This paper was prepared as a thought piece for the Sustainable Development Technologies Canada (SDTC) Clean Tech Advantage Summit in April 2016
Canada lives an environmental paradox. As a nation that simultaneously boasts vast natural resources and a deeply embedded appreciation of nature, we have slipped from environmental leader to laggard. But this is not just an environmental problem; this is an economic problem. With global competitiveness and trade becoming increasingly tied to environmental performance, we as a nation are at threat of falling behind in a changing world. The good news is that Canada has every tool at its disposal to thrive in a new global economy. By embracing a Renaissance of sorts and renewing commitment to evidence-based, scientifically grounded policy that sets the conditions necessary for spurring innovation, Canada can ensure a prosperous and sustainable economy.
2. Canada’s Environmental Paradox
The Canadian identity is closely linked to the natural environment. Canada is one the wealthiest nations on Earth in terms of its vast natural endowments. It is the second largest nation on the planet (CIA, 2015) ranking fourth in total renewable water resources (CIA, 2011) and boasting more coastline than any other country (MoW, 2012). Canada has 24% of the world’s remaining intact forest area (Chung, 2014) and 25% of the world’s wetlands (NCC, 2016). In addition, it has plentiful natural resource stocks including energy sources, mineral deposits, fisheries and farmland. Canadians truly are unique inheritors of ecological bounty and this has permeated our identity as people. As environmentalist and author David Boyd (2003) puts it, “passion for the natural environment is one of the rare subjects of societal convergence” in Canada.
From the 1970s to the early 1990s, Canada built a strong reputation as an international environmental leader. The examples are numerous. It was the first industrialized nation to ratify the United Nations Convention on Biological Diversity (CBD, 2015) and the United Nations Framework Convention on Climate Change (UNFCCC, 2014). Canadian Maurice Strong was known for his central role in the Rio Earth Summit and in other international normative processes on environmental issues. Canada demonstrated leadership on issues such as acid rain, ocean governance, and Arctic protection (Boyd, 2003); and took a leading role in negotiating and adopting one of the world’s most successful multilateral environmental agreements, the Montreal Protocol for combatting ozone depletion.
Unfortunately, this leadership has since waned. While the process of quantifying and comparing environmental performance is far from standardized, there have been numerous studies and rankings that put Canada at the bottom of the pack when compared to its peer countries. In a 2010 study from Simon Fraser University, Canada’s environmental performance ranked 24 out of the 25 wealthiest nations in the OECD (Gunton, 2010). In a 2013 study published by the Center for Global Development, Canada ranked last among 27 industrialized nations on environmental performance (Waldie, 2013). Even one of the country’s most highly respected think tanks, the Conference Board of Canada (2013), ranks Canada 15 out of 17 industrialized nations on environmental performance. In an analysis of country’s governance structures for enabling sustainable development, the OECD commented that Canada has “a tendency to talk rather than act.” And while a dominant narrative in Canada for decades has been that the country is a world-leader on the environment, there is a growing awareness and awakening to the fact that “Canada’s reputation far exceeds our track record.” (Suzuki, 2003)
Herein lies the Canadian environmental paradox – a nation with an abundance of natural resources and strong cultural ties to the natural world has slipped from an environmental trailblazer to a laggard when compared to its peers.
3. New Framing
Understanding Canada’s comparatively low environmental performance requires new framing. For so long, the arguments have been about whether or not Canada is lagging and not about how Canada is lagging. When one investigates more deeply it becomes apparent that many of Canada’s environmental problems are also economic problems.
Canada does rank high on certain environmental indicators, for example, fourth for protected areas (IUCN, 2015) and fourth for share of total installed renewable electricity globally (OECD, 2014a). In addition, it scores high on environmental inventions (fifth) (OECD, 2012) and on clean-tech innovation (sixth) (WWF, 2014). Where Canada falls short is on measures of productivity.
Productivity measures the efficiency with which an economy transforms inputs into outputs (StatsCan, 2014). The most common measure for productivity is labour productivity (output in dollars per hour worked) and Canada has lagged behind the United States and other major countries on this measure for over three decades (Hodgson, 2013). Environmental productivity measures are also problematic for Canada. According to a recent report by Smart Prosperity (2016), when comparing the country to a group of 14 peer countries that are most similar in terms of income, population density, economic structure and economic growth Canada ranks:
· 14th out of 15 on CO2 productivity (GDP per unit of CO2 emitted)
· 15th out of 15 on energy productivity (GDP per unit of CO2 emitted)
· 9th out of 15 on water withdrawal productivity (GDP per unit of water used)
· 11th out of 15 on material consumption productivity (GDP per unit of material consumed)
To put this more simply, Canada’s economy uses comparatively more natural resources than its peers for generating wealth. Combine this with our lagging labour productivity and the case for framing these issues differently becomes apparent. While discourse often pits the environment against the economy, our productivity numbers show that we must consider both to have a prosperous Canadian economy in the future. The data shows that environmental performance and economic competitiveness often go hand-in-hand. Nine of the countries ranked in the World Economic Forum’s top fifteen for environmental performance are also in the top fifteen for global competitiveness (Boyd, 2012) with Switzerland ranking number one on both indices.
This is a tremendous opportunity for Canada. As a nation, we are not expecting to see large labour market changes or export growth from current industrial sectors (EDC, 2015), which means technological deployment, deepening of workforce skills and knowledge, resource efficiency (Smart Prosperity, 2016), and transformative innovation (StatsCan, 2014) are the areas where potential wealth creation could be realized.
4. A Canadian Renaissance
Canada is at a unique point in history. 2015 marked a monumental year of change for the country and the global discussion around sustainability. Domestically, a Liberal government was elected after 10 years of Conservative rule. In addition, the oil and gas producing province of Alberta elected an NDP government ending the 44-year Progressive Conservative dynasty. The Canadian political landscape is vastly different than it was at the beginning of 2015. On the international front, the United Nations held three high profile conferences on sustainable development – the Financing the Future Forum in Addis Ababa on sustainable finance, the Sustainable Development Summit in New York to adopt the post-2015 development agenda (the Sustainable Development Goals) and COP 21 in Paris for a globally binding climate agreement. Environmental issues, particularly climate change, are on political agendas all over the world.
The UN Environment Programme also called for decarbonisation (net zero emissions) by the year 2050 to meet a 2°C warming scenario (UNEP, 2015). This is a particularly pertinent for Canada’s fossil fuel industries, as they will need to be replaced by low carbon energy systems and products to meet global climate objectives. And to add yet another layer of complexity to the system, these realizations about the imminent future of the industry come at an especially volatile time as commodity markets are experiencing drastically depressed oil and natural gas prices which have led to economic downturn, particularly in fossil fuel exporting regions.
There is an opportunity for Canada to take advantage of these unique conditions and undergo a Renaissance of sorts - to return to the status of an environmental leader and a country that “punches above its weight” economically (Flaherty, 2010). The Renaissance was characterized by a surge of interest in classical learning and values, particularly philosophy, arts and science. Canada has the opportunity to apply this to the policy context and renew its commitment to evidence-based, scientifically grounded policy that sets the conditions necessary for a new Canadian economy.
A transition is already underway and investment patterns are changing; the numbers speak for themselves. 2015 was a record year for clean energy investment reaching $329B and surpassing capital expenditure in oil and gas ($321B) for the first time ever (Leibreich, 2016). It is estimated that $90 trillion in global infrastructure investments will be required from 2015 to 2030 particularly in areas like energy technology, water infrastructure, and transportation innovation as populations grow and low-income countries develop (GCEC, 2014). The question is if Canada will be a buyer or a seller of the technologies that will attract these dollars and meet these growing needs.
Canada has one of the most educated populations on the planet (OECD, 2014b), vast natural resources and an inherent entrepreneurial spirit. There is every opportunity to create the kind of expertise and technology the world needs.
5. New Approaches, New Legacy – Conclusion
What will determine how this future unfolds is how we as Canadians approach it. Will we let this new transition divide us or will we have it unify us; be our common 21st Century project as the national railway once was? Will we see change as a threat and resist it until we are forced to adapt or will we see it as an opportunity, embrace it, and get ahead of the transition? Will we use the wealth from our current industries to build the industries of the future? Will we focus on the ecosystem Canada creates for environmental and economic innovation or will invest in dying sectors of the past?
Speaking as a young Canadian who is passionate about the future of this country and our planet, I believe there are several things we need to do to create the conditions for the successful transition to a sustainable future.
· Reframe innovation
In many senses, the term innovation has become synonymous with technology. It is important that we also consider and encourage innovations in business models, policy, platforms, etc. as they can enable technology deployment and have potential transformative impacts on consumer behaviour and/or culture. We should also address the various scales of innovation. A complete strategy around innovation investment and ecosystem building will include considerations for both incremental and transformative solutions. While there are low hanging fruit and quick wins, a portfolio approach that considers potentially disruptive innovations should be employed.
· Humanize our challenges for new solutions
At the very root of innovation is meeting basic human needs or desires. We often focus too much on what technologies do and don’t think about why they exist in the first place. If we look at our challenges from the human lens first, it can open a space for broader solutions beyond simply incrementally improving current ways of doing things.
· Be deliberate about where Canada can win big
As discussed in this paper, Canada has a vast array of resources at its disposal. While there is no crystal ball for what the future will bring, there is knowledge about the industries and sectors that will be required to meet the needs of global trends like growing populations, mass urbanization, carbon constrained economies, etc. Canada should take stock of competencies in relation to these trends and deploy our resources towards these areas of growth.
· Build ecosystems
No one country can be a leader in everything, but building a strong, resilient economy is about creating reinforcing ecosystems for innovation to thrive. This is done through implementing policy architecture that matches our values and priorities domestically and in the global marketplace, making well-placed investments, and strategically building capacity in the areas that we believe our competitive advantage lies.
Change is never easy or comfortable but it is inevitable. As we progress and evolve, those who thrive are those who are able to embrace the opportunities of transition by becoming indispensible to making it happen. The natural environment is embedded in who we are as Canadians and for that reason we already have an unfair advantage in a world where sustainable development is central to economic wellbeing. We can take the bounties of the industries of the past and transform them into the industries of the future. We can be the trailblazers that show the world how to build that model. That is the legacy I see for Canada.
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 A peer country refers to nations with comparable governing and economic systems, they vary per study.
 Australia, Austria, Denmark, Finland, France, Germany, Ireland, New Zealand, Norway, Spain, Sweden, Switzerland, and the United States.