On October 16th, 2019, the Climate Action Reserve approved a long-awaited protocol that gives Canadian landowners an opportunity to generate carbon offsets through the preservation of grassland areas.  The protocol, titled “Canada Grassland”, provides the rules around how to quantify, report and verify the carbon that is retained in soils by preventing their release, along with other associated greenhouse gas (GHG) emissions, into the atmosphere through the conversion of existing grassland into cropland. This framework builds off a similar protocol that has been established in the United States, giving Canadian landowners access to the same financial incentives as enjoyed by their southern counterparts.

Landowners who are facing pressure to convert their land to cropland, and where their property has been in grassland for at least 10 years, have an opportunity to develop carbon offset credits that can be traded in the voluntary market. To take advantage of this opportunity, the owners must be willing to enter into a Qualified Land Agreement to legally prevent the conversion from grassland to another land use. While Canadians may be familiar with regulated carbon markets, where entities that fall under regulations must either pay a penalty or offset their GHG emissions, the lesser-known voluntary market serves a host of public and private entities who desire to voluntarily offset their emissions.

The value for carbon credits tends to be lower in the voluntary market as compared to those in regulated markets, but voluntary offset pricing is relatively immune to political and market fluctuations, thus providing the potential for an additional, relatively stable revenue stream for landowners who are dedicated to the conservation and preservation of their land. Down the road, if these projects demonstrate the viability of this activity to the Federal and Provincial governments, they could eventually be adopted by the regulated and higher value markets.

There is one unique flexibility mechanism that has been built into this protocol. In the US version, the landowner must guarantee that the land will be maintained and monitored for 100 years after the credits have been generated. In the Canadian version, there is an option to only commit to the 20-year minimum; however, in doing so, the number of credits would need to be adjusted for that lower period of time commitment.

Another significant difference between the two protocol versions centers around financial additionality.  One major challenge with the Canadian version is the requirement to conduct a real estate appraisal to assess whether there is financial pressure to convert the land to cropland, which would add additional cost to developing the project. In order for a property to be eligible, there must be demonstrated financial pressure for conversion to cropland, meaning that the cost for this eligibility assessment step will need to be accrued, whether the land can then generate credits or not.

This provides a first concrete step for landowners to gain the recognition and compensation for the environmental services they provide through the conservation of their land. The Edenfort team has a long history of assisting Canadian agricultural stakeholders in monetizing their conservation efforts, so we are ready to support you on your journey towards carbon credit generation. Please reach out to us if you desire to learn more or if you have interest in evaluating your land for this opportunity.

 

About the Author

Shahira Esmail is a Project Advisor at Edenfort and is based in San Francisco, California.  She has broad experience in working to implement scientifically rigorous programs that result in the adoption of innovative practices, the quantification of environmental benefits and the reporting of these successes for the agricultural, forestry and clean-tech sectors.  Shahira earned a Bachelor of Science degree from the University of Guelph and a Master’s in Environmental Studies from the University of Waterloo.  With a strong background in environmental research and policy and detailed expertise in data management and analysis, climate change strategy, carbon mitigation, and project development, Shahira leads with passion in helping to develop solutions to mitigate the impacts of climate change on a warming planet.

 

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