Climate leadership in BC: a look at the legislation

British Columbia is a leader in climate policy, and we’re proud to be headquartered in a province that has taken an ambitious position on climate action. With the leadership position that BC has taken, there are bound to be lessons along the way as the Province navigates uncharted waters while working to shift to a low carbon economy.

Over the last few days the Vancouver Sun has published a series of articles questioning projects funded by the Pacific Carbon Trust. The Sun’s criticism of the Pacific Carbon Trust’s portfolio essentially boils down to three issues related to additionality: funding, early action initiatives prior to mandated emissions reductions, and project start date. We thought we would review some of these issues to shed light on how the legislation has shaped the projects that offset the public sector’s greenhouse gas emissions.

1. Funding – To be considered financially additional, the offset funding must help overcome the financial and technological barriers to project implementation. Even with grants and other incentives, many clean energy projects face significant financial barriers to adoption. As a result, projects that receive other sources of funding are not precluded from also receiving offset funding. Offsets are one piece of the financial model, and are stackable with other funds. Each project is assessed on its own merits to determine whether carbon offset funding is required.
   
   
2. Early action initiatives prior to mandated emissions reductions – Offsets can encourage organizations to undertake projects earlier than regulatory start dates, but not after regulation is in place. In other words, rather than waiting until a regulation is enforced, offsets can spur project development in advance of the regulation, which results in a net climate benefit. For example, most landfills in BC will have to capture landfill gas by 2016, but offsets can help incentivize municipalities to take action now.
   
   
3. Project Start Date –There are two points raised in the Sun’s article regarding project start date: 1) The project must have started after November 29th, 2007, and 2) projects already underway are eligible for carbon offset funding. BC’s Emission Offsets Regulation states that a project’s activities, e.g. burning biomass, must start after November 29th, 2007; however, under the guidelines the decision making for the project could have started earlier than 2007. This timing gap between a project’s investment decision and the commencement of project activities seems to be a source of confusion.
   
   The second point around project start dates is that projects that are underway are eligible for ongoing funding from offsets. The key to additionality is that the business case for the project includes offset funding, and the decision is made to select that project over and above business as usual. Carbon offsets are incorporated into this decision-making process and incentivize decision-makers to undertake the project. In reality, companies begin considering large capital projects long in advance of a spending decision taking place. In almost all cases, payment for offsets is only made retroactively, once the reductions have taken place and been verified.

 

The projects that the Pacific Carbon Trust has purchased have been developed and certified according to the legislation that is in place. This includes independent third-party assessment throughout the project development cycle to the same level of rigour as the audits of public companies financial statements. These projects have been a driver of investment, innovation, energy-efficiency and employment in BC. An example: the first credits sold to the Pacific Carbon Trust were from the greenhouse industry. The new carbon capture technology recently unveiled by ProSelect at the SunSelect greenhouse in Delta demonstrates how investment in carbon reduction technologies can help drive next-level innovation.

With any new program, project, or legislation, issues arise in the system design that can be improved upon. Addressing criticism, the Province announced earlier this month that it would fund a $5-million capital program for school districts, eliminate carbon measurement costs, streamline the system, and create an advisory panel for the Pacific Carbon Trust.

We agree that a full review of the successes and lessons to be learned of the current program would be positive for all parties involved. Climate change presents real challenges to British Columbia’s economic development and we need to work together to ensure that we improve the systems we have in place, rather than ‘scrapping’ the system altogether.

 

Media Contact:
Alison Murphy, Offsetters: 604-699-2672 or alison.murphy@offsetters.ca