1. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 1

2. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 2 NATURAL CAPITAL: NEW MEASURES TO MONITOR THE ECONOMY'S ECOLOGICAL FOUNDATIONS Carolyn Cahill, Senior Policy Advisor National Round Table on the Environment and the Economy

3. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 3 Todays Objectives Describe the role of these indicators Explain the focus on capital and ecosystem services Describe some lessons learned, including the importance of data structures

4. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 4 The NRTEE Arms length advisory agency to the Canadian federal government Members from different regions and sectors Provides advice on how to balance concern for the environment and the economy Try to move beyond dept and sectoral silos Dont have to push for consensus

5. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 5 Senate House of Commons Senate House of Commons Prime Ministers Office Privy Council Office JUDICIARY Governor General SOVEREIGN PARLIAMENT National Round Table on the Environment and the Economy Supreme Court of Canada Federal Court of Canada Tax Court of Canada Minister of the Environment Minister of Foreign Affairs Minister of Finance Minister of Natural Resources Minister of Health Minister of Industry (Statistics Canada) Minister of Industry (Statistics Canada) Department of Environment Department of Finance Department of Natural Resources Department of Health Department of Industry Department of Foreign Affairs and International Trade Prime Minister Ministry Prime Minister Ministry

6. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 6 Indicators are an act of translation Simple signals in a complex world Need to know who youre speaking to, and for what reason – In this case, audience was the Canadian Minister of Finance….

7. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 7 The Mandate … understanding how ecological functions contribute to economic activity is an essential part of managing responsibly for future generations. Paul Martin, May 2001

8. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 8 Role of the Indicators Supplement (not replace) macro-economic indicators to: Help answer the question are we living at the expense of future generations? Point out these issues in an economic forum, gain a new context, new audience. Required characteristics: link to economic context, small set, easy to understand

9. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 9 Why the Focus on Capital? A way of expressing SDs concern with inter-generational equity A way of illustrating the dependence of the economy on a broad range of capital, particularly ecosystem services.

10. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 10 Indicators (I) Air Quality (population weighted exposure for ground-level ozone) – 3% increase since 1986 Water Quality (based on exceedances of surface water quality guidelines) – 22% of water bodies poor or marginal in 2002-2003 Greenhouse Gas Emissions – 18.5% increase since 1990

11. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 11 Indicators (II) Forest Cover (based on satellite imaging) – 392 hectares in 1998 Extent of Wetlands (based on satellite imaging) – medium term option only Educational attainment (% of working age popn with upper-secondary and tertiary qualifications) - from 43% in 1990 to 55% in 2000

12. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 12 Lessons Re: Scope Small set of indicators – cant cover the necessary complexities and are only illustrative. Fine line between simple and simplistic Genuine disagreements: important to discuss to continue the development of this issue. Inclusion of intra-generational equity Expressing indicators in monetary terms International/trade context

13. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 13 Lessons Re: Data Capital indicators arent enough. Need data structures to better analyse the link between todays economy and state of all types of capital. National data picture patchy and incomplete. Few real indicators (i.e., few time series).

14. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 14 Final Result Small number of illustrative indicators of natural and human capital – 3 indicators officially adopted in 2003. Need for the expansion of the System of Natural Accounts Need for better national environmental databases.

15. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 15 Last Thoughts Focus tends to reside on picking the right indicators. Good data structures will allow the development of indicators for different audiences, different purposes. Perhaps the best approach to a national approach to performance indicators that is both integrated and flexible.