Alberta producers will likely continue to sit on the fence about carbon credits until such systems become a better fit for agriculture, says a researcher.
The carbon market isn’t a good investment of either time or money for most farmers in the province, said Sven Anders, a professor in agricultural economics and food marketing at the University of Alberta. Efforts must be made to help them participate in carbon-credit systems, he added.
It could include providing information and advice to help producers determine if carbon-credit systems are suitable for their farms.
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“And I think it’s the job of the Government of Alberta and major commodity organizations in the industry to think about whether this is something that they should invest in….”
Anders is the co-author of a recent report on carbon-credit systems in agriculture. It was published by the Simpson Centre for Agricultural and Food Innovation and Public Education at the University of Calgary’s School of Public Policy.
It said Alberta has the largest total beef cattle herd in Canada and is second only to Ontario in having the most farms. The province also had the highest level of agricultural greenhouse gas emissions in the country from 1990 to 2019, accounting for 38 percent of the national agricultural GHG total.
The Alberta and federal governments need to include farming in their efforts to reach carbon-reduction targets under the Paris climate agreement, said the report. However, creating strategies to lower the sector’s carbon intensity without compromising its contribution to the provincial economy poses a challenge, it added.
Studies on carbon-pricing policies have exclusively focused on carbon taxes, it said. As a result, “there has been little exploration to date of the effectiveness of using carbon credits to encourage Alberta farmers to practise farming techniques that lower emissions while earning extra revenue without jeopardizing their agricultural output.”
Carbon-credit systems allow farmers to earn extra money by selling their surplus of carbon credits to companies that emit higher amounts of greenhouse gases, said the report.
“However, agricultural carbon-credit systems are still at (an) early stage; hence, these benefits cannot be guaranteed due to their uncertain nature and the paucity of scientific evidence about agricultural carbon credits.”
Due to current carbon-offset prices and the level of emissions by farms, the market currently isn’t set up to pay producers enough to cover the cost of the farming practices needed to lower emissions and generate credits, it added. Prairie producers have instead adopted a few practices, such as no tillage, simply because they boost profits by improving efficiency, said Anders.
Taking on the responsibility of saving the climate by participating in carbon-credit systems while also growing food is a complication many farmers are not ready to face, he said.
“And I think there’s not a lot of strong pro-climate convictions in the agricultural sector as well.”
Producers may also have fears about privacy and control of their data under emissions protocols that can involve extensive paperwork to ensure they are living up to their commitments, said Anders.
“So, the farmer would basically have to open themselves up, and… farmers are a bit allergic to revealing all their numbers and allowing complete strangers to travel around their farm and poke questions into everything.”
The report said such reluctance has been further deepened by “a history of regulatory risk: the agriculture sector has seen the revocation of carbon-credit eligibility for certain practices, and invalidated credits can lead to significant financial losses for farmers.”
Anders said the report contains four policy recommendations aimed at making carbon-credit systems a better fit for Alberta farmers. They include designing projects at the farm level to ensure reductions of emissions follow a suitable offset standard.
The Alberta Emission Offset System is currently the only such government initiative in Canada to include agriculture, said the report. However, it involves programs such as the Technology Innovation and Emissions Reduction System (TIER), which was originally aimed at large corporations in industries like oil and gas that are relatively easy to administer.
The federal government is developing the Greenhouse Gas Offset Credit System. Anders said there needs to be a framework that considers the unique challenges facing the agriculture sector, such as its fragmentation among thousands of farmers and ranchers.
“So, we need to overcome the mismatch between what farmers can do on the farm and what the standards are.”
The report also recommends that producers be offered incentives to get into carbon-credit systems through cost-sharing programs for expert agronomic practices. These could be undertaken by services such as aggregators, which are businesses that act as intermediaries between farmers and companies buying carbon offsets, he said.
Although farmers are allowed under the system to do such work on their own, “without dedicated extension or expert services that help farmers understand how you could actually get this carbon offset, no farmer in their right mind is going to take the time and do that by themselves.”
The third recommendation involves promoting carbon-credit systems by emphasizing co-benefits and economic incentives for farmers that go beyond the financial gains from selling the actual credits. For example, these could include better fertilizer management that lowers costs while improving productivity, said Anders.
The report’s final recommendation is that future research should investigate how farmers are evaluating the benefits and risks of participating in the carbon market, “so we have to work on the trust,” he said.
For the full report, visit https://bit.ly/3Em9aQ1.
