional copies of this publication may be downloaded from the Pembina Institute website, www.pembina.org.

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About the Pembina Institute The Pembina Institute is a national non-partisan think tank that advances clean energy solutions through research, education, consulting and advocacy. We have spent close to three decades working to reduce the environmental impacts of Canada’s energy production and use in several key areas: • driving down energy demand by encouraging energy efficiency and transportation powered with cleaner energy sources; • promoting pragmatic policy approaches for governments to avoid dangerous , such as increasing the amount of renewable energy plugged into our electricity grids; • and — recognizing that the transition to clean energy will include fossil fuels for some time — advocating for responsible development of Canada’s oilsands and shale gas resources. For more information about the Pembina Institute, visit www.pembina.org.

The City of Toronto established Toronto Atmospheric Fund in 1991 to focus on reducing local greenhouse gas and air pollution emissions. Working with a $23-million endowment from the sale of the long-closed Langstaff Jail Farm, TAF operates as an arms- length agency at no cost to the City. TAF helps the City achieve the targets set out in the Council-approved climate plan and supports energy cost savings through energy efficiency. TAF-supported projects such as a street lighting retrofit, traffic light LED conversion, and building retrofits have generated $55 million in savings for the city to date. TAF deploys three programs — Incubating Climate Solutions, Mobilizing Financial Capital, and Mobilizing Social Capital — to address Toronto's major emissions sources: buildings and transportation. Based on a careful study of Toronto's emissions profile, TAF has a strong interest in energy efficiency retrofits in buildings, electric vehicles for fleets, efficient transportation of goods, natural gas alternatives like geothermal, and social innovation to support emission reduction strategies.

Acknowledgements The Pembina Institute wishes to thank the Toronto Atmospheric Fund for their generous support of this project. The authors would like to thanks to project advisors Cherise Burda, Anthony Caruso, Murray McLeod, and professor Matthew Roorda; to Maheen Memon, Alison Bailie, Graham Haines for their research contributions; and to Sue Cumming for facilitating the stakeholder workshop.

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Greening the Goods

Opportunities for low-carbon goods movement in Toronto

Contents Executive summary ...... 6 1. Introduction ...... 9 1.1 Freight emissions in Toronto ...... 10 1.2 The freight sector in the GTHA ...... 12 1.3 Freight actors ...... 14 1.4 Feedback from experts ...... 17 2. Options for low-carbon delivery in Toronto ...... 18 2.1 Criteria for selection of options ...... 18 2.2 Summary of low-carbon delivery options ...... 19 2.3 Description of options for low-carbon delivery ...... 22 3. Next steps for low-carbon delivery in Toronto ...... 32 Appendix A. Stakeholder insights ...... 35 Appendix B. List of experts ...... 37 Appendix C. Alternative options ...... 39

List of Figures Figure 1 GHG emissions by sector, in Canada ...... 9 Figure 2 Sources of GHG emissions in Toronto ...... 11

Figure 3 Patterns of NOx emissions in Toronto ...... 11 Figure 4 GHG intensity of goods moved by trucks ...... 12 Figure 5 Daily truck trips destined for the Greater Golden Horseshoe, 2006 ...... 13 Figure 6 Types of commodities moved by trucks, 2006 ...... 14 Figure 7 Schedule of deliveries in Southwark building, U.K...... 24

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Figure 8 Berlin’s low-emissions zone ...... 30

List of Tables Table 1 Low-carbon delivery options for Toronto ...... 20 Table 2 Implementation of low-carbon delivery best options ...... 21

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Executive summary

Freight trucks are one of the fastest growing sources of greenhouse gas (GHG) emissions in Ontario. In the City of Toronto, trucks are the largest emitter of nitrogen oxides (NOx), which contribute to smog and respiratory diseases such as asthma. Growing population and employment in Toronto means more pressure to transport goods quickly and reliably, which increases the number of trucks on municipal roads. Greening the Goods presents policy options and innovative ideas that government and businesses can implement to improve goods movement in Toronto. These ideas will help companies cut both costs and emissions of their operations, and reduce congestion on our streets, saving us all time and money.

How to green the goods These six initiatives to improve goods movement represent the top recommendations from our research and stakeholder engagement on urban freight strategies. They have been successfully implemented in other cities and urban areas across the world and have great potential to be implemented in Toronto.

1. Off-peak deliveries Working with local businesses to shift delivery scheduling away from peak congestion times Off-peak delivery encourages freight operators and receivers to schedule deliveries outside of peak congestion periods, opting instead for early morning, evening or overnight deliveries. Off- peak delivery reduces delays caused by congestion and lack of parking during the day. Pilots in New York City and the United Kingdom have resulted in faster and more reliable delivery times, with few disruption complaints. The Ontario Ministry of Transportation (MTO) is currently piloting off-peak deliveries in preparation for the Pan Am/Parapan Am Games in 2015. If successful, the program should be continued after the games, with support of the City of Toronto, to improve traffic operations in congested areas and to reduce exposure to emissions during the day.

2. Local delivery plans Bringing together neighbouring businesses to discuss local delivery challenges and develop strategies to coordinate deliveries Local delivery plans are developed by businesses, property managers and tenants to collect information about deliveries of goods. This information can then be used to create strategies that make deliveries more reliable, efficient and cost effective. These plans have been shown to reduce the overall number of trips and disruptions in the area.

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Large office and retail buildings in Toronto could consolidate tenant deliveries to minimize the number of repetitive deliveries and improve the use of their loading facilities. Local business improvement associations (BIAs) that face issues with congestion and truck parking could use delivery plans to coordinate and better plan delivery times and locations.

3. Delivery truck parking Combining better parking enforcement with better options for on-street loading A lack of adequate parking and accessible loading space makes the timely delivery of goods in urban areas challenging. Reducing the number of vehicles that circulate while looking for a place to make their deliveries can help reduce congestion and emissions, as well as reducing traffic disruption from illegally parked vehicles. The City of Toronto’s Downtown Traffic Operation Study (DTOS) recommends the creation of 13 courier delivery zones in the downtown area during off-peak periods to reduce illegal parking. The City should review other neighbourhoods that lack adequate loading spaces and select appropriate strategies for truck parking and loading.

4. Open data for freight ITS applications Using real-time traffic data to improving truck routing and reduce empty or partially loaded truck trips Intelligent transportation systems (ITS) utilize traffic management software, sensor information and wireless technology to improve the efficiency of traffic networks and optimize routing decisions. These systems send real-time information to road users to help them dynamically adapt to road conditions and make better logistic and trip-routing decisions. Other freight ITS applications can help pair packages to be delivered with underutilized trucks in the area. The City of Toronto should consider sharing real-time traffic network data to support improved travel decision-making of truck drivers and fleet operators. The MTO iCorridor is one way of disseminating ITS information from roads in the GTHA. The city could also consider working with Peel region to develop a Smart Freight Association and online portal that would help match trucks with extra capacity to companies that need packages delivered.

5. Incentives programs for low-emission vehicles Provide rebates for low-emissions retrofits and the purchase of newer high- efficiency vehicles A 2007 emission inventory of the City of Toronto showed that heavy trucks contribute more total NOx pollution than cars, even though there are many more cars on the road. An effective way to improve air quality and public health would focus on retrofitting or removing the oldest and most polluting trucks used in urban areas. The Province of Ontario should consider reintroducing a low-emissions vehicle program such as the Green Commercial Vehicle Program (GCVP) that was offered from 2009 to 2011. Funding for a rebate program could be provided by emission pricing policies, outlined in option 6 below.

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6. Emissions fees Charge a fee for emissions to accelerate the adoption of fuel-efficient and low- carbon vehicle technology Putting a price on emissions through various fees and pricing schemes can support the acceleration of emissions intensity reduction in the commercial vehicle fleet sector. There are various options for pricing GHG emissions. National and regional carbon price schemes apply to all sources of carbon emissions, whereas low-emissions zones, tolled lanes and gas taxes target emissions generated by the transportation sector. The Province of Ontario should consider adding an emission fee on fuels, or apply an annual emission fee to commercial vehicle registration based on vehicle age and type. The City of Toronto could also explore emissions-based road tolls on the Gardiner and Don Valley Parkway or a low-emission zone and regulations for vehicles entering the city.

Next steps for low-carbon goods movement in Toronto The City of Toronto, neighbourhood BIAs, the Province of Ontario and the freight industry can begin working together to make Toronto a “smart freight city”, where goods are moved more efficiently and with less pollution. Here are three actions that can begin today to support low- carbon freight options for Toronto:

1. Urban freight strategy The City of Toronto should develop an urban freight strategy to prioritize policies and programs that can reduce environmental impacts and improve the efficiency of deliveries in the city. Priority policies the City could include are: off-peak deliveries, better on-street parking for truck loading, and sharing traffic data to support freight ITS applications.

2. Neighbourhood freight forums Bringing together fragmented and independent businesses and clients to review and improve their transportation practices is an important first step in implementing strategies such as consolidation and off-peak deliveries. Neighbourhood freight forums can help kick off local delivery plans in areas where congestion, road space management, and air quality issues are of concern.

3. GHG impact and cost-benefit analysis of freight policies The Province of Ontario and Metrolinx should consider supporting GHG modelling and cost- benefit analysis, including health impacts, of low-carbon urban freight strategies to help build the case for freight ITS applications, clean vehicle incentive programs and emissions fees policies.

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1. Introduction

Reliable and cost-effective delivery and movement of goods and services are vital to the economy and functioning of the Greater Toronto and Hamilton Area (GTHA). However as the number of freight deliveries grows, so does the level of congestion, which contributes to increasing GHG emissions and air pollution. GHG emissions from the freight sector are predicted to surpass emissions from passenger vehicles Canada-wide in 2030 (see Figure 1), and similar growth of emissions will occur in Toronto.

120

Buildings e) 2 100 Passenger Transport 80 Freight

60 Electricity

40

20 Greenhouse gas emissions (Mt CO

0 2005 2010 2015 2020 2025 2030

Figure 1 GHG emissions by sector, in Canada Data source: Government of Canada1 Businesses and residents of the GTHA have simply learned to cope with this situation: companies internalize the cost of congestion delays and illegal parking tickets on downtown streets, while citizens deal with congestion and the health impacts of poor air quality. Despite its importance for our regional economy and quality of life, the freight sector does not have a comprehensive and supportive set of policies and programs that would help it tackle congestion and growing emissions. The City of Toronto will need to play an important role in addressing the challenges faced by the freight sector by developing and implementing best practices, and encouraging business solutions that will improve the movement of goods and reduce emissions. Rather than focusing regional freight policy and regulation at the provincial and national levels, this report features best practices for local movement of services and goods in Toronto, and

1 Canada, Canada’s Sixth National Report on Climate Change 2014 (2014). http://unfccc.int/files/national_reports/non- annex_i_natcom/submitted_natcom/application/pdf/final_nc_br_dec20,_2013[1].pdf

The Pembina Institute 9 Greening the Goods Introduction recommends options that will help create a stronger, cleaner and smarter freight sector. Recommended options build upon existing freight initiatives and research in the region to accelerate emissions reduction, and focus on ideas that can be tested in the next one to three years. Some solutions may have relatively small impacts but may be easier to implement in the short term. Other strategies will help transform the market over the longer term, but may be more challenging to implement; they may require more research and supportive best practices before they can be advanced. Section 1 reviews the greenhouse gas and air pollution contributions from the freight sector, and describes the industry and government stakeholders. It also includes insights offered by experts about the best options for low-carbon delivery in Toronto. Section 2 is an overview of the benefits and implementation strategies for low-carbon delivery options that have the best chance to reduce emissions. Criteria for selecting those options are reviewed, and successful national and international examples are presented. Section 3 suggests three key actions that are needed to advance freight best practices in Toronto in the next few years.

1.1 Freight emissions in Toronto The City of Toronto’s goal is to reduce its GHG emissions to 30% below 1990 levels by 2020. The city is already halfway to its 2020 target, with another 4 million tonnes of emissions to go.2 Meeting the 2020 target will require major new investments, best practices and programs. Emissions from the freight sector, in particular commercial vehicles and trucks, will play a part in achieving this goal. A detailed inventory and analysis of the City of Toronto’s emissions sources in 20073 provided an estimate of community source of GHG emissions, including the contribution from trucks and commercial vehicles. The study found that heavy trucks contributed 9% of Toronto’s GHG emissions in 20044, about 5.5 million tonnes (megatonnes; Mt) of carbon dioxide equivalent (CO2e). This represents one-quarter of all transportation-related emissions, shown in Figure 2. The City of Toronto’s model of emissions sources estimates that the contribution of GHG emissions from trucks has increased slightly from 2001 to 2008; however, the lack of detailed data on the truck fleet and distances travelled in Toronto make it difficult to get an accurate estimate of emissions.5

2 Bryan Purcell, “Nailed it! Toronto exceeds Kyoto target”, eighty by fifty blog, Toronto Atmospheric Fund, April 24, 2013. http://www.toatmosphericfund.ca/2013/04/24/toronto-exceeds-kyoto-target/ 3 The 2011 Toronto GHG emissions will be released by the City of Toronto in 2014. 4 ICF International, Greenhouse Gases and Air Pollutants in the City of Toronto: Toward a Harmonized Strategy for Reducing Emissions (2007), iii. http://www1.toronto.ca/city_of_toronto/toronto_atmospheric_fund/files/pdf/ghginventory_jun07.pdf 5 City of Toronto, Summary of Toronto's 2011 Greenhouse Gas and Air Quality Pollutant Emissions Inventory, Staff Report, March 27, 2013, 8-9,14. www.toronto.ca/legdocs/mmis/2013/pe/bgrd/backgroundfile-57187.pdf

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Figure 1 Sources of GHG emissions – Community at large

Natural gas (mainly for space heating) 26% 37% Transportation – Trucks

Transportation – Cars and Light Trucks Transportation – Personal Vehicles

27% Electricity 9%

Figure 2 Sources of GHG emissions in Toronto Source: ICF International6

Despite significant reductions in emissions intensity of substances such as sulfur oxides (SOx) and carbon monoxide, trucks contribute to air quality issues in the city.7 Commercial vehicles 8 accounted for 36% of all NOx emissions in Toronto in the 2007 emission inventory. Air quality studies, like the recent South Etobicoke and South Riverdale studies, show cars and trucks are the most significant source of NOx pollution, which contributes to smog and 9 respiratory diseases such as asthma. A city-wide model shows that NOx emissions concentration is highest along every major highway (Figure 3).10

Figure 3 Patterns of NOx emissions in Toronto Source: Ciccone11

6 ICF, Greenhouse Gases and Air Pollutants in the City of Toronto, iii. 7 David Thompson, “Putting Transportation on Track in the GTHA A survey of road and rail emissions comparisons”, Sustainable Prosperity and the Pembina Institute, (2011), 3. http://www.pembina.org/pub/2155 8 ICF, Greenhouse Gases and Air Pollutants in the City of Toronto, iv. 9 City of Toronto, “Nitrogen Oxides” Local Air Quality Studies: Etobicoke-Lakeshore (Wards 5 & 6) (2014). http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=68a79e5f01543410VgnVCM10000071d60f89RCRD&v gnextchannel=44a0e211597a1410VgnVCM10000071d60f89RCRD 10 Anthony Ciccone, All Sources and Cumulative Air Quality Study – City of Toronto. Presentation, October 15, 2011. http://www1.toronto.ca/city_of_toronto/environment_and_energy/key_priorities/files/pdf/2011-10- 18_golder_associates.pdf 11 All Sources and Cumulative Air Quality Study, 25.

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New federal fuel standards and clean technology will impr