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VCS eases rules for issuing Canada carbon credits

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WASHINGTON (Reuters) - A leading verifier of voluntary carbon market offsets said on Wednesday it has eased its rules for Canadian projects that aim to cut emissions of greenhouse gases to issue carbon credits.

The Voluntary Carbon Standard Association said it would allow clean projects hosted in Canada to issue the offsets, known as Voluntary Carbon Units, without corresponding cancellation of credits under the Kyoto Protocol on global warming.

Before the VCS move, projects in Canada wanting to issue the credits had to demonstrate that they would not be double-counted in a Kyoto Protocol related program. That problem has happened in other developed countries that have agreed to cut their emissions under the U.N. pact.

VCS made the move because "there is no regulatory framework to implement the Kyoto Protocol (in Canada), none is likely to emerge, and the country is unlikely to achieve its Kyoto Protocol reduction commitment."

Canada has fallen behind meeting its Kyoto commitments and is not doing enough to curb global warming, a report from environmental group WWF said earlier this month.

Carbon offsets allow companies that elect not to immediately cut their own emissions to invest in projects that aim to cut emissions elsewhere. Many companies in heavy industries like power utilities buy VCUs and other voluntary offsets to improve their environmental image or to get ready for mandatory carbon regulation plans.

Trade in global voluntary offsets more than doubled last year to $705 million though volumes slowed late in the year due to the economic slump, according to a report in May from New Carbon Finance and Ecosystem Marketplace.

At this time, estimates of soil sequestration capacity vary depending on region, soil type or best practices, but it presents at least another decade of opportunity for the North American farmer to help our environment. Of all the market incentives being discussed, carbon credit trading is the one that seems to be best able to encourage farmers to adopt practices that promote carbon sequestration and thus the creation of carbon sinks. Agricultural carbon sequestration activities should be -- and in some cases are -- being incorporated into emission trading systems that create a carbon credit for each additional equivalent unit of CO2 in the soil. Credit trading would give farmers much needed added revenue source for adopting methods that promote soil carbon retention.

This system is enjoying success in Alberta, Canada where farmers have generated and sold more than one million tonnes of verified sequestered carbon in the past eighteen months, using their best land management practices and have received signifi cant revenue to support their farm operations and the rural economy.

There is much discussion about how to regulate greenhouse gasses in North America while renewing and rebuilding the economy. As a free marketer, I do not believe in any additional taxes, especially a carbon tax because of the devastating effect it would have on consumers.

We need a market mechanism that puts a buyer under a corporate or compliance obligation and an agricultural seller in a position whereby the changes he has made to his farm operation to sequester carbon can be measured and verified by an independent third party. This helps the farmer, helps the rural economy and helps our environment.