By Jody MacPherson
Originally appeared in C3 Views for Climate Change Central, September 2003
Every summer, farmers across Alberta carry fresh produce, meat and poultry to open air markets where consumers squeeze, poke and prod the goods looking for a healthy bargain.
But they don’t have to leave the farm to take part in a new marketplace where environmentally friendly agricultural practices are rewarded and large corporations provide the incentives.
It’s an exchange system where credits are awarded for reducing greenhouse gas emissions. The credits can be sold to others to help meet their own targets. At least one company based in Alberta is now offering its expertise in the exchange of this climate change commodity.
AgCert Canada Co., based in Edmonton, will examine farms, calculate and monitor their green quotient. In partnership with the United States Department of Agriculture, AgCert has a patent pending on a certification protocol awarding credits for reducing greenhouse gas emissions.
Len Eddy is the Managing Director of AgCert Canada, which conducted its first audits of farms in Alberta this past summer. He says many Alberta corporations, including those in the oil and gas or power generation sectors, are world leaders in the emissions reduction marketplace.
“Some are already buying emission reduction credits even though under the Kyoto Protocol, they don’t have to begin showing the reductions until 2008,” he says. They may be doing it on a voluntary basis or to satisfy the conditions of a development permit granted by the provincial government.
Under the Kyoto Protocol, Canada agreed to reduce its greenhouse gas emissions by an average of six percent from 1990 levels for a five-year period from 2008 to 2012. This is equivalent to a 30 percent reduction from what emissions are expected to be in 2008 if allowed to continue at the current rate.
About 10 percent of Canada’s total greenhouse gas emissions come from sources on the farm. Eddy says they took a look at the science of reducing emissions and examined how to turn it into a commercial opportunity. No matter how they looked at it, they kept coming up with manure – pig manure to be exact.
According to Eddy, “there are still cost issues and technology barriers, so we were looking for the ‘low hanging fruit’ you might say.”
In fact, AgCert looked so low it actually became interested in what was beneath the barn. As a first step, storing manure in deep pits instead of stockpiling it in open lagoons will cut down on the emission of methane and nitrous oxide gases, says Eddy. This is the first improvement that farmers can implement in order to generate emission reduction credits. The bottom line is that even small improvements could mean money in the bank for farmers.
“We actually pay for the farmer’s data,” says Eddy. “If the farmer follows the rules of practice consistently, we pay for and create the credit.”
For example, tracking the weight gain of the animals generates a known volume of manure and a corresponding amount of emissions. By comparing the “before and after” manure management practices, the emissions reduction per pound can be calculated.
“Eventually, the objective is to recognize the carbon sequestration that occurs when manure is injected back into the soil,” he says. “But when we look at emissions reductions on the farm, we have to think about it in terms of incremental change.”
There are economies of scale to be considered, as well. The “mega-manure” producers – those with larger confined feeding operations, for example – are more likely to see a better return on investment, but Eddy says that doesn’t mean it wouldn’t work for a smaller producer under the right conditions. Currently, offsets emissions can’t be considered a win or fail for emissions prevented from going into the atomosphere. Unless the price goes up around $15-20/tonne it’s not going to pay for itself on its own, but it will help, he says.
There are a more than a few industries hoping the agricultural sector will take up the challenge. Approximately 600 companies in Canada alone are potential buyers of the credits. And the market is not limited to Canada.
“Companies in Japan and in Europe are also interested in our project activities in Mexico and Brazil,” says Eddy.
Many people don’t realize the international market is up and running. Of course, not everyone is on board with the Kyoto Protocol. Countries like the United States did not sign the agreement but they have set up the Chicago Climate Exchange, involving many high profile American companies. Eddy says about 180 farms in the United States, mostly in the mid-west and the Carolinas, are generating credits already.
The governments of Alberta and Canada are talking a lot about the poop for profit scheme and specifically, how to get in on both the buying and selling sides of the emissions reduction market. They recently solicited input from stakeholders in a consultation process to help determine public policy. The government is working on concrete plans for Canada’s involvement based on the input it received.
Still, for some, the process may sound a bit far-fetched. Markets for farmers usually involve the noise of a bustling crowd, the fragrant odours of fresh vegetables, the deal made with a wink and a firm handshake. The emissions reduction market is a little more abstract – payment for what isn’t produced (greenhouse gases) instead of what is. But companies like AgCert and businessmen like Len Eddy are doing their best to make it more real for everyone every day.