Appendix A: Analysis and Assessment of Individual Measure

1.8 ecoFREIGHT Program

Table11: Summary of Analysis for ecoFREIGHT Program

Summary of the Initiative

The ecoFREIGHT program is a catch-all for a set of voluntary initiatives described as programs that build and maintain partnerships within the transportation sector. Included in the program are Memoranda of Understanding between the rail and air freight industry associations with respect to greenhouse gas emissions reductions.

Analysis

There are two contributors to the emissions reductions attributed to ecoFREIGHT. First, the estimates include direct and indirect impacts of funded pilot or demonstration projects. The definitions used are that the direct impacts are the reductions in emissions associated with the funded adoption of a new technology, while the indirect impacts are those associated with the penetration of the technology into the marketplace after the demonstration. Two concerns arise here. First, as with other project-based-funding programs, the question of free-ridership arises. One must ask whether any of the funded technologies would have been adopted by program participants absent the funding (free riders erode the direct impacts). Unlike other program-impact estimates in the Plan, the ecoFREIGHT program also supposes that future market penetration of the new technologies is due to the financed demonstration projects. Again, it is important to estimate the incremental portion of these adoption decisions due to the program. It would be more effective to examine other jurisdictions where similar programs are not in place in order to estimate the increase in market penetration in Canada relative to other locations with similar fuel prices.

The second portion of emissions reductions attributed to this program is due to Memoranda of Understanding (MOU) adopted between the federal government and the air and rail transportation industries. The NRTEE has previously outlined concerns with the attribution of emissions reductions to these MOUs given that the definition of emissions reductions used is “reductions relative to business as usual.” In order to assess these MOUs, several questions should be asked. First, would regulations in the U.S. lead to similar emissions reductions in Canada with or without the MOU in place? Given the importance of freight traffic between the U.S. and Canada, producers will follow the regulations put forward in both jurisdictions in order to ensure continued access to both markets. In the case of the rail MOU, the NRTEE has pointed out in the past that the terms of the MOU exactly mirror new EPA guidelines in the U.S.[48] Under the MOU, Canadian freight transporters agree to meet regulations they would likely meet absent the MOU, and so few incremental emissions reductions should be attributed to this measure. The second question, related to the incrementality of emissions reductions, is whether the emissions reductions would have occurred absent the MOU due to other drivers. This is likely the case in the air travel sector, where newer, more efficient airplanes are cheaper to operate, can cover longer distances, and also lead to reduced GHG emissions. The first two drivers are likely more important to their adoption than the third, and so one can suppose that the airplanes would have been adopted absent the MOU between the air industry and the government. In order to assess the role of the MOU, it must again be asked whether differences are observed with respect to emissions reductions in Canada versus other similar jurisdictions, not simply whether air travel in Canada is becoming more efficient.

Conclusions

Evaluating impacts of information and voluntary programs is very difficult. In either case, determining the incremental impact of the program requires strong assumptions about what would have happened absent the program, as specific actions are neither incented through subsidies, disincented through fees, or forced through regulation. The standard for attributing emissions reductions to voluntary or information programs should be the provision of clear evidence that the actions taken would not have happened absent the program, and to the best of our analysis, that is not provided here.

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48 United States Environmental Protection Agency (EPA), 2008.