Soil carbon measurement and carbon offset aggregation for Agricultural Producers.
SOIL CARBON AND CLIMATE CHANGE
Soil is the world’s single largest reservoir of carbon. It sequesters and stores excess carbon dioxide (CO2) from the atmosphere while producing our food. Vegetation draws down CO2 and locks it in the soil through photosynthesis and biological systems to create soil organic carbon (SOC), the most important factor in the health and fertility of soil. And scientists now agree that SOC loss is the most important factor in chronic global degradation and erosion of soil.
It is estimated that with regenerative agriculture and proper soil management, the world could sequester three billion tonnes of carbon per year. In BC and Alberta alone, there is approximately 20 million hectares (50 million acres) of ranchland.
Up to now, the measurement of SOC has been complex and prohibitively expensive. However, if we can cost-effectively measure and monitor the carbon in soil and its accrual, there can be official offset protocols that will reward those producers practicing regenerative agricultural via the carbon markets. Pachaterrae is in a unique position to introduce such accurate and cost-effective measurement together with the offset protocols needed to unlock this tremendous value.
Using the conservative price of $11 per tonne CO2e achieved in some voluntary markets, the industry could realize $900 million in carbon offsets per year. The bulk of this will go to producers who practice regenerative agriculture.
UNDERSTANDING THE PROBLEM
Alberta emits around 274 million tonnes of carbon equivalent per year while BC and Ontario’s annual emissions are 50 million tonnes and 155 million tonnes respectively.
Alberta's Emissions & Offsets
Alberta has by far the highest emissions in Canada, which is why the province saw the need to start their Climate Leadership Program as far back as 2007.
Under current programs there is a significant shortage of viable greenhouse gas (GHG) offsets. Since the inception of the Alberta cap and trade system, a total of 25.2 million tonnes of offsets were generated, of which only 800,000 were registered in 2016.
Recent attempts at creating large-scale offsets were very expensive. For example, the Shell Quest Project cost $1.5 billion to build but only sequesters 1 million tons of carbon per year, which is an upfront cost of $1,500 per tonne of carbon per year. Moreover these projects rarely show additional benefits to industry, such as food security or increased production yield.
On the other end of the equation, producers who have been practicing regenerative agriculture for years are frustrated because their efforts in increasing SOC are not being rewarded or recognized by an offset or otherwise. Although the economics of regenerative agriculture is improving, they still face competitiveness issues with conventional agriculture and a robust offset protocol may well tip the scales.
HOW A CARBON PRICING SYSTEM WORKS
The government caps the allowable GHG emissions by industry. The caps are benchmarked on emissions for normal, efficient operations. The caps become more stringent every year, forcing industry to innovate and work towards carbon neutrality. In Alberta, emitters must report emissions over 100,000 tonnes and pay a “tax” per tonne for the emissions over the allowed cap.
To support industries that reduce emissions, the government allows emitters to buy registered carbon offsets. An offset is a verified and registered reduction of GHG, measured in tonne CE. In other words, rather
than pay the carbon “tax” to the government, the offset system allows emitters to directly finance and support projects that reduce emissions. The supply of offsets in the market largely determines the discount paid relative to the set government rate.
This is already a significant market. Over 25 million offsets were registered in Alberta by 2018.