This year School District 27 will have to purchase carbon offsets.
In 2010, the district along with other provincial agencies, including health authorities, post-secondary institutions, and government offices across B.C. for the first time have had to quantify their carbon output and pay for it.
It’s part of a government plan that requires its operations to be carbon neutral or reduce their carbon footprint to zero by 2010 or purchase carbon offsets as a way to achieve neutrality.
The concept of carbon neutrality through offsets is a new and growing, although controversial, practice.
An individual or organization is deemed carbon neutral if it has a net-zero carbon footprint achieved by balancing a measured amount of carbon released with an equivalent amount sequestered or offset, buying enough carbon credits to make up the difference.
In the pursuit of carbon neutrality, the province requires organizations to measure their greenhouse gas emissions; reduce the emissions; offset the remaining emissions by investing in projects that reduce greenhouse emissions (carbon offsets); and report publicly on plans and actions to reduce emissions.
The local school district has undertaken energy-minimizing initiatives such as installing a geothermal field at Mile 108 school, upgrading two boilers at the Williams Lake high schools, and installing a bio-energy boiler at Alexis Creek. Many of the upgrades are paid for through various grants to the district. However, a carbon surplus still remains and the district estimates it will have to purchase approximately $125,000 worth of offsets this year from the newly created Crown corporation, Pacific Carbon Trust.
“We collect all of our natural gas, propane, electricity and all of our paper consumption, our fuel, gas and diesel for buses, and then … we come up with how many litres of each we used and how many kilowatts we used,” says Doug Gorcak, manager of facilities and transportation at the school district. “Each of those products has a different conversion factor as to how many tonnes of carbon it creates.”
That data is entered into a computer program called a “Smart tool,” which then reports how much carbon an organization has produced.
The Trust, says Scott MacDonald, PCT CEO, was created by government to provide a reliable and made-in-B.C. market for offsets.
“In the absence of the Crown corporation the school board would be out shopping on the international market trying to find some (offsets) and they wouldn’t know where they were of what kind of quality,” he says.
The offsets provided by the trust are subject to a third-party validation process and are regulated by the B.C. offset regulation and the Ministry of Environment. When approved, offset providers typically have a five-year contract period in which to sell their offsets. Offsets allow an organization, like the school district, to buy into a pool of funds that are distributed to approved organizations which provide carbon offsets through system upgrades using innovative technologies.
MacDonald says that transaction should not be characterized as “providing funding” to organizations, rather “purchasing the carbon rights.”
The carbon trust’s website highlights certain offset projects as part of an “offset showcase.” They include: four greenhouses where funds were used to purchase offsets provided by the installation of biomass boilers, insulating curtains, and energy curtains. Those system upgrades, the trust estimates, removed 141,000 tonnes of carbon from the air. Other projects are the installation of 10 hybrid-heating systems at hotels and resorts in Whistler, Revelstoke, Sun Peaks, and Vancouver and fuel switching for a Richmond cement plant that it is estimated to reduce emissions by 189,000 tonnes over three years.
The majority of offset providers, according to MacDonald, are private companies. The trust is also working on some municipal projects including a municipally owned landfill.
MacDonald says the money, such as that provided by the local school district, generally provides a small amount of funding to offset providers.
It varies from project to project but he estimates it to be around 20 per cent of the total cost.
The incentives for organizations to offer carbon credits are multiple.
Some companies want to be environmentally responsible, others experience the financial benefit of buying into a system that’s cheaper to operate over time and others want to decrease their carbon tax rate.
The provincial carbon tax is the other piece of this equation. It applies to the purchase and use of fuels such as gasoline, diesel, natural gas, heating fuel, propane and coal as well as peat and tires when used to produce energy and heat.
According to the Ministry of Finance, the tax is revenue neutral when applied in concert with personal and corporate tax cuts. Ministry information outlines personal tax cuts for only the the first two income tax brackets of five per cent and business-tax rate cut of one per cent by 2011, a small business tax rate cut from 3.5 per cent in 2008 to zero by 2012, and an industrial property tax credit by 50 per cent of school property taxes payable by light and major industrial properties in 2009 rising to 60 per cent this year.
Although not a provincial body, the City of Williams Lake is also aiming for carbon neutrality. It has signed onto the province’s Climate Action Charter committing to be carbon neutral by 2012. City staff have identified emissions and are working to reduce them, but because the City runs snow clearing, garbage disposal and recycling operations it too may end up with too much carbon and find it necessary to purchase offsets.
“We will be working this into our annual budget as the school district does,” say City staff.
The Pacific Carbon Trust sets its offset-selling price at $25 a tonne.
Carbon tax rates
as of July 2010
Gas: 4.45 cents/litre
Diesel: 5.11 cents/litre
Jet fuel: 5.22 cents/litre
Natural gas: 3.80 cents/cubic metre
Propane: 3.08 cents/litre
Coal – high: $41.54/tonne
Coal – low: $35.53/tonne