Thursday, April 14, 2022

Once bitten, Alberta farmers shy

Alberta farmers were bitten once when the province revoked carbon credits, so they’re reluctant to participate in the current program, according to a study by the  University of Calgary’s School of Public Policy.

Participating in a carbon-credit system allows farmers to generate credits for reducing emissions; they can then sell those credits for cash on a credit market to emitters who need to purchase carbon-offset allowances for exceeding their mandated emission limits, the study explains.

“Despite there being an active carbon-offset market in Alberta, however, farmers in the province hardly participate,” it said.

”This appears partly due to a history of regulatory risk: the agriculture sector has seen the revocation of carbon-credit eligibility for certain practices, and invalidated credits can lead to significant financial losses for farmers. 

“Farmers are also reluctant to participate due to the inadequacy of offset credit revenues in covering the foregone costs of implementing emission-reduction practices given current carbon-offset prices and the emissions level per farm.” 

 It said some lower-emission farming protocols have proved profitable for farmers by improving efficiency, even without carbon-offset incentives. 

“While farmers may adopt these practices for their own reasons, they are reluctant to participate in Alberta’s carbon-offset market unless they are sufficiently rewarded. Market conditions thus far have not encouraged them to do so.

“Alberta farmers may continue to largely sit out the carbon-credit market until returns for earning credits become more stable and more rewarding.”

The study recommends the government should try to persuade farmers to reduce carbon emissions for their own sake and not bother trying to persuade them to sell carbon credits because that “will, for the time being, remain a difficult sell. “