Canada’s carbon future

Canada has made a commitment to move to net-zero carbon emissions by 2050. This raises two fundamental questions: can the available technologies help us meet our goal or do we need new technologies that have yet to be proven?  In economic terms, there is a possibility frontier that reflects our current capacity to produce and a corresponding carbon footprint. We have both the opportunity to make better use of existing technologies that would move us towards the possibility frontier and to develop new ways to do things that expand the frontier.  The global dialogue and Canadian policy are not overly clear which objective they are pursuing. While the outcomes are similar, the methods vary markedly.

Let me give you an example from our research (Awada, Nagy and Phillips, 2021).  Canada was an innovator in the science of dry land agriculture. In addition to new cultivars adapted to our soil and climatic conditions, we also invented, adapted and adopted some of the world’s first and best farming practices (such as crop rotations) and related technologies (especially air seeders that underpin the zero till revolution in agriculture).  While many of these improvements were driven by the search for yield (which expands our production), they have also reduced the emissions of carbon and other greenhouse gases. Our paper in PLOS One^[1] suggests that the combination of these two have capped GHG emissions in the Canadian Prairies and in recent years actually turned the crop sector in Alberta and Saskatchewan into a net carbon sink.  The development of these new tools in the first instance expands our possibilities, but realizing those possibilities requires a lot of hard work to adapt and adopt them by users. Moreover, that technology is now available to farmers everywhere in the world to use. This is one example of how we can do better by diffusing the best-available technology rather than focusing on investing to generate something new. 

While we can see the impact of both innovation and diffusion in agriculture, it is less clear, to me at least, what is the appropriate balance between invention and diffusion in other GHG emitting sectors?  How much should we invest in the development of new products and process and how much should we incentivize industry to search out, trial, adapt and adopt the best available technology from wherever it comes?

This in many ways is a recalibration of our discussion about innovation.  Too often we think of innovation as the search for some type of new ‘tech’.  The more general definition is that it is the development of some new product, process, technology, market or organization. The often-overlooked aspect of innovation is that it is more than something new to the world—it also includes the diffusion to others, so that it is also something new to a sector, new to a region or new to a firm.

World firsts are nice, but the real returns come from the uptake and use by everyone.  The challenge is that most of our money and effort is directed to inventing something new and efforts to adapt and adopt something that someone else has invented are largely unsupported.

Canada differentially invests its resources in upstream research by university researchers, with a concomitant supply-push strategy focused on universities and inventors commercializing their own invention (industry as a whole invests less in innovative effort in Canada than in most OECD counties).  This focus on upstream research and on a narrow and linear pathway to the market limits our potential to achieve our ambitious climate goals.

Somewhat counterintuitively, programs that explicitly support adaptation and adoption of existing technologies get very high returns but are chronically underfunded. Canada’s Industrial Research Assistance Program (IRAP) is a highly valuable partner helping firms and sectors move closer to the production possibilities frontier by adapting and adopting existing technology to their specific needs.  IRAP is not about inventing anything new. It makes firms stronger and bigger by helping them put together the right human capital with the right technologies, so that production can be moved to a higher order of competitiveness. While this program delivers the goods, it has trouble competing for funds with programs offering to deliver exciting new inventions. 

We need to broaden our focus.  Adoption and diffusion may be less glamorous, but they are the pathway to impact.  Adaption and adoption involves a lot of trialing. The boring nature of trialing puts it at a competitive disadvantage to exciting world of discovery. Furthermore, while the returns are demonstrably higher, it takes more work and there are lots of small failures.

In a sentence:  putting all our eggs in the invention basket and all the diffusion efforts on the inventor and not on the buyer, is the wrong end of the supply chain. We can and should be more strategic in our pursuit of the Net Zero goal.

¹ Contribution of land use practices to GHGs in the Canadian Prairies crop section (plos.org) https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0260946

Dr. Peter W.B. Phillips is the director of the Centre for the Study of Science and Innovation, and a distinguished professor in the Johnson Shoyama Graduate School of Public Policy's University of Saskatchewan campus.

He earned his Ph.D. at the LSE and practiced for 13 years as a professional economist in industry and government. At the University of Saskatchewan, he was the Van Vliet Research Professor, created and held an NSERC SSHRC Chair in Managing Technological Change in Agriculture, and was director of the virtual College of Biotechnology.

He has had appointments at the LSE, OECD, European University Institute in Florence, University of Edinburgh and University of Western Australia. He was a founding member of the Canadian Biotechnology Advisory Committee and was on the boards of Canadian Agri-food Policy Institute, Pharmalytics and Ag-West Bio Inc. He has also held over 15 peer-reviewed grants worth more then $250 million and is author/editor of 15 books, and over 60 journal articles and 55 book chapters.