A Yukon-based carbon-offset fund is only viable with government support, according to a new report commissioned by the Yukon Conservation Society.
“We wanted to see—because the Yukon has such a small population—whether a carbon-offset type of program could work in the Yukon,” said Karen Baltgailis, the society’s executive director.
It can, but only with the backing of the territorial government.
Private companies and non-profit carbon funds would easily fail without the startup money required at the outset, wrote Malcolm Taggard in the Feasibility of a Yukon Carbon Offset Fund report, published on March 27.
Through such a fund, people, businesses and institutions can buy credits to offset their carbon footprint. The money spent on such credits funds projects that cut carbon emissions.
The idea is popular with airlines, which allow passengers to buy credits that offset the amount of jet fuel they use flying.
In 2007, around US $64 billion was traded, worldwide, through carbon funds.
Canadians have plenty of carbon-offset funds available to them, from private companies to nonprofit organizations. These funds do everything from planting trees, to developing renewable energy sources, to eliminating methane.
But, so far, the Yukon is losing out on that investment. None of the funds invest in the territory.
Enter the Yukon Conservation Society, which got $25,485 last year from Indian and Northern Affairs to conduct a feasibility study into a Yukon-based carbon-offset fund.
“We would like to see Yukon climate change mitigation be funded through people making voluntary donations to offset their carbon footprint for everything from travel, that could be air or car, to heating,” said Baltgailis.
Only a government-run and -funded offset would work, the 23-page reportconcluded.
However, there is hunger for a carbon-offset fund in the Yukon, Taggard found in the 304-person survey.
“Forty-eight per cent say they would buy carbon offsets from a Yukon fund and, on average, these people are willing to spend $330.40 annually to buy offsets,” found Taggard.
That would suggest the 12,615 Yukon households would be “willing to contribute over $2 million annually to a Yukon carbon fund.”
But most people are more generous to phone surveyors. When asked to pony up real cash, they are a lot less willing to contribute.
So Taggard pegs the estimated growth of a Yukon-based fund at $100,000 annually.
Private industry has already made signals it would support such a carbon fund.
“Whitehorse Motors is actively seeking a credible Yukon carbon-offset fund so that the car dealership can buy offsets for the first year’s emissions of each vehicle they sell on behalf of their customers,” according to the report.
While the donation to the fund would be small, it could be the stepping stone of a larger program, wrote Taggard.
Air North is also interested in offering offsets, and even the mines could donate to the fund.
North American Tungsten, a company operating the Cantung mine and proposing a second near Macmillan Pass, is looking for a renewable energy source for its operations.
“A wind power test tower has been erected and the possibilities of mini-hydro are also under consideration,” wrote Taggard.
A Yukon carbon fund would help pay for those projects, he wrote.
On the flip side, carbon use in the Yukon has been dropping for more than a decade.
Yukoners put 394,000 tonnes of carbon dioxide emissions into the atmosphere in 2006, according to Environment Canada.
Sixty-three per cent of those emissions came from cars, trucks and airplanes, while buildings and households account for another 31 per cent, Taggard’s study found.
That’s a dip from 538,000 tonnes in 1990, with the exception of a brief uptick in 1996.
A carbon fund would try to lower emissions even further.
However, though most offset funds in Canada are private, there just isn’t enough business here to support that model, noted Taggard.
Private offset funds have their own risks because the industry is still moving from a “Wild West” period where rules on carbon trading were rare, to a period of heavy regulations.
A national offset system is planned to launch in January 2010, as outlined in Environment Canada’s Turning the Corner: Canada’s Offset System for Greenhouse Gases report.
“The federal government plans to create and administer a Canadian carbon-offset fund that issues marketable offset credits, but does not sell them,” wrote Taggard.
Within this regulatory framework, the Yukon should copy the British Columbia model, he wrote.
The Pacific Carbon Trust is a Crown corporation that began in March 2008.
It regulates the carbon credit market for the BC government, which has pledged to become carbon neutral by next year. It plans to reduce overall greenhouse gas emissions by 33 per cent in 2020.
And the trust will manage offset credits for BC residents and businesses in the near future, too.
“A fund operated at arm’s length by the Yukon government (the Pacific Carbon Trust model) that also allows the participation of other governments, the private sector and individuals is feasible,” said the report.
The Yukon government has the money and the capacity to attract experts, to make the carbon fund work.
On top of that, it has pledged to become carbon neutral by 2020, meaning the territory’s biggest employer is looking for options.
That bodes well for an offset fund designed to build more energy efficient technology.
“Planting trees is an iffy offset because they could burn down or get eaten by bugs, or somebody could log them eventually,” said Baltgailis.
“So the kinds of things we were thinking about would be supporting projects like people getting training in installing climate-friendly technologies,” she said.
Heat pump technology, wind power, solar power and household energy upgrades are just some industries that could use more trained expertise.
“It could fund the types of agriculture that use a whole lot less carbon or fossil fuels,” she said. “It could be organic or no-till types of processes.”
The government is still reviewing the report, said Environment Department spokesperson Nancy Campbell.
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