NFU comments on Ontario Compliance Offset Credits Regulatory Proposal

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December 22, 2016

David Coates, Project Manager

Ministry of the Environment and Climate Change

Climate Change and Environmental Policy Division

Air Policy Instruments and Programs Design Branch

77 Wellesley Street West

Floor 10, Ferguson Block

Toronto, ON M7A 2T5

Dear Mr. Coates:

RE: EBR Registry Number: 012-9078, Ontario Compliance Offset Credits Regulatory Proposal

The National Farmers Union (NFU) is in favour of effective government action to massively and urgently reduce greenhouse gas emissions. Farmers are on the front lines of climate change, as our livelihoods depend on a stable climate. In recent years, farmers in Ontario and across Canada have experienced difficulties and losses due to prolonged periods of drought, untimely frosts, excessive rainfall, and intense storms, as well as from increased disease and insect pressure related to unusual weather conditions. We are also aware that many of our current farming practices, technologies and the structure of our markets result in greenhouse gas emissions (GHGs) that are higher than necessary to produce the food that our customers need. In short, we have both the desire and the ability to contribute to climate change solutions.

The NFU is also aware that re-stabilizing the climate will take time. The uncertainty farmers face will continue into the future, thus farmers will need assistance to implement climate adaptation strategies to improve farm resilience while reducing GHGs. TheOntario Climate Change Action Plan that was launched in mid-2016 provides some first steps towards the kind of programming needed to achieve the transition to a climate-friendly food and farming system.

The NFU is opposed to international trading of carbon offset credits. When transactions involve developing countries that may not have the capacity to ensure these purchases create real offsets, there is a high risk of fraud. The NFU is also opposed to international trade in carbon offsets because it has already resulted in powerful corporations unjustly taking land from small farmers to support illegitimate or poorly regulated carbon credits. Thus, we support the proposed Ontario regulation’s restriction that limits eligible offset initiatives to those within Canada’s borders. We also support the reporting requirement that ensures the Ontario-registered offsets are not simultaneously used in another emission trading system.

Ontario has chosen, along with Quebec, to join California’s Cap and Trade system. For Ontario’s system to become formally linked, the Ontario Compliance Offset Credits Regulations must meet or exceed California’s standards. The proposed regulation is parallel with California’s standards in the following ways:

  • A maximum of 8% of compliance can be met through offset projects; at least 92% of a capped emitter’s compliance obligation must be achieved by way of actual emission reductions.
  • Offset credits cannot be claimed by companies and industries that are already subject to the emissions cap.
  • Offset credits are only allowed for GHG emission reductions that are real, permanent, quantifiable, verifiable, enforceable, and additional.
  • There are suitable monitoring, verification, accounting and enforcement processes to maintain the integrity of the offset credits.
  • Offset credits must comply with approved offset protocols.
  • Offset protocols are made public to promote development of projects and regulatory transparency.

The NFU agrees with the requirement that offset credits are available only to projects that go beyond “business as usual” and that credits are not available for initiatives that are already legally required. We also note that the challenge of climate change is so large that measures to reduce GHGs must go beyond what can be accomplished through the cap and trade system alone. Targeted regulations are also needed to accelerate emission reductions. Thus, we urge Ontario to continue to develop and enact GHG reduction regulations in the public interest, and to resist lobbying pressure from large emitters that might seek to prevent further regulation as a way to maximize opportunities to reduce their own compliance costs.

Protocols under Ontario’s offset regulations will need to be acceptable to the other jurisdictions (Quebec and California) so that the offset credits will have the same value per tonne of CO2 equivalent reduced, avoided or removed, regardless of where the credit is created and registered. Like California, Ontario’s regulation requires a public consultation process for all proposed new offset protocols, which the NFU supports. The NFU looks forward to participating in these consultations.

Depending on their specific details, carbon offset protocols could have either positive or negative impacts on agriculture and family farming in Ontario and across Canada. For example, the NFU is concerned that the rising cost of farmland is becoming a barrier to new entrants and young farmers. We urge Ontario to carefully design protocols (such as an afforestation protocol) to ensure they will not cause large emitters seeking offset credits to begin competing for land with family farmers.

We also urge Ontario to ensure that offset protocols not only reduce , remove and/or avoid emissions, but that they also support – or at least do not undermine – adaptation. Diversity and resilience are key to climate adaptation for agriculture and farmers. We would not like to see the scale of offset projects required for compliance under the proposed regulation to lead to excessive concentration of farm ownership and/or control or undue standardization of farm practices.

The NFU in Ontario and all across Canada looks forward to continued work towards climate change solutions in agriculture. We are calling for research, extension, funding programs and fiscal measures that promote both adaptation and mitigation while promoting the viability of family farms and rural communities and the production of wholesome food for Canadians and Canada’s export customers.

Respectfully submitted by

The National Farmers Union
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