Saskatchewan Soil Conservation Association Inc. Box North Park PO, Saskatoon, SK S7K 8J

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1 Saskatchewan Soil Conservation Association Inc. Box North Park PO, Saskatoon, SK S7K 8J EXECUTIVE SUMMARY SPEAKING POINTS / KEY MESSAGES (Version 3) Carbon Advisory Committee November 2016 Saskatchewan growers using minimum or zero till (direct seeding) are sequestering 8.75 million new tons of CO2 every year on more than 23 million acres of farmland. That is the equivalent of taking 1.83 million cars off the road. These figures come from the Prairie Soil Carbon Balance (PSCB) Project a collaboration of the Saskatchewan Soil Conservation Association and soil scientists with Agriculture and Agri-Food Canada - that analyzed thousands of samples, taken at intervals over a 15-year period, from farms in all of the soil zones across Saskatchewan s grain growing regions. The PSCB also proves that carbon sequestration does not decline over time as previously thought, but continues at a high rate deep into the prairie soil year after year. This finding is significant because maintaining and increasing soil sinks, that sequester large amounts of greenhouse gases (GHGs), is one of the most important long-term solutions to climate change identified by the Kyoto Protocol and the Paris Agreement. Saskatchewan growers will own a majority of the soil carbon offsets created in Canada, and have long been involved in research and policy development for soil carbon sequestration. The Carbon Advisory Committee (CAC) proposes that Saskatchewan growers, in partnership with the Saskatchewan Crop Insurance Corporation (SCIC), develop a Soil Carbon Registry/Bank. This would ensure a fair return to farmers by enabling them to register and bank the offsets they generate until they decide to sell them. SCIC, with its long working relationship with producers, and expertise in the area of soil carbon offsets, would be a natural partner in the development of the model. The Soil Carbon Registry/Bank would be self-financing, with no cost to government over the long term. The federal and provincial governments agreed, in the Vancouver Declaration on March 3, 2016, to establish a pan-canadian offset protocols framework and verified carbon credits for carbon sinks that could be traded internationally. We urge the federal government to give this commitment, which will take into account international best practices and accounting standards, the highest possible priority to resolve serious issues such as the proper baseline for offset protocols. (See the actual text of the statement in the attached Speaking Points.) If emitters of GHGs are penalized through the imposition of a carbon tax or emission reduction limits, it is reasonable that those who remove GHGs, through carbon sequestration or capture, should be compensated in equal measure. The CAC wants to ensure that soil carbon sequestration is fully recognized and rewarded for its contribution to climate change reduction goals.

2 In all of the discussion about soil sinks in Canada, the single most important fact is that the basic science is well established, conclusive and respected by soil scientists around the world. The 0.38 tons of CO2 per acre being sequestered every year by Saskatchewan growers using minimum or zero till (direct seeding) is the average of the scientific analysis of thousands of samples taken in 1996, 1999, 2005 and 2011 from all of the soil zones across the Saskatchewan grain growing regions. The total of 8.75 million new tons of CO2 being sequestered each and every year in Saskatchewan soil is the result of 23,034,000 acres (2011 Census) of minimum or zero till crop management in this province. The 8.75 million tons of CO2 being sequestered is the equivalent of 1.83 million cars being taken off the road (or well over twice the number of light motor vehicles registered in all of Saskatchewan in 2015). That research, the Prairie Soil Carbon Balance (PSCB) Project, was the result of the partnership and international leadership of the Saskatchewan Soil Conservation Association (SSCA) and the soil scientists with Agriculture and Agri-Food Canada (AAFC) in the early 1990s. Much of the previous scientific thinking about soil sequestration of CO2 was based on small plot research and incorporated into soil system computer models, the most notable one being the Century Model. The PSCB Project was initiated to move the science from small plots to the field scale. One of the early assumptions made in the Century Model, now proven false by the PSCB Project, was that carbon sequestration into the soil under zero or minimum tillage would decline over time and that soil would become saturated with the CO2 after a period of 20 to 30 years. The PSCB Project and other research in Saskatchewan proved that, in fact, the sequestration was going much deeper into the prairie soil than initially believed and that sequestration rates were continuing at a high level. Scientific clarification of the saturation issue, which is essential for the long term projections and use of the soil sink in meeting Canada s emission reduction goals, will depend on further research. More research is also required to establish the management practices that will maximize carbon sequestration in hay and pasture land. If emitters of GHGs are penalized through the imposition of a carbon tax on pollution or emission reduction limits, it is reasonable that those who are removing GHGs, through carbon sequestration or capture, should be compensated in equal measure. Grower ownership of the soil carbon offset, and the option to bank that offset for sale at some future date, are the two critical elements necessary to ensure a fair return to farmers.

3 The Alberta carbon offset trading experience, which required the use of aggregators for the sale of offsets, is a clear illustration of a system that did not provide a fair return to producers. We propose that a Soil Carbon Registry/Bank, for growers to register and to hold their offsets until they are sold, could be developed in Saskatchewan by a partnership between producers and the Saskatchewan Crop Insurance Corporation (SCIC). Saskatchewan growers will own a majority of the soil carbon offsets created in Canada and have a long history of involvement in the research and policy development for soil carbon. SCIC has experience with soil carbon offsets and a long working relationship with producers so they would be a natural partner in the development of the model. The Soil Carbon Registry/Bank should be self-financing, with no cost to government over the long term. The protocol to define a soil carbon offset or removal, whether it is developed by Canada or Saskatchewan, needs to be one that it is based on science and is accepted by international regulators. (It should be noted that the Carbon Advisory Committee will emphatically oppose any attempt to adopt the Alberta soil carbon protocol. It is an integral part of the systematic approach by Alberta to transfer value to the aggregators and to minimize the return to growers. We will also oppose any suggestion for retroactivity in the soil carbon offset program. Such an approach will so seriously complicate the administration and verification of the offsets that it would reduce the credibility and value of the offset.) On a separate but related topic, there will likely be serious consideration for an exemption from a carbon tax for the agricultural sector (as is the case in British Columbia). Significant research and analysis will be required so that growers can fully understand the financial implications of any potential national carbon tax exemption compared to a potential revenue stream through a carbon offset program. Any carbon tax exemption must consider all farm inputs, not just fuel alone. It is important to note that the Carbon Advisory Committee is not advocating for either a carbon tax or a carbon trading system. We do want to ensure that soil carbon sequestration is fully recognized and rewarded for its contribution to climate change reduction goals in either system. One of the comments often heard is that farmers are doing direct seeding anyway, why should they get paid for it? Grain growers are business operators with significant risks and highly variable income and as such, they need to be developing every possible revenue source from their farming activities, including payment for soil carbon sequestration. Look at slaughter plants and how they use every possible part of the animal being slaughtered to maximize revenue. And remember, society will have placed a value on the importance of carbon removal.

4 A frequent criticism of soil carbon payment for direct seeding is the business-as-usual (BAU) argument which says that any practice that involves well-established and widely-used technology is not creating new sequestration to meet emission reduction goals and is therefore not eligible for offset or removal payment. - The BAU language is not part of any of the text of the United Nations Framework Convention on Climate Change (UNFCCC or the Convention ), the Kyoto Agreement or the Paris Agreement. It appears to have originated early in the climate change discussion by environmental activists who opposed the concept of offsets because they thought it was just an excuse for large emitters to avoid making changes. - Many who make the BAU comment do not understand that direct seeding is creating new sequestration each and every year. - But the key argument against the BAU criticism of carbon soil offsets for soil sinks is that it does not take into account the very high importance that the Kyoto Protocol and the Paris Agreement place on anthropogenic sinks and the need to maintain and increase those sinks if a long term solution to climate warming is to be found. For example (from a number of different references to sinks in the Paris Agreement): Parties strive to include all categories of anthropogenic emissions or removals in their nationally determined contributions and once a source, sink or activity is included, continue to include it Parties should take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases as referred to in Article 4, paragraph 1d, of the Convention, including forests But the most immediate and important concern is our understanding that federal officials, working with the federal-provincial climate change committees authorized by the First Ministers meeting in February, are considering the year 2005 as the baseline not only for Canada s climate change reduction targets but for all other offset reductions and removals that might become part of that climate change plan. After a baseline is set, only the amount of soil carbon sequestration achieved in addition to the amount achieved in the baseline year would be recognized. A 2005 baseline for soil carbon removals will essentially penalize the Province of Saskatchewan and our growers for their early adoption of direct seeding practices. As the result of promotion of direct seeding by the SSCA and AAFC as both a climate change initiative and an effective soil management practice, Saskatchewan had already achieved a high level of sequestration by 2005 which will therefore be ineligible for the climate change strategy. Our research of the climate change policy literature has found a credible argument that each offset and removal should have a unique baseline. The fundamental premise is that each

5 baseline should be determined by the specific policy intervention that was the reason (but not the only reason) for the increased activity in that particular project or removal. (Refer to the paper entitled: What is Additionality? Part 1: A long standing problem Discussion Paper No. 001, January Version 03, authored by Michael Gillenwater, and published by GHG Management Institute.) We want to be clear that the Carbon Advisory Committee is not suggesting a specific date for the baseline. That is a technical discussion which will require consideration of established protocol frameworks after the current proposal for a 2005 baseline is eliminated. While we continue to make the argument against the arbitrary assignment of 2005 as the baseline for soil carbon offsets, we note a very important statement in the Vancouver Declaration of March 3, 2016, that was issued after the First Ministers Meeting on Clean Growth and Climate Change. All provinces and the federal government agreed to: Work together to enhance carbon sinks, including in agriculture and forestry, taking into account international best practices and accounting standards, to recognize their contribution to mitigating GHG emissions, and toward the establishment of a pan-canadian offset protocols framework and verified carbon credits that can be traded internationally. We urge the federal government to make this commitment an immediate priority. The factors that will establish pan-canadian offset protocols for carbon sinks that can be traded internationally, by taking into account international best practices and accounting standards, could very well resolve the baseline issue. The ability to trade Saskatchewan soil carbon offsets in a manner that is accepted by all provinces and internationally is essential to ensure our growers have an opportunity to make a major long-term contribution to Canada s climate change strategy.

6 LIST OF ALL SUPPORT ORGANIZATIONS ENDORSING THE SASKATCHEWAN SOIL CONSERVATION ASSOCIATION S CARBON ADVISORY COMMITTEE: Saskatchewan Barley Development Commission Saskatchewan Canola Development Commission Saskatchewan Flax Development Commission Saskatchewan Oat Development Commission Saskatchewan Pulse Growers Saskatchewan Wheat Development Commission Agricultural Producers Association of Saskatchewan Saskatchewan Association of Rural Municipalities Soil Conservation Council of Canada