Enhancing Industry Involvement in Carbon Sequestration and Conservation Projects

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Enhancing Industry InvolvementinCarbon
Sequestration and Conservation Projects

• A.D. Latornell Conservation Symposium(November,
  2001)

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Introduction

• Kyoto Protocol (1997)
• CO2, CH4, N2O, six others
• Limits during 2008 to 2012
• Canada 6 below 1990 levels
• 1999 - 15 above
• 2010 projected - 27 above
• Land-use, land-use change and forestry(LULUCF)

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Canadas Projected Emissions
http//www.ec.gc.ca/press/2001/010711_b_e.htm
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COP-6 (The Hague and Bonn)

• Afforestation, reforestation and deforestation
  (article 3.3)
• Land management (article 3.4)
• Limits for Canada
• Offset deforestation
• (29 Mt CO2 / year)
• Additional from land management
• (44 Mt CO2 / year)

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Some Activities by MOE / MNR

• Ontarios Forest Carbon Budget
• Reviewed tree planting programs
• Surveyed landowners
• Greenhouse Gas Reductions and Credits Through
  Biodiversity Conservation Projects
• MOE ON ENV (99) 450
• Woodlot Managers Guide to Carbon Sequestration
  and Greenhouse Gas Benefits

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Market Study

• Survey of Customers and Suppliers
• 34 customers
• 26 suppliers
• Barriers to Participation
• Market Size
• Financial Feasibility

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Customer and Supplier Survey

• Customers
• 34 surveyed
• Mixed range of industries
• Bias - electricity generators - Ontario
• Suppliers
• 26 surveyed
• CAs, County forests, Forest companies

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Barriers

• Customers
• demand, lack of policy direction
• project risk and insurance
• Suppliers
• financial and operational
• communication

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Demand and Supply

• Demand
• 6,500 kt CO2e / year
• 5 of shortfall
• Supply (Ontario)
• 565 kt CO2e / year
• Reforestation - 159,000 ha (3.0 t CO2e/ha/yr)
• NSR - 222,000 ha (0.3 t CO2e/ha/yr)
• Expansion - 117,000 ha

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Financial Analysis

• Simple investment
• Investment with tax benefit
• Investment with partial timber harvest
• 7.0 lt ROR lt 9.5
• Assumed Jack Pine, 50 year rotation, 1500 / ha
  planting costs, 15 transaction costs, GHG
  benefits sold as generated

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Woodlot Managers Guide
http//www.woodrising.com/MOE/WMGuide.html
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Conclusions

• GHG picture becoming clearer
• MOE / MNR is getting prepared
• Carbon sequestration business
• GHG benefits are a method of supporting
  conservation and biodiversity enhancement projects