Environment Minister Jim Prentice has unveiled proposals for a carbon market system in Canada and cited farmers as among the groups that could benefit.
Farm groups are interested but have questions about the details.
In a speech to the Economic Club of Canada, Prentice said, “Projects that could qualify for offsets span the economy, from farmers using reduced or no-till techniques to store more carbon dioxide in their fields, to wind turbines producing clean electricity using only the wind, to landfill sites that are able to turn captured methane into usable fuel.”
The plan to develop a carbon market comes in two parts. Part one “sets out the rules and requirements to generate offset credits from the registration of a project to the issuance of the actual credits,” he said. “The second document explains the verification process for eligible projects – to ensure that the reductions achieved are real.”
The government will collect comments on the plan during the summer and publish final versions of them in the fall, he added.
The minister’s announcement was welcomed by Laurent Pellerin, president of the Canadian Federation of Agriculture. “CFA is pleased to see Minister Prentice recognize and support agriculture as an important sector in their proposed offset system for greenhouse gases. As a sector that will be outside of the planned greenhouse gas regulations, agriculture can be a cheap and reliable source of offset credits on the carbon market.
“The CFA looks forward to working with Environment Canada to ensure the unique character of agriculture is reflected in the offset system and that methods to deal with sink reversals – such as liability periods and discount factors – do not serve as a barrier to farmers fulfilling their carbon offset potential.”
The principle concern for CFA is learning how the system will work and whether it will really have much benefit for producers. Farm production practices can qualify as carbon sinks that sequester carbon dioxide. But there’s a 25-year liability period that, for example, means a farmer using no till could face repaying carbon credits if for some reason the land loses its ability to be a carbon sink. It would appear to be the same if forests used as a carbon sink were destroyed in a fire.
Canada’s plan for battling climate change includes reducing greenhouse gas emissions by 20 per cent from 2006 levels by 2020 and by 60 per cent to 70 per cent by 2050, Prentice said. “To reach our targets, we are establishing a regulatory framework that will impose mandatory emissions reduction targets across the full spectrum of Canadian industry.
“The offset system will be a key part of that overall commitment,” the minister continued. “It is intended to generate real reductions in greenhouse gas emissions by providing Canadian firms and individuals with the opportunity to reduce or remove emissions from activities and sectors that will not be covered by our planned greenhouse gas regulations.”
Setting a price for carbon in Canada will get businesses’ attention, he added. The government doesn’t want a system where paper credits are bought and sold like some complex financial product. “Every offset credit will represent a real and verified emission reduction, equal to the equivalent of one tonne of carbon dioxide. … We will be rigorous in ensuring that credits will only be issued for projects that actually reduce the amount of greenhouse gas emissions in this country.”
Alberta has established a carbon market and other provinces are working on them. “The federal plan is meant to complement those efforts, not supplant or duplicate them,” he said.
Markets such as the Montreal Climate Exchange will provide a platform on which these credits can be bought and sold, he added.