Notes for an address by the Hon. David Anderson, P.C., M.P., Minister of the Environment On the occasion of the GLOBE 2002 Conference Vancouver, British Columbia March 13th, 2002

Speech delivered by the Hon. David Anderson P.C., M.P., Minister of the Environment

Thank you Maurice.

It is my pleasure to welcome GLOBE 2002 to Vancouver and to British Columbia. Once again, we can thank the organizers for bringing leading-edge companies and leading-edge thinkers right to our doorstep.

I am honoured to share the stage today with Maurice Strong and Sir Mark Moody-Stuart. These two individuals personify the type of leaders our world needs.

Sir Mark and Maurice are great examples of how every profession and every sector of society can, and must, play a role in making sustainable development real.

There has never been a more timely opportunity for GLOBE. In less than five months people from around the world, including as many as 150 world leaders, will gather in Johannesburg for the World Summit on Sustainable Development.

I hope the Summit will ignite a new generation of public and private sector leaders to work towards a better, more sustainable world.

It seems very fitting that Maurice is playing an important role at this conference. For those who are not already aware, he was the Secretary General of the Rio Summit. And GLOBE 2002 is a key milestone on the road to Johannesburg and the 10th anniversary of Rio.

When I addressed this conference two years ago, I offered some ideas on how we could engage more players in moving forward with sustainable development. These ideas were organized within what I called "a new architecture of environmental management."

This new architecture is composed of a range of principles whose intent is to channel market forces towards an economically strong and environmentally and socially sustainable Canadian society.

Sounds overwhelming. But really, it is simply an approach for sound environmental management for the 21st century.

Over the past two years, Environment Canada has been working to integrate the architecture into every aspect of how we address Canada's environmental priorities

In my remarks today, I want to briefly look back on the Government of Canada's progress in building a foundation for a new architecture of environmental management.

Knowledge, innovative policy tools and partnerships have been at the top of our agenda.

I want to suggest next steps in these areas.

I want in particular to focus on the significant challenge that lies before us with respect to achieving our climate change goals, and demonstrate the new architecture is already working to move us – both as government and as industry – in the right direction.

And before closing, I want to outline how we can take this new architecture even further.

While my intent today is to focus on climate change, I think it is critically important that we do not lose sight of our other key environmental priorities.

We want to reduce the health impacts of environmental threats through:

• improving air quality;
• improving water quality;
• addressing the special vulnerabilities of children; and
• effectively managing toxic substances.

And we want to cement Canada's natural legacy through:

• the conservation of wildlife;
• the protection of habitat; and
• the sustainability of our natural resources.

Along with climate change, these three priorities are intertwined: reducing toxic substances in our environment protects our wildlife and our water; cleaning our air reduces the threat of climate change and smog to our health, especially our children, and managing our forests ensures their sustainability.

Our goals are ambitious, but within our grasp. To make our goals a reality, we need to pursue not merely economic growth, but more sustainable, more efficient growth.

The traditional environmental approach – where government sets the targets, makes the rules, and points the way – won't get us there.

We need to focus on prevention rather than clean-up.

In the two years since GLOBE 2000, we have expanded our partnerships across government and with industry.

We have focused more energy on developing knowledge and providing it to Canadians.

And we have made better use of innovative policy tools and incentives.

We have worked to develop partnerships with industry and the environmental community, because we see these as a key plank in our strategy in implementing CEPA. There is still much more we can do with them.

An instrument that produced impressive results in the late 1990s was the Accelerated Reduction and Elimination of Toxics (ARET) program. Together, program participants have reduced toxic substance emissions by more than 27 thousand tonnes — a decrease of 72 per cent from base-year levels to December 2000.

I will soon launch the program to succeed the ARET program. It will challenge companies to commit to voluntary targets to reduce use and emission of pollutants; experience has shown us that success will depend on measurable reduction targets and rigorous verification of performance.

We have also developed a stronger partnership with municipalities by doubling our funding for the federal government's Green Municipal Enabling Fund and Green Municipal Investment Fund to $250 million.

Through Infrastructure Canada, the Government has approved 1297 projects to date, 830 of which are "green" projects. In the process we have leveraged over $1.4 billion from a $400 million investment. These funds are still in the early stages of implementation. As they continue, and are complemented by new programs, such as the recently announced Strategic Infrastructure Fund, we will continue to see further development of green, sustainable infrastructure.

One the many tangible benefits of our partnership with municipalities is a reduction of over half a million tonnes in Canada's greenhouse gas emissions.

Through partnerships we are demonstrating the clear connection between these decisions and the changes we are already beginning to see in our local, national, and global environments.

The strength of the partnerships we form relies heavily on the quality of available information we provide to Canadians. This is why Environment Canada has:

• provided leadership in areas such as the National Pollutant Release Inventory and ecolabelling;
• created the Task Force on the Canadian Information System for the Environment (CISE); and
• informed Canadians about key trends in environmental issues.

Last fall, I received the CISE Task Force recommendations and I look forward to working with my federal and provincial colleagues to implement their ideas.

Federal, provincial and territorial governments have already established common ground through the National Round Table on the Environment and the Economy (NRTEE).

I am pleased to note that NRTEE President and CEO David McGuinty will share some of their progress at GLOBE 2002.

Business needs to better understand the economic benefits of sustainability. And they must have the capacity to not only act on that understanding, but also to measure their progress.

A benchmark survey of corporate sustainability reporting in Canada showed that only 57 companies published reports. When compared to other countries, Canada places in the middle of the pack with only 26% of our largest companies producing environmental or sustainability reports. We can do better.

The innumerable decisions taken by governments, companies, shareholders, employees and consumers not only drive our economy, they impact our health and our environment.

Making environmental knowledge more readily available will help to build interest, awareness and capacity to produce sustainable development reports.

As we develop our knowledge the pressure will no doubt increase to ensure economic activity fully takes account of the costs we exact on the environment.

Innovative policy tools, such as economic incentives, are among the most promising measures for promoting environmental excellence.

Since GLOBE 2000, we have expanded the Ecological Gifts Program and there has been a dramatic increase in the number of donations. To date, over 235 ecological gifts have been made in eight provinces, conserving at least 20,000 hectares of ecologically sensitive lands valued at more than $33 million.

Our work to date on incentives is encouraging, but we must build on our successes in a number of ways, including:

• aligning tax and subsidy signals to support the integration of sustainable development into business decision-making; and
• re-examining the influence and impact of government as a corporate entity. This could include a renewed emphasis on sustainable development criteria in procurement.

These successes and these challenges are all related to the new architecture. But the greatest challenge to the new architecture lies immediately before us – in dealing with climate change.

I am making the new architecture real. Just as many participants at GLOBE are reducing their greenhouse gas emission through actions that focus on partnerships, knowledge and innovation, so is government action on climate change.

I am certain that everyone in this room has heard of the recent debates in Canada about the Kyoto Protocol. Some say we are proceeding too fast. Others suggest that we are going too slow. Both sides are wrong. Considering that negotiations in Marrakech on the details of implementation concluded only four months ago, I would argue that we are working on a reasonable timetable.

And despite reports to the contrary, we are developing a plan to achieve our Kyoto target.

It is not a final plan – it cannot be, at this stage. But it will provide a good framework for discussion over the next number of months. We want to consult and adapt it according to the views of provinces, industries, stakeholders, as well as average Canadians.

Some of our key considerations in developing the plan include:

• cost-effectiveness;
• regional and sectoral impacts;
• domestic reductions versus purchase of international credits; and
• environmental, health and other co-benefits.

In keeping with the need for a mix of policy approaches, we are looking at three-part approach that involves emission trading, targeted measures, and government investment in international permits.

For Canada, domestic emissions trading is an innovative policy tool that will be key to meeting our climate change challenge. Working with provincial and industry stakeholders to create a Canadian system harmonized with the proposed International emissions trading program , not to mention a possible U.S. trading program, will ensure that a future DET works to produce results

Firms that would be covered under DET would have to decide whether to buy permits or reduce emissions. They would likely reduce their own emissions where it is less costly than their three alternatives which would be:

• buying emission reduction permits from other companies;
• buying emission reduction credits from other domestic sources such as agricultural sinks and landfill gas capture – which also becomes a source of earnings for other sectors of the economy; or
• buying credits in the international marketplace

It is actually the international price of carbon credits that will determine what emission reductions might be most cost-effective to make at home. In essence if we leave everything up to the market, the international carbon price will determine the balance between domestic reductions and the international purchase of credits.

The second part of our approach involves targeted measures to address emissions in sectors not covered by the domestic emissions trading system, such as residential and commercial buildings, transportation, forestry and agriculture. These measures would include both new policy tools and require strong partnerships.

There are some compelling reasons to ensure more reductions are made domestically than the market alone might dictate. Focusing efforts at home provides:

• environmental and health benefits from cleaner air;
• employment and competitiveness benefits from investing in new technologies domestically; and
• the ability to address other policy goals as well, such as improving urban transit systems.

Finally, the third part is government investments in any international credits that might be needed to close any remaining gap. At Marrakech, we negotiated international rules that allow us to purchase emission reduction credits in the international market place and to invest in emission reduction projects in developing and developed countries. Canada's approach will want to take advantage of this international market.

Such a three-part approach will help us achieve a reasonable balance between low overall costs and our ability to deal with competitiveness issues. It will also help to moderate differential impacts while reaping desirable co-benefits.

As everyone in this room is well aware, we need a global effort if we are ever to stabilize or reverse the damage we have already done to our climate. For this reason I welcome the U.S. re-engagement in the climate change debate.

On February 14th, President Bush announced the long awaited U.S. climate change strategy. The strategy links the reduction of greenhouse gas emissions to economic output.

And while I am not entirely satisfied with their approach, it does put some important building blocks in place and features many of the elements in our own plans.

In keeping with the need for enhanced cooperation, I was in Washington last week to negotiate an agreement with the United States to expand and intensify our countries' existing bilateral cooperation on climate change.

I can report to you that we agreed to pursue increased bilateral cooperation on climate change in the areas of:

• science and research;
• technology development;
• capacity-building in developing countries;
• carbon sequestration;
• emissions measurement and accounting;
• targeted measures to spur the uptake of cleaner technology; and
• market-based approaches.

The most significant aspect is what the U.S. is doing with its investments in technology and science. We need to make comparable and compatible investments in developing our knowledge. The clean energy technology revolution is, at its core, a race for innovation. To borrow an analogy with the recent Olympics in Salt Lake City, I am of the opinion that we should strive to make it to the podium, at the very least.

We must also continue to understand the costs of doing nothing.

Over the last few years we've seen a rising number of unusual weather events with significant impacts.

The 1996 Saguenay flood cost $1 billion and repeated itself not too long ago.

The 1997 Red River flood caused the evacuation of more than 25,000 people in Southern Manitoba, and resulted in $300 million in damages.

The ice storm we experienced in eastern Canada a few years ago saw three million Canadians without electrical power and total damages of about $5.4 billion.

The impact of southern Alberta's current draught problem may have an impact of $5 billion, pressuring Prairie agricultural revenues and crop insurance.

The best estimates of climate change scientists are that we will see more of these severe weather events, not fewer. We will see more people affected by floods or drought in this country, not fewer. We will see more impacts on agriculture and our forests, not fewer.

And the impacts of climate change aren't likely to stop there. They will also affect the health of Canadians. Many of those changes will be due to more and more serious heat waves, as well as increase smog.

Therefore we cannot stand by and do nothing about greenhouse gas emissions – as some have recently suggested.

And we should not be put off our resolve and our focus by the worst-case Kyoto scenarios that have recently been popular in the media.

Some lobby groups have recently produced cost estimates using out-of-date data that produce scenarios that are often quite unrealistic.

Within the next couple of months, through the work of a federal/provincial/territorial working group, we expect to have a more accurate picture of the range of possible costs. This picture will take into account the Bonn and Marrakech accords and the impact on world carbon prices with the U.S. out of the market.

Many studies place Kyoto economic costs at less than 1 per cent of GDP in 2010. And I would ask that when you hear of cost estimates in the range of 40 billion and even more, that you remember something. Much of this analysis is based on the presumption that Canada would be the only nation in the world to take action on greenhouse gas emissions. The Protocol requires 55 countries to ratify in order for it to be binding. There is a significant positive difference on the impact to Canada under Kyoto.

We know we want to build a more efficient and less wasteful economy. We know the many benefits that will come as we take steps that will translate into cleaner air, improved health for all Canadians and a better-protected environment for all.

Responsible corporate activity will be the cornerstone of the global effort to reduce greenhouse gas emissions.

The many examples of companies that have reduced GHGs remind us is that corporations are clearly not the major obstacle to address this challenge. They are vital partners in the path to our Kyoto target.

For this to be successful, the business case must be well understood.

A walk through the GLOBE 2002 trade show floor provides a number of inspiring ideas. For companies that want greater productivity – sustainable technologies can help. Technologies that allow companies to get the job done while using fewer raw materials and producing less waste.

Already, a growing number of corporations are recognizing the competitive advantages that can be realized through sustainable practices.

I encourage all corporations to follow the international trend of the BPs, the Dow Chemicals, the Shells and others whose corporate culture incorporated greenhouse gas reduction targets even as early as 1999.

There is a sea change in business thinking. Canada's leading companies are also Canada's companies with commitments to sustainability. Companies are responding to shift in consumer expectations and are shifting their business practices. They understand the reasons to get ahead of the curve – for their shareholders, for their stakeholders and for their future.

It is not just for me to define business excellence. And it is not simply a matter for GLOBE 2002. We have to make sure that the dialogue we start here continues – in boardrooms, at annual general meetings, and with employees.

This year, we have a special imperative to be bold in our commitments and imaginative in our solutions.

In September, world leaders will meet in Johannesburg at the World Summit on Sustainable Development – or Earth Summit 2002. The 1992 Earth Summit in Rio brought the challenges into sharper focus, especially climate change.

The Earth Summit 2002 is a critical milestone in confirming a path towards a better world for everyone.

The concept of eco-efficiency was raised at the Rio Summit.

Since then, many exciting ideas have come to the fore – from factor-4 efficiency to the triple bottom line. The World Business Council for Sustainable Development was created to explore these and many other ideas.

Today, a next generation of conceptual models is being developed. Ambitious corporate thinkers are moving beyond eco-efficiency. They are beginning to imagine corporations with zero, or even restorative, environmental impacts.

This raises a two-fold challenge and opportunity.

The first is whether we can tap into and build on the leadership and excellence in this room and define for the world a measurable standard of corporate environmental innovation and excellence. We know who many of the leaders are, but can we define them in quantifiable terms so that others can follow the trail they have blazed? Can the leaders in this room come together, agree on the best of these measures and on what sets them apart from other corporations, and in doing so set an objective for the rest of the world to strive for?

It is not for me to define all the characteristics of such a "winner's circle" but some of attributes we would intuitively expect from corporate leaders are: corporate sustainability reporting, implementation of Environmental Management Systems and demonstrated and measurable commitment to eco-efficiency.

We have the talent and vision and we have the upcoming WSSD opportunity to showcase leadership in real and measurable terms. I hope we can begin a dialogue today towards an achievement by that time.

The second part of the challenge is to look down the road at what leadership could look like in a decade. We need to begin a dialogue towards what excellence could and should look like in 10 years time.

How can we work to achieve it?

How can we collectively set and attain stretch goals that take us beyond eco-efficiency to a point where firms industries or sectors of society leave no environmental footprint at all?

We can begin that process, here, today at GLOBE.

Business as usual is not an option. Ambitious targets need to set and then met.

Quite simply, we are not going fast enough. The strain on our ecosystems is telling us so. And people living in communities throughout the world believe that their environment is getting worse, not better.

An Environics poll that surveyed 25,000 citizens worldwide found that majorities of citizens in most countries believe that environmental quality in their country has deteriorated over the past ten years. Sadly, they are mostly right.

The ten years since world leaders met in Rio de Janeiro have seen the international community build comprehensive domestic and international institutions to meet the challenge of sustainable development.

I know some have been disappointed with the progress that has been made but there is a solid practical and intellectual base for real success in the next decade. Implementation will be the rallying cry in Johannesburg and I invite you to bring this message back to your companies and homes. The human, the economic and the ecological imperatives have never been clearer.

Once again, thank you for this opportunity to address the Opening Plenary of GLOBE 2002. I look forward to sharing ideas with many other delegates, exhibitors, and presenters.

And I want to offer best wishes to everyone on a successful conference. Like GLOBE Conferences of previous years, I am confident that many ideas, inspirations, and partnerships will be spring forth over the next few days.

Thank you.

Related documents:

• Environment Canada at GLOBE 2002 [information collection]