The Paris Meeting

The Premier’s and Prime Minister’s Offices will be making submissions at the COP21 world summit in Paris in December explaining to a global audience how they will address reducing climate change in their jurisdictions. They need to have their plans about what they plan to do to support this international effort.

Why does Alberta or the other provinces have to justify this at all anyway?

During the last little while we have been hearing about climate change and how this might affect the global impact to biodiversity and even farming over the longer term. Should we be concerned about this or not? Or is this just another thing for urbanites to be complaining about? The federal government hasn’t been too excited about it to date, although there are some bureaucratic departments preparing reports about it.

The scientific evidence does support the notation of climate change, over and over again. A build-up of atmospheric greenhouse gases (GHG) such as carbon dioxide, methane, nitrous oxide, water vapor and chlorofluorocarbons has been increasing in the troposphere above the earth for the past 100 years. It might not seem like very much of an increase in these gases – 20 to 25 per cent overall, but they are measurable and continue to increase.

Most of this increase was due to economic growth in the west with increased use of fossil fuels: coal powered electricity, use of petroleum motors, natural gas, industry, residential and even from agriculture. Canada’s agriculture share is about eight per cent of the country’s GHG. Overall, agriculture supplies about 14 per cent of the global GHG.

Commitments at the Kyoto Protocol in 2005 created a legal obligation by the member countries including Canada, the U.S., and 35 industrialized countries and the European Union (EU) to reduce their GHG emissions. However, in 2011 Canada pulled out: it couldn’t meet its target commitment. This also was reported to have saved the Canadian government about $14 billion in penalties by not meeting the original agreement.

Prior to 2011 many countries, including Canada, signed a Copenhagen Agreement to cover off Kyoto because it was coming to an end anyway. The Copenhagen pledge is non-binding, but it does set some mark in the sand by committing or suggesting to reduce emissions by 17 per cent below 2005 levels: this is still seven per cent above the 1990 emission levels.

Figure 1. Projected Long-run Carbon Dioxide Levels and Average Global Temperature Increases with Business-as-Usual. Grey areas indicate uncertainty ranges based on model data used. From OECD Environmental Outlook to 2050. Climate Change Chapter, 2011.

Balancing the GHG Ledger

GHG can be emitted, and they can be sequestered or removed. Much of the removal occurs in the land with grasses, land use change where converting from annual crops to perennial crops such as grasslands and pastures, and from new tree and forest land absorption of carbon. Wetlands also act as a carbon sink. Wetland restoration and retention on farmland are also effective mechanisms for GHG sequestration. A carbon accounting system can be set up to use the carbon uptake as a sink for credits against carbon emission. This then lets reporting of emissions having been balanced off with credits. To offset their emission accounts, emitters can purchase these credits.

Any conversion of grasslands to summerfallow or perennial crops, or deforestation to non-forests or reduced forests accounts as a certain amount of carbon emission. This is added to the debit side of the ledger.

Although there are the different greenhouse gases being produced they’re measured as equivalents of carbon dioxide (CO2 or CO2e). Today about 75 per cent of the global emissions are from CO2. The other gases, however, have an overall greater impact per liter.

Methane has about one third of GHG contribution but it’s 25 times more potent at causing increased temperatures. Nitrous oxide has a potency of about 310 times that of CO2, of course making that much more of a problem. The agriculture process produces all of the gases, but it can also help to reduce them to a certain extent. This all gets into the GHG global balance.

The natural process has sunlight come through the atmosphere to warm the earth; most of the rays including ultraviolet are reflected back through this atmosphere. However, with the increase in GHG some of the ultraviolet bounces back to the earth warming it even more.

If you think that the drought last summer was bad, get ready for the next 50 to 100 years. GHG monitoring shows these gases are continuing to rise, almost in a straight-line effect, worldwide. Reports from the Organisation for Economic Co-operation and Development (OECD) indicate that with business-as-usual global GHG could increase by 200 per cent together with corresponding average temperature increases of four to five C degrees. This suggests the winters as well as the summers could be warmer. Of course, this is projecting no changes to continuing increases in CO2 equivalents.

Projected Climate Change

With climatic map modeling, scientists are able to show that some areas in the U.S. by 2100 could become overall warmer. Western Canada and the U.S. show increases of 1.5 to 2°C; most of eastern Canada and the U.S. is projected to go up 0.5 to 1°C. This can be good and bad; mostly not good for agriculture.

Mapping models were done to predict changes in agriculture with business-as-usual. The Saskatchewan Research Council showed in Alberta some gradual reduction in tree and shrub cover, shifts from taller to shorter grassland species and a gradual introduction of plant and animal species currently found only in the U.S. Grassland production in moister regions could produce more forage than in drier areas; this could affect livestock stocking rates positively, and help improve producer incomes.

Some areas with good water would be able to grow more crop varieties and good forage and pasture. Areas with limited water or precipitation could struggle.

Food Security Concerns

Food security also becomes an issue. It’s one thing to get through the summer, be worried about pasture growth and fall forage for this year, but it’s another to look forward for the next 20 and 50 years for overall farm production, particularly in the low moisture regions. The year 2100 is only 85 years away. If nothing happens others will have to deal with the problem.

Food security is a hot topic these days, especially if you have to import as much food as Canada does. According to Statistics Canada, the country presently imports about 35 to 40 per cent of its food. Many of the fruits, fresh vegetables, coffee and tea are brought into the country every day to keep up with the high demand. However, 26 per cent of the beef and 30 per cent of the pork consumed was even imported although we did export a considerable amount of these into a higher priced market. But in the end, 40 per cent on average is still imported.

Trucks and aircraft are coming into the larger centres hourly to fill this need. Our population has the expectation that these are available foods – and they are willing to pay for them. But what happens with higher temperatures and reduced production from import areas south of our border, especially when those increasing populations there will also have high demands?

Agriculture runs on ready source of cashflow. There are also the government subsidies in the form of research, insurance and compensation support and direct producer payments that help keep the system working. Following business profitability one part of the sector would move ahead of the other: dryland pasture and forage where cattle presently spend six to eight months of the year could be challenged as unprofitable; dryland grain production could also be challenged, making the cattle business compromised compared with today’s outlook.

Part of the push to get climate change under wraps are investors wanting some positive reaction from companies where they have their investment portfolios, pensions and RRSPs including the large food groups such as Costco, Nestlé, Kraft-Heinz, Walmart, Archer Daniels Midland (ADM), Cargill – all of whom run on shareholder infusions. Today, 60 per cent of the Fortune 100 companies have GHG reduction mandates. And this seems to be getting more traction.

One monitoring group, the Carbon Disclosure Project (CDP) based in London, UK, surveyed 97 international conglomerates about their resolution or direction for controlling climate change as a way to address long-term product sustainability. More than 60 countries contributed information; more than 50 supply chains are involved. The general outcome was that many firms had existing or emerging schemes including certification programs, checklists or monitors to leverage their suppliers to show some type of compliance. Suppliers to the agri-food sector included producers who supply basic grains and livestock into the system.

Possible Strategies

Now to the meeting in Paris in December. Rather than a full-blown strategy the Premier will probably be focused on an architecture with four pillars:
1) How do we price carbon?
2) How do we undertake a more robust efficiency strategy?
3) How do we grow the economy through renewables?
4) How do we ensure a long-term and sustainable electricity system?

The world is watching this file fairly closely. There are still the disbelievers and deniers: that any warming is just a normal cycling process, or this is just a herd mentality. At the same time, the general population has considerable interest in the environment, and particularly how the farming sector is involved in the environment, and its potential relationship to possible climate change.

During the past few weeks, interest groups including agriculture have been engaging the panel presenting their views on what to possibly do and how to do it. There were two public sessions in Calgary and Edmonton, a chance for anyone who wants to go on-line to participate in the survey and sector presentations on September 17 in Edmonton.

Agriculture and the beef sector do not want to have the next draft of regulations dictating how the province will go about meeting its objectives. One large source of GHG is from the oil sand operation – 22 per cent of the total for the province. Coal-fired power plants bring in 17 per cent, agriculture at eight per cent and forestry comes in at one per cent.

Figure 2. Comparing Alberta’s GHG Profile by Sector. Agriculture produces about eight per cent of the total. Everyone is sure there will be a plan to move from a petroleum-base including the oil sands to alternative energy, but this could take over 50 years to accomplish. Also the large amount of GHG coming from coal power stations needs to be addressed. Alberta’s coal power stations presently supply over 40 per cent of its electricity. The timing for any conversion is also into the next generation.

Ruminant methane belching produces just under 50 per cent of agriculture’s eight per cent for the province, or about four per cent of the provincial total. Additional methane can be released from stored manure when it decomposes under low oxygen conditions seen with lagoons and poorly aerated manure piles. On-farm nitrous oxide comes from the soil; anaerobic respiration due to wet soil conditions or high microbial activity where both carbon and nitrate are present; and in manure storage. Some of the soil nitrate conversion can be caused by excess nitrogen fertilizer application. These can all be modeled to determine tonnes of carbon equivalent for each farm, ranch or feedlot.

One strategy to help reduce GHG is having carbon pricing: charging for excessive GHG emissions. If emitters are penalized, research and process changes can be directed to help reduce their outputs.

Many European countries use this system. British Columbia has a $30 per tonne tax for GHG (equal to about 7.67 cents per litre for diesel); and Alberta has a hybrid of a carbon pricing system and a performance standard for industry. Alberta’s agriculture sector is excluded for now. Today there is a levy of $15 per tonne for GHG to large industries such as coal powered electricity generation and the oil sands that produce 100,000 tonnes of GHG or more per year. This takes care of about 50 per cent of Alberta’s emissions. The levy will move up to $20 on January 1, 2016, and in 2017, to $30.

Figure 3. Alberta’s Agriculture GHG Source by Function. Ruminant belched methane produces over 40 per cent of the total agriculture sourced GHG.The move to a $30 carbon levy could increase the cost of fuel manufacturing. If agriculture became part of the formula farm diesel could increase by 7.67 cents per litre, or an extra cost of $1.30 to $1.50 per acre for most crops. This is an extra $1.00 to $1.50 per tonne, depending on the crop.

There is presently an offset program for agriculture where emitting companies can compensate Alberta farmers for providing a carbon sink. Offsets allow a company to voluntarily purchase the equivalent amount of GHG they’re producing, possibly at a fee less than the outright government levy. This can be paid to those providing the offset including farmers who follow an audited program as an ecological service (ES) that stores or reduces carbon in the system.

Alberta offers 13 agriculture carbon offset programs and is presently working on developing more of them. These include dealing with tillage/conservation, beef low residual feed intake, reduced age at harvest and days on feed and others. The major problem is the amount of administrative detail required and the audit process. Of the 10 available, three are actually used the most: tillage, biogas and a wind power project. However, even with these restraints over the years more that $100 million has been paid out from the offset program.

Some of these agricultural GHG levels can be managed, both methane and nitrous oxide: this is part of the sector’s focus. Livestock feeding management, manure management and other best management practices (BMP) on the farm can all help reduce GHG emission, and play a part in the climate change initiative. Changing from annual crops to perennials helps store carbon in soil and forage. This could be a positive use for marginal land that has come out of pasture for crops, or for some pastureland destined to be used as cropland.

Offsets, however, are presently not generally that important to farmers: they have been reducing GHG’s in ways that make economic sense to them, such as converting to no-till farming or rotational grazing, not because they might get a few dollars in offsets.

Figure 4. GHG pools. Forests and perennial grasses sequester or use carbon dioxide; cattle belch methane.It also points toward a need for more research in the area to better understand the GHG interactions at the farm. What is realistic and what is market driven at the same time? A farmer’s job is maximizing the return on the operation. At the same time society is concerned with climate change, something to be managed and compensated (or at least not penalized) for reducing some of the causes.

Working with the System

It’s the agriculture sector general direction to work with the system and avoid carbon regulation. Generally as price takers the sector wants to participate, work with the program and avoid increasing prohibitive costs to take away from already slim margins.

Producers and industry groups had a chance to voice their views to the panel. We do have thoughts on all the pillars and can participate both to reduce emissions and assist in the effort. The industry needs to be at the table.