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Benchmarking – Chapter 4

4.0 Drawing Lessons: Succeeding in Low-Carbon Performance The NRTEE’s Low-Carbon Performance Index represents a first step in gaining deeper understanding of where Canada needs to strategically focus to prosper in a low-carbon economy. Tracking these indicators over time, and expanding the list of indicators while deepening the analysis, will provide further insight on our progress and our competitive positioning. Data availability and quality are of utmost importance for this analysis, and as collection improves for indicators specific to a low-carbon context, the Index can be adjusted and improved to reflect advancements and new priorities. Research in this rapidly developing area will surely reveal new insights to policy makers on which are the best indicators for measuring durable low-carbon competitive capacity. It will then be possible to incorporate new knowledge as it emerges so that this tool can continue to provide a valuable contribution to an evolving challenge. The NRTEE offers this Index as both a tool for policy makers now, and also as a way of thinking through the inevitable policy challenges ahead. For Canada, the inescapable conclusion is that when it comes to low-carbon performance, we need to do better. Canada’s performance on the Index is sixth place among the G8 countries. Our competitors, save for the United States at this stage, are all investing more and preparing their economies for the low-carbon transition. Low-carbon policies and plans are only just being contemplated and implemented in this country, federally and provincially. Canada’s rankings in the five benchmark categories reinforce current perceptions and past investments and commitments. Our high energy and therefore carbon-intensive economy clearly leaves us second from the bottom in Emissions and Energy, while uncertainty about national carbon pricing and coordinated federal/provincial/territorial climate policy approaches keeps us near the bottom on Policy and Institutions. On Investment and Innovation, Canada is squarely in the middle of the G8 pack, while on Skills we are the leader. So, Canada’s story is moderately positive in some areas and clearly requires improvement in others. It is why we fall firmly in the second-tier of low-carbon performing countries, behind the European Union countries, in the overall rankings. Unless a significant effort is made in some of the categories, particularly Emissions and Energy and Policy and Institutions, we can expect to remain there. But now, with this Index, we can measure not just where we are now but, as policies and actions accumulate, whether we are closing the gap between us and the leaders. Competitive advantage in the future requires competitive advance in low-carbon performance. Every country in the world will feel the effects of the low-carbon transition. How they position themselves to compete in terms of their domestic emissions and energy use, investment, innovation, skills, and policies will have lasting effects on their economic viability. The message stemming from this analysis is clear: Canada will face unique challenges competing in a global low-carbon economy based on our current profile, but this by no means holds us back from a prosperous future. Action now to build capacity for trade and investment in a carbon-constrained market will propel us forward to be leaders in providing the skills, technologies, financing mechanisms, and goods and services that will only grow in demand. The core lesson to be drawn from the creation of this new Low-Carbon Performance Index is that Canada needs to perform across a range of factors if our country is to truly succeed as low-carbon performers. Investment in low-carbon energy innovation will lead to a better energy and emissions performance; strong national carbon pricing regimes will drive much of the investment capital and behaviour for this innovation. Having a low-carbon growth plan developed collaboratively with industry and across jurisdictions in Canada will help identify where to focus and invest strategically. It can help governments and businesses make the right choices so Canada succeeds in the global race for low-carbon economic success. This will be a challenge but the NRTEE believes Canada is up to it. RECOMMENDATIONS // FIRST the LCPI should be updated regularly to continually track performance and measure progress. New indicators should be added and existing ones adjusted to ensure they are robust and relevant. Public accountability is essential for elected officials, governments, businesses, experts, and others to assess progress and propose future steps. SECOND a dedicated nationally scoped low-carbon index should be developed and published with a broader, more comprehensive range of categories and indicators to marshal domestic efforts across all governments to support the development of a low-carbon economy for Canada. This new index of performance measures should be focused on specific objectives considered relevant, meaningful, attributable, and balanced. Expectations and benchmarks should be developed simultaneously to ensure a strong focus on outcomes. THIRD these two indices should form the basis for developing a comprehensive low-carbon growth plan for Canada. Such a policy pathway needs to be fully integrated into existing and future economic, environmental, and social policy planning frameworks.