Based on recently completed analysis of the potential economic impact of reducing emissions, there would be very little impact on net farm income from meeting the Kyoto target.
Changes to energy prices resulting from the Kyoto protocol implementation measures would be expected to have a very small impact on the overall economy and agriculture.
Furthermore, it is thought there will be positive implications for agriculture and rural economies through expansion of bio-fuels production. This will increase demand for agricultural products that are used as feed stocks to produce ethanol, corn and wheat, and bio-diesel, soya, canola oil and animal fats, and would create new jobs in building and operating ethanol and bio-diesel plants.
Farmers have an opportunity to be rewarded economically for their new actions to address climate change such as adopting soil conservation practices which enhance agricultural sinks. The draft plan on climate change enables an emission trading system to be designed in a way that would allow farmers to be financially rewarded for the sinks or emissions reductions credits they generate by selling these credits into the emissions trading system. Agriculture also has opportunities to adopt more energy efficient farming practices and technologies which help to control costs and reduce emissions at the same time.
The potential for greenhouse gas, GHG, reduction from the agricultural sector can be broken down as follows:
--a potential of 10 megatonnes, Mt of CO2-equivalent, of GHG reductions in 2010 in the form of agricultural sinks resulting from actions currently underway, business as usual, and this is essentially due to farmers undertaking responsible environmental stewardship,and improved farm management practices promoted by federal government programs such as Action Plan 2000, Budget 2001, the Greencover program and the Agricultural Policy Framework, and provincial government programs; and
--further adoption of agricultural sink enhancing and GHG reducing initiatives could lead to an additional 8.4 Mt of reduction that could be used as offsets in the domestic emission trading, DET, sector.