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Moving Forward On Agriculture Mitigation and Carbon Management

Moving Forward On Agriculture Mitigation and Carbon Management. Presentation to the “Agriculture and Carbon Management: Benefits and Opportunities for Manitobans” By R. J. MacGregor Winnipeg, February 11, 2003. BAU with. Sinks. Gap (6.5 Mt). 6% below. 1990.

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Moving Forward On Agriculture Mitigation and Carbon Management

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  1. Moving Forward On Agriculture Mitigation and Carbon Management Presentation to the “Agriculture and Carbon Management: Benefits and Opportunities for Manitobans” By R. J. MacGregor Winnipeg, February 11, 2003

  2. BAU with Sinks Gap (6.5 Mt) 6% below 1990 For the first commitment period,we know agriculture can contribute MT CO2e 75 BAU without Sinks 70 65 60 55 50 Potential reductions from BAU (5 to 20 Mt) [with incentives] 45 40 35 1990 1999 2010

  3. The Federal Plan acknowledges the potential Action Estimated result (2008-12) • Business as Usual (BAU) sink 10 Mt/y • Current programs -AP2000, Greencover & APF 5.8 Mt/y • Next steps - emissions reductions 1 Mt/y - sinks 9 Mt/y TOTAL 24.8 Mt/y Counting everything in the National Inventory is only one challenge, attribution for program delivery is another major issue

  4. The Federal Plan identifies offsets as the incent mechanism for the agricultural sector • The sector indicated they preferred a market mechanism to more traditional instruments • We made the case and the “door is open” to developing an offset system that will work for agriculture domestically • Getting Articles 3.4 in Kyoto was the key to unlocking this door To be successful, offsets must make economic sense, as well as environmental sense

  5. The sector will need to be involved in the design of a workable offset system - become familiar with the issues ... • Offsets must be real • They have to provide sinks or emission reductions that will be counted in the national inventory - IPCC rules will be important • They must be measurable and verifiable • Science is the key and we have good start, but more required (NCGAVS, model farms, GHGMP, CCFIA, BIOCAP etc.) • Probably need to be project based • An entity will have to develop a plan to show they can provide real offsets: ex ante review, ex post verification, certification • They must be additional/surplus & occur in 2008-12 • Over and above “business as usual” in the commitment period • Need to be differentiated from other incentives or requirements • There is a policy against providing “credit for early action” • This is the “baseline” issue and critical to whole system and dealing with continuum and saturation

  6. … and there is more to a system... • They must be calculated on a net-net basis • “Leakage” will need to be accounted for • The system must be affordable • Transaction costs must be kept low relative to the value of the offsets - @ $10/t this may be a challenge • The role of numerous players will need to be sorted out • producers, registry, government, auditors, aggregators, futures/commodity markets, insurance industry etc. 2000 2010 2020 2030 2040 2050

  7. … and more issues of particular interest to agriculture • Permanence and Liability are critical issues for the sector wrt. soil sinks • At Calgary Credit Workshop agricultural participants did not support the transfer of the liability for emission reductions from covered sector to agricultural sector • Problem is that building sinks depends not only on management choices - but also on the weather • It may not prove economic to maintain them on a long term basis - producer wants flexibility also

  8. What are the next steps? • Development of an Offset System within a DET/covenant world • options • rules • analysis • consultations • Best guess - we will need to have pretty good idea on “if” and “how” an offset system would work by this fall!!!!!!

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