Carbon credits could benefit Billings Township, climate action committee hears

Registering properties for renewable energy certificates could generate revenue for Billings through selling carbon credits. Shutterstock

KAGAWONG – The climate action committee for Billings Township held its first meeting since July 2021. The first item for discussion was the Community Energy and Emissions Plan (CEEP), which has been finalized and is now available online or in print upon request at the municipal office. Completion of the CEEP means the committee will need to update its terms of reference for moving forward. 

Committee Chair and Billings Deputy Mayor Brian Barker said, “on reviewing the CEEP, the significant number of action items makes it clear a significant amount of work is needed to move forward with the implementation of the plan, keeping in mind the municipality will need to allocate sufficient financial and human resources over time to ensure the success of the plan. We want it to be successful but there are limits to resources.”

The township will continue its partnership with Central Manitoulin for climate action and hopes to work with other townships and First Nations communities as well. Central Manitoulin and Billings have also agreed to share a climate change implementation co-ordinator, with the hiring process expected to be completed by January 2022. Funding has been set aside by both municipalities to fund the position.

Committee member Chris Theijsmeijer spoke about carbon credits, to increase understanding on how they work and how the township might be able to benefit from these. “With the Liberals getting voted in nationally, their carbon plan is going to be our future for the next couple of years,” he began. 

In 2015, Canada signed on to the Paris Climate Agreement, a legally binding, international agreement in which most countries agreed to reduce greenhouse gas (GHG) emissions to keep global warming below 2⁰C and would strive to keep global warming below 1.5⁰C. Following the Paris Agreement, the federal government set a price on every carbon tonne emitted (essentially carbon dioxide, or CO2). It started at $10 per tonne and rose to $50 per tonne by 2020. However, COVID hit and the price currently sits at $40.

That $40 per tonne is going to rise to $170 per tonne by 2030. “That’s a huge increase and that’s the main reason I want to speak to council, to make sure they understand the level of that,” Mr. Theijsmeijer said. 

Thinking of carbon dioxide per tonne is a hard thing to visualize, he noted. The idea is to have people use or produce less carbon dioxide; it’s a way of punishing people who use a lot of carbon dioxide while rewarding people who are either absorbing carbon or using less. CO2 is the primary problem causing climate change and there needs to be a price on it because, “essentially we emit it into our atmosphere and forget it’s there. We drive our cars and don’t think too much about what’s coming out the tailpipe.”

The carbon tax already applies to the gas we purchase for our vehicles, Mr. Theijsmeijer continued. He calculated that at $40 per tonne, the tax works out to about nine cents a litre. “When you start quadrupling that over the next nine years, then you’re going to add another 40 cents a litre roughly. Gas prices are also affected by inflation so the carbon price affects construction costs, food delivery, manufacturing and any kind of heating fuel like oil, propane or natural gas. Costs will go up for people who use cars or businesses that are producing a lot of GHGs, their costs are going to go up.”

This is where Billings can benefit.

Someone with land or a large forest can register that with a renewable energy certificate, he explained. “There’s the natural asset carbon credit as well so you can register forest, wetlands, fields, or basically anything that’s going to absorb carbon. You have to agree to maintain the property in an ecological way. I think you can still cut down a tree but you can’t cut down the forest because it nullifies the program.”

“Once you are registered and approved, you can start selling that as a credit into the market. We in Billings with forest can actually make money off of these companies that are producing GHGs. They’re going to avoid the carbon tax by paying into the voluntary market,” said Mr. Theijsmeijer.

How carbon credits work is one company produces a lot of GHG. They’re going to have to pay tax on what they produce. “There will be a baseline amount (per sector) they’re allowed to produce greenhouse gases or CO2 up to,” he continued. “Anything above that, they literally have to pay money on. They have to pay for these corporate emissions.”

Corporate emissions payments can be expensive so there is an option for a company to buy credits for extra GHG emission. That’s where the term ‘offset’ comes in. “You have these emissions and you’re basically going to pay for them. The idea is that you’re going to continue polluting but by investing the money in other areas you can try to make up for the fact you’re producing a lot of GHGs,” he said.

“Another company that doesn’t produce as much GHG, maybe because they have a cleaner emissions process or they have incorporated a lot of solar panels to create their own electricity, can be rewarded with credits for being under what they are expected to produce,” Mr. Theijsmeijer said. “Those credits can be banked or sold to another company.” 

You can get a renewable energy certificate for having a green energy source such as the wind turbines in M’Chigeeng First Nation, the hydro station in Kagawong or a large solar array. Owners of these energy projects will be able to sell carbon credits to those companies that are creating too many GHGs. 

Mr. Theijsmeijer wants Billings to reduce carbon use as much as possible. “Let’s look at our natural areas that we can actually sell for carbon credits. Let’s look also at the hydro station. We can get renewable energy credits from that, or OEC can.”

He summed up by saying a new lens needs to be applied to all the decisions Billings is making. “I think the carbon system affects so many things in Billings, whether it’s our buildings, whether it’s our vehicles, whether it’s our construction projects, all of those things are just going to get more expensive,” he said.

“We can look at our natural asset inventory, at our natural spaces and ask how much forest do we have on this land? Can we use that then to apply for some carbon credits? There’s going to be a lot more green investments. The tax money the government is collecting, they’re going to be able to put that back into green projects and that’s going to be the theme of many federal funding programs. Almost every application these days contains something about the green side of it. You have to use that lens and think about it.”

The committee agreed to recommend that council hear the presentation. “I think it’s important,” said Mr. Barker.  “I think it’s more important to get it out to the community as a whole so people do have an understanding of what’s happening toward climate change and carbon credits is just a small part of it, but it is the future. Education is going to be a big part of this. The presentation to council is a start.”