Canadians should stop thinking of environmental progress and economic growth as being in conflict, says a new report from TD Economics.

The report, The Greening of the Canadian Economy, argues that environmental consciousness has become embedded in corporate decision-making and the country needs a way to evaluate how much better the private sector has become at reducing its environmental footprint.

TD's chief economist, Craig Alexander, says Canada should stop dividing the economy into "green" and "brown" sectors, because the definitions are too narrow.

Green is more than wind and solar

The "green" economy is more than wind energy, solar panels and clean technologies for storing energy, he said. And many sectors considered "brown," such as mining and manufacturing, have greatly improved environmental standards.

Canadians have a very high awareness of environmental issues, and that has helped push an environmental agenda within corporations, Alexander said.

Before 1997, economic growth as measured by GDP rose in lockstep with greenhouse gas emissions. But since then, the two have become "decoupled," his report said.

Now, a one per cent increase in GDP results in a 0.44 per cent increase in greenhouse gases. At the same time, Canada has seen its air quality and water quality improve, and Canadians have embraced recycling and the protection of land.

Alexander said that change came about because corporations embedded green thinking into their processes. They pushed suppliers to improve their environmental record, streamlined their processes in order to waste less and invented products that were more efficient.

Savings in going green

Many corporations found that costs came down when they embraced less wasteful practices, and some discovered new markets by offering green alternatives to consumers.

But Canada has no viable way of measuring this kind of progress, the report said.

Alexander said he believes it would be "empowering" for Canadians to realize that economic growth is not at odds with protecting the environment.

"When it comes to defining the relationship between the environment and the economy, we need to stop thinking of 'a' green economy or 'the' green economy and start thinking in terms of the 'greening' of the economy," he said.

He recommends a "broad, holistic approach" that  would look at how environmental improvements are motivated by government environmental policy, environmental and economic efficiency and corporate responsibility.