Measuring Employment in the Environment Industry

Background
Objectives and scope of the project
Addition of an employment question to the survey

Background

The collection of firms producing environmental goods and delivering environmental services constitutes Canada's "environment industry." This industry has grown significantly in the past twenty years and stands to continue this development in the future as emerging issues such as the level of greenhouse gas emissions are addressed.

The environment industry is not a traditional industry sector and is not currently defined in the North American Classification of Industries System (NAICS). The NAICS classifies firms based on the predominant products they produce or services they offer. For example, a company producing electric pumps would be classified in the electrical products sector. If some of those pumps were used to manage pollutant outputs in a factory, part of that firm's activity could be considered to be environmentally-oriented. Therefore it might be appropriate to classify the firm as part of the environment industry. At the same time, however, the bulk of that firm's outputs is not oriented to environmental ends.

In the absence of a standard classification, the environment industry consists of activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems to waste, noise and eco-systems. The industry also includes cleaner technologies, products and services that reduce environmental risk and minimise pollution and resource use.¹ Statistics Canada's Environment Industry Survey, Business Sector (EIS), follows the above definition in determining its survey coverage. It is a census of all establishments operating in Canada that were involved either in whole or in part in the production of environmental goods, the provision of environmental services and the undertaking of environment-related construction activities.

Detailed information about the Environment Industry Survey can be found in the Definitions, Data Sources and Methods section of the website.

The EIS currently collects data on total revenues, environmental revenues, specific types of environmental activities and environmental export revenues by region. Additional information on environmental revenues by type of clients and by customer location are also collected through the survey. The integrated data are consequently used to profile the economic performance of the environment industry.

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Objectives and scope of the project

An important aspect in the evaluation of the industry's performance is in the area of job creation and employment generation. Related to the challenges involved in classifying firms to the environment industry is the issue of identifying the employees who work in environment-related activities. Currently, the published data on employment include only the total employment of those businesses producing environmental goods and services, i.e., employees who worked in the production/provision of goods and services that have both environmental and non-environmental applications.

This project aims to produce alternative measures of environmental employment by undertaking the following initiatives:

1. Addition of a sub-component employment question to the Environment Industry Survey, 2002.
2. Estimate environmental employment using these approaches:
   1. Estimation of environmental employment using aggregate-level data
   2. Application of firm-level ratios of environmental revenues to total revenues to total employment data of each establishment in the survey
   3. Tabulation of the micro-level data on environmental employment for 1996, 1997 and 1998
3. Development of concordance lists which are required in order to make Input-Output modeling useful as an alternative approach to estimating environmental employment.

Measures 1 and 2 cover environmental employment estimates for the business sector, as defined in the Environment Industry Survey. The coverage for measure 3 includes the business sector and limited research on the non-surveyed portion of the environment industry (government, non-profit organizations, institutions). This project is a preliminary but critical step in the development of information about the environment industry and its place in the Canadian economy. By beginning to refine measures of employment for the industry, the work facilitates the movement towards a more consistent and comprehensive set of employment data for multiple years, both past and future. All estimates of environmental employment in this report will be presented using tables by industry group.

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Addition of an employment question to the survey

The sub-component employment question

In the latest survey cycle, reference year 2002, the questionnaire includes a section on environmental employment. Specifically, the survey asks the following question:

"Of the total employment reported in Box 196, Question I1, please estimate the proportion of your employees who spent any time in the production/provision of environmental goods and services, or environment-related construction services. Your best estimate is acceptable."

Question testing

The testing of the employment questions was conducted during January and February 2003. Respondents were initially contacted via email on January 14, 2003. The following text box presents the content of the e-mail inquiry. Telephone and fax follow-ups continued throughout February in order to obtain necessary information from non-responding firms.

The overall response rate from the question testing was 69%. All of the responding firms indicated that the first question on the definition of a standard full-time work week is consistent with the definition used by their firm. In terms of responses to the second question on the proportion of environment-related employment to total employment, the majority of responding firms stated that they are able to provide the data. However, certain respondents noted that their firm does not specifically track the number of workers that are involved in environment-related activities. In these cases, the respondents indicated that they would try to come up with a reasonable estimate. On this basis, it was decided to include the question on the Environment Industry Survey, 2002.

Data collection and processing

The questionnaire design was completed by the end of February 2003. The final version of the questionnaire and the accompanying Guide were printed at the end of March 2003. The survey was mailed on April 25, 2003. The required capture and edit system has been tested. The data collection and processing period will be carried out between May and October 2003. This phase includes all respondent follow-ups, questionnaire imaging, and data capture. Preliminary survey results will be released upon completion of the editing and imputation phase of the survey.

The measures