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In light of the significance of GHG technologies to Canada’s GHG
emissions-reduction plan and the public policy agenda, this article evaluated
the state of GHG technology adoption and availability in Canada. It addressed
several policy-related issues concerning businesses’ investments
in GHG technologies, domestic and international market access for Canadian
GHG technology producers and the process of innovation for GHG technology
development. The main research findings are summarized in this section.
These findings respond to the questions asked in the Introduction.
How heavily have Canadian businesses invested in GHG technologies to
reduce their emissions?
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Industry spending on GHG technology made up a relatively
small proportion of total expenditures in 2002.
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Canadian businesses in 16 primary and manufacturing industries
spent $1.1 billion on GHG technologies in 2002. The bulk of expenditures
were made by three large industrial emitters: oil and gas extraction;
pulp, paper and paperboard mills; and electric power generation, transmission
and distribution.
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Examples of the most common GHG technologies adopted by businesses
were: solar energy, cogeneration, alternative fuel and waste-to-energy.
How successful are Canadian suppliers of GHG technologies? Have they
been able to access both domestic and international markets?
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GHG technology suppliers form a relatively new segment of
the environment industry. Some GHG technologies, including fuel cells
and
methane capture systems, started out as demonstration projects and
have become viable revenue sources with both domestic and international
applications.
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Businesses earned $362.3 million in revenues from the sales
of GHG technologies in 2002, much less than from other traditional
environment
industry segments, such as recyclable materials, waste management,
water pollution control and air pollution control.
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Between 2000 and 2002, the 28% increase in GHG technology
revenues surpassed the revenue increases in other well-established
markets, such
as water and air pollution control, illustrating that the GHG technology
market is less saturated and offers room for growth.
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Canadian suppliers have started tapping into international
markets for GHG technologies. Exports of $139.5 million accounted
for 38% of GHG
technology revenues in 2002.
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Domestic markets continue to provide opportunities for Canadian
GHG technology producers. Businesses that invested in GHG technologies
imported most of their GHG systems and equipment.
How extensive are business R&D and innovation activities that are
related to GHG technology development?
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In 2002, R&D expenditures on renewable resources and energy
conservation made up 30% of total R&D spending on energy. GHG
technologies must compete with conventional technology areas such
as fossil fuels
as
well as energy transportation and transmission for a share of this
spending.
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R&D for GHG technology development was carried out mainly
by these industries: management, scientific and technical consulting services;
scientific R&D services; architectural and engineering services;
and machinery manufacturing.
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Financial support for R&D to develop GHG technology originated
mainly from the federal government, while the parent and affiliated firms
tend to be the major source of industrial R&D funding.
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From 2000 to 2002, only 2% of firms involved in the production
of environmental goods and services were GHG product innovators.
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Primary and manufacturing businesses cited the high cost of equipment,
lack of financing, and lack of available technology as the three
most common barriers to the adoption of GHG technologies. These barriers
help
to explain the most common obstacle faced by environmental firms
that
were involved in GHG technology development—the lack of market
demand.
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Other common problems and obstacles for environmental firms
involved in GHG technology development were lack of financing and the
high cost
of developing the technology. These translate to the relatively high
degree of uncertainty in producing and marketing GHG technologies.
This could
be why most firms that carried out GHG technology innovation activities
in 2002 had already enjoyed some success in previous attempts at GHG
technology
innovation.
Statistical monitoring of GHG technologies is still relatively new. The
current data collected by the Survey of Environmental Protection Expenditures
and Environment Industry Survey serve as benchmark information to evaluate
GHG technology adoption and availability in Canada. Future survey results
will be critical in assessing Canada’s progress in supporting the
development, commercialization and adoption of GHG technologies.
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