The global market for technologies that reduce greenhouse gas (GHG) emissions is exploding, but Canadian businesses have failed to seize new - or even maintain existing - opportunities to sell such “climate-friendly” technologies globally. Despite this poor overall performance, Canada has global strengths in several specific climate-friendly technologies, according to a Conference Board of Canada report, Global Climate-Friendly Trade: Canada’s Chance to Clean Up.

“The good news is that Canada does certain things well,” said Danielle Goldfarb, Associate Director, International Trade and Investment Centre and author of the report. “Canada will not be a leader in everything, but it is not too late for this country to be a leader in some technologies, parts of technologies, or related services. We have areas of relative strength due to our geography and resource base that we could harness to become world leaders in specific climate-friendly technologies and services.”

Global trade and investment in climate-friendly technologies is growing rapidly. The worldwide industry is estimated to become the third largest in a decade’s time. In order to stabilize GHG emissions, the world will need to further accelerate trade and investment in such technologies. Examples include: wind and solar power, hybrid cars, more efficient electrical appliances, and waste minimization technologies. Carbon capture and storage, tidal and wave energy, and advanced electric cars are examples of technologies that are expected to become available soon.

World trade in climate-friendly technologies grew by 10 per cent on average annually over 2002-08. (European and Asian businesses and governments were the leading traders, and drove this rapid global trade growth. China in particular had over 40 per cent average annual growth over that period.) In contrast, Canada’s climate-friendly exports did not grow at all during this six-year period. When inflation is accounted for, Canadian exports actually fell.

Moreover, while Canadian businesses are slowly increasing their adoption of other countries’ climate-friendly technologies, they are doing so at a much slower rate than the world average.

Yet Canada also has certain strengths in the global market. These tend to be in areas associated with the country’s geography and resource base, notably waste management and energy technologies. The report finds that Canada “overtrades”, or has relative global strengths, in 13 categories of climate-friendly technologies.

With clear policy signals and more globally oriented business strategies, Canada can become a world leader in specific climate-friendly technologies and related services. To achieve this, governments should eliminate domestic and international barriers to developing, trading, and investing in climate-friendly technologies. Canadian businesses need to identify technologies, parts of technologies, and related services in which they have the potential to be world leaders, and become more willing to adopt global technologies in other areas.

The report is published by the Conference Board of Canada’s International Trade and Investment Centre. The centre is intended to help Canadian leaders better understand what global economic dynamics - such as global and regional supply chains, domestic barriers to trade, US policies, or tighter border security - could mean for public policies and business strategies.

SOURCE: CONFERENCE BOARD OF CANADA