The research shows that if Canada's environmental policies were strengthened to the level in other developed countries such as Sweden and Norway, Canada's environmental ranking would move from almost dead last to first place.
That Canada has one of the poorest environmental performance records of any developed country is, sadly, no longer news. What is newsworthy is that it's not our cold climate or long geographic distances that lie behind Canada's poor environmental record, it's merely weak government policies.
It turns out that the federal government and others have been somewhat misguided in justifying Canada's poor environmental performance on the basis that, as Minister Prentice recently put it, "we are a northern country, spread out across vast distances".
A recently released study by Simon Fraser University and the David Suzuki Foundation confirms that Canada has the second worst environmental record of any developed OECD country, ranking 24th out of 25. Only the United States ranks lower. The top ranked countries are Denmark, Sweden, and Norway. (As an interesting aside, Sweden and Denmark simultaneously topped Canada in the World Economic Forum's Global Competiveness Index, finishing 4th and 5th to Canada's 9th place finish. This clearly belies the notion that effective environmental and economic policies are somehow incompatible.)
More interestingly, the study is the first ever to examine the reasons for Canada's poor environmental performance. Factors such as Canada's cold climate, large size, and heavy reliance on natural resource industries are examined and it was found that none of these factors explain our poor performance. It turns out the traditional excuses for Canada's poor performance are simply not valid.
Most noteworthy is that the research shows that if Canada's environmental policies were strengthened to the level in other developed countries such as Sweden and Norway, Canada's environmental ranking would move from almost dead last to first place.
The study rated the record of 25 OECD countries using 28 environmental indicators such as energy intensity, water consumption, timber harvest, sewage treatment, species at risk, greenhouse gas emissions, pesticide use, and nuclear waste.
As noted, the study shows that Canada's environmental record continues to be among the very worst in the OECD. An obvious and important question comes to mind: if it's not Canada's climate and geography, why is Canada's record so poor compared to other developed countries, and what can be done to improve Canada's performance? To address this question the authors completed an analysis of factors that explain environmental performance.
The authors reviewed the literature to identify factors that may affect a country's environmental performance. They identified seven factors: energy prices, environmental governance, industrial structure, technological development, economic output, population growth, and climate. National data was collected for each of the seven factors, and then the role of each indicator was assessed in explaining the differences in environmental performance.
The results show that only two of the seven factors — energy prices and environmental governance — explain the lion's share of the difference in the overall environmental performance among countries.
The next step in the analysis was to assess why Canada's environmental performance is so poor. The authors conducted a sensitivity analysis to illustrate how Canada's environmental ranking would change with changes in key factors affecting environmental performance.
Two of the seven factors were changed: energy prices and environmental governance.
These two factors are selected for the sensitivity analysis because they can be changed by public policy. The other five factors were not used in the sensitivity analysis because they are considerably more difficult to alter by public policy, and they have a demonstrably lower impact on environmental performance.
Using the sensitivity analysis the authors set energy prices and environmental governance in Canada to the average for OECD countries. A second sensitivity analysis conducted set them to the average for the top three performing OECD countries.
Results of the sensitivity analysis show that Canada's environmental performance changes dramatically with changes in energy prices. If energy prices equalled the OECD average, Canada's overall environmental rank moves from 24th to 12th. If energy prices equalled the average for the three OECD countries with the highest energy prices, Canada's environmental rank moves from 24th to 1st.
Changing environmental governance also improves Canada's environmental rank, but not as dramatically. Because Canada's environmental governance is already close to the OECD average, setting environmental governance to the OECD average has no affect on Canada's overall rank. Setting Canada's environmental governance to the average of the top three OECD countries moves Canada's rank from 24th to 17th.
The study provides good news for Canadians. The results show that Canada's poor environmental performance is not due to factors beyond Canada's control such as climate and geography. Instead, Canada's poor performance is caused by poor public policy.
The study shows that the most significant policy error is the decision to set energy prices at among the lowest levels in the OECD and the failure to adopt the best environmental governance regime.
This item first appeared in The Hill Times.