Giving credit where it’s due: New front opens in carbon tax debate

Farmers could benefit greatly from a carbon trading market but the devil will be in the details

A coalition of national farm organizations say farmers’ stewardship efforts should be recognized in the new carbon credit program.
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A new front has opened up in the carbon tax debate: What sort of reward will farmers get for their stewardship efforts?

On March 6, the federal Environment Department — now named Environment and Climate Change Canada — issued a draft of the regulatory framework for its new carbon offset market. This sets the stage for determining what sorts of initiatives will qualify for carbon credits that can then be sold in a carbon trading program.

“This system will encourage cost-effective emissions reductions right here in Canada and create new economic opportunities, particularly in the forestry, agriculture and waste sectors,” Environment Minister Jonathan Wilkinson said in a news release.

But under the system, producers won’t be getting credit for using zero till or having perennial forage coverage — particularly if those efforts were completed prior to 2017.

Ottawa had already telegraphed its intention to not give credits for stewardship efforts made before it instituted a carbon tax. The idea being that carbon credits shouldn’t reward efforts that were “business as usual” and would have happened even without the carbon tax.

But farmers have long argued they should get credit for practices that sequester carbon in the soil, such as zero till and keeping land in forages.

So a few days before the draft of the regulations was announced, 10 national farm groups announced they had banded together to form a lobbying group called the Agriculture Carbon Alliance.

“By advocating for the contributions that farmers have made to a greener Canada, we will continue to support #cdnag growth and sustainability,” the new group tweeted.

“Farmers have a history of rapidly adopting new technologies that have proven to soften their environmental footprint while protecting their profitability. We are here to share those stories with Ottawa.”

The coalition will be co-chaired by two Ottawa officials with long experience in dealing with federal officials: Dave Carey (vice-president, government and industry relations with Canadian Canola Growers Association) and Scott Ross (assistant executive director of the Canadian Federation of Agriculture).

The other eight farm groups in the alliance also know their way around Parliament Hill: Canadian Cattlemen’s Association, Grain Growers of Canada, Canadian Pork Council, Egg Farmers of Canada, Chicken Farmers of Canada, Turkey Farmers of Canada, Canadian Horticultural Council, and Canadian Hatching Egg Producers.

While no price has been put on carbon credits, the amount of money could be enormous, especially as the carbon tax rises to $170 per tonne by 2030. Under the new carbon emission trading system (called the Federal Greenhouse Gas Offset System), “regulated entities” (that is, large emitters) that exceed their emission limits can purchase federal offset credits. The money would go to businesses, municipalities, or individuals such as farmers that earn credits for projects that reduce carbon emissions or take them out of the atmosphere.

But it is only for activities “not already incentivized by carbon pollution pricing” — hence Ottawa’s insistence that initiatives that occurred before 2017 don’t apply.

But the process of determining what qualifies for a carbon credit has a way to go.

The draft regulations are in the public comment stage and drafting protocols for specific projects will only start this spring. Finalized regulations and the first set of protocols are due this fall. (The comment period is open until May 5 — to view the draft regs or to comment, go to the ‘Federal Greenhouse Gas Offset System’ at the Government of Canada website.)

Of the four draft protocols created so far, only the one for “enhanced soil organic carbon” will appeal to producers. This protocol will look at the “adoption of sustainable agricultural land management activities, to reduce emissions and enhance carbon sequestration in soils.”

Federal officials say protocols for developing a carbon market related to livestock feed management, avoiding grassland conversion and manure management will be undertaken in the future. In order to qualify, projects and initiatives have to be quantifiable, unique and permanent. As well, these activities cannot be “already incentivized by carbon pollution pricing.”

Essentially that means no double dipping for producers will be available. For example, the draft regulations suggest farmers won’t be able to receive carbon credits from the new Clean Fuel Standard by providing ethanol, and then register that project as a new program to receive additional credits.

But there are expected to be a flurry of new initiatives. The key to them will be having credible ways to measure progress, for example the level of emission reductions from variable-rate fertilizing or how much additional carbon is stored in soil by specific regenerative agriculture practices.

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