Indicators as Incentives

by Nicolas Sacchetti

« The whole modern era of trying to re-craft our science system and the innovation policy part of it has been fairly talked about the Equity – Diversity – Inclusion (EDI), the Environmental – Social – Governance (ESG), and the inclusivity questions, » says Professor Phillips. 

Professor Peter W.B. Phillips is the Center for the Study of Science and Innovation Policy Director and Research Lead, Bioscience and Food Policy; and Distinguished Professor, Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan.

At the 2nd P4IE 2022 on Measuring Metrics that Matter, Pr Phillips chaired a discussion that look at policies, indicators and actions for the clean energy transition. The discussion was anchored on a report he co-authored with Rachel Samson and Don Drummond of the report Cutting to the chase on fossil subsidies published the Canadian Climate Institute.

Phillips states that while we invest and adhere to a host of EDI/ESG indicators to communicate our intentions, we seldom think about how these signals also incentivise people. While sometimes realize what we want, signals can also yield counterproductive activities.

Phillips asserted « When you don’t align the incentives towards where you want to go, people will end up following their own interests, that may differ from our long-term goal.»

« Hope is not a strategy. You are throwing that up in the wind. »

– Pr Peter W.B. Philips


According to Pr Phillips, we are incentivising the fossil fuel industry to become more resilient and reliant, which may stretch the sector out for 10 – 20 – 30 years. However, the investments and efforts in the fossil fuel sector is at least partly at the expense of developing other potential technologies. « You are truncating markets by incentivising one at the expense of others, » he asserted.

« When you are no longer in a perfect world, you can’t just look at comparative statics. » Phillips noted that the work of Canadian Climate Institute is intended to show the interconnectedness and trade-offs inherent in this fundamental policy area.  He noted that studies suggest there are up to 50 communities in this country of over 10,000 people where the energy sector employes upwards of 10% of their workforce. Their voices must and will be heard.  

Phillips cited the example the of the city of Estevan in south central Saskatchewan, which hosts SaskPower’s major coal fired power station. Under federal law, the unabated coal-fired turbines, and nearby coal mines, will need to shut down by 2029, representing the potential loss of 13% of the local workforce. Without clear alternatives, employees are quitting. This transition is going more quickly in Alberta, where coal power generation is expected to end in 2024 but the firms have moved to alternative fuel sources, helping to lock in employees.

The bottom line is that we need to start thinking about more than one indicator and more than one variable as we look to realizing the varied economic, social and governance objectives of our climate and energy policies.

Phillips’ latest book with David Castle — Ideas, Institutions, and Interests: The Drivers of Canadian Provincial Science, Technology, and Innovation Policy – offers insight into how the provinces are using science and innovation to address this and other policy challenges.

Ce contenu a été mis à jour le 2023-10-27 à 21 h 38 min.