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The Climate Change
Challenge for Agriculture
At issue is how the world will manage its carbon
and nitrogen stocks sustainably
Presentation to the Kyoto Mechanisms Seminar
March 14, 2003 by Dr. R. J. MacGregor
Agriculture and Agri-Food Canada
The Agriculture Policy Framework
(APF) is our basis for moving forward...
The APF elements:
Food Safety and Food Quality
Environment
Science and
Innovation
Renewal
Business
Risk Management
International
Trade & Development
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…to promote sustainable and
profitable resource use...
Environment:
• Farm
Environmental
Planning
• Managing:
- pests,
- nutrients
- nuisances
- land and water
Water
Nutrients
Pathogens
Pesticides
Biodiversity
Soil
Erosion
Organic matter
Air
Wildlife habitat Particulates
Species at risk Greenhouse
Wildlife damage gases
Odours
Innovation
•Biofuels,
• Bioproducts
• Bioprocesses
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…where addressing climate change is about
contributing to environmental solutions that
are economically sustainable
• Climate change is all about managing the
carbon and nitrogen cycles
• Agriculture is based on using energy from
the sun for photosynthesis to transform
carbon & nitrogen into food, fibre and bioproducts consumed by humans
• Agriculture Policy Framework links goals for
environmental management and innovation
to better manage natural resources, based
on carbon and nitrogen cycles
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Climate change is a global challenge
…changing how we manage C & N
• All nations, industries and citizens need to
learn to sustainably manage carbon,
nitrogen and other sources of greenhouse
gases
• Agriculture has an important role in these
cycles (20% of global emissions)
• The challenge is to learn to profitably
recycle rather than extract carbon and
nitrogen
• Canada has opportunities to use its
leadership in agricultural GHG science to
create advantages in world markets
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Agriculture has many unique opportunities
to manage greenhouse gases ...
Reduce
Greenhouse gas
emissions
Agricultural
GHG
Management
Remove
Atmospheric C to store
in soils and perennial
crops
Replace
Adapt
Use science,
innovation &
business risk
management
to adapt to
climate
change
Innovate to replace fossil
fuels with bio-based
energy, chemicals and
materials
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…because agriculture’s biological
processes make us different from
energy users
Agriculture Emission Sources
1
Sources
Other
Gas
% of
Emissions
CO2
CH4
N2O
3%
41%
56%
16.11
Manure
12.4
Fertilizers
7.17
Crops
18.5
Enteric fermentation
0
1996
10
20
Tg CO2 Equivalent
Agriculture’s primary energy source is the sun, not fossil fuels.
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We have opportunities to reduce
emissions and improve productivity
• Emissions represent inefficient use of
resources:
– Increasing efficiency can improve the economic
performance and reduce the environmental
footprint of agriculture. Some opportunities are
to:
• Improve nutrient use efficiency
• Improve efficiency of livestock feeding
• For 2008-12 -- 1 Mt emissions reductions (mostly N2O
& CH4)
• We can make efficiency gains now, but more
science and technology are needed:
• to improve understanding and control of nitrous oxide
and methane emissions
• to pave way for better management practices and
technologies
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We have opportunities to remove
carbon dioxide from the air in ways that
enhance sustainable resource use
• Improve management of soil & grazing lands
• 10 Mt BAU sink to maintain
• For 2008-12 -- 7.7 Mt incremental sinks
• Improve marginal land management
– Promote permanent cover/perennial growth,
agroforestry, etc (Greencover is a start providing
1.1 MT)
• Invest in science
• improve sequestration techniques & measurement
• position ourselves to consider other land bases (eg.
Wetlands) in order to support public policy development
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We have opportunities to innovate to replace
conventional with renewable feedstocks to
link us with future economic growth
• Innovation in biofuels, bioproducts &
bioprocesses
– Use ethanol & biodiesel to address current
emissions:
• Encourage policies for Canadian ethanol/biodiesel
market and industry development that keeps sourcing,
production & benefits in Canada, and builds industrial
base for future.
– Put in place building blocks for future technology
• Research, technology development, demonstration and
industry development to improve efficiency of grainbased ethanol in short-term and cellulosic ethanol in the
medium term
• Invest in research, analysis and industrial development
to lay foundation for long-term transition to renewable
bioproducts & bioprocesses
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Annual impact of mitigative strategies
(relative to business-as-usual)
Our strategy must be built on the fact
that many Kyotos are required
replace
reduce
0
remove
2000
2010
2020
2030
2040
2050
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For the first commitment period,
we know we can contribute
MT CO2e
75
BAU without
Sinks
70
BAU with
Sinks
65
60
Gap (6.5 Mt)
55
6% below
1990
50
Potential reductions
45
from BAU (5 to 20 Mt)
[with incentives]
40
35
1990
1999
2010
Incentives are needed to send the right signals
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There is a strong role for agriculture in
the Federal Plan for Mitigation ...
First steps- Building the Foundation on Solid Science
Increase awareness: Baseline study of awareness level and small programs to increase
knowledge of agriculture’s role in climate change and GHG emission
Develop GHG mitigation & science programs: Shelterbelts, Biofuels, Model Farms, GHG
Mitigation (soil, nutrients, livestock), Manure technology, Carbon measurement/verification
International: Win recognition of agricultural sinks in Kyoto Protocol
New Steps - To Realize the Potential
Develop emissions trading system: Agriculture has opportunity to participate in market
for offsets (provides flexibility to firms in a DET system)
Develop climate friendly technology: Invest in promising areas such as ethanol from
cellulose feedstocks, bioenergy, bioproducts
Encourage renewable biofuels: Expand use of ethanol and biodiesel in transportation
with potential benefits for agricultural sector
Building core knowledge: Develop economically viable mitigation methods by investing in
science and economic analysis
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… and the Federal Plan acknowledges
the potential
Action
• Business as Usual (BAU) sink
• Current programs
-AP2000, Greencover & APF
• Next steps
- emissions reductions
- sinks
TOTAL
Estimated result
(2008-12)
10 Mt/y
5.8 Mt/y
1 Mt/y
9 Mt/y
24.8 Mt/y
Counting everything in the National Inventory is only one challenge,
attribution for program delivery is another major issue
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The Federal Plan identifies offsets as
the incent mechanism for the
agricultural sector
• The sector indicated they preferred a market
mechanism to more traditional instruments
• We made the case and the “door is open” to
developing an offset system that will work
for agriculture domestically
• Getting Articles 3.4 in Kyoto was the key to
unlocking this door
To be successful, offsets must make economic sense, as well as
environmental sense
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The sector will need to be involved in the
design of a workable offset system - become
familiar with the issues ...
• Offsets must be real
– They have to provide sinks or emission reductions that will be
counted in the national inventory - IPCC rules will be important
• They must be measurable and verifiable
– Science is the key and we have good start, but more required
(NCGAVS, model farms, GHGMP, CCFIA, BIOCAP etc.)
• Probably need to be project based
– An entity will have to develop a plan to show they can provide
real offsets: ex ante review, ex post verification, certification
• They must be additional/surplus & occur in
2008-12
– Over and above “business as usual” in the commitment period
– Need to be differentiated from other incentives or
requirements
– There is a policy against providing “credit for early action”
– This is the “baseline” issue and critical to whole system and
dealing with continuum and saturation
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… and there is more to a system...
• They must be calculated on a net-net basis
• “Leakage” will need to be accounted for
• The system must be affordable
– Transaction costs must be kept low relative to the
value of the offsets - @ $10/t this may be a
challenge
• The role of numerous players will need to be
sorted out
– producers, registry, government, auditors,
aggregators, futures/commodity markets,
insurance industry etc.
2000
2010
2020
2030
2040
2050
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… and more issues of particular
interest to agriculture
• Permanence and Liability are critical issues
for the sector wrt. soil sinks
• At Calgary Credit Workshop agricultural
participants did not support the transfer of
the liability for emission reductions from
covered sector to agricultural sector
• Problem is that building sinks depends not
only on management choices - but also on
the weather
• It may not prove economic to maintain them
on a long term basis - producer wants
flexibility also
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What are the next steps?
• Development of an Offset System within a
DET/covenant world for Large Industrial
Emitters (LIE)
–
–
–
–
options
rules
analysis
consultations
• Best guess - we will need to have pretty
good idea on “if” and “how” an offset
system would work by this fall!!!!!!
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But we also need to think about adaptation
because we can’t move fast enough to
avoid
some
impacts
• Expected changes
– Warmer temperatures, drier or wetter conditions, more extreme
events
– water supply & infrastructure
– financial risk management
Doubling of CO2
– food safety, disease
(2050 under business as usual)
management/eradication
•
Assess impacts & plan to
manage risks.
– Build knowledge base,
networks & planning systems.
– Assess impacts and adaptation
strategies for key policies
e.g. water infrastructure &
drought management
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