Frequently Asked Questions

About Climate Change and Carbon Offsets

What is global warming?

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

 

What are greenhouse gases?

Greenhouses gases are pollutants released into the air that increase the warming effect of the sun’s radiation. 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).

 

How do greenhouse gases damage our atmosphere?

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.

 

What is "CO₂e"?

CO₂e is a common unit of measurement used to compare the relative climate impact, or global warming potential, of the different greenhouse gases.

 

What is "global warming potential"?

Global warming potential (GWP) is a measure of how potent a given greenhouse gas is in terms of its ability to remain in the atmosphere - and thereby contribute to global warming. GWP is a relative scale which compares the gas in question to that of the same mass of carbon dioxide.

 

Where do most of the GHG emissions come from in BC?

In 2009, BC’s emissions sources were as follows:

Source: Livesmart BC

What is a carbon offset?

A carbon offset represents a reduction or sequestration of greenhouse gas emissions generated by activities in one location - such as improved energy efficiency - that can be used to compensate for, or offset, the emissions from another source, such as a plane trip. Because our atmosphere is like an ocean of gases, reducing carbon emissions at any location will be beneficial to the whole system.

 

Doesn’t offsetting just give companies a licence to pollute?

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.

 

What is “carbon neutral?”

Carbon neutrality is about recognizing that we are responsible for 100 per cent of the carbon pollution we generate. Achieving carbon neutrality involves measuring GHG emissions, reducing emissions where possible, and offsetting the remainder.

 

What is a "carbon footprint"?

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 (CO₂e) emitted.

 

Who does the carbon neutral regulation apply to in BC?

The regulation, part of the Greenhouse Gas Reduction Targets Act introduced in 2007, covers all provincial public sector operations including ministries, school districts, colleges, universities, health authorities and Crown corporations. 

It does not include municipalities, who have their own Climate Action Charter, a commitment to work towards carbon neutrality signed by 179 BC municipalities. 

About Pacific Carbon Trust

What is Pacific Carbon Trust?

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.

 

Why was Pacific Carbon Trust (PCT) created?

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 benefits, in addition to the benefit of carbon reduction. 

About Carbon Neutral Government

How many offsets were required for Carbon Neutral Government?

The total offsets required to meet government 2010 carbon neutral public sector commitment was about 730,000 tonnes. Each year, the public sector will measure, reduce, report out on emissions, and then purchase offsets to achieve carbon neutrality.

 

What measures are in place to ensure taxpayers are receiving value for money?

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.  Each year, we are audited by the Office of the Auditor General. Service plans, audit reports and other financial information are available on the Corporate Documents page of our website.

Our procurement process is competitive to ensure high-quality, competitively priced offsets. Projects must be validated and verified by independent, ISO14065-accredited 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.

 

How much of taxpayers’ dollars are being spent on this initiative? How is the money being spent?

$21 million has been provided over four years (2007/08 through 2010/11 fiscal 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).

Revenues from the sales of offsets are re-invested in credible greenhouse gas reductions in support of the growth of a low-carbon economy in BC. Pacific Carbon Trust is expected to be self-sufficient by 2011.

 

Can you name the projects that the public sector commitment has helped fund?

PCT has 22 projects in its 2010 Carbon Neutral Government portfolio.

 

Does the requirement of carbon neutrality apply to local governments as well as provincial public sector organizations?

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.

One hundred and seventy-nine local governments 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.

 

Why can’t public sector organizations create and sell their own offset projects?

A key criterion for offset projects is that the reduction of one tonne of CO₂e is only "counted once" in reducing emissions. Therefore an emission reduction within a PSO's operations that lowers the organizations emissions and counts towards an organization’s carbon neutral claim cannot also be sold as an offset credit to be counted as a reduction a second time by another organization. This "counted once" criterion is captured in the emission offsets regulation and is integral to establishing a credible offset system in the province.

However, public sector organizations are themselves able to develop limited offset projects that are outside of their carbon neutral regulatory commitment (e.g. from activities not covered by the regulation). As an example, BC Transit or boards of education could implement an offset program from reduced bus emissions, which are not covered by the regulation. 

Developing Offset Projects with Pacific Carbon Trust

What price does PCT pay for offsets?

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.

As for individual projects, for competitive and contractual reasons, we do not provide pricing information on individual projects.

 

Is PCT forward buying?

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

We are the asset owners, but we also engage operators and technology suppliers. Who owns the carbon offsets?

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 Pacific Carbon Trust, to satisfy the emission offsets regulation’s ‘counted once’ criteria.

 

Who can qualify as a validator or verifier?

Pacific Carbon Trust only purchases offsets from emission reduction and/or removal enhancement projects that are accompanied by validation/verification statements of assurance provided by validation/verification bodies that are ISO 14065 accredited at the project level, for the relevant activity of validation or verification, and for the specific scope relevant to the project being validated or verified. 

It is anticipated that BC’s Emission Offsets Regulation will be amended to recognize validation/verification statements from bodies undergoing ISO 14065 accreditation. In anticipation of this, Pacific Carbon Trust will accept validations and verifications from VVB undergoing ISO 14065 accreditation as long as they are conducted in conjunction with a witness audit as part of the accreditation process. 

 

Not all offset purchasers require validation, as it can be a costly process without any guarantee of an offset sale. Why do you require validation?

Validation is a regulatory requirement. 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. Validation protects project proponents as well, giving them a level of assurance that their project will result in saleable offsets.

 

Who pays for validation and verification? How much does it cost?

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.

 

Why are you purchasing offsets in a competitive bid process? Why can’t we directly negotiate a contract?

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.

 

My project is small. Given anticipated revenues versus the cost to develop the documentation required, it doesn’t appear to be worth my while to bid. What can I do?

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. 

 

My project does not seem to fit the open solicitation procurement process. Am I excluded from selling offsets 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.

 

What is the evaluation process? Who is involved?

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

Each committee member is provided with copies of all proposals. 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.

Qualifying Offset Projects

Why don’t on-grid electricity generation or reduction projects qualify to produce offsets?

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.

 

Does PCT require offset projects to be consistent with particular protocols?

Unless a quantification protocol is suggested by Pacific Carbon Trust 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).

 

Do you require the offsets to be registered on any particular registry?

When accepted for delivery by PCT, offsets will be recorded on the Markit registry and the Pacific Carbon Trust website.

 

What happens to offsets in capped industries under cap and trade? Are offsets convertible into allowances?

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

 

We have an emissions reduction project. Is it eligible as an offset project with Pacific Carbon Trust?

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.

 

What is the significance of the Nov. 29, 2007 start date for offset projects?

In order for an offset project to pass the additionality requirements of the Emission Offsets Regulation, the offset proponent must have considered and included the value of developing offsets as part of the justification for going ahead with the project. The November 2007 date is based on the date that the Greenhouse Gas Reductions Target Act was passed, signalling that carbon offsets would be a saleable commodity, and thereby creating a market for carbon in BC. All of PCT’s projects are compliant with this start date.

Buying Offsets from Pacific Carbon Trust

How much will it cost me to buy offsets?

PCT offers a premium portfolio of BC-based offsets at $25 per tonne.

 

How can I purchase a carbon offset?

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.

 

How did PCT arrive at $25/tonne? Aren’t there cheaper alternatives?

As a Crown corporation, Pacific Carbon Trust 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 Pacific Carbon Trust by Public Service Organizations (PSOs) for each tonne of GHG emissions offset. Pacific Carbon Trust 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.

 

Why are firms buying offsets?

Many organizations recognize that including offsetting as part of their sustainability strategy is an innovative way to address climate change: 

 

Offsetting offers numerous benefits. You can:

• Contribute to a cleaner environment and a low-carbon economy; 
• Show your leadership by taking full responsibility for emissions – a move that is also generating new business opportunities; and 
• Take advantage of a cost-effective solution by using carbon offsets to help reduce emissions you’re unable to reduce yourself.

 

Why should I choose to buy from Pacific Carbon Trust?

British Columbia organizations that buy from PCT can:

• Share their enthusiasm for investing in projects right here in BC – helping industries reduce their footprint while contributing to BC’s green economy; 
• Enjoy peace of mind in buying offsets from projects that must pass at least two independent audits to ensure offsets are real, measureable and permanent.

 

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 ISO14065-accredited 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.

 

Are offset purchases tax deductible?

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.

 

Can an offset purchase be considered a charitable donation?

No.

 

What do the offsets cost Pacific Carbon Trust to buy?

Pacific Carbon Trust 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.

Offset quality

What standards are PCT offsets measured against?

Offset projects must be compliant with the BC emission offsets regulation. The emission offsets regulation is based on the ISO 14064-2 standard.

 

Do temporary emission offsets qualify – that is, projects that will eventually release or reverse GHGs emissions?

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

 

Can projects sell their offsets to more than one organization?

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

 

Do your projects meet the Gold Standard?

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.

 

What is ISO 14064?

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.

 

What does “additional” mean?

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.

 

What makes PCT’s offsets high-quality?

Pacific Carbon Trust’s 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.