counting canada’s natural capital: assessing the real value of canada’s boreal ecosystems Note on the 2009 update This updated report shows major changes that increase the original ecological services product (ESP) to gross domestic product (GDP) value ratio from 2.5 to 13.8.The changes reflect the inclusion of a new annual value for stored carbon services reported as an annuity and a revised social cost of carbon values using current estimates. Changes to GDP figures are based on revised Statistics Canada GDP sectoral values (from $48.9 billion in the 2005 report to $62.0 billion in the 2009 update; after deducting environmental costs and government subsidies, the net market value estimates go from $37.8 billion to $50.9 billion). The changes in nonmarket ecological service values jumped from $93.2 billion to $703 billion, primarily due to the revaluation of stored carbon in forests and wetlands, which (as noted in our report) is now $582 billion (based on an amortized annuity calculation of stored carbon) versus our original net carbon sequestration value of $1.85 billion in the 2005 All cover photos: Garth Lenz report.This change is explained in our methodological description and footnotes in the report. All other ecosystem service values remain the same as those reported in 2005. Counting Canada’s Natural Capital: assessing the real value of canada’s boreal ecosystems Mark Anielski and Sara Wilson1 Research Associates The Pembina Institute About the Canadian Boreal Initiative The Canadian Boreal Initiative was created in response to both the opportunities and threats facing Canada’s Boreal region. Based in Ottawa, the CBI brings together a wide range of conservation organizations, First Nations, industry leaders and others to create new solutions for Boreal conservation and sustainable development. It supports scientific research to advance thinking on conservation-based planning for the Boreal region, and acts as a catalyst by support- ing a variety of on-the-ground efforts across the Boreal by conservation groups, First Nations and others. In 2003 the CBI convened the Boreal Leadership Council, an extraordinary group of conservation organizations, First Nations and resource companies. In concert with the members of the council, the CBI created and launched the Boreal Forest Conservation Framework – a vision for the protection and sustainable development of Canada’s entire Boreal ecosystem. www.borealcanada.ca About the Pembina Institute The Pembina Institute is an independent, not-for-profit environmental . policy research and education organization. Founded in Drayton Valley, Alberta, the Pembina Institute has a multidisciplinary staff of more than thirty, with offices in Drayton Valley, Calgary, Edmonton,Vancouver, Ottawa and Toronto. The Pembina Institute’s major policy research and education programs are in the areas of sustainable energy, climate change, environmental governance, ecological fiscal reform, sustainability indicators, and the environmental impacts of the energy industry. ussi disponible en Français www.pembina.org A 1 The principal authors contributed equally to this study. ISBN 978-0-9733409-9-0 COUNTING CANADA ’S NATURAL CAPITAL : ASSESSING THE REAL VALUE OF CANADA ’S BOREAL ECOSYSTEMS About the authors Mark Anielski Mark Anielski is an ecological economist, entrepreneur, Alberta Government in the ministries of Treasury, professor, author, and president of his own consulting Environment, and Forestry, Lands, and Wildlife, con - firm, Anielski Management Inc., which specializes in ducting economic analysis of environmental policies. measuring the sustainability and well-being of commu - From 1995 to 1999, he was part of Alberta Treasury’s nities and organizations. Since the early 1990s, Mark performance measurement team, which designed and has been pioneering the development of natural capital implemented Alberta’s internationally recognized per - accounting systems in Alberta and Canada and is cur - formance measurement system (Measuring Up) and rently a senior adviser to the Chinese Government on three-year government business planning process. green gross domestic product (GDP) accounting for Since leaving the Alberta Government in 1999, he China. He has considerable experience in public policy has dedicated his work life to developing alternative z n e L h t r a G analysis of natural resource, energy, royalty, and fiscal measures of economic progress, such as the US policy issues in both the public (Alberta Government) Genuine Progress Indicator (GPI), the Alberta GPI and private (GPC—Government Policy Consultants) Sustainable Well-being Accounting System, Ecological sectors. His expertise is varied and broad; it includes Footprint Analysis, and other quality-of-life indicator accounting for sustainable development, natural systems. resource accounting, public policy analysis, business planning, and performance measurement. His new Genuine Wealth model, which provides an accounting framework for measuring and managing the From 2000 to 2003, he served on the National Round total human, social, and natural wealth of communities, Table on the Environment and the Economy and the is currently in development. Mark is president of the Environment and Sustainable Development Indicators Canadian Society for Ecological Economics, a Senior Steering Committee, which developed the first set of Fellow with the Oakland-based economic think-tank sustainable and environmental performance indicators Redefining Progress, and an associate of the Pembina for Canada. Mark teaches corporate social responsibility Institute for Appropriate Development. at the University of Alberta’s School of Business. He also teaches a course in sustainable economics at the Mark has a master’s degree in Forest Economics and Bainbridge Graduate Institute near Seattle—the first two bachelor’s degrees, one in Economics and the MBA program in sustainable business practices and other in Forestry, all from the University of Alberta. ethics. Prior to starting his own consulting practice, Mark lives in Edmonton with his wife, Jennifer, and Mark spent 14 years as senior policy adviser to the their two young daughters. PEMBINA INSTITUTE CANADIAN BOREAL INITIATIVE COUNTING CANADA ’S NATURAL CAPITAL : ASSESSING THE REAL VALUE OF CANADA ’S BOREAL ECOSYSTEMS Sara Wilson Sara has training in environmental economics from the Smithsonian Institution in Washington, DC, and Sara Wilson is an ecological economist and policy a background in economic applications such as cost- analyst who works as principal consultant for benefit analysis and full cost accounting. For example, Natural Capital Research and Consulting. She has she has authored The Costs and Benefits of Sewage compiled, analyzed, and developed social, economic, Treatment and Source Control for the Halifax Harbour and environmental indicators for provincial account - and The GPI Water Quality Accounts in Nova Scotia. ing purposes, and developed market and non-market valuations for ecosystem services such as carbon Sara has provided research and policy development sequestration and water quality. Sara has also services for the National Round Table on the developed environmental policy alternatives, Environment and the Economy, the Pembina Institute including initiatives that address climate change, for Appropriate Development, Genuine Progress Index pollution prevention, ecosystem conservation, and for Atlantic Canada, the David Suzuki Foundation, ecological fiscal reform. z n e L h t r a G Sara was a lead author on the first provincial Genuine Rainforest Solutions Project, the Canadian Boreal Progress Indicator (GPI), namely the Alberta Initiative, and the Green Budget Coalition. As a result, Sustainability Index—a set of social, environmental, her work includes projects in the forestry, energy, and economic accounts that evaluate the sustainability fisheries, agriculture, and mining sectors in Canada. of Alberta’s natural, social, and human capital; and the Nova Scotia GPI (i.e., The State of Nova Scotia’s Sara has a master’s degree in Science in Forestry Forests: Ecological, Social and Economic Values (Mixed Boreal Forest Disturbance Ecology), a of Nova Scotia’s Forests). She has also authored an certificate in Economics and Policy Solutions for assess ment of the measures of community well- Ecosystem Conservation, and a bachelor’s degree being proposed for land-use planning in the Central (honours) in International Development Studies Coast, North Coast, and Haida Gwaii/Queen and Environmental Geography. Sara currently lives Charlotte Islands; and the GPI accounts on forests in Gibsons, BC, with her husband, Faisal, and their and water quality. two children. CANADIAN BOREAL INITIATIVE PEMBINA INSTITUTE COUNTING CANADA ’S NATURAL CAPITAL : ASSESSING THE REAL VALUE OF CANADA ’S BOREAL ECOSYSTEMS Acknowledgements The authors would like to thank the Canadian Boreal (World Wildlife Fund), Kevin Kavanagh (World Initiative for its generous financial support of this Wildlife Fund), Rick Moll (Statistic Canada), Gerry project and, specifically, Cathy Wilkinson and Matt Gravel (Statistic Canada), Robert Smith (Statistic Carlson for their leadership and guidance throughout Canada), Gary Stewart (Ducks Unlimited Canada), this two-year project. We would also like to thank Glenn Mack (Ducks Unlimited Canada), Silvie Forest Mark Winfield of the Pembina Institute for Appropriate (Ducks Unlimited Canada), Chris Smith (Ducks Development, who shepherded this project from its Unlimited Canada) Dr. Werner