Program Research

The ESDI Steering Committee is mandated to develop a small, focused set of approximately five to ten indicators, most of which must be ready in the short-term. Six groups of technical experts were asked to assist the ESDI Initiative by providing a realistic assessment of the state of existing data and methodologies, and to suggest specific indicators that adhered to the capital approach. A description of the cluster group process, their mandates, and their membership are included in other sections of this site.

The following document briefly describes the indicators that these groups are submitting to the ESDI Steering Committee for their consideration. Although the cluster groups were asked to recommend any promising indicator, this document provides an overview of what the cluster groups believe are feasible capital indicators at the current time.

Categories of capital indicators

During the work of the cluster groups, a few common categories of indicators emerged from the application of the capital framework. The following lists these categories starting with the most direct measure of capital stocks (quantity) and proceeding to increasingly less direct measures of capital. It is important to note that a less direct measure of a capital stock is not necessarily less valuable than a more direct measure. Also, a specific indicator can fall into more than one indicator category.

1. Quantity of capital stocks - these indicators can either be in monetary or physical units.

2. Quality of capital stocks - these indicators are particularly related to the long-term sustainability of the stock (e.g., measures of agricultural soil health).

3. Outcomes of ecosystem services - these indicators are related to 'free' services provided by the environment and considered essential to the long-term sustainability of the economy (e.g., the ability of an ecosystem to assimilate pollutants).

4. Ecosystem health - these indicators reflect the state of the ecosystem and its ability to continue to provide ecosystem services. Recommendations falling in this category include indicators of biodiversity and habitat quality.

5. Pollutant loadings - these indicators provide a sense of the demand for ecosystem services. Indicators of this sort say nothing about the actual quantity or quality of capital available, however, they measure how the use of the capital evolves over time. Presumably, if the demand for capital is steadily increasing, the point will eventually be reached where the demand for the service will outstrip the capacity of the capital to provide the service.

Summary of recommendations from the cluster groups

The following section summarizes the indicator recommendations developed by the cluster groups for consideration by the ESDI Steering Committee. Unless stated otherwise, all of the indicators listed below currently seem to be feasible in the short term. However, researchers for each cluster group are presently examining them in detail, and they will be described fully in the cluster groups' final reports that will be completed in March 2002.

Quantity of capital stocks

Capital stock: Water
Indicator: Measure of water scarcity

Based on Statistics Canada's Canadian Water Account (which is presently under development and at the current time includes only surface water), this indicator consists of an aggregation of the differences between the demand for water (based water use intensity coefficients that relate GDP to water use by industry) and the surface water availability for a given area. In a related, longer-term recommendation, the cluster group recommended that groundwater stocks should be added to the Canadian Water Account.

Capital stock: Dependable agricultural land
Indicator: Change in stock of agricultural land / Crop production on marginal land

This indicator measures the area of dependable agricultural land (millions of hectares) available in Canada and compares this with the area of land actually under cultivation. In doing so, the indicator reports on the extent to which agricultural production relies on marginal land. This indicator is based on the Canada Land Inventory, and includes the inventory's category 1, 2 and 3 agricultural land.

Capital stock: Dependable agricultural land
Indicator: Amount of agricultural land converted to urban land

This indicator was selected as an example of irreversible change in land use and cover that could affect the long-term sustainability of the Canadian economy. It measures the portion of urban land that occupies dependable agricultural land (classes 1 through 3 in the Canada Land Inventory) in Canada.

Capital stock: Fish stocks
Indicator: Percentage of fisheries that are sustainably exploited

This indicator will identify the percentage of fisheries and marine resources whose actual exploitation rate is greater than their target (and by design sustainable) exploitation rate. This indicator was proposed as a proxy for fish stocks in the absence of reliable and comprehensive stock data.

Capital stock: Forest ecosystems (including both commercial and non-commercial forests)
Indicator: Total forest area

The cluster group cautioned that this would be a very stable indicator in the short-term, with significant changes occurring only on a decade-to-decade basis. For this reason, the cluster group recommended that this be used as a supporting indicator. As a longer-term recommendation, the group suggested that further development of Canada's national forest inventory is necessary to provide an accurate baseline from which to measure change in forest area and to differentiate amongst different forest types.

Capital stock: Reserves of fossil fuels, minerals and metal resources
Indicator: Dollar value of non-renewable resources

This indicator could be used to calculate a total national wealth indicator, which would aggregate monetized values of the stocks of all types of substitutable capital. The indicator will include both energy (crude oil, natural gas, crude bitumen [tar sands] and coal) and minerals (potash, copper, gold, iron, lead, molybdenum, nickel, silver, uranium and zinc). Because of large annual fluctuations in resource prices, the indicator will be calculated using five or ten-year price averages and could be presented with the annual quantities of stocks presented on the same graph as the annual value of the stocks, providing an indication of whether the value of resource wealth went up because of increased market prices or because of increased quantities of reserves.

Capital stock: Fossil fuels reserves
Indicator: Combined stocks of all fossil fuels

This indicator would aggregate stocks of economically recoverable fossil fuels (including conventional oil, non-conventional oil, natural gas and its associated liquids, and coal) using a common energy unit (e.g., petajoules).

Quality of capital stocks

Capital stock: Agricultural land
Indicator: Soil residue cover

This is an indicator based on an index of the average number of bare-soil days that account for the number of days per year when soil is left exposed under specific cropping and tillage practices in various regions of Canada. A decline in the number of bare-soil days over time indicates an improvement in soil cover and less likelihood that soils will become degraded or contribute to the degradation of the broader environment.

Capital stock: Agricultural land
Indicator: Soil organic carbon

This indicator is based on a model that predicts carbon exchanges and the rate of change of organic carbon matter. It measures the rate of change in soil organic carbon from 1970 to the present and will project this rate to 2010. Estimates are given in kilograms per hectare per year.

Capital stock: Agricultural land
Indicator: Nutrient balance for nitrogen

This indicator monitors the deficiency or excess of nutrients within soils. It is an estimate of the quantity of nitrogen remaining in the field after harvest (i.e., the difference between the amount of nitrogen that is available to the growing crop from all sources and the maximum amount removed in the harvested portion of the crop under average conditions). Amounts that are in excess of crop requirements pose a risk, as they may run off the site, putting other ecosystem components at risk.

Capital stock: Commercial forests
Indicator: Percentage of wood supply from certified forests

This indicator will measure the percentage of Canada's annual wood supply that is certified either through the Forest Stewardship Council or the Canadian Standards Association. This indicator is not a measure of ecosystem health for all of Canada's forests, but represents a measure of how well Canada's commercial forests are being managed. This indicator provides a direct link between economic activity and the sustainability of the economy.

Capital stock: Water quality and freshwater fish health
Indicator: Mercury in fish tissue

Mercury in fish varies by region and species and is the main food source of mercury exposure to humans and wildlife. Mercury bio accumulates and can result in mercury poisoning in humans. Although mercury is a naturally occurring substance, anthropocentric sources contribute to high mercury levels in ambient waters. The presence of mercury in fish tissue indicates a risk to human health as well as a risk to ecosystem health. In effect, the level of mercury in fish provides a measure of water quality and freshwater fish health.

Capital stock: Human capital (education)
Indicator: Literacy and numeracy

Literacy is calculated as the percentage of the population that scores a three or above (on a scale of 1 to 5) in tests measuring prose, document, and quantitative literacy. This indicator of the state of human capital may show little movement in the short-term (although a stable signal could be interpreted as a good sign). However, this indicator could be of greater relevance when examined in the context of international comparisons. It could also show variations from region to region or amongst sub-populations.

Capital stock: Human capital (education)
Indicator: Educational attainment of the population aged 25 - 64

This indicator, in combination with the literacy and numeracy indicator, shows a balance or imbalance in human capital stock and would be most relevant as a trend analysis over time. It could also be compared to a benchmark or international standard and be used to compare Canada's educational attainment relative to other OECD countries with whom Canada's human capital will need to compete. Measures of educational attainment are the most commonly-used proxies for the state of human capital.

Capital stock: Human capital (education)
Indicator: Child educational potential (longer-term indicator)

This summary measure of human capital potential is particularly useful for measuring sustainable development. The existing test that measures child educational potential is being improved and will eventually provide better predictors of the future educational achievement of the population.
Capital stock: Human capital (health)Indicator: Health adjusted life expectancy (HALE) This indicator provides a measure of both the quantity (in years) and quality of life. It is a summary outcome indicator that captures the impacts of all determinants of health. A decline in HALE indicates a decline in the health and ultimately the size of the population.

Outcomes of ecosystem services

Service from capital stock: Provision of clean water for humans and ecosystems
Indicator: Surface water quality

This indicator would assemble key surface water quality measurement guidelines for a core set of chemicals, organic substances, metals, viruses, radioactive materials and potential pollutants typically monitored and measured in surface waters by provincial governments across Canada. The indicator will aggregate deviations from the CCME's highest water quality standards (i.e., for aquatic habitats). The indicator will therefore have a bearing on the quality of water to provide ecosystem services and ecosystem health, as well as its fitness for human consumption.

Service from capital stock: Provision of clean water for human health
Indicator: Incidence of water-borne diseases

This indicator measures the incidence of waterborne diseases in Canada. The unit of measure can be either the incidence rate, expressed as the number per 100,000 people, or the actual number of cases. The indicator links water quality with human health and provides an indication of the state of water quality control in Canada, it links human use and water interactions with health outcomes. The indicator is proposed as a core indicator because is has excellent national coverage, is based on clinical procedures and a health surveillance system, and sends a clear message about the risk associated with water supply and ambient surface water quality.

Service from capital stock: Provision of clean water for human health
Indicator: Municipal population served by wastewater treatment

This indicator measures the degree to which Canada's municipal population is served by wastewater treatment by revealing the amount of communities that meet a certain level of wastewater treatment (e.g., secondary treatment). The notion behind the indicator is that an increasing level of treatment for an increasing percentage of the municipal population is a desirable societal goal, impacting both human and ecosystem health.

Service from capital stock: Provision of clean air
Indicator: Air pollutant population exposure

This indicator will be population weighted and, in the short-term, will include an aggregation of the deviation between a reference point and actual exposure to ozone and particulate matter (both pollutants weighted equally). The reference point has not yet been determined, but the group's researcher will test this indicator to determine if it is preferable to use no observable effects levels or Canada-Wide Standards.

Service from capital stock: Provision of clean air
Indicator: Level of acid deposition on ecosystems

This indicator will be calculated as an aggregation of relative deposition rate of sulphate/nitrate loading weighted for the sensitivity of the site compared to the natural deposition rate of the area.

Service from capital stock: Carbon storage
Indicator: Level of carbon storage in Canada's forests (longer-term indicator)

This indicator would measure the carbon storage of forests in Canada. By 2008, the Canadian Forest Service will have an updated reporting mechanism on the carbon sequestration of Canada's forests that will be used for this indicator. An indicator of carbon storage already exists in the Canadian Council of Forest Ministers' National Status 2000: Criteria and Indicators of Sustainable Forest Management in Canada that could be used in the short-term, however, the indicator is based on many assumptions because of the limits of existing data.

Service from capital stock: Climate stability
Indicator: Average national temperature

There is a tremendous delay effect between human influences in the climate system and identifiable changes and there is a very large disconnect between the cause and effect of climate changes. As a result, an indicator of average national temperature would be relevant on a decade-to-decade basis. In order to take into account the noise fluctuations that would be seen in this indicator on a yearly basis, a five or ten year rolling average national temperature relative to the Environment Canada's 1951- 1980 climate normals will be used.

Ecosystem health

Indicator: Index of vulnerable, threatened and endangered species

This national indicator will be the sum of the number of species on the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) list in each of the three categories: vulnerable, threatened, and endangered. This indicator can be a total, or can focus on marine and terrestrial species.

Indicator: Areas protected from industrial activity

This indicator would track the area of protected areas (IUCN classification 1 - 3). Protected areas can serve as a proxy indicator for ecosystem health by sending a signal about the long-term protection of biodiversity, as represented by the sum total of all ecosystems, animal and plant species, and ecological processes of protected areas. As a medium-term improvement to this indicator, the group recommends the addition of private stewardship and land trusts to the existing protected areas.

Indicator: Total area of natural ecosystems without roads

This indicator will measure the extent of fragmentation of Canada's forested lands caused by roads. Roadless areas can serve as a proxy indicator for ecosystem health by sending a signal about the long-term protection of biodiversity, as represented by the sum total of all ecosystems, animal and plant species, and ecological processes of roadless areas.

Pollutant loadings (demand for ecosystem services)

Indicator: SOx/NOx emissions

Acid generation potential, fine particle generation potential, and ozone generation potential can all be linked to measurements of SOx/NOx emissions. The amount of SOx/NOx emissions also provide a measurement of the demand placed on the environment to clean the air for both human health and for ecosystem health.

Indicator: Total greenhouse gas emissions

Greenhouse gas emissions provide a measure of the demand for the ecosystem services provided by the atmosphere that result in a stable climate. The indicator will be measured in CO₂ equivalents.