Response to 17-10 - Carbon Offsetting
The BFO Board of Directors agrees that land managed by beef farmers to grow grasses and legumes plays a critical role in storing carbon and mitigating greenhouse gas emissions. BFO has been advocating to government and the public that pasture and forage acres managed by beef producers store large amounts of carbon, while also producing high-quality protein.
In order to decrease greenhouse gas emissions and fight climate change, Ontario has put a price on carbon by implementing a cap and trade program, which came into effect at the beginning of this year. Regulated sectors and large emitters must report their emissions and have enough allowances and carbon offset credits to cover their emissions. Carbon offset credits represent carbon dioxide reduced, avoided or removed from the atmosphere, and they can be created and sold by unregulated sectors, which includes agriculture.
Ontario’s agriculture industry, including beef producers, will have the opportunity to create and sell carbon offset credits. Two activities that would be able to generate carbon offset credits and that are most relevant to beef production are avoided grasslands conversion (maintaining and enhancing grasslands) and reduced livestock enteric emissions. The protocols for these activities, along with other activities that could generate carbon offset credits, are currently being developed. The protocols include all the technical specifications for the activities. Along with the technical specifications that must be followed, there is also regulation on creating and selling carbon offset credits that includes strict requirements and criteria.
The Ministry of the Environment and Climate Change (MOECC) held a consultation on the regulation for carbon offset credits, and BFO’s full submission can be found on BFO’s website. Based on the regulation, there will be extensive criteria and administrative requirements for an activity that sequesters or reduces carbon to be considered for an offset credit. Proposed offset credits must meet criteria of being authentic, additional to what is “business as usual”, verifiable, validated, enforceable and permanent. Permanent is defined as 100 years for carbon sequestration activities. There will also be rigorous assessment, recordkeeping and reporting to ensure credibility of the reductions.
Unfortunately, BFO’s Board of Directors believes that the administrative burden and vigorous criteria laid out in the regulation will prevent most farmers from creating or selling carbon offset credits in the cap and trade program. Further to this, the revenue to be expected from selling carbon offset credits is hard to predict, as their value will be based on market demand from the regulated sectors and large emitters. While it’s true that grasslands managed by beef producers store large amounts of carbon and should therefore be valuable in a carbon market, we believe that the potential revenue will likely not be enough to make the process worth the time and effort of an average beef producer.
BFO is disappointed that the strict regulation will likely prevent beef producers from getting credit in the cap and trade program for their contribution to carbon sequestration and emission reductions. This is especially true because Ontario’s beef producers are experiencing increased costs due to cap and trade, such as the increased cost of fuel, and carbon offset credits will almost certainly not be a way for producers to make up for those increased costs.
Though there will likely be limited opportunity for beef producers to create and sell carbon offset credits in the cap and trade program, BFO is consulting with MOECC and other agricultural organizations on the potential for another type of offset credit, which would not be eligible for use in the regulated cap and trade program and would have a lower dollar value, but would have less stringent requirements and therefore be more feasible for agriculture. We will keep county and district associations updated on any progress made with this concept.
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