First I must declare my interests here. I like dogs and I know how smart and how dumb they can be. I have had a dog that would look where you pointed and I have had dogs that looked at your finger. Whether an animal like a dog, or an ape, or dolphin, or parrot, or elephant is conscious is going to depend on how consciousness is defined. If you want the answer to be no, it can be. If you want it to be yes, it can be. But if your search is to understand consciousness, then you must be interested in its earliest beginnings, whether you consider them fully formed or not.
When we look for the earliest nervous system, we look at the earliest animals. It is very early animals that developed the neuron, although some important pieces existed earlier and are shared with fungus. Yeasts use something akin to synapses to sense their environment. Vertebrate synapses have about 600 proteins, invertebrate only about 300 of these and yeast share about 50. (see here) The neuron is a major feature of a nervous system and the synapse is a major feature of a neuron. We have to go back to the common ancestor with worms to find the start of brains, organized groups of neurons working together as opposed to wide nets. We share a nervous system architecture type with all other vertebrates. We share more specifics with other mammals, still more with other primates and most with other apes. It is going to be impossible to put a point along this history and say before this there was no trace of consciousness and after it there was full consciousness. So the question should probably not be ‘are animals conscious?’ but ‘how similar is the consciousness of this particular species to ours?’ Is it very similar, hardly similar at all or somewhere in between?
Here is the abstract of BJ Baars’ paper, There are no known differences in brain mechanisms of consciousness between humans and other mammals. (paper here)
‘Recent scientific findings indicate that consciousness is a fundamental biological adaptation. The known brain correlates of consciousness appear to be ancient phylogenetically, going back at least to early mammals. In all mammals alertness and sensory consciousness are required for the goal-directed behaviors that make species survival and reproduction possible. In all mammals the anatomy, physiology, neurochemistry and electrical activity of the brain in alert states shows striking similarities. After more than seven decades of cumulative discoveries about waking and sensory consciousness, we have not yet found fundamental differences between humans and other mammals. Species differences such as the size of neocortex seem to be irrelevant to the existence of alertness and sensory consciousness, though different mammals obviously specialize in different of kinds of sensory, cognitive and motor abilities. Skeptics sometimes claim that objective evidence for consciousness tells us little about subjective experience, such as the experience of conscious pain. Scientifically, however, plausible inferences are routinely based on reliable and consistent patterns of evidence. In other humans we invariably infer subjective experiences from objective behavioral and brain evidence — if someone yells Ouch! after striking a finger with a hammer, we infer that they feel pain. The brain and behavioral evidence for subjective consciousness is essentially identical in humans and other mammals. On the weight of the objective evidence, therefore, subjective experience would seem to be equally plausible in all species with humanlike brains and behavior. Either we deny it to other humans (which is rarely done), or, to be consistent, we must also attribute it to other species that meet the same objective standards. It seems that the burden of proof for the absence of subjectivity in mammals should be placed on the skeptics.’