Agricultural Protocols within the Alberta Offset System

1. Agricultural Protocols within the Alberta Offset System Tom Goddard, Agriculture & Rural Development June 17, 2010, Washington DC

2. 2006 2020 Alberta Overview Energy: 86% of emissions in Alberta • Most electricity generated from coal • Oil and natural gas • Oilsands represent 13% of total global reserves, less than 10 % of global emissions, 18% of Allberta’s emissions Agriculture: 8% of emissions in Alberta • Rainfall 300 to 450 mm (12 to 18 in) • Average temperatures of – 24 0C in Jan to 24 0C in July (-11 to 75 0F) • 53 M ac farmland • 1/3 of Canada’s agricultural land • Small grains, oil seed, pulses • 40% of Canada’s beef, $ 1.8 M exported in ‘08 • Irrigation - potatoes, sugar beets, sp crops Alberta’s GHG emissions in the Canadian context

3. Carbon Market Context: Canada and AB 1997 – National Table GHG Reduction – Agricultural Sinks 1990’s – National collaboration GHG research 2002 / 3 – Alberta initiated Climate Change Action Plan • Specified Gas Emitters Regulation (SGER) • Applies to all facilities producing over 100,000 t CO2e per year • Required to report average emission intensities • Pork Protocol 2007 – Alberta amended SGER legislation to require mandatory emission intensity reductions of 12% per year - Applies to 103 facilities 3 options: • Reduce emissions, trade performance credits • Pay Climate Change Emissions Management Corporation at $15 / T CO2e • Purchase offsets Profile of AB companies emitting more than 100,000 T CO2e / yr

4. Alberta Approach • Long term issue • Need to start with practical, achievable objectives • Policy certainty for industry • Large investments being made now – expensive to retrofit, investment is for 40 years+ • Implementation of new technology will be a big part of the long-term solution. • Linked to our unique role as North America’s energy supplier • Market instruments - bridge gap between current emissions and long-term solutions. • All Albertans must be part of the solution • Requires strategic and focused investment in transformational changes (technology, behavioral) • Remain globally competitive

5. Alberta Government Approved Protocols • Offset must be quantifiable, real, verifiable • ISO 14064-2 compliant • Science-based • Rigorous technical review • Internationally compatible • Streamlined use • Transparent and consistent • Verifiable by independent 3rd party • Reduced costs and administration • Provides certainty for investors – GHG tonnes reduced • Of 28 protocols currently approved, 10 are agricultural

6. Check Carbon Offset Solutions website for draft protocols, protocols under development 1 2-10 mo Develop & compile Technical Seed Document(s) (TSD) for protocol foundation 2 Protocol Developer Prepare Technical Protocol Plan (TPP) 3 Submit TPP & TSDs to Alberta Government for review 4 Provide feedback to protocol developers – 60 days* 5 Alberta Government Adapt into Alberta protocol format (Standardization) 6 Protocol Developer 4-6 mo 1st round of reviews – expert technical review No sustained objections, then move forward. 7 2nd round of reviews – broader stakeholder review No sustained objection, then move forward 8 Coordination by Climate Change Central (C3) “All parties involved” 3rd round of reviews – posting for public review 30 days 9 10-30 days Finalization of protocol & review of public comments by Alberta Environment** 10 1-2 mo 11 Government approval & posting of protocol Alberta Government Alberta Protocol Development Process

7. Agricultural Protocol Topics and Stages In Review: • Summerfallow • Beef - Residual Feed Intake • Nitrous Oxide Emission Reduction Developing: • Conversion to Perennials • Pasture Management • Wetlands Restoration and Preservation • Covered Manure Storage Approved: • Reduced Tillage • Pork • Beef - Days on Feed • Beef – Lifecycle • Beef - Edible Oils • Energy Efficiency • Afforestation • Biomass • Biogas • Dairy National in scope

8. Reduced Tillage Protocol • Applies to annual crops • Equipment definition • - Geometry – opener width / spacing • Dry Prairie versus Parkland boundary • Soil C sequestration coefficient, N20 and energy coefficients drawn from research compiled for Canada’s GHG Inventory Methodologies (Tier II) • Discounted baseline adjustment allocates incremental rates of new carbon sequestered to early adopters • Soil C sequestration coefficient also discounted for: • Risk of reversals using probability of reversal (10 – 12%) • Assurance based on tonnes registered, now 0.4 Mt CO2e • Revised every 5 years as new research informs Zones of soil carbon change coefficients

9. Successes Relatively easy to apply, large interest and uptake 3.2 M T CO2e registered since July 1, 2007 41% of all offsets used for compliance in 2009 15% of total GHG reductions required by SGER Range from $ 8 – $ 12 / T CO2e in ’09 to $10 - $14 in ‘10 Challenges Guidance – practical use of protocol, e.g. crop yr vs calendar yr Ownership – must be specified in contracts Verification – types of farm records vs digital data Opportunities Supports continuous improvement, accelerated practice change Knowledge is transferrable to other environmental attributes that need verification data, e.g. certification, footprinting Experiences Implementing Reduced Tillage Protocol

10. Future Protocol Possibilities • Manure as Soil Amendment, Injection • Fuel Use Efficiency, Irrigation • Swath Grazing • Crop Nitrogen Use Efficiency • Biofibres • Other …. Beef LCA “hotspots”?