National
Round Table on the Environment and the Economy
Annual Report 2005-2006
The Year in Review
Corporate Activities
Meetings
The members of the NRTEE meet as
a round table four times a year to review and discuss the ongoing
work of the agency, set priorities and initiate new activities.
This year, the members met in Ottawa in May and September, Fort
McMurray (Alberta) in November and Gatineau (Quebec) in February.
An additional plenary was held on
November 22, 2005 with former Prime Minister Paul Martin. The
purpose of this special plenary meeting was to deliver the NRTEE’s
energy and climate change advice in advance of the United Nations
Climate Change Conference in Montreal. This meeting marked the
first time in the NRTEE’s history that a Prime Minister
attended a plenary session.
The Round Table’s Executive
Committee held six meetings over the year, convening as a group
by conference call and in person in July, September, November,
December 2005 and January and February 2006.
Program Areas
The NRTEE focused on five key program areas during
the year. Most programs are led by a member of the Round Table
who chairs the program’s task force or committee. This body
is a multistakeholder group that assists in guiding and shaping
the program’s recommendations and highlighting areas where
more work is needed. The five program areas are described briefly
below.
Greening of
the Budget
Goal: To investigate and recommend
the use of economic instruments in improving the environment.
At the heart of this program is the annual Greening
of the Budget submission, which contains recommendations
for consideration by the Minister of Finance in preparing the
ensuing year’s budget. In developing its advice, the Round
Table strives to achieve a consensus among stakeholders around
sustainable development initiatives.
In the 2005 federal budget, the government announced
it will actively consider opportunities to use the tax system
to advance environmental goals. To help identify these opportunities,
the NRTEE was asked to outline options for a “feebate”
that would provide a consumer rebate for fuel-efficient vehicles
and impose a fee on fuel-inefficient ones.
The NRTEE delivered its advice and recommendations
to the Minister of Finance in October 2005. The Round Table recommended
to the federal government that it not introduce a program of vehicle
“feebates” in the next federal budget.
After researching the issue and consulting with
industry, labour, consumer and environmental organizations and
government representatives, the Round Table concluded that feebates,
on their own, may not be effective in achieving their goals of
encouraging conservation and minimizing greenhouse gas emissions
in Canada. A comprehensive, integrated strategy aimed at reducing
greenhouse gas emissions across the whole transportation sector
would be a better option.
Energy and Climate Change
Goal: To provide advice on
long-term energy and climate change strategy for Canada.
On February 16 of 2005, as the Kyoto Protocol took
effect, the Government requested that the NRTEE consider the energy
and climate change issues and challenges that Canada faces and
provide advice on a long-term strategy.
The NRTEE’s long-term advice will examine
how Canada can set itself on a course to achieve deep and long-term
reductions in greenhouse gas emissions while positioning Canada
for maximum economic benefit. It will also examine Canada’s
international role with regard to climate change in the following
three areas: integration of climate change objectives into Canadian
foreign policy, trade and aid objectives; promoting linkages between
Canada’s emerging carbon market and existing/emerging international
ones, as well as ways to shape future global markets for carbon
through domestic instruments and international initiatives; and,
maximizing trade opportunities, in particular developing a strategy
to promote the export of Canadian climate-related technologies.
While some recommendations will apply to the year
2050 and beyond, other issues were more pressing since they related
to options discussed in the fall the United Nations Climate Change
Conference (COP11) held in Montreal, QC.
The NRTEE’s advisory report entitled, Advice
to the Prime Minister in Advance of COP11 was released in
November 2005. The report examined new approaches to governance
in an effort to tackle the important issue of climate change.
The Round Table’s recommendations focused on how to improve
policies in three areas related to climate change: the dangers
of climate change to Canada, engaging the United States and developing
countries that are not participating in the Kyoto Protocol on
Climate Change, and improving Kyoto’s “Clean Development
Mechanism” for carbon trading and sustainable development.
Capital Markets and
Sustainability
Goal: To explore the relationship
between capital markets, financial performance and sustainability
in Canada.
Through the Capital Markets and Sustainability
program, the Round Table will facilitate a strong, neutral and
independent multistakeholder debate on responsible investment
1and corporate responsibility
2 by exploring the links between
sustainability (both environmental and social) and financial performance
in Canada.
The Round Table will address, through a series
of background papers and numerous multistakeholder consultations,
the following questions: Is there a financial return to business
in pursuing the integration of environmental, social and governance
(ESG) factors? Is the pursuit of such policies rewarded through
the investment allocation decisions of fund managers in the capital
markets?
Additional issues the NRTEE will examine include:
what are the consequences for companies that either decide to,
or decide not to, integrate ESG factors into their business decisions;
do capital markets influence such decisions by rewarding leaders
or punishing stragglers; and, what can be done to encourage pension
funds and companies to increase their integration of ESG factors
into their decisions.
Building on the findings and recommendations stemming
from the background papers and consultations, the NRTEE will release
a State of the Debate report in the Fall 2006.
Ecological Fiscal Reform (EFR)
and Energy
Goal: To demonstrate how governments
can use fiscal policy as a strategic tool to simultaneously achieve
environmental and economic objectives.
Fiscal policy is one of the most powerful means
at the government’s disposal to influence outcomes in the
economy. The appropriate signals from governments to industry
and consumers encourage the optimal allocation of resources to
achieve environmental and economic policy objectives at a lower
cost. EFR is an example of a successful economic instruments and
market-based approach to stimulate a more innovative economy.
Working with key stakeholders, the NRTEE released
a State of the Debate report entitled Economic Instruments
for Long-term Reductions in Energy-based Carbon Emissions
report in August 2005. The report synthesizes the major conclusions
of the two year multistakholder process and includes a set of
recommendations aimed at helping the country take a leadership
position in the innovation of technologies that will lay the foundations
of a sustainable energy future, in Canada and around the world.
Conserving Canada’s
Natural Capital: The Boreal Forest
Goal: To examine ways to advance
conservation in balance with economic activity on lands allocated
for resource development in Canada’s boreal forest through
both regulatory and fiscal policy reform.
Canada’s Boreal region comprises 6 million
square kilometers, stretching across the north in seven provinces
and all three territories and contains the last natural, original
forests remaining in the world. It is a vital part of Canada’s
“green account” – the natural capital that makes
the country one of the wealthiest in the world. In terms of its
environmental importance – as a repository for biodiversity
and a counterbalance for carbon emissions contributing to climate
change – the Boreal forest compares with South America’s
Amazon.
The NRTEE’s research emphasized that this
precious resource has been affected seriously in recent decades
by logging, mining and energy extraction and global warming. Planned,
measured, sustainable development of the Boreal is essential to
enable these crucial economic activities to thrive while protecting
the equally crucial natural environment.
The program task force completed and released a
State of the Debate report entitled Boreal Futures:
Governance, Conservation and Development in Canada’s Boreal
in October 2005. The report is the result of extensive research
and multistakeholder input and identifies opportunities for achieving
the balance in the region through initiatives in four interrelated
areas: leadership, education and information; ecological fiscal
reform; innovations in planning and regulatory frameworks; and
institution and capacity building.
1 The NRTEE
defines responsible investment (RI) as the integration of environmental
criteria and social criteria, insofar as the latter underpin the
“social licence to operate” in investment decision
making.
2 In the
context of this NRTEE program, corporate responsibility (CR) encompasses
examination of the same environmental and social issues as RI,
but it deals with these issues within the context of how capital
is allocated within a company.
