Transcript the slideshow - Keystone Agricultural Producers

Keystone Agricultural Producers of Manitoba
Carbon pricing:
Making it work for Manitoba farmers
Presented by:
James Battershill, General Manager
Sean Goertzen, Climate Project Coordinator
October 2016
Keystone Agricultural Producers of Manitoba
Climate Change
Keystone Agricultural Producers of Manitoba
Climate Change
• The climate is changing
• On the Prairies: more floods, droughts, extreme heat, …
• Caused by greenhouse gas emissions from human activity
• Carbon pricing could help reduce emissions
Keystone Agricultural Producers of Manitoba
Why this Matters to Manitoba Farmers
Keystone Agricultural Producers of Manitoba
Why this Matters to Manitoba Farmers
• Adapting will be a major challenge
• Canada is putting a price on carbon
• Let’s push for a design that will work for farmers
Keystone Agricultural Producers of Manitoba
Emissions
Keystone Agricultural Producers of Manitoba
Emissions
• Ag is 40% of Manitoba’s emissions
Sources:
• Fertilizer
• Livestock
• Fuels
Keystone Agricultural Producers of Manitoba
Sequestration
Keystone Agricultural Producers of Manitoba
Sequestration
• Crop and pasture lands sequester carbon and nitrogen,
preventing emissions
• Certain practices boost sequestration
• Zero tillage, rotational grazing, …
• Ag can be part of the solution
• A carbon price could help pay for it
Keystone Agricultural Producers of Manitoba
Carbon Pricing
Keystone Agricultural Producers of Manitoba
Carbon Pricing
• A tool to fight climate change
• People and businesses pay for their emissions
• Let’s them decide how to reduce
Keystone Agricultural Producers of Manitoba
Risks & Opportunities
Keystone Agricultural Producers of Manitoba
Risks
• Could cover fertilizer, fuel, and other inputs
• Impact on farmers depends on:
• Coverage
• Price
• Costs passed along
Keystone Agricultural Producers of Manitoba
Opportunities
• The impact also depends on options available to:
• Reduce emissions (avoid the carbon price)
• Get paid to sequester carbon
• These actions can:
• Help farmers’ bottom line
• Slow climate change
• Strengthen social license
Keystone Agricultural Producers of Manitoba
BC’s Carbon Tax
Keystone Agricultural Producers of Manitoba
BC’s Carbon Tax
• $30 per tonne of emissions
• Applied to fuels, including:
Gas
Diesel
Propane
Natural gas
• Simple design
6.67 cents per litre
7.67 cents per litre
4.62 cents per litre
5.70 cents per cubic metre
Keystone Agricultural Producers of Manitoba
Revenue Neutral
• Government must cut other taxes
• BC has cut:
• Personal income tax
• Corporate income tax
• Small business income tax
• School tax on farmland by half
Keystone Agricultural Producers of Manitoba
Farmers’ Experiences
• Greenhouse growers and other high energy users hit harder
• Small impact on most farms at $30
• In 2014, BC introduced:
• 80% rebate for greenhouse growers
• Full exemption for farm gas and diesel
Keystone Agricultural Producers of Manitoba
Alberta’s Hybrid
Keystone Agricultural Producers of Manitoba
Alberta’s Hybrid
• Covers power plants and industry, including fertilizer
manufacturing
• Facilities must reduce their emissions or pay the carbon price:
• Buy credits from facilities that beat their target
• Pay into tech fund
• Buy offset credits
Keystone Agricultural Producers of Manitoba
Alberta’s Offset Market
• Farmers can reduce emissions, earn offset credits, and sell them to
industry
• Projects include managing tillage, fertilizer, manure, grazing, feed,
biomass, ...
• Strict rules
• Farmers work with project developers
• Could get “early action” credits until 2012
Keystone Agricultural Producers of Manitoba
Farmers’ Experiences
• Early action credits were popular; new projects less so
• It’s new revenue, but prices need to exceed the high costs
• Project developers take a large share
• Prices could rise soon
Keystone Agricultural Producers of Manitoba
Alberta’s New Carbon Tax
Keystone Agricultural Producers of Manitoba
Alberta’s Carbon Tax
• $20 per tonne in 2017, $30 in 2018
• Covers fuels
• Farm gas and diesel exempt
Keystone Agricultural Producers of Manitoba
Cap and Trade
Keystone Agricultural Producers of Manitoba
Cap and Trade
• Cap set on total emissions
• Businesses buy allowances
• High emitters buy extra allowances from low emitters
• Cap and trade, carbon tax, hybrid: all ways to put a price on
carbon
Keystone Agricultural Producers of Manitoba
Cap and Trade: Where it’s Used
• EU, California, Quebec, and soon Ontario
• California & Quebec cover power plants, industry, & fuel
distributors
• Costs passed on to farmers, like any carbon price
• Not a large impact for most farms at $16 per tonne
• Linked market
Keystone Agricultural Producers of Manitoba
Revenue Recycling
Keystone Agricultural Producers of Manitoba
Revenue Recycling
• How government uses the money
• BC cuts other taxes
• California, Quebec, Ontario use it to further reduce emissions
• e.g. retrofit grain dryers, protect soil health, …
• Reduce emissions = avoid carbon price
Keystone Agricultural Producers of Manitoba
Manitoba Coal Tax & Ban
Keystone Agricultural Producers of Manitoba
Manitoba Coal Tax & Ban
• Our coal tax is a narrow carbon price
• Placed on power plants and industry in 2012
• Coal ban on space and water heating in 2014
• Recycled tax revenue to help businesses deal with the ban
Keystone Agricultural Producers of Manitoba
Government Plans
Keystone Agricultural Producers of Manitoba
Government Plans
• Feds: $10 in 2018, $50 by 2022
• Provinces design their own systems
• Manitoba: carbon tax or hybrid
• ALUS could help farmers sequester carbon
Keystone Agricultural Producers of Manitoba
What could work for Manitoba farmers?
Keystone Agricultural Producers of Manitoba
Should agricultural inputs be exempt from Manitoba’s carbon
price?
Which ones (if any) and why?
Keystone Agricultural Producers of Manitoba
Are you concerned that a carbon price will increase the cost of
your inputs?
Keystone Agricultural Producers of Manitoba
What’s more important to you, having new funding to improve
your operations and reduce emissions, or a carbon price that
is as simple as possible?
Keystone Agricultural Producers of Manitoba
Consider the idea of a “climate friendly” label for products from
farms that are reducing emissions and improving sequestration.
Could this help farmers strengthen their social license with
consumers?
Could it add a competitive advantage to our products globally?
What challenges might this approach face?
Keystone Agricultural Producers of Manitoba
Thank you!