Canada's Conservative government has long made sound economic management the centerpiece of its claim to office. Now, with the country's outlook showing mixed signals and a federal election coming next year, I'm looking at ways to measure the health of the economy, and what each says about Canada's.
It's increasingly myopic to talk about the economy without also talking about the carbon emissions associated with economic activity. Extreme weather risks disrupting every country's economic policies and stability, not least Canada's. At the same time, the great mistake of environmentalists is divorcing concerns over the planet from the inherent desire to maintain a high standard of living.
So talking about climate and the economy means judging the Conservatives on more than just the tons of carbon Canada releases into the atmosphere each year. It also calls for using what may be a more important indicator: carbon intensity, or the tons of carbon emitted per dollar of economic output.
Trends in carbon intensity are important because they measure the country’s progress toward the ultimate goal of climate activists: not just cutting emissions, but also doing so without sacrificing material well-being. A government making progress toward lower carbon intensity can credibly claim a good environmental record.
That is not a claim the Conservatives can easily make. In 2006, Canada emitted five tons of carbon for every U.S. $10,000 of economic output, according to data from the U.S. Energy Information Administration that controls for price differences between countries and over time. That was 9 percent higher than in the U.S., and 31 percent higher than the average among Organization for Economic Cooperation and Development countries.
By 2011, the latest year for which the EIA has published cross-country data, Canada’s carbon intensity had fallen to 4.4 tons per $10,000, a reduction of about 12 percent. But both the U.S. and the OECD average dropped by almost 10 percent over the same period, meaning economic activity in Canada is still unusually carbon-heavy by comparison.
In fact, only four developed countries -- Estonia, South Korea, Australia and Poland -- had carbon intensities higher than Canada’s in 2011, a number that is unchanged since 2006. Here's how Canada compares with other major industrialized nations:
Looming over those figures is the effect of increased development of the oil sands. By the government’s own estimates, that increase will push Canada’s carbon emissions back up in absolute terms, putting the country out of reach of the commitment Prime Minister Stephen Harper made in 2009 to cut emissions 17 percent below 2005 levels by 2020.
But just as worrisome, it could slow or even reverse the decline in Canada’s carbon intensity levels, moving it further away from other developed countries. It is fine to brag about becoming an energy superpower, but seeking that mantle ought to include tackling the environmental consequences with a similar amount of bravado. How to do that should be part of any meaningful debate over Canada's economy.
(Christopher Flavelle is a member of Bloomberg View's editorial board. Follow him on Twitter at @cflav. This post is adapted from an article published in the April edition of the Literary Review of Canada.)
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