Measuring Natural Capital Productivity in Canada
Sustainable Prosperity's goal in this project is to shed light on the relationship between economic activity and the environment by exploring the linkages between changes in Canada’s natural capital and its measures of productivity generally and, more specifically, through the construction of an environmentally adjusted measure of productivity. While it is now commonly accepted that economic activity and the state of our environment are linked, many economic measures still fail to incorporate the environment – both the things we draw from it and the pollution we release into it. With measures of productivity including natural capital, Canada would be able to better understand these linkages. This, in turn, would help identify strategies that can help the country become more efficient and innovative in the use and protection of natural capital, and thus more productive and more prosperous. Using the forestry sector as a case study, this project aims to construct an environmentally adjusted measure of multifactor productivity. In doing so, another layer of understanding will be added to the environmental and economic performance of this sector.
Midsummer Analytics' Principal, Robert Smith, is participating as a member of the Advisory Board for the project. He is bringing his knowledge and expertise in natural capital accounting and productivity measurement to bear on the proposed conceptual framework and methodology and on the identification of appropriate data sources. He is also actively involved in the discussions regarding the policy relevance of environmentally adjusted productivity measures.