Ontario should consider scrapping several of its proposed offset protocols due to concerns over permanence, additionality, leakage and mitigation potential, the province’s Environmental Commissioner (ECO) said Tuesday.
Out of 13 project methodologies being developed by the province, an ECO report identified two that should be shelved and at least another three more where the government should proceed with caution.
Ontario is jointly developing the protocols with Quebec, with California-based Climate Action Reserve tasked with authoring them. But their publication is behind schedule, with the first methodology covering landfill gas only published late last year and the remainder due to be delivered this year.
Under the Western Climate Initiative (WCI), which links the carbon markets of Ontario, Quebec and California, emitters can currently use offsets to cover 8% of their annual capped emissions.
The ECO report found that “not all offset protocols accepted by [Ontario’s] partners are based on adequate evidence of effectiveness.”
It said the province should only approve projects that will result in quantifiable, additional, and permanent reductions, adding that “if offsets are not done right, they can be little more than greenwashing.”
The ECO said the proposed so-called ‘no-till farming’ protocol aimed at Ontario’s vast agriculture sector should be discontinued due to issues relating to permanence and additionality.
“Conservation cropping only sequesters carbon while conservation practices are sustained. When farmland changes ownership, and/or when economic conditions shift, a change in farming practices can quickly release the sequestered carbon,” the 284-page report said.
“Practices can change multiple times in a century, and even one tillage event can result in significant GHGs.”
The ECO added that the mitigation potential can be very low, establishing an appropriate baseline for no-till can be challenging, and many farmers opt to engage in the practice anyway to cut labour, fuel costs and soil loss.
The report instead called for the government to provide other forms of financial support to the sector, for example by linking crop insurance to soil-carbon levels to incentivise farmers to sequester more carbon.
Neither Quebec nor California currently allow offsets from conservation cropping in their carbon markets.
The ECO also recommended that the province ditch its proposed forest management protocol and consider also binning its afforestation/reforestation methodology, saying Ontario lacks an adequate scientific basis for allowing these offsets and also citing concerns relating to permanence.
Forest-related offsets currently make up around three-quarters of the more-than 90 million handed out by California to date, and the report acknowledged that this category could account for a similarly high portion of Ontario’s credits.
As a result, some developers are already combing Ontario for potential opportunities, even before the protocols are finalised. Bluesource Canada late last year signed an agreement to develop one of Ontario’s first projects, teaming up with a forest manager to advance an improved forest management (IFM) initiative.
But ECO highlighted forecasts that forest loss due to fire will double by 2100, and says California’s protocol “does not provide a scientific justification for the specific reversal risk ratings and therefor the size of the buffer” account meant to insure against such events.
“This weakens the credibility of California’s forest offset credits, and leaves Ontario without satisfactory guidance to assure the permanence of offset credits that might be created here,” the report added.
The ECO also flagged a potential lack of additionality in forestry projects, particularly IFM, which it recommended be abandoned.
“Carbon held per hectare on working forestlands within a single region and forest type can vary considerably. If baselines are set at, or close to the average for a region and forest type, many lands that happen to hold more than the average carbon level could qualify for offset credits without changing anything. This would not genuinely create additional carbon sequestration.”
In addition, the report noted that forestry projects can lead to leakage, for example increased harvesting elsewhere.
“Without proof that offset projects reduce wood product demand, it is difficult to justify any discount factor, let alone one that is well below 100%,” it added, referring to California’s current 20% rate, which assumes that a protected forest will see a fifth of its potential wood demand shifted to another forest but which ECO said lacks evidence to support it.
“To ensure the credibility of California-registered offset credits used by Ontario emitters, the government should ask the California Air Resources Board to demonstrate the science behind the discount rates used in California’s offset protocols.”
PROCEED WITH CAUTION
The report also identified mine methane capture and destruction and grassland projects as having potentially dubious environmental credibility.
The ECO recommended that Ontario proceed with caution on grasslands while attempting to minimise permanence, leakage and additionality issues through a ‘properly designed’ programme, which includes the use of discount factors.
On the mine methane, the Commissioner’s Office urged the province to commit to working with its WCI partners to monitor any influence that offset revenue from these projects may have on boosting North American coal production.
The study was unable to form a judgment on livestock emission reduction projects “because very little is known about the proposed enteric fermentation offset protocol, [and] the ECO does not have enough information to provide a rating or make an informed assessment of its merits and demands.”
The report gave passing grades to the remaining seven proposed protocols, which include:
- Landfill gas capture and destruction
- Ozone-depleting substances capture and destruction (ODS)
- Refrigeration systems
- Nitrous oxide reductions from fertilizer management in agriculture
- Anaerobic digestion
- Organic waste management
- Urban forest projects
The ECO examined Ontario’s other climate action efforts, noting that the inaugural year of the province’s cap-and-trade scheme went well. However, it called on the government to work more closely with California and Quebec to reduce the massive allowance supply currently hanging over the WCI market.
The report proposed adjusting future emissions caps and allowance supply “as needed” to successfully meet the governments’ emissions reduction targets – something that California regulators are also looking into themselves at the request of lawmakers.
“I would expect that, from a compliance point of view, Ontario will be able to meet [its] 2020 target because it includes the availability to use offsets and buy allowances from outside Ontario,” Commissioner Dianne Saxe told the Canadian Press.
Her comments are in stark contrast to those made two years ago by previous Commissioner Ellen Schwartzel, who predicted that Ontario would miss its goal to cut emissions by 15% below 1990 levels by 2020 unless it adopts some more ambitious policies.
Tuesday’s ECO report said Ontario’s target to cut emissions 37% by 2030 could also be in jeopardy, and called for each major sector in the economy to adopt a steadily declining carbon budget tied to the provincial GHG cap.
It also urged greater transparency in the province’s emissions accounting, and said the government needs a better plan for spending the proceeds from quarterly allowance auctions, which totalled around C$2 billion last year.
By Lori Martinez and Mike Szabo – email@example.com