Trade in carbon offsets has given farmers another source of revenue.
But this new commodity lacks the certainty of traditional farm products, says Graham Gilchrist, a professional agrologist who works in the Office of the Farmers’ Advocate.
Speaking at the Alberta Agricultural Economics Association conference in Red Deer on Friday, Gilchrist described how large industrial emitters of greenhouse gases in Alberta are now required to meet specified emission targets. Those that don’t must obtain emission performance credits from others that exceed their required reductions, pay $15 per excess tonne of greenhouse gases into a climate change and emissions management fund, or buy emission reduction offsets from other entities — like farms.
Farmers are able to produce offsets by following specified protocols — such as minimum tillage — that have been shown to reduce greenhouse gases. These offsets are collected by “aggregators,” verified, registered and sold to buyers. Ultimately, they’re audited by Alberta Environment.
Since 2007, about 5.1 million megatonnes of ag carbon offsets have been created and sold in Alberta, said Gilchrist. Those sales have generated roughly $46 million for farmers.
However, problems exist. Alberta Environment has refused to recognize some poorly documented offsets that were purchased by industrial emitters, and there have been farmers and landowners accused of fraud with respect to their creation of offsets.
“There is no good regulation around how that commodity is moved,” said Gilchrist of the underlying problem.
“We’re now five years into this but we still don’t have oversight, in the traditional senses of our other commodities. The challenge then is if somebody screws up, the only person that bears the penalty is the final emitter.”
Ag carbon offsets are selling for less than the $15 that heavy emitters would otherwise have to pay into the climate change and emissions management fund.
“There’s a reason there’s a discount,” said Gilchrist, pointing to issues of quality and trust.
The ag protocols for creating carbon offsets are sound, said Gilchrist. The problem is that the associated management and record-keeping practices need to catch up.
hrichards@www.reddeeradvocate.com