Public sector groups in Nanaimo started bucking up thousands of dollars this year in carbon offset costs as part of the province’s commitment to become carbon neutral.
The carbon offset money from education, health and other public sector buildings all goes to the same place – the Pacific Carbon Trust, a Crown corporation established in 2008 to deliver B.C.-based greenhouse gas offsets.
B.C. businesses and organizations with projects or activities that drastically reduce or remove carbon dioxide from the atmosphere can sell those emission savings to the Pacific Carbon Trust as carbon offsets.
The trust in turn sells these offsets to public sector organizations – and some private sector clients – at a rate of $25 per tonne of greenhouse gas emissions.
Before the province established the Pacific Carbon Trust, there was a limited number of B.C.-produced offsets available, said Scott MacDonald, chief executive officer.
The province also wanted to ensure the offsets meet a certain quality standard and are truly local offsets, he added.
“B.C. is positioned to be a leader in North America around this,” said MacDonald. “We’re one of the early buyers. From our perspective, by creating an offset market, you are creating an incentive for people to reduce their emissions.”
The trust estimates it will need to purchase between 800,000 and one million tonnes of offsets for the public sector to be carbon neutral each year – a cost of $20-$25 million to the public sector.
“We’ll be investing in approximately 30 offset projects each year,” said MacDonald.
Each project will range in size from about 1,500 tonnes to more than 100,000 tonnes of emissions reduced or removed from the atmosphere. Companies selling offsets to the trust must measure their reduction and then have it evaluated by a third-party engineer and verified by a third-party accountant, said MacDonald.
The trust does not disclose the per-tonne price paid to those private sector companies.
“They are all negotiated on an individual, contract basis,” said MacDonald.
There are three types of projects that generate carbon credits for a company, he added – fuel switch projects, such as a cement plant’s switch to burning wood waste instead of coal; increased energy efficiency, such as a Delta company that installed insulating curtains in greenhouses to help reduce use of natural gas; and carbon sequestration, where carbon is removed from the atmosphere and deposited in a reservoir. An example of the latter is planting trees, which absorb carbon from the air.
As the trust and the B.C. offset market grow, B.C. could begin carbon trading on international markets, MacDonald said.
Ian Gartshore, president of Shore Energy Solutions Ltd. and chairman of the non-profit Energy Solutions for Vancouver Island, said carbon trading provides organizations with an incentive to become more green and shifts the onus onto polluters for reducing their emissions.
The end result is less carbon entering the atmosphere and companies saving money. But carbon trading is only part of the solution, Gartshore added, and he believes it needs to be paired with a reworked carbon tax, which was also introduced in 2008.
The province’s carbon tax is currently revenue-neutral and flows back to individuals and businesses in tax cuts, he said, but to be truly effective, the money should go toward emission-reducing projects, such as bike lanes in municipalities, solar hot water systems for schools or even help for businesses and individuals for retrofitting projects.
“Carbon trading is on the open market, so it’s not targeted,” he said. “If you want to put money in particular sectors, then the carbon tax is the better vehicle.”