5.2 Priority Areas for Action

Canada’s Opportunity: Adopting Life Cycle Approaches for Sustainable Development

CANADA NEEDS TO DEVELOP CAPACITY AND EXPERTISE IN LIFE CYCLE APPROACHES

There is a clear need to develop Canadian capacity and expertise to facilitate the implementation of Life Cycle Approaches within both the public and private sectors. The needs of these sectors differ with regards to the level of training, guidance and awareness that are required to foster an increased application of Life Cycle Approaches. Due to the multifaceted nature of Life Cycle Approaches, the development of a collaborative knowledge-sharing model makes sense. A joint effort to bring together a network of practitioners to further mainstream applications would benefit government and business. This collaborative model would provide an opportunity for practitioners from both sectors to share knowledge and expertise with each other. The government, through its participation, would provide much needed oversight and address any trust issues surrounding data sharing across the private sector.

In the public sector, training and guidance for people implementing Life Cycle Approaches and also for senior decision makers needs to be a priority. This is intended to address an overall lack of awareness of the benefits associated with using these approaches and a practical understanding of how and where Life Cycle Approaches work best. The nature of the public sector requires that their application be coordinated across departments. To increase the use of Life Cycle Approaches within government policy decisionmaking, clear guidance and direction will be needed on how to use these within existing mechanisms such as the Regulatory Impact Analysis Statement (RIAS) and Strategic Environmental Assessments (SEAs). The GoC will also have to develop internal capacity to identify key sectors that would benefit the most from their adoption. In order to accomplish this, better engagement, training, and guidance will be required across elements of the public service. From an internal operations perspective, such training will be particularly valuable for departmental staff who have an important role in the stewardship of assets across the life cycle, especially during the use phase.

The private sector is a leader in the application of Life Cycle Approaches in many different forms, from corporate life cycle costing to product design development. The capacity to implement them, within the different private sector actors, however, is highly variable. Large corporations have the ability to implement Life Cycle Approaches with no or minimum assistance as they have the internal financial and human resources to implement them. The situation is quite different for SMEs, where there is a definite lack of capacity, expertise and, in most cases, awareness. Due to their small size, most SME’s have underdeveloped management systems that could easily adopt Life Cycle Approaches and would require further training, guidance and awareness. This capacity gap may present significant economic risks for Canada, as SMEs represent collectively 99.7 % of Canada’s business and industrial profile.¹⁴⁷

The government could help the promotion and use of Life Cycle Approaches by directly supporting industry associations or by participating in cost-sharing initiatives with companies, industry and trade associations, and universities. In Québec, a partnership between the federal government and the food sector (Fonds de développement de la transformation alimentaire) enabled many SMEs to undertake Life Cycle Approaches projects since the mid-1990s. Other jurisdictions are embracing similar approaches.

CANADA NEEDS TO DEVELOP INFORMATION RESOURCES THAT REFLECT THE CANADIAN REALITY

There is a need to provide science-based, transparent, adaptable and reliable life cycle data for Canadian resources, processes and products. A Canadian Life Cycle Inventory (LCI) database would benefit a variety of stakeholders and provide access to important information for both the private and public sectors.

This data is normally housed in a LCI database (see text box on the next page for more information on LCI databases). Several public and private national and multi-national databases currently exist. Ecoinvent (Swiss-based) and Gabi (German headquarters) are two of the most commonly used private databases. These databases are available on a fee for use basis. The U.S.’s database is supported by the federal government and is housed at the National Renewable Energy Laboratories (NREL). The EU also has a publicly available database, the European Reference Life Cycle Database (ELCD), which is administered by the Joint Research Centre (JRC). In Canada, the Québec government has funded CIRAIG to adapt the Swiss-Ecoinvent data to reflect any differing geographic realities.

Several sets of guidelines have been created to provide some consistency in the collection of data for these databases. As mentioned in Chapter 3, the EU released the first edition of their guidance documents in 2010 called the International Reference Life Cycle Data System (ILCD) Handbook.¹⁴⁹ In 2011, the UNEP-SETAC Life Cycle Initiative launched their Global Guidance Principles for LCI Databases (also known as the Shonan Guidance Principles).¹⁵⁰ These principles go one step further by suggesting how to manage LCI databases, in addition to how to collect the data they contain.

There is a need to provide science-based, transparent, adaptable and reliable life cycle data on Canadian resources, processes and products.

National databases are necessary as LCI data is geographically dependent. For example, the source of electricity (e.g., hydro vs. coal-fired) can have significant implications for GHG emission data contained in the database. Using data from the European databases can result in misleading findings for environmental inputs and impacts of Canadian products, companies and industrial sectors.

A Canadian LCI database would benefit a variety of stakeholders and provide access to important information for both the private and public sectors. This was acknowledged by the Senate Standing Committee on Agriculture and Forestry in 2011 when they recommended that “the Government of Canada defray 34 per cent of the costs for a value not exceeding $5 million in a public/private partnership to develop a database of life-cycle assessments of manufactured products, for use in Environmental Product Declarations.” ¹⁵¹

The database would allow the private sector to respond to trade and market access requirements related to Life Cycle Approaches. LCI data is needed for companies to conduct an LCA of their product or commodity to satisfy private and public sector regulations. The database would also enable companies to ensure that the information that they are providing is truly reflective of the impacts associated with their product or commodity and thus level the playing field on which companies compete. The availability of rigorous data that is comparative to that in other international jurisdictions is of particular importance to companies.

The integration of Life Cycle Approaches into government internal operations and decision making would also be supported by the database. Decisionmakers could use the data to inform the development of policies and programs to ensure that key economic and environmental impacts of the options are identified and considered in the process. With the existence of a Canadian LCI data, the GoC would be able to request life cycle information from potential suppliers as part of its procurement processes.

A few important points need to be considered with respect to the development of such a database in Canada:

• International guidelines on LCI database development should be followed when developing the Canadian database to ensure that the data developed complies with international standards. Canada should be engaged in these discussions at the international level to ensure that the data developed in Canada will be accepted by other jurisdictions;
• Long-term, predictable funding support is required along with an institutional arrangement to host the database, such as through a public-private partnership or in an academic or independent government institution with a supportive mandate;
• The data and statistics from the Canadian database needs to be comparable with those from similar databases of Canada’s trading partners, in particular the European Union and the United States;
• Industry confidence in maintaining the confidentiality of data is important. There needs to be the forging of an implicit relationship whereby industry needs to have the assurance that data related to their industrial and manufacturing processes will not be misrepresented or misused. Some sort of partnership will be required; and
• This effort will need to be linked to existing efforts, such as the Québec database that is currently being created by CIRAIG, as well as data from Statistics Canada. Without an institutional anchor, Canada will not get coherence in the LCI database that it needs and seeks. The development of a Québec LCI database and the recently announced Québec carbon footprint initiative may have implications throughout Canada if Québec was to expand the use of Life Cycle Approach-based provisions on goods and commodities. If capacity does not exist within other provinces and territories to provide the requested data and information, there could be implications for inter-provincial trade, creating barriers to the movement of goods and services across provinces. To prevent such problems, the federal government could play a critical role in supporting the development of a national LCI database.

It is also worth noting that economic and environmental data systems (which are the basis for a LCI database) have historically had an emphasis on industry sectors rather than commodities. Statistics Canada has traditionally built its data systems on industry profiles but this is not how most international jurisdictions are currently approaching the database development. In the future design of data and standards, there may be a need to shift the approach toward commodities rather than just industry sectors.

CANADA NEEDS TO PLAY A PROACTIVE ROLE IN THE DEVELOPMENT OF NATIONAL AND INTERNATIONAL LIFE CYCLE APPROACH STANDARDS

Canada should be involved in multilateral discussions where life cycle-based standards are being created, such as EPDs (e.g., France’s La Grenelle) or content requirements (e.g., California’s Low Carbon Fuel Standard). This would include the development of robust Product Category Rules (PCRs) by third parties but with the oversight of the federal government. With the strong reliance on commodities in Canada, there is also a need to develop PCRs for commodities.

There is an urgent need for guidance and standardization of LCA methodologies to ensure the consistent use of this tool. Globally, many jurisdictions are leading the development of standards and Canada is being forced to accept foreign standards being imposed on our exports. The need to act is reaching a critical point whereby Canada needs to have standards for LCA methodologies (e.g., PCRs) associated with certain goods and commodities so that coherent national and international responses could be developed to these emerging trade-related regulations. This will ensure that Canadian companies have a comparable basis on which to compete for access to markets that have LCA-based regulations imposed by governments or private companies. The U.S. has started a similar process with the American Centre for LCA, in which the EPA has been involved with a committee to support the development of PCRs in the U.S.¹⁵²

Collaboration with industry and international organizations is vital to ensure that LCA is applied consistently and in a harmonized fashion. The federal government can play a strong role here by providing consistent guidance and streamlined support for developing life cycle methodologies that can be adopted within a sector and broadly endorsed across jurisdictions within our country and abroad.

A practical way to make progress is for the GoC to play the role of “certifying the certifier” by encouraging industry associations to develop these standards, which would then be evaluated by the GoC. This would allow the GoC to make progress on a targeted basis and simultaneously develop standards or guidelines for multiple commodities categories (e.g., oil and gas, wood, etc.). By using a collaborative model for stakeholder engagement, the GoC could identify priority areas where no guidance exists for the use of LCA and work with stakeholders to develop immediate short-term responses. The endorsement of a designated standard for a product, process or commodity class within a sector where there may be numerous competing standards would help the private sector to mitigate the risk of increased green-washing in the marketplace.

Canada should be involved in multilateral discussions where life cycle-based standards are being created, such as EPDs (e.g., France’s La Grenelle) or content requirements (e.g., California’s Low Carbon Fuel Standard).

Similarly, participation from the government in the management of a uniform labelling program or EPD for multiple environmental attributes for a product or class of products that meets a designated standard would lend credibility to the label, increase awareness surrounding the label, and encourage companies to invest in the certifications required to support use of the label. The development of a robust process, as well as product or commodity standards to which a product is measured to attain a designated eco-label would lead to a greater degree of confidence. The use of such standards would allow a level playing field and reduce inconsistent claims (e.g., green-washing) while reducing complexities for consumers.

THE GOVERNMENT OF CANADA NEEDS TO APPLY LIFE CYCLE APPROACHES INTERNALLY TO REALIZE ECONOMIC AND ENVIRONMENTAL EFFICIENCIES

The GoC would benefit from a shift in current institutional practices to simultaneously increase economic savings and enhance environmental stewardship. A reform in the current institutional practices would allow the GoC to use Life Cycle Approaches to realize economic and environmental efficiencies in management of its expansive asset base. There would be benefits in functionally integrating the acquisition, maintenance and disposal functions across the GoC through the development of budgeting and management practices that are more conducive to Life Cycle Approaches. This would confront the GoC’s intrinsic bias toward low up-front capital costs that result from current accounting and budgeting practices. In traditional cost-benefit analysis, options that fare best over the life cycle seem costly, but over the long-term they lead to more benefits, both economically and environmentally. Progress would be fostered by having the Finance Department and Treasury Board Secretariat recognize this in budgeting and expenditure management and by having the Auditor-General recognize this in programs audits and evaluation.

The GoC should use performance information to conduct benchmarking and to build and bolster the business case for green procurement and asset management based on Life Cycle Approaches. A specific goal would be to maintain and expand the use of performance-based building-management contracts to ensure that green buildings are performing as designed and to optimize building management. Specifically, enhanced systems should be developed to measure and track use-phase (operation and maintenance) costs associated with the various public sector assets. The effort can begin with assets and commodities with the greatest potential impact and performance variability. For example, current policies provide no incentive for individual departments to act on energy efficiency. If an individual department saves money on electricity, the savings go to the government’s consolidated funds, leaving no benefit for the department.

The GoC would benefit from a shift in current institutional practices to simultaneously increase economic savings and enhance environmental stewardship.

Life Cycle Approaches need to be integrated into decision making in the area of major policy and program development. The Regulatory Impact Analysis Statement (RIAS) that must be developed for every regulation created by the GoC could include Life Cycle Approaches to facilitate integrated decisionmaking frameworks. Similarly, Strategic Environmental Assessment (SEAs), which are required for Cabinet decisions on new policies and programs, represent an opportunity to systematically include Life Cycle Approaches. This type of action is essential to improving internal knowledge and capacity within the federal government on Life Cycle Approachrelated opportunities and risks. Mainstreaming these efforts through such existing mechanisms is more practical than creating new instruments, although a specific assessment of their utility is still required.

The GoC has already taken a number of measures to improve the performance of the regulatory system for the development of major resource projects (e.g., Project Agreements, Major Project Management Office) which have improved the efficiency and effectiveness of the system. Policy makers have been adopting broader applications of Life Cycle Thinking (LCT) including the implementation of Cumulative Environmental Impact Assessment models to address these issues. Such models would evaluate and address impacts from a regional planning horizon rather than on a project-by-project basis. There are additional opportunities to improve the regulatory system by using Life Cycle Approaches to explore issues such as cumulative effects of natural resource development and the impacts of product use.

5.3 CONCLUSION

Four key conditions are needed for the successful uptake and implementation of Life Cycle Approaches in both the public and private sectors. They are (1) awareness of benefits, (2) capacity and expertise, (3) life cycle data and information, and (4) common standards. The government could intervene at various scales (domestically, regionally, globally) and through a series of short- and long-term actions to advance the establishment of these key conditions. This would help address the trade and market access issues while increasing efficiencies within its own operations and in the private sector. This is an area where the government will need to work in partnership with the private sector. Changes in government’s practices will also be needed in the longer-term. The task is not a small one, but a few targeted actions now will go a long way to putting Canada back in the driver’s seat.

[147] Moore and Polushin 2009

[148] Interuniversity Research Centre for the Life Cycle of Products Processes and Services 2012b

[149] European Commission Joint Research Centre 2010a

[150] UNEP-SETAC Life Cycle Initiative 2011b

[151] Standing Senate Committee on Agriculture and Forestry 2011

[152] American Centre for Life Cycle Assessment ND