Good afternoon. Thank you for inviting me.
Today, I'll limit my remarks to agriculture, since that's what we're working on at Smart Prosperity, although I should note that Smart Prosperity has argued elsewhere for the important role of clean innovation and market incentives for enhancing forest carbon sinks and reducing greenhouse gas emissions from the forestry sector, including through innovative bioenergy and other bioproducts and for moving towards a resource efficient, circular economy.
Canada is already a greenhouse gas efficient producer of crops and livestock. The sector has more than doubled the value of its output over the past decade or so, while keeping emissions near constant, which has caused the sector's overall greenhouse gas emissions intensity to decline by 0.9% per year from 1990 to 2012. Due to improved feeding practices and other factors, we are also one of the most greenhouse gas-efficient animal protein producers in the world. This means that increasing Canada's export market share could potentially decrease global greenhouse gas emissions, if our production is causing production in other jurisdictions to decline.
Agriculture currently accounts for only 10% of greenhouse gas emissions, but as Canada and the world move towards deep decarbonization, mitigating greenhouse gas emissions from crop and livestock production will increasingly require action from industry and policy-makers. This is particularly crucial if we are to meet our ambitious growth targets set out in the agricultural economic sector table report, as well as our long-term potential to meet the economy's burgeoning demand for safe, quality food.
Given tight margins and an industry that competes on a global market, the most realistic long-term solutions involve innovative technologies and practices, including but not limited to improved crop and livestock genetics, changes in animal diets, using technology and big data to improve nutrient management and emerging technologies for producing low-carbon fertilizer. Governments have a clear role to play in fostering this innovation.
We need to start acting now because promising opportunities for low-cost reductions in the agricultural sector are currently available and can potentially improve the sector's competitiveness. Based on our preliminary research at Smart Prosperity, we believe that the most promising efforts to reduce emissions, while maintaining producers' profitability, will be to improve nutrient applications and that's mainly nitrogen from fertilizer. There is extensive evidence from Canada and elsewhere that modest reductions in fertilizer application rates can enhance farmers' profits. For example, one recent study estimated that advanced nitrogen best management practices for corn in Ontario, and canola, wheat and barley in Alberta could potentially decrease per acre nitrous oxide emissions by 29% to 33% relative to the reference case. This is a win-win because it also increased profits by anywhere from $29 to $71 per acre.
Potential policy instruments to achieve this include improved extension and certification services, innovative tools, such as income support and insurance schemes, reverse auctions or cross-compliance schemes. As well, we can improve access to technology, such as seasonal weather forecasting services.
Enhanced carbon sequestration will also play a role in reducing the sector's carbon footprint, although technical and institutional hurdles pose some challenges for creating a substantial and viable offsets market. In part, this is due to issues of permanence, additionality, transaction costs and possibly the low price commanded on the market for offsets. We believe at Smart Prosperity that the economic growth potential for agriculture is enormous, but we need to take the long view. Sector growth should not be achieved through significant increases in greenhouse gas emissions. Fortunately, the last couple of decades have shown that smart policy choices can lead to simultaneous improvements in both economic and environmental performance.
Thank you.