Global warming – also known as climate change – is a rise in global temperatures caused by rising levels of greenhouse gases in our atmosphere.

Greenhouses gases are pollutants released into the air. Some greenhouse gases occur naturally in the atmosphere; others result from human activities such as fossil fuel combustion and land use changes.

Greenhouse gases include: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).

Greenhouse gases (GHGs) trap the heat of the sun, causing a "greenhouse,” or warming, effect. Today's atmosphere contains 32 per cent more carbon dioxide than it did at the start of the industrial era. Climate change means much more than hotter temperatures; it has the potential to permanently alter life as we know it. Effects can include:

• rising sea levels, decreased snowpacks and increased glacial melting
• increased heat waves and droughts, and
• increased extreme precipitation

These changes can lead to increased risks of:

• extinction of up to 30 per cent of plant and animal species, and
• decreases in global food production

All of these impacts have the potential to devastate our quality of life, both here in BC and globally.

In 2007, BC’s emissions sources were as follows:



Source: Livesmart BC

A carbon offset represents a reduction or sequestration of greenhouse gas emissions generated by activities, such as improved energy efficiency, that can be used to balance the emissions from another source, such as a plane trip.

Offset projects create real and permanent reductions in the amount of CO2 entering the Earth’s atmosphere, which benefits us all; however, offsetting is just one tool in the fight against climate change. Here in BC, a carbon tax was introduced to encourage environmentally responsible choices and reduce the use of fossil fuels. In 2008, the BC government introduced the Cap and Trade Act, making British Columbia the first Canadian province to legislate hard caps, or limits, on greenhouse gas emissions.

Carbon neutrality involves measuring GHG emissions, reducing emissions where possible, and offsetting the remainder.

A carbon footprint is a calculation of GHG emissions caused by an individual, organization or activity. It is usually expressed in terms of the amount of carbon dioxide equivalent emitted.

Pacific Carbon Trust is a Crown corporation established in 2008 to deliver BC-based greenhouse gas offsets, to help clients meet their carbon reduction goals and to support the growth of BC’s low-carbon economy.

The BC government established Pacific Carbon Trust as part of an aggressive plan to address climate change. PCT provides an important tool in reducing greenhouse gas emissions, one that government and others can use once they have done all they reasonably can to reduce their emissions.

In addition to helping clients implement their carbon reduction strategies, PCT is providing BC businesses with new economic opportunities. The price attached to selling offsets can help make clean technology projects a reality, resulting in many economic and social benefits, in addition to the benefit of carbon reduction.

Under the Public Sector Energy Conservation Agreement government will assess all facilities to identify carbon savings opportunities. To date, projects that will achieve over $7 million in annual energy savings have been approved. The BC government is also promoting active transportation, increased use of technology that improves work-life balance, and conservation of resources in all forms. In addition to formal programs, government “Green Teams” have been instrumental in engaging staff to do their part to reduce GHGs.

Some examples:

• Reduced the need for 210 new physical servers through server virtualization, yielding an estimated 88 per cent power savings;
• Implemented advanced power management, including auto-sleep mode during off hours, saving more than 10 million kilowatt hours of electricity annually;
• Replaced existing computers with Energy Star 4 models, including new online tools such as Window’s Live Meeting, Groove and Office Communicator –reducing the need for business travel;
• Supported the procurement of hybrid vehicles, bringing the total up to 21 per cent of government’s light vehicle fleet – one of the largest hybrid fleets in North America;
• Invited 84 high-mileage fleet operators from across the province to participate in the Fuel Smart Driver program.

$24 million is provided over four years ($9 million in 2007/08 and $5 million over the following 3 years) to cover the cost of starting up a new Crown corporation and to ensure it has adequate funds to begin developing a portfolio of credible greenhouse gas offsets that meet eligibility requirements under the BC Emission Offsets Regulation (EOR).

As a Crown Corporation, we must be transparent and publicly accountable in all our operations. We are responsible to our shareholder, the Minister of Finance, and by extension, the people of British Columbia.

Our procurement process is competitive to ensure high-quality, competitively priced offsets. Projects must be validated and verified by objective third parties, and our purchases must support offset projects that would otherwise not go forward without the sale of offsets. These and other requirements are outlined in the Ministry of Environment’s Greenhouse Gas Reduction Targets Act and Emission Offsets Regulation.

That depends on the structure of the contracts that you have entered into with your partners. We have encountered situations where external service providers have taken contractual ownership of the ‘carbon rights’ associated with project systems.

Having multiple partners does not preclude you from selling offsets to Pacific Carbon Trust, but does require working with your partners to clarify and effect the transfer of clear title to the offset to PCT, to satisfy the Emission Offsets Regulation’s ‘counted once’ criteria.

Not in the Open Solicitation Procurement Process. But PCT can contract for future offsets and pay on delivery.

Forestry offsets are unique in that the time between the beginning of the project and the creation of an offset can be significant.

Upfront investments may be considered in future targeted calls to certain sectors.
 

PCT acquires offsets in a competitive bid process, and price is one of the key factors in the evaluation of bids. The price varies; ultimately the price paid for offsets is dependent on the price bid in by the project proponents and the evaluation criteria used in awarding contracts.

BC’s electricity system primarily comprises hydro and green power plants. Electricity projects are by provincial government policy considered to be essentially carbon neutral due to their small impact (measured in carbon per kilowatt hour).

In addition, under the BC Energy Plan, new power plants are required by regulation to be carbon neutral, and existing power plants will have to be carbon neutral by 2016.

However, off-grid projects where electricity is generated primarily by fossil fuels – for example, diesel – would potentially be eligible as offset projects.

Unless a quantification protocol is suggested by PCT or designated by the Director, proponents can choose an internationally recognized quantification protocol for their industry and adapt it for BC. The protocol chosen must be high quality and be compliant with ISO-14064 and the BC Emission Offsets Regulation (EOR).

When accepted for delivery by PCT, offsets will be recorded in PCT’s inventory and published on the Pacific Carbon Trust website.

Activities that are regulated under cap and trade would no longer produce offsets. Proponents may be able to enter into a contract with PCT for allowances related to a project that was producing offsets prior to the implmentation of the cap.

To be eligible, the project must have begun commercial operation after November 29, 2007, and must meet the additionality criteria as well as other requirements laid out in the BC Emission Offsets Regulation.

For more information, please view the Emission Offsets Regulation and/or Emission Offsets Regulation Guidance Document.

Ex-ante reductions are reductions recognized before they have actually occurred. PCT does not currently accept ex-ante offsets.

Currently, a validation or verification body must include: 1) a person who is authorized to act as an auditor of accompany under section 205 of the Business Corporations Act; and, 2) at least one qualified professional. Effective July 1, 2010, the validation and verification body must be accredited in accordance with ISO 14065 by a member of the International Accreditation Forum.

Validation is a requirement from regulation. As a Crown corporation, it’s incumbent on us to ensure we purchase offsets of the highest quality. Validation helps ensure that the projects are sound, and that they will deliver the volume of offsets needed to meet our clients’ needs – including meeting the provincial government’s commitment to a carbon neutral public sector by 2010. Validation protects project proponents as well, giving them a level of assurance that their project will result in saleable offsets.

The project proponent is responsible for costs relating to validation and verification. Cost will vary, depending on the complexity of the project and the quality/comprehensiveness of the information provided.

Stage one provides a pre-screening process, so that proponents of out-of-scope projects do not spend significant time and money proving their concepts and developing the required documents. Successful proponents are put on the Potential Qualified Suppliers list, and will have the confidence that, at least on a conceptual level, their project is worth further development. Projects that are more advanced, in-scope and are supported by the required documentation will pass quickly through the process.

It’s important to note that projects on the Potential Qualified Suppliers List have met the minimum criteria; being on the list does not guarantee that the project will produce eligible GGRTA offsets. This can only be determined once a project plan has been developed and validated.

PCT has developed the two-part open solicitation to streamline the procurement process for both PCT and project developers (proponents). Part one pre-screens projects to ascertain eligibility, resulting in a potential qualified suppliers list. Part two is available only to qualified suppliers. Part two bids are evaluated based on validated project plans, pricing, volume and delivery schedules.

PCT is committed to open, fair and transparent procurement practices. This ensures that we deliver the best quality offsets at the best price for taxpayers. Our competitive procurement methods satisfy Canadian procurement and contract laws, honour trade agreements and are in line with our values.

Smaller projects with similar attributes can be combined into a package by an aggregator to make it more cost effective to bid. Proponents with smaller projects may want to investigate opportunities to aggregate or use the services of an aggregator.

PCT is also investigating alternative cost-effective mechanisms allowed under the BC Emission Offsets Regulation (EOR) that may allow smaller projects bid directly to PCT.

PCT plans to acquire offsets through several different processes. If you believe your industry or project faces issues preventing you from bidding into the continuous procurement process, please talk to one of our procurement staff.

The evaluation process is the stage in which proposals are reviewed and involves an Evaluation Committee made up of associates from PCT, provincial government partners and also subject matter experts from the private sector, when appropriate.

Prior to the evaluation process, a procurement document (for example a RFQ or RFP) is created by PCT, together with an evaluation workbook which will be used by the committee to evaluate proposals. It should be noted that the requirements and guidelines in this workbook are the same as those provided in the solicitation document.

Each committee member is provided with copies of all proposals. Using the evaluation workbook, committee members first evaluate each proposal independently and then meet to reach consensus and final scoring. Once the committee has reached a final evaluation of the proposal, proponents are invited to a one-on-one debriefing meeting to discuss the evaluation results and potential next steps.
 

PCT has ongoing procurement processes for acquiring BC-based offsets, and subject to the quality, quantity, timing and price of proposed offsets, it awards contracts under that process. The price to buy offsets is determined through this open competitive process.

No.

Depending on the nature of its business, some organizations may be able to write off offsets as part of its cost of doing business. This would need to be evaluated on a case-by-case basis with the Canada Revenue Agency (CRA). The CRA does not provide deductions for carbon offset purchases by individuals.

As a Crown corporation, PCT must ensure the environmental integrity of the offset, which as a general rule, translates into a higher priced offset.

Government set this price as an internal transaction price to be paid to PCT by Public Service Organizations (PSOs) for each tonne of GHG emissions offset. PCT has extended this price to all of its clients. In determining the price, it was important to define a benchmark for abatement projects, providing an incentive for reduction efforts. The $25/tonne CO2e price is competitive with other quality offsets.

PCT has initially set its offset selling price at $25/tonne.

If you are a company, municipality or organization interested in purchasing offsets, you can contact us at 250-952-6793. Currently, we do not sell offsets to individuals, though we may do so in the future.

Offset projects must be compliant with the BC Emission Offsets Regulation. The Emission Offsets Regulation is based on the ISO 14064-2 standard.

To qualify, greenhouse gas reductions must endure for a period of at least 100 years.

No. Offsets can only be counted (and sold) once. When an offset is purchased by PCT, the offset is “retired” and project details are posted on the PCT web registry to ensure the offset will only be counted once.

There are many quality offset standards, and the Gold Standard is one of them. The criteria set out in the BC Emission Offsets Regulation are built on recognized international standards and results in high quality offsets. These standards are comparable to high-level standards from other jurisdictions, including the Gold Standard.

ISO 14064 is an independent, voluntary GHG project accounting standard developed by the International Organization for Standardization (ISO), the world’s largest developer and publisher of international standards. ISO is a network of the national standards institutes of 157 countries, including Canada and the US.

To ensure the integrity of the offset, project proponents must demonstrate that the incentive of having project emission reductions recognized as offsets helps the project overcome, or partially overcome, obstacles to carrying out the project. Put simply, additionality answers the question: “Would the project have happened anyway?” For example, if the project is already required by law or regulation it would not be considered additional. On the other hand, if the project cannot proceed without the funding associated with the eventual selling of offsets, the project would be considered financially additional. There are several types of additionality, including financial, technical and other.

PCT Offset projects are regulated under the Ministry of Environment’s Emission Offsets Regulation and have to meet strict criteria. These projects meet all the requirements of a high quality offset, as follows:

• Within scope – the emission reductions are for eligible greenhouse gases (CO2).
• Real – the reductions are derived from specific and identifiable actions, are associated with defined projects, and the projects result in a net reduction of GHG emissions.
• Measurable – the difference between the baselines and the projects can be scientifically measured using methods that maintain the principles of accuracy and conservativeness.
• Additional – the baselines represents conservative estimates of the most likely emissions scenarios that would have occurred in the absence of the offset mechanism.
• Verifiable – project plans have been developed, have been validated by an independent assurance provider, and will be verified by an independent assurance provider in accordance with the BC Emission Offsets Regulation.
  Counted once – the reductions have not already been claimed and will only be counted once as an emission offset.
• Clear ownership – the proponent has superior claim of ownership to the GHG reduction and will transfer exclusive rights to the legal and commercial benefits of the emission reductions to the Pacific Carbon Trust.

Pacific Carbon Trust is a Crown corporation of the British Columbia provincial government. We are responsible to our shareholder, the Ministry of Finance – and by extension, the people of British Columbia. We take that responsibility very seriously. Our offsets are validated and verified by objective third parties, counted once, and our purchases must support offset projects that would otherwise not be viable. These and other requirements are outlined in the Ministry of Environment’s Greenhouse Gas Reduction Targets Act and Emission Offsets Regulation, built on internationally recognized standards.

No. Municipal and regional district operations (such as landfills) are not included in the definition of public sector organizations (i.e. Ministries, school districts, health authorities, post-secondary institutions, and crown corporations) under the regulations.

More than 100 municipalities across BC have made a voluntary commitment to have carbon neutral operations by 2012 in the Climate Action Charter signed on September 26, 2007. Pacific Carbon Trust can play an important role in helping municipalities reach their carbon reduction goals.