Climate change is something that permeates all aspects of our society, it can be ranging from the economic factor by making the prices of certain foods grow higher, to our day-to-day life by making the heat insufferable. It seems however, that without a clear plan on how to tackle and reduce our greenhouse gas emissions, the futures seems distant and petrifying. How can we find the path of least resistance to flight climate change? I think that’s the key point to discuss about.

Kilogram per kilogram methane is capable of trapping 28 times more heat than carbon dioxide over a period of a hundredth years according to the Second State of the Carbon Cycle Report (https://carbon2018.globalchange.gov/). This is usually represented by the (GWP) of a greenhouse gas, basically it provides a way to compare the effect on how much the Earth might warm up using as a reference carbon dioxide. Going back to the first idea, knowing that methane traps more heat than carbon dioxide means that if we direct our efforts into mitigating methane emissions, we could be able to see our efforts turn effects faster than following carbon dioxide mitigation strategies.

Hence the question comes to how can we reduce methane emissions? And what types of business can emerge from these intersection of a climate change problematic and the global efforts to mitigate emissions of methane a potent greenhouse gas

Carbon offset-credits

Carbon-offset credits is one of the programs some governments are using as a way to help reduce emissions. I will focus primary in Canada, in this case they outline in their website https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/output-based-pricing-system/federal-greenhouse-gas-offset-system.html the main components of the plan. In general terms the target person this goes to are high greenhouse gas methane emitters that “undertake innovative projects that reduce GHGs compared to business-as-usual practices”, where these reduction can be either by actually reducing or removing from the environment. But, they also specify another part which is that they need to be approved and follow the “Canadian Greenhouse Gas Offset Credit System Regulations and an applicable federal offset protocol”. At the end of the day each token/tradeable unit is 1 tonne of carbon equivalent reduced/removed but this token needs to come from verified GHG reduction project.

In order to register a project it needs to fall under one of the different protocols  inside the Compendium of Federal Offset Protocols. Right now the available projects and publication dates are:

1. Landfill Methane Recovery and Destruction (June 8, 2022)
2. Reducing Greenhouse Gas emissions from Refrigeration Systems (December 8, 2023)
3. Improved Forest Management on Private Land (May 6, 2024)

Nevertheless, there is a plan to add two more in the close future which are

1. Enhanced Soil Carbon
2. Livestock Feed Management

These protocols provide the outline to ” […] ensure projects generate GHG reductions that are real, additional, quantified, verified, unique and permanent”. The crediting is the time in which a project would have to follow the protocol and is eligible to emit the tokens for selling or trading

Crediting period

“5 (1) Unless otherwise provided in the applicable protocol, the period in respect of which a project can generate offset credits is

• (a) in the case of a sequestration project related to forestry, 30 years;
• (b) in the case of a sequestration project other than one related to forestry, 20 years; and
• (c) in the case of any other project, 10 years.” (Taken from https://gazette.gc.ca/rp-pr/p2/2022/2022-06-08/html/sor-dors111-eng.html)

How much are tokens’ worth? Who defines their value in the market?

The markets are the one who are going to define the prices for the tokens. Meaning that there is no fixed minimum or maximum. According to the website in the expected impact section “[…] to profit from the sale of federal offset credits, which are expected to trade for prices below the excess emissions charge in their last year of eligibility” meaning that we can assume the upper bound would be the excess emissions charge, which right now is $50 per CO2e of excess emissions for the 2022 compliance period.

What about the third-party to perform the analysis of the project and verifies and quantifies the carbon credits that are being emitted?

In order to verify that that third-party verification body can actually certify the it needs to follow the following regulations

“23 To be authorized to conduct a verification for the purposes of these Regulations, a third party must

• (a) meet the following accreditation requirements:
  • (i) it is accredited as a verification body, under ISO Standard 14065:2020 entitled General principles and requirements for bodies validating and verifying environmental information, by the Standards Council of Canada, the ANSI National Accreditation Board or any other accreditation organization that has a memorandum of understanding with the Department of Environment and that is a member of the International Accreditation Forum,
  • (ii) it has a scope of accreditation that includes technical activities at the project level with respect to GHG project verifications, and
  • (iii) it is not suspended by an accreditation organization that issued its accreditation; and
• (b) use a verification team that have the necessary competencies to verify a project report, corrected project report, reversal report or monitoring report, including at least one individual with training relevant to the project type, as specified in the applicable protocol.” (Taken from https://gazette.gc.ca/rp-pr/p2/2022/2022-06-08/html/sor-dors111-eng.html)

Furthermore this brings the question of what are the verification standards, in this case it would be explained following ISO Standard 14064-3. Which in summary explains that they are following their project initial protocol (the one the proponent submitted) and hitting their target and that there are no discrepancies.