Biosequestration through GHG offsets:

1. Biosequestration through GHG offsets: An overview of activity in Canadian federal departments of forestry and agriculture April 28, 2009. Washington, DC.

2. Outline of presentation • Status of Canadian federal offset system • Development of offset quantification protocols • Forestry and Agriculture • Link to UNFCCC negotiations • Closing remarks

3. Status of Federal Offset System • March 2008: Regulatory Framework for Industrial GHG Emissions announced, including Domestic Offset system. • Offset system administered under the Canadian Environmental Protection Act (CEPA) and implemented by Environment Canada. • Draft regulatory framework and associated guidance document for quantification protocol developers were released for public review. • Results of review have not yet been released but expected soon.

4. Offset Protocols: Forestry (1/3) • Role of federal agencies in protocol development has changed over time. • Key role is providing high quality scientific and technical advice and tools, nationally. • Canadian Council of Forest Ministers developing a Forest Carbon Management Quantification Framework. • Industry Provincial Offsets Group (IPOG) working on a protocol for Forest Management. • Canadian stakeholders well represented on the Forest Carbon Standards Committee.

5. Offset Protocols: Forestry (2/3) • Afforestation: • CFS began leading the development of this protocol in 2005, in collaboration with provincial government experts, private sector stakeholders and universities. The draft protocol was based on preliminary policy guidance available at that time. • Avoided Deforestation: • Lower priority based on level of interest and degree of forest sector control.

6. Offset Protocols: Forestry (3/3) • Forest Management: • Early investigation of project-specific methods. • Main problems: uncertainty in validity of baseline projection, high transaction costs, leakage. • Recent assessment of potential of WRI’s regional performance standard method. • Main problems: data and modelling requirements, defining the boundaries (homogeneity of age class distributions and productivity), requires high degree of cooperation.

7. Offset Protocols: Agriculture (1/3) • Government (federal & provincial) involvement and investment has been essential to protocol development. • No protocols developed by private sector exclusively. • Alberta’s offset protocols were based on draft developments for a national Federal offset system in 2004-05, following ISO 14064-2. • Most advanced protocol involving soil sinks = adoption of reduced tillage.

8. Offset Protocols: Agriculture (2/3) • Under the “default coefficient” method for no-till practice, all farmers using practice in project area are eligible. • However, offset is only for C sequestered from the proportion above the level of adoption in the base year. • 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 C-sequestering practice in hope of being able to make land eligible at later date.

9. Offset Protocols: Agriculture (3/3) • AAFC continues to provide scientific and technical advice related to other potential biosequestration activities, including: • Summerfallow Reduction • 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)

10. Links to UNFCCC negotiations • From a federal government perspective, quantification protocols for forestry and agriculture offsets need to be consistent with the measurement, monitoring and accounting rules for LULUCF under the UNFCCC. • Domestic approaches and experiences have relevance to the current UNFCCC negotiations of a post-2012 agreement: • improving the treatment of LULUCF (including HWP), • improving the rules and expanding the scope of LULUCF projects in the CDM, and • addressing of developing country deforestation and forest management.

11. Concluding remarks: Agriculture • Offsets provide large opportunity for agricultural sector in Canada. • Good experience with several emissions reduction and removals practices in agriculture sector. • All major farm groups aware of the issue and opportunities for farmers. • Anticipated offset values will never drive agricultural practices.

12. Concluding remarks: Forestry • Economic potential of offsets in the forestry sector remains highly uncertain due to uncertain policy environment and major issues in protocol development. • Interest is increasing and tools for incorporating carbon into forest management planning are available and improving (e.g. CFS CBM). • The issue of ownership or right to claim offsets from land-based offsets on Crown (provincial) land remains largely unresolved.

13. Final Concluding remarks • For bio-sequestration projects, differences in how each system addresses the following issues can have significant impacts on the comparability of potential offset credits: • Baseline or base year • Timing of recalculation of baseline • Liability for reversal of credited sequestration • Treatment of natural disturbances • Standards for measurement, monitoring and verification

14. THANK YOU! MERCI! Peter Graham, Canadian Forest Service, NRCan Brian McConkey, Agriculture and Agri-Food Canada