Transcript Slide 1

Agriculture – Offsets
Brian McConkey
Agriculture and Agri-Food Canada
• Sector is engaged
– All major farm groups aware of the issue and
opportunities for farmers
• Successful model of offset system in
Province of Alberta
– Alberta protocols fast-tracked in future
Canadian Federal System?
Alberta Offset System
(http://www.carbonoffsetsolutions.ca/index.htm)
• First jurisdiction in North America to have hard caps on
emissions
• Applies to all facilities that produce over 100,000 tonnes
of CO2e
– Baselines established from average emissions intensity from
2003-05
– Targets -12% off of baseline
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Facilities meet targets through:
– Emission intensity gains from own operations
– Invest in offsets
– Pay (“invest in”) the government-managed Climate Change and
Emissions Management Fund at CDN$15/tonne CO2e
• Funds used to develop or invest in Alberta-based technologies,
programs, and other priority areas
• Effective cap on value of offsets
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Alberta Offset System
• Offset Protocols were based heavily on draft
developments for a national Federal offset system in
2004-05
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Be real, demonstrable, quantifiable;
Not be required by law or paid by public funds;
Have clearly established ownership;
Be counted once for compliance purposes;
Be verified by a qualified third party
• Offset Protocols must follow ISO 14064 part b
– Life cycle-like analysis
– Requires that all GHG sources and sinks controlled, related, or
affected by the project be considered
– Reductions are all relative to baseline established as part of
protocol
Alberta Offsets- Agriculture
• Protocols have been established for several
agricultural activities
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Edible oil in beef diets
Reduced slaughter age of beef cattle
Improved hog feeding
Improved handling and spreading of hog manure
Biogas production from animal manures
Adoption of reduced tillage (only protocol involving
soil sinks)
Alberta Offsets- Agriculture
• Protocols being developed (where knowledge good and
life-cycle reasonably simple) for:
– Summerfallow Reduction
• Protocols being considered (where knowledge not so
good and/or life cycle relatively complex) for
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Conversion to Perennial Forages
Residue Management
Rangeland Management
Beef - Residual Feed Intake
Pasture Management
Soil Amendment
Beef grazing/forage system improvements
Nitrogen Use Efficiency
Wetlands Management (restoration)
Offset Implementation
• Government involvement and investment has been
essential to protocol development
– No protocols developed by private sector exclusively
• Non C-sequestering practices follow the “industrial
model”
– Documenting start of practice relatively simple
– No permanency issues
• However, C sequestration by no-till has been most
successful in terms of delivering offsets to market
– Over half of total offsets
– Large area so attractive business for aggregators
– All have used the so-called “default coefficient method”
Eligibility- No-till
• Under the “default coefficient” method, all farmers using
practice in project area are eligible
– Approach adapted from draft Federal offset system protocol of
2005
• However offset is only for C sequestered from the
proportion above baseline of adoption at time of project
eligibility (2002 in Alberta, 2000 in federal system?)
– E.g. if 30% of land in no-till in 2002 then only 70% (i.e. 100-30%)
of the C sequestered under no-till is included for crediting (i.e.
assume 30% of land in project was in no-till at start of project)
– Crediting period >= 2002 in Alberta (>=2008 in Federal system?)
“Default Coefficient” Method
• Addresses problem of practical infeasibility
of determining tillage history
• Provides incentive for maintenance of C
sequestering practice
• Rewards early adopters
– Partially penalizes late adopters
• Removes perverse incentive to stop Csequestering practice in hope of being
able to make land eligible at later date
Verification
• Have been much experience with verification under
Alberta, CCX, and Federal trial systems
– Third-party verification always been supplemental activity to
existing businesses (e.g. financial accounting, crop insurance)
• No-till verification hierarchical
– Desktop verification (general)
• Area farmed, documentation of eligible machinery, etc.
– Farm visit (audit)
• check machinery, fuel purchases, etc.
– In-season field (exceptional audit)
• Field inspection to determine if no-till was practiced
• (No penalty/no reward for voluntary reporting that no-till
was not practiced has been proven successful)
Permanence and Liability
• Alberta system
– Government of Alberta has discounted the amount of
the offset (10-12.5%) and accepted liability for any
future reversals.
– Discount includes the permanent reductions (reduced
N2O and fossil fuel emissions) and C sequestration
– “Breakthrough” that makes C sequestering offsets
economically feasible
– No monitoring after project so no plan to know if there
has been reversals in specific projects
• Canadian Federal System ?
– This was stopper for initial development of Csequestration protocols in mid 2000s
Relationship to Inventory
• Need for “bottom line” that determines if
Government targets have been met
– Captures “leakage” within country
• Trading with under Kyoto Protocol requires
any emission reduction be assigned to
RMU or AAU
• Alberta used national inventory GHG
quantification methods where possible
– Federal system?
Summary
• Offsets provide large opportunity for agricultural
sector
– Have good experience with several offsets
– Anticipated offset values will never drive agricultural
practices
• If left to private sector alone to develop protocols
there will likely be few agricultural offsets
• C-sequestrating offsets will require government
underwriting of liability for reversals
– Too complex and unknown risk to expect this to be
accomplished through private sector