This week’s Rio+20 Conference has the global green economy as one of its central themes. Jurisdictions from Germany to China are developing policies to spur new forms of green economic development in the wake of the 2008 financial crisis.
For Canada, the concept involves challenges and opportunities, particularly in light of the importance of the natural resources sector to our prosperity. That is why Canada should work towards developing a strategy around the green economy that matches its national circumstances, according to the White Paper, entitled Towards a Green Economy for Canada. The White Paper provides the basic state of knowledge and framework for developing a definition of a green economy that would be relevant to policy makers and the private sector.
Although Canada is greening, it is far from green. “Green” implies an economy that is operating within the ecological boundaries in which it exists, which no economy in the world can claim to be doing. But “greening” the economy – towards what would ultimately be a green economy – is very much a realistic goal for Canada. Because at its heart, greening is about being more productive in the use of resources, this agenda is one that would serve both our environmental interests.
But first, there must be a clear understanding of what the issues are for Canada. The White Paper suggests that:
- We need an inclusive definition of green economy. It helps us little to think of the green economy as strictly the purview of windmill, solar panels, etc. Our national ambition should be to green our entire economy.
- We must focus on resource productivity because that is where our strengths lie, and it is where international markets will be.
- Progress towards a green economy must be based on a solid base of knowledge and information. There are currently large gaps in information and data that will need to be filled.
- We need a research and policy dialogue around the greening of Canada’s economy, with leadership from governments and business as a critical component.
“The path to a green economy goes through a dramatic increase in resource productivity. Focusing our policies and investments on the development of business and technology models that deliver resource productivity will not only increase the value of our resources, but also create solutions that the whole world will be seeking,” suggests one of the report’s authors, Alex Wood, Senior Director, Policy and Markets, at Sustainable Prosperity.
Click here to view the entire report, Towards a Green Economy for Canada
ABOUT SUSTAINABLE PROSPERITY
SP is a national green economy think tank and policy research network based out of the University of Ottawa. Directed by some of Canada’s top economic, environmental, research and business leaders, our mission is to generate smart ideas to build a greener, more competitive Canadian economy.
The global financial crisis has prompted many countries to consider the concept of a green economy and how it impacts financial and environmental policies.
The Managing Director of the International Monetary Fund, Christine Lagarde, said in a recent speech: “first and foremost, we need to get growth going again - but on a different track than before the crisis.”
A green economy is compatible with a strong economic future for Canada, including increased productivity, employment, and innovation. “This is particularly true in light of the advantage that resource productivity will represent as we move into an era of increased resource scarcity. Being more productive will make us more competitive, and developing solutions and products that serve to increase resource productivity will find new, ready, and substantial markets internationally,” according to the White Paper.
Though Canada is becoming more service oriented, its economy is rooted in natural resources, which represent about one-fifth of Canada’s GDP. Canada is unique as it has an abundance of natural resources, including, land, water, forests and energy, and a relatively small population. As a result, it has not yet encountered any meaningful resource scarcity, for the most part. At the same time, its economic ambitions, particularly when it comes to the development of its natural resource and energy resources, have international environmental implications, notes the report. The definition of a green economy, as it relates to Canada, must also be unique.
The green economy is sometimes referred to as the “clean economy.” The increased use of both terms and their importance to decision makers has highlighted the need to for a more rigorous definition.
There are a number of widely used definitions of the green economy, which are meant to apply globally to all countries, regardless of differing economies or circumstances. The United Nations Environment Program (UNEP) definition is: “A green economy can be defined as an economy that results in improved human well-being and reduced inequalities over the long-term, while not exposing future generations to significant environmental risks or ecological scarcities.”
The Organization for Economic Co-operation and Development (OECD) defines green growth as “fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies. To do this it must catalyze investment and innovation which will underpin sustained growth and give rise to new economic opportunities.”
Countries such as Canada also face the challenge of creating a clear understanding between “greening the economy” and actually achieving a “green economy.”
The White Paper points to key elements of a definition, including the need for it to be inclusive.
“All sectors should aim to improve their relative environmental performance, with a longer term goal to achieve large absolute reductions in environmental impacts (e.g., waste, pollution), and greatly improve the productivity of natural resource use and protect the ecosystems they depend on. Canada needs to improve its stewardship of its natural capital, and aim to reinvest the proceeds of its resource riches into innovation and sectors that directly contribute to a low-carbon, resource-efficient and climate-resilient future,” according to the White Paper.
A definition of Canada’s green economy should also emphasize “the opportunity that exists around a resource productivity agenda, and how that would serve Canada’s economic and environmental interests,” notes the report.
In the context of defining a green economy, the White Report examines the concept of decoupling, which refers to the separation that can occur between two related economic factors. “There are two types of decoupling that are relevant to the green economy: decoupling resource use from GDP (“resource decoupling”) and decoupling resource use from environmental impacts (“impact decoupling”),” notes the report. There is relative versus absolute decoupling. Relative refers to a change in the growth rate; absolute refers occurs only when the growth rate of resource productivity exceeds the growth rate of the economy, which is rare. Achieving a green economy means a country has achieved relative and absolute decoupling, meaning that it has figured out how to reduce the impact of its economic activity to levels that are sustainable and also achieve economic growth that respects absolute environmental thresholds.
Statistics Canada estimates Canada’s natural capital value at CAD $89,000 per capita. Canada ranks first in the world in natural capital per person, third in forest area and renewable fresh water supply, and seventh in arable land area.
Any definition should come with a system for measuring how green we are and how much we are greening as a country.