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Annual Report 2009-2010 – The Year in Review

POLICY AND RESEARCH PROGRAMS

The National Round Table on the Environment and the Economy strives to ensure its policy and research activities are directly relevant to Canada’s national interest.

The Round Table offers an opportunity for our stakeholders to gather and share in the development of effective insights and understanding. Through its research and analysis the Round Table is a catalyst for innovative and effective public policy in sustainability. The NRTEE offers independent advice to governments on how best to address the challenges and seize the opportunities associated with creating a sustainable, 21st century economy for Canadians.

Over the 2009-2010 fiscal year, the NRTEE has focused its attention on a number of critical issues and research areas:

• Carbon pricing policy;
• The economic risks and opportunities of climate change;
• Adaptation of northern infrastructure to climate change;
• Water sustainability and Canada’s natural resource sectors;
• Sustainable development governance; and,
• Review of the Government of Canada’s implementation of the Kyoto Protocol.

We released several reports and one brochure related to our work in 2009- 2010. We also held 25 consultation meetings across the country on various issues. These consultation sessions were held in order to ensure stakeholder engagement in various phases of our initiatives (program scoping, sharing of information, review of results and discussion of recommendations).

ACHIEVING 2050: A CARBON PRICING POLICY FOR CANADA

Published in April 2009, this report recommended a carbon pricing policy for Canada, designed to meet the government’s 2020 and 2050 GHG emissions reductions targets. The report explores how best to establish a unified carbon pricing policy for Canada – in the form of an economy-wide cap-and-trade system – that would meet Canada’s environmental goals at least economic cost. The report consisted of an advisory report and a technical backgrounder. The NRTEE’s research included wide consultation with stakeholders, on-going input from an Expert Advisory Committee, a review of global experiences, and the creation of new economic modelling and analysis.

Following the release of the report, the NRTEE held a series of outreach sessions in six Canadian cities — Vancouver, Calgary, Ottawa, Toronto, Montreal, and Halifax — during the spring and summer of 2009, to gauge regional views and gain insights on the potential impact of the proposed carbon pricing policy. A summary report, released in December 2009, highlights the key outcomes from the sessions, including areas of agreement and divergence as well as specific issues participants felt the federal government needed to be aware of when moving toward a unified national cap-and-trade system.

Participants across Canada strongly supported the recommendations of Achieving 2050, in particular:

• An economy-wide carbon pricing policy with the greatest breadth of coverage possible;
• Achieving 2050’s cap-and-trade implementation road map, which was seen as a logical, sequenced approach to implementing an adaptive policy that minimizes risks;
• Taking action now, rather than delaying;
• A move from the current fragmentation of carbon prices and policies across Canada to a unified, national approach;
• The report’s recommendation to send a carbon price signal that is certain and credible now, while being able to adapt to changing circumstances over time;
• A cap-and-trade system that can eventually link with a U.S. system;
• The use of auction revenue first and foremost for technology deployment and innovation; and
• The report’s recommendations concerning new governance institutions.

As well, participants from all sessions wanted the federal government to be aware of some issues of concern:

• Implementing a cap-and-trade system could put Canadian firms at a competitive disadvantage with U.S. firms, from proposed U.S. protectionist measures in draft climate legislation, carbon leakage, and greater auction of permits in Canada than in the U.S.
• The energy system could lack the necessary capacity to meet the demands of electrification as a result of carbon pricing.

Copies of the Achieving 2050 advisory report, technical backgrounder, and outreach report, can be found at: http://nrt-trn.ca/wp-content/uploads/2011/08/carbon-pricing-tech-backgrounder-eng.pdf

CLIMATE PROSPERITY – THE ECONOMIC RISKS AND OPPORTUNITIES OF CLIMATE CHANGE FOR CANADA

Building on its previous work on climate change, the NRTEE launched its Climate Prosperity program in 2009-2010, focusing on the economic risks and opportunities for Canada related to climate change. A brochure providing details of the program was produced and distributed to a large number of stakeholders.

Climate Prosperity will develop strategic policy recommendations for governments to secure Canada’s economic future in a changing climate over the course of seven distinct reports. It will offer new insights and ideas on how Canada can not only cope with climate change, but prosper through it. In 2009-2010, efforts were focused on program scoping, initial research, and stakeholder consultation, resulting in an integrated, comprehensive program approach based on two main policy research streams.

The first stream deals with the physical impacts of climate change. Climate change will bring risks to the economy, for example, from a rise in sea levels and from extreme events such as storms and fl oods. There will also be some economic benefits for Canada from climate change, at least in the short-term, such as reduced heating bills as winters become less cold. Currently, there is insufficient knowledge about what the physical impacts of a changing climate will mean for Canada’s economy and regions, and the costs of adaptation.

The second research stream addresses the risks and opportunities that are created by a global transition to a low-carbon economy. As the world enacts policies to reduce emissions, new industries and technologies will emerge. This stream of work will explore how Canada can seize these opportunities and enhance its competitiveness.

Work has been undertaken on both streams. The NRTEE has launched an ambitious research agenda involving original economic modelling and analysis, as well as extensive consultations with key environmental, industry and expert stakeholders. Significant progress has been made in understanding the impacts of climate change for Canada under various scenarios of warming, the economic implications of climate change on four specific sectors (coastal zones, human health, public infrastructure and forests), the implications of uncertain U.S. climate policy for Canadian climate policy choices, and Canada’s standing in low-carbon competitiveness compared to other G8 countries.

Knowing where we stand is a key component in determining where we must focus if Canada is to compete and win in this new reality. This is the purpose of the first report entitled Measuring Up: Benchmarking Canada’s Competitiveness in a Low-Carbon World, released in May 2010. It assesses Canada’s competitiveness against other G8 nations in areas such as emissions and energy, skills, investment, innovation and governance.

Copies of the report and the brochure, as well as more information on the Climate Prosperity program can be found at: http://www.nrt-trn.ca/eng/issues/programs/climate-prosperity/climate-prosperity-eng.php

TRUE NORTH: ADAPTING INFRASTRUCTURE TO CLIMATE CHANGE IN NORTHERN CANADA

Canada’s North is on the frontline of climate change. The speed and magnitude of change and the uneven and limited response capacity to address climate risk pose unique threats to this region. This is clearly apparent with infrastructure. Future challenges include engineering in cold climates and remote locations, a lack of back-ups in infrastructure systems and limited financial and human resources to assess risks and apply and enforce standards. Moreover, melting permafrost is undermining building foundations and threatens roads, pipelines, and communications infrastructure, while storm surges, wildfires, fl oods, blizzards and changing wind and snowstorm patterns all pose risks to remote and vulnerable communities.

Canada’s North is likely to experience unprecedented pressure on infrastructure, given the effects of climate change as well as changing demographics and increased economic development. The program’s purpose was to demonstrate how improvements in the use of existing risk-based mechanisms — codes and standards, insurance, and disaster management — can reduce the vulnerability of northern infrastructure, while also addressing climate risks into the future. Released in November 2009, True North was a product of over two years of intensive research and consultations with almost 100 stakeholders from the North and across Canada.

The report set out 16 recommendations to make community, energy, and transportation infrastructure more resilient and able to cope with expected climate change. The NRTEE’s recommendations focus on four areas:

1. Integrating climate risks into existing government policies, processes, and mechanisms.
2. Ensuring northern interests are represented and implicated in the development of climate change solutions.
3. Strengthening the science capacity and information use in the North to support long-term adaptation efforts.
4. Building community capacity to address climate risks to northern infrastructure and take advantage of opportunities.

Copies of the report and information on the research process can be found at: http://www.nrt-trn.ca/eng/publications/true-north/true-north-eng.php

CHANGING CURRENTS: WATER SUSTAINABILITY AND THE FUTURE OF CANADA’S NATURAL RESOURCE SECTORS

The NRTEE program on Water Sustainability and Canada’s Natural Resource Sectors is designed to examine the relationship between the energy, mining, forestry and agriculture sectors and water sustainability. The program raises the profile of water management within Canada, particularly with respect to the natural resource sectors. Its goal is to provide recommendations to governments, industry and water management authorities on policies, approaches and mechanisms through which water can be better managed to foster both ecosystem health and the natural resource sectors’ economic sustainability.

In 2009-2010, the NRTEE completed the program’s first phase, which focused on defining the most important water uses to the sectors and key issues relative to them. The program’s sub-committee, comprised of members of the NRTEE, played a strategic guidance role for the program and was deeply involved throughout Phase I. This group is complemented by an Expert Advisory Committee (EAC), made up of leading Canadian water experts. The NRTEE’s research was also supplemented by a number of roundtable meetings held in conjunction with industry associations. These meetings helped to verify the in-house findings of the NRTEE and enhanced the understanding of the key issues from the perspective of the industry stakeholders. This work resulted in the publication of Changing Currents: Water Sustainability and the Future of Canada’s Natural Resource Sectors, released in June 2010, in conjunction with the inaugural Canadian Water Summit in Mississauga, Ontario.

Information on Water Sustainability and Canada’s Natural Resource Sectors can be found at: http://www.nrt-trn.ca/eng/issues/programs/water/ water.php

SUSTAINABLE DEVELOPMENT GOVERNANCE

More than 20 years ago, Canadians embraced the emerging concept of sustainable development in response to the landmark Brundtland Report. Meeting the needs of present generations without compromising those of generations to come is at the heart of bringing environmental and economic interests together to create truly sustainable development solutions. But this has been easier said than done. Adversarial positions and entrenched interests have replaced dialogue and debate aimed at forging common solutions in recognition of a common future. Governments are often caught in the middle, forced to arbitrate between competing interests and positions in an attempt to navigate a way forward when they need to innovate with more open ways of bringing people together.

Today, complex, long-term issues such as climate change, water management, clean energy and more require new collaborative engagement processes if we are to truly make progress. That’s why the NRTEE and the Public Policy Forum collaborated in 2009-2010 to examine how we could reinvigorate our governance processes to make real progress on sustainable development.

Over the course of two round table discussions and one-on-one interviews with 20 of Canada’s leading experts and practitioners in the field of sustainable development and governance, the NRTEE developed the content towards production of a report entitled Progress Through Process: Achieving Sustainable Development Together. The report set out eight key “Elements of Successful Collaborative Governance for Sustainable Development”:

1. Focus on Clear Outcomes
2. Find the Right Convenor
3. Bring the Right People Together
4. Ensure Real Commitment
5. Create Clear Rules and Scope
6. Foster Shared Ownership and Accountability
7. Build Legitimacy
8. Establish Ongoing Dialogue

Copies of the report can be found at: http://www.nrt-trn.ca/eng/publications/ progress-through-process/sustainability-project-report-eng.php

KYOTO PROTOCOL IMPLEMENTATION ACT

The Kyoto Protocol Implementation Act (KPIA) was passed by Parliament in June 2007 and calls on Canada to meet its international commitment under the Kyoto Protocol by reducing greenhouse gas emissions to 6 per cent below 1990 levels by 2012.

Every year, the government must prepare a Climate Change Plan describing the measures and policies it enacted to ensure that Canada meets its obligations under the Protocol. This plan must also detail the expected emission reductions resulting from the government’s measures and policies.

Subsection 10(1) of C-288 requires the NRTEE to:

1. Undertake research and gather information and analyses on the Plan or statement in the context of sustainable development; and
2. Advise the Minister on issues that are within its purpose, including the following:
   1. The likelihood that each of the proposed measures or regulations will achieve the emission reductions projected in the Plan or statement;
   2. The likelihood that the proposed measures or regulations will enable Canada to meet its obligations under Article 3, paragraph 1, of the Kyoto Protocol, and
   3. Any other matters that the Round Table considers relevant.

The NRTEE undertook the required analysis to comply with our obligations under KPIA and our findings were provided in a report to the Minister of the Environment in July 2009. The NRTEE offered the following conclusions in its report:

• Emissions reductions attributed in the Plan to specific policies and programs are likely overestimated due to methodological issues. This is most apparent for the accounting of emissions reductions for the Technology Fund and the Climate Change Trust Fund, as well as the persistence of free-ridership, rebound, and additionality issues in some of the individual measures.
• There are deficiencies in relying exclusively on the KPIA annual assessment approach – with its short-term focus and unclear definition of emissions reductions – as the formal accountability mechanism and process for forecasting and tracking emission reductions in Canada. Transparent forecasting and evaluation processes are important for ensuring Canada is on a path to achieving long-term reductions. Comparing forecasts of the impacts of policies to the emissions reductions that eventually result from these policies can allow for improving of both forecasting methods and policy over time.
• A transparent longer-term (post 2012) process of forecasting and accounting for GHG emissions reductions could address these issues.

The 2009 NRTEE KPIA Response also recommended:

• That for future KPIA Plans, the government forecast estimates of future reductions in terms of projected changes in Environment Canada’s GHG Emissions Inventory;
• That future KPIA Plans refl ect both emissions forecasts and actual emissions data from the inventory, and further, that consideration be given to developing and implementing an ongoing public presentation of this information beyond the KPIA period;
• That future KPIA Plans apply consistent methodologies between the integrated modelling and forecasts for specific policies and programs and provide a more detailed and transparent explanation of differences between two sets of forecasts.
• That the uncertainty analysis provided in the 2009 Plan be deepened by providing additional information on the assumptions behind the various forecasts.

Copies of the report can be found at: http://www.nrt-trn.ca/eng/publications/ KPIA-2009/Index-KPIA-NRTEE-Response-2009-eng.php

NRTEE CONVENING ROLE

In order to deliver sound recommendations and policy advice to governments, the NRTEE relies on two main strengths: The high quality of its research and its strong and unique convening power. The NRTEE’s credibility makes it a natural and effective convener for matters related to sustainable development.

In 2009-2010, the NRTEE used its convening ability on a regular basis, generating lively and productive roundtable discussions on a broad range of interests across sectors and regions of Canada. NRTEE staff and Members are regularly asked to meet with or present to various government officials, industry groups, and other stakeholders. The NRTEE exercises its convening power through consultation sessions, scoping exercises, outreach on published materials, and a number of other events that include a speaking or facilitating role.

The NRTEE was more engaged in such external activities than ever before in 2009-2010, either by hosting or participating in over 60 stakeholder sessions and speaking engagements in Canada and abroad. Most of these events were organized as part of the NRTEE’s main research programs. On a few occasions, the NRTEE convened stakeholders to roundtable discussions on other related topics. For example, we convened, in October 2009, a group of government, industry and non-government stakeholders to a roundtable discussion with the Head of the U.K. Carbon Trust. In April 2009, the NRTEE hosted a meeting of industry, NGO and academic stakeholders to learn about Australia’s experiences in designing and implementing a cap-and-trade system. Blair Comley, Deputy Secretary of Australia’s Climate Change and Energy Efficiency Department, provided a presentation and responded to questions. The NRTEE also brought together stakeholders to a discussion on the Canada-Iraq Marshlands Initiative (CIMI), a project funded by the Canadian International Development Agency (CIDA). CIMI is an initiative of the University of Victoria, the Fraser River Basin Council and the University of Waterloo, whose members have been working with Iraqis on the restoration of the Marshlands since 2005.

CORPORATE MANAGEMENT INITIATIVES

Greening the NRTEE

The NRTEE is committed to operating in an environmentally responsible way by reducing its carbon footprint and greening its operations. In January 2010, the NRTEE adopted a new Environmental Code of Practice and formalized a comprehensive set of policies and practices to guide its greening activities. A new tagline, Think Green; Act Green, created and selected by NRTEE employees, captured the spirit of the initiative.

The NRTEE Secretariat has committed itself to conduct an annual inventory of GHG emissions from NRTEE operations and to calculate its carbon footprint according to recognized standards and methods. The information generated by the annual GHG inventory highlights opportunities for the NRTEE to reduce or avoid energy use in its operations. From Jan. 1st to Dec. 31st 2009, the NRTEE’s carbon footprint totalled 176 metric tonnes CO₂e (carbon dioxide equivalents), most of which was generated by business travel.

For details on the NRTEE Greening Initiative, please visit: http://www.nrteetrnee.ca/eng/about-us/greening-the-nrtee/greening-the-nrtee-eng.php

COMMUNICATIONS AND PUBLICATIONS

The 2009-2010 year saw the Communications Unit of the NRTEE support the production of a number of significant reports and the development of new and updated tools to stay in touch with Canadians, stakeholders and the media. During this time, website visits more than doubled to 443,050.

The NRTEE’s outreach continues to be marked by an evolution to electronic publishing, with two reports, Progress Through Process and the third volume of the Achieving 2050 series being released exclusively in electronic form. We have also reduced the number of printed copies we produce, in most cases from thousands to hundreds. In a continued effort to capitalize on the efficiency of new technology, we have increased dissemination of reports through e-mails and, occasionally, through the use of flash-drive technology. This approach saves the NRTEE financial resources, reduces the Round Table’s environmental footprint, and expands outreach.

The efforts to highlight electronic publications coincided with a substantial number of downloads of our products from the Round Table website. For example, Achieving 2050: A Carbon Pricing Policy for Canada, was downloaded 26,879 times by the end of the fiscal year, its companion Technical Report was downloaded 18,007 times, while the downloads of True North: Adapting Infrastructure to Climate Change in Northern Canada numbered 22,821.

Aside from our traditional communications with stakeholder organizations, the NRTEE has made efforts to increase collaboration with related agencies, government departments, non-governmental organizations and other groups interested in sustainable development.

Our main communications tool, the NRTEE website, continued to evolve over the year – both technologically and with respect to content. Visitors to the site can now take advantage of a larger menu of interactive offerings which allow our reports to be more-easily navigated and digested. The website also includes highlights of the NRTEE at work, with photographs and summaries of various meetings where our policy analysts gather information for our reports. The innovations have led to significant increased website traffic.

* FY (Fiscal Year)

Finally, the NRTEE also achieved a noteworthy presence in the media during the year. Round Table members made a number of appearances in traditional print and broadcast forums. True North and the first volume of our Climate Prosperity series both received significant attention, and our work has begun to appear on the blogs and electronic communications of various stakeholder groups, journalists and others who utilize the social media. The NRTEE also produced “thought pieces” and explained its research in publications such as The Hill Times and Policy Options magazine.