15. Uncertainty of regulatory framework in other regions Emissions Intensity Standard vs. Absolute Requirement Cap and Trade vs.Carbon Tax Carbon Offsets in Alberta
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18. Players in the Alberta Carbon Market Carbon Credit $ Verification Reports Carbon Offsets in Alberta
19. Examples of Verifiers in Alberta by Industry Accounting Engineering Environmental Carbon Offsets in Alberta
Alberta is the first in North America to implement a regulated emissions offsets marketSpecified Gas Emitters Regulation: facilities that emit more than 100,000 tonnes of greenhouse gases a year to reduce emissions intensity by 12%.Companies have four choices to be in compliance: 1) Make improvements to their operations 2) Contribute to the Climate Change and Emissions Management Fund 3) Purchase or use Emission Performance Credits from facilities that have gone beyond the 12% reduction.4) Purchase Alberta-based offset creditsSo depending on a company’s marginal abatement cost curve, the purchase of offsets may be the best option to meet the SGER policy.
Third- Party verification of carbon offsets is mandatory Verifier provides assurance that the amount of GHG emissions the seller claims to have reduced is valid and constitutes a GHG credit that may be traded or purchased by potential buyers. Carbon offsetting, also known as carbon credits, is essentially a service: the purchaser pays someone else to create greenhouse gas reductions on his or her behalf.
Administratively complexThe NRTEE discusses need for clarification of baseline emissionsConsider the impact of adding sectors to the market’s supply mixUncertainty of regulatory framework Emissions Intensity Standard vs. Absolute Requirement Cap and Trade vs.Carbon TaxCreating exact numbers for fabricated offsets is administratively complexTalk about strategic risk management for DeloitteWhen the government grants an offset credit, it must assess whether emissions reductions are “real, incremental, quantifiable, verifiable and unique reductions of greenhouse gases.”[34] The key question is relative to which baseline the offsets are judged to be incremental. In order for offsets to generate emissions reductions, the actions undertaken must be incremental to what would have happened absent the offset program, and this is impossible to know. In practice, the offset rules stipulate that an offset will be granted for activities such as “a reduction in the amount of tillage on farmland…or...generation of electricity from wind energy.”[35] In a report entitled ‘The Risk Intelligent Energy Company’, Deloitte outlined risks inherent to climate change in the energy industry.
Though this could be a threat if CA firms are not specified, most likely it will be an opportunity to Deloitte. The current specifications in place seem to point to CA firms as the ideal third-party verifier. Currently: Recommended that a verifier should be a professional engineer or a chartered accountantbut there are still no standards as to who can specifically be a third party verifier The Future: Alberta Environment may specify that only certain Third Parties can be verifiers Opportunity for Deloitte if CA firms are listed as one of the few verifiersCurrent regulation signals that this may be the case
Creating exact numbers for fabricated offsets is administratively complexTalk about strategic risk management for DeloitteWhen the government grants an offset credit, it must assess whether emissions reductions are “real, incremental, quantifiable, verifiable and unique reductions of greenhouse gases.”[34] The key question is relative to which baseline the offsets are judged to be incremental. In order for offsets to generate emissions reductions, the actions undertaken must be incremental to what would have happened absent the offset program, and this is impossible to know. In practice, the offset rules stipulate that an offset will be granted for activities such as “a reduction in the amount of tillage on farmland…or...generation of electricity from wind energy.”[35] In a report entitled ‘The Risk Intelligent Energy Company’, Deloitte outlined risks inherent to climate change in the energy industry.
Though this could be a threat if CA firms are not specified, most likely it will be an opportunity to Deloitte. The current specifications in place seem to point to CA firms as the ideal third-party verifier. Important to secure and maintain key relationships. Loss of petro canada and suncor were big blows to the company. Lead the way in developing research papers like PwC is already doing.