[PPT] - The Institute for Agriculture, Forestry and the Environment PowerPoint Presentation

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“Integrated Solutions for Greening Alberta’s Growth” Agri-Environmental Partnership of Alberta Forum, March 10, 2010

The Institute for Agriculture, Forestry and the Environment

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Premier’s Mandate

Institute as a catalyst to: Institute as a catalyst to:

Assist the Alberta Government

Assist the Alberta Government in achieving its objective to in achieving its objective to “green growth” “green growth” and improv nd improve environmental outcomes. e environmental outcomes.

Enhance competi

Enhance competitiveness opportuniti tiveness opportunities for Agriculture and s for Agriculture and Forestry, and other manage Forestry, and other managers o rs of natural re natural resource sources. s.

Brand Alberta as the leader

Brand Alberta as the leader in Environmental Innovation. in Environmental Innovation.

Through: Through:

Innov

Innovati tion in poli

n in policy, processes and systems, institutions,

cy, processes and systems, institutions, science and technol science and technology. gy.

A deci

A decision support system for selection, evaluati sion support system for selection, evaluation and

n and

implementation of market-based approaches for Ecosystem implementation of market-based approaches for Ecosystem Se Services (ES). rvices (ES).

Documenti

Documenting ecosystem integrity. g ecosystem integrity.

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Change the paradigm from environment as a

Change the paradigm from environment as a compliance cost, to … compliance cost, to …

Integration of the environment into a new business

Integration of the environment into a new business model - model - new way of doing business through a market ew way of doing business through a market based approach: based approach:

As an asset on the balance sheet;

As an asset on the balance sheet;

Profit

Profit centre rather than a cost centre centre rather than a cost centre

IAFE: A New Paradigm

Market as a key part of Alberta’s policy toolbox to: Market as a key part of Alberta’s policy toolbox to:

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Alberta has a unique opportunity to

participate in these markets with its diverse energy, agricultural and forestry industries, and its natural assets.

Experience shows there are emerging

pportunities for adding value to our

resource products and services.

Why Now and Alberta?

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Leading edge – no other jurisdiction has

done this.

Time is right for developing new

environmental markets for Alberta’s natural resource industries.

Pursue global, national and regional

market opportunities to take advantage of changing economic times.

Leadership Opportunity

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* Agri-Environmental Partnership of Alberta

IAFE Stakeholder Engagement

IAFE IAFE Forestr Forestry Agriculture Agriculture (AEPA* (AEPA*) Research Research Institu Institutes es ENGOs ENGOs Public Public GoA GoA Indu Industry stry Government Government

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Board Member Representation

(two ag. members)

Dialogue and Presentations to AEPA Board Feedback at AEPA ES Workshop (Oct. 28,

2008)

Input and recommendations by AEPA

Project Teams – Ecosystem Services, Environmental Market Opportunities and Land-use Framework

Participation in IAFE Engagement

Agriculture Sessions

Over 35 individual meetings by Board with

Ag. Groups

IAFE Relationship with AEPA

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Build on existing knowledge and approaches;

Build on existing knowledge and approaches; collaboration and cooperation with stakeholders collaboration and cooperation with stakeholders

Improved outcomes and results.

Increased efficiency.

Reduce duplication.

Less government intervention.

Strengthen Alberta’s competitive advantages

Board Direction

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Millen Millennium nium Ecosystem Ecosystem Assessm Assessment ent (2005) (2005)

October 22, 2009

Ecosystem Services: The Benefits People Obtain from Ecosystems

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Focus has been on provisioning services.

Governance is hierarchical and prescriptive.

Historically, exclusive use of command and control

Historically, exclusive use of command and control policy. policy.

A mix of instruments in various sectors:

Cows and Fish (Information)

Forest management plans (standards)

GHG emissions management scheme

More recently we are seeing new policies emerge

More recently we are seeing new policies emerge (LUF). (LUF).

October 22, 2009

The Current Approach to Ecosystem Services

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20 leading experts from around the world 20 leading experts from around the world with experience in researching, designing, with experience in researching, designing, implementing and administering market- implementing and administering market- based instruments (MBIs) in the Agriculture based instruments (MBIs) in the Agriculture and Forestry Sectors. and Forestry Sectors.

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Important to have an enabling ecosystem services

Important to have an enabling ecosystem services market policy framework that allows transformation market policy framework that allows transformation and innovation in business. and innovation in business.

This is not an agriculture or forestry policy

framework. It is an integrated framework focused on
framework. It is an integrated framework focused on

ecosystem services and market based approaches ecosystem services and market based approaches that provides opportunities for agriculture, forestry, that provides opportunities for agriculture, forestry, First Nations, and other natural resource managers First Nations, and other natural resource managers for new business and revenues through value-added for new business and revenues through value-added products and services. products and services.

Public perception regarding the transfer of

Public perception regarding the transfer of responsibility for environment to the private sector responsibility for environment to the private sector will be a risk. will be a risk.

Messaging regarding public communications, and

Messaging regarding public communications, and collaboration with industr collaboration with industry and ENGOs and ENGOs will be ke ill be key. .

Need for New Policy Direction

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Shift in the role and functions of government and the

Shift in the role and functions of government and the private sector/business in the management of the private sector/business in the management of the environment. environment.

Feedback from stakeholders is supportive of direction

Feedback from stakeholders is supportive of direction and need to shift roles and responsibilities for and need to shift roles and responsibilities for management of the environment outside of management of the environment outside of government. government.

Public assurance is the responsibility and

Public assurance is the responsibility and accountability of GoA. accountability of GoA.

Institutional alignment and re-engineering may be

Institutional alignment and re-engineering may be necessary. necessary.

Key Considerations

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Ecosystem services are integrat

Ecosystem services are integrated in nature. Recognizes ed in nature. Recognizes systems, the connections and ch systems, the connections and choices (or trade-offs) to be

ices (or trade-offs) to be

made around the environment, economy, and society. made around the environment, economy, and society.

Creates incentives to go beyo

Creates incentives to go beyond regulatory compliance to nd regulatory compliance to reward environmental reward environmental performance and results. performance and results.

Results in

Results in an integrated an integrated approach to policies. approach to policies.

Enables pro-active approaches

Enables pro-active approaches addressing problems before addressing problems before they occur. they occur.

Requires coordination acro

Requires coordination across departments and sectors. ss departments and sectors.

Relies on transparent informatio

Relies on transparent information about state of environment n about state of environment and movement towards environmental outcomes. and movement towards environmental outcomes.

October 22, 2009

An Ecosystem Services Market Approach

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A market-based approach is a form of government

A market-based approach is a form of government regulation and governance. regulation and governance.

A market-based approach is one that relies on

A market-based approach is one that relies on market forces to re-allocate goods and services market forces to re-allocate goods and services through full and effective pricing. through full and effective pricing.

The assumption: once the true cost of environmental

The assumption: once the true cost of environmental protection is internalized in market prices- protection is internalized in market prices- invoking nvoking a more sustainable trajectory of economic growth. a more sustainable trajectory of economic growth.

A market-based approach uses a alternative set of

A market-based approach uses a alternative set of policy instruments. policy instruments.

October 22, 2009

What is a Market Based Approach?

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Market-based policy requires the need for setting caps

Market-based policy requires the need for setting caps (limits) and baselines (starting point) for ecosystem (limits) and baselines (starting point) for ecosystem services - services - involves consensus building. nvolves consensus building.

Information sharing and availability is critical to well

Information sharing and availability is critical to well functioning markets and we tr functioning markets and we traditionally do not do this aditionally do not do this well. well.

There is a lack of data

There is a lack of data on ecosystem processes and

n ecosystem processes and

variables that influence ecosystem well-being. variables that influence ecosystem well-being.

There is a need to better understand the dynamics

There is a need to better understand the dynamics between ecosystem process and human and natural between ecosystem process and human and natural disturbance variables. disturbance variables.

October 22, 2009

The Market-Based Approach

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October 22, 2009

Some Examples…

Phosphorus Trading

Began in 1997 to ensure protection of City of New

Began in 1997 to ensure protection of City of New York’s Drinking Water supply in 1600 sq. mile York’s Drinking Water supply in 1600 sq. mile Catskill/Delaware Watershed Catskill/Delaware Watershed

Choice of Investing $6-$8

Choice of Investing $6-$8 billion in Filtration billion in Filtration Treatment System versus $1.4 Billion to implement a Treatment System versus $1.4 Billion to implement a wide range of watershed protection programs with wide range of watershed protection programs with landowners (predominately agriculture with over 230 landowners (predominately agriculture with over 230 dairy farms) to achieve desired water quality levels. dairy farms) to achieve desired water quality levels.

Current expenditures on watershed protection to

Current expenditures on watershed protection to date approx. $507 million in date approx. $507 million including: land purchase, cluding: land purchase, conservation conservation easements, certification, eco-branding, easements, certification, eco-branding, and whole farm plan implementation. and whole farm plan implementation. New York City Watershed Partnership

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October 22, 2009

Some Examples…

Phosphorus Trading

Began in 2005 to improve the quality an

Began in 2005 to improve the quality and extent of d extent of riparian vegetation along the Ovens River, a Heritage riparian vegetation along the Ovens River, a Heritage River in the Province of Victoria in Australia. River in the Province of Victoria in Australia.

Uses auctions to promote the protection and

Uses auctions to promote the protection and improvement of native vegetation on private lands improvement of native vegetation on private lands including erosion, controlling weeds and improving including erosion, controlling weeds and improving the native vegetation along riverbanks through the native vegetation along riverbanks through fencing and off-stream watering systems. fencing and off-stream watering systems.

Expenditures to date approx. $2 million with 44

Expenditures to date approx. $2 million with 44 landowners under agreement restoring and protecting landowners under agreement restoring and protecting 1181 ha of riparian area and more than 100 km of 1181 ha of riparian area and more than 100 km of river frontage. river frontage. Australia’s River Tender Program

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October 22, 2009

Some Examples…

Phosphorus Trading

The South Nation River watershed is located

The South Nation River watershed is located southeast of Ottawa, Ontario Canada. The watershed southeast of Ottawa, Ontario Canada. The watershed is 3900 sq. km. in size, has a population of about is 3900 sq. km. in size, has a population of about 125,000, and is mixed farming with dairy and cash 125,000, and is mixed farming with dairy and cash crop corn and soybeans predominant. crop corn and soybeans predominant.

Since 1998, new/expanded wastewater dischargers

Since 1998, new/expanded wastewater dischargers are legislated to have no net increase to Phosphorus are legislated to have no net increase to Phosphorus (P) loading in the watershed. (P) loading in the watershed.

Has created a P credits trading market for agriculture

Has created a P credits trading market for agriculture BMP’S and upgrades to septic systems, manure BMP’S and upgrades to septic systems, manure storage, milkhouse storage, milkhouse washwater, barnyard runoff ashwater, barnyard runoff control, livestock access and buffer strips. control, livestock access and buffer strips. South Nation Conservation

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October 22, 2009

Some Examples…

Phosphorus Trading

Began in 2004, is a coalition of conservation, city,

Began in 2004, is a coalition of conservation, city, business, farm, and scientific leaders with the goal of business, farm, and scientific leaders with the goal of developing innovative, market-based tools that developing innovative, market-based tools that combine with regulatory controls to deliver broad combine with regulatory controls to deliver broad conservation benefits, at lower costs and with conservation benefits, at lower costs and with reduced conflict, in the Willamette River Basin of reduced conflict, in the Willamette River Basin of Northwestern Oregon. Northwestern Oregon.

Inclu

Includes a lan des a land area of around 11,500 square miles, a area of around 11,500 square miles, a population of around 2.5 million, and around 75 population of around 2.5 million, and around 75 percent of percent of Oregon's economic activity. Oregon's economic activity.

Has created an Ecosystem Credit Accounting system

Has created an Ecosystem Credit Accounting system that allow buyers and sellers to trade in multiple that allow buyers and sellers to trade in multiple types of ecosystem credits. types of ecosystem credits. Willamette Partnership

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October 22, 2009

Source: David Primozich 2009

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Is a tool that guides the development of

Is a tool that guides the development of future policy, and future policy, and

Provides a rationale and philosophy affecting

Provides a rationale and philosophy affecting policy development policy development

What is a Policy Framework?

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Introduction

What are Ecosystem Services

Purpose of the Ecosystem Services Market

Purpose of the Ecosystem Services Market Policy Framework Policy Framework

Critical Assumptions

Principles

Requirements for Policy Development

Defining Environmental Objectives

The IAFE Policy Framework

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Understanding the Need for Policy Intervention

Policy Objectives and Responses

Choosing the Right Policy Instrument

Governance for a Successful Market-Based Approach

1. Business Model
1. Business Model

2.

2. Ec

Ecosyste

system Ser

m Services Assessment ices Assessment

3. Information Management System
3. Information Management System
4. Ecosystem Services Trading Platform
4. Ecosystem Services Trading Platform
5. Verification and Validation Systems
5. Verification and Validation Systems
6. Knowledge Structure
6. Knowledge Structure
7. Policy Evaluation Process
7. Policy Evaluation Process

The IAFE Policy Framework

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1. Assess existing policies or

programs for adverse incentives Result: No obvious adverse policies or programs

2. Assess information barriers

Result: Policy or program reform required Result: Information sharing is a barrier Outcome still not achieved Explore the development

f a market friction instrument

Result: No identifiable information sharing barrier

4. Assess the potential for establishing

property rights and offsite provisioning of ecosystem services. Outcome still not achieved Explore the development of: regulatory instrument Explore the removal of policies that present adverse incentives Explore the development of: permit or credit trading instrument, offset instrument

5. Assess whether market attributes can be

used to improve policy outcomes Explore the development of: Payment scheme with auctioning, market friction instrument

3. Assess the barriers to market creation:
New property rights can be established
Sufficient buyers/sellers
Institutional capacity is available to

support design and implementation Result: All market creation conditions can be met Result: Any of the market creation conditions cannot be met Result: Property rights and

ffsite provisioning of ecosystem

services can be established Explore the development of:

ffset instrument

Result: Offsite provisioning of ecosystem services cannot occur and barriers exist to establishing new property rights Result: Market attributes are likely to improve policy

utcomes

Result: Market attributes are not likely to improve policy

utcomes

Assess whether policy instrument is meeting the specific environmental

bjective identified in the policy context step of the policy development process.

If it is not review policy context information and work through the process again. Using the information gathered about the environmental objectives and policy context

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Clear definition of roles,

Clear definition of roles, responsibilities, author responsibilities, authority, ity, accountability, and decision making accountability, and decision making

Central market authority who facilitates:

Brokering

Trade

Verification

Certification

Information sharing

Non-Government/Government

Governed by a Representative Board

Scale (provincial, regional, community)

Public assurance function lies with GoA

Governance

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Ecosystem Services Assessment -

Ecosystem Services Assessment - (build on Albe build on Alberta’s leade rta’s leadership ship in biodive in biodiversit sity monito monitoring – ring – ABMI PLUS) BMI PLUS)

Information Management Systems

Trading Plat

ading Platfo form (Cent rm (Central o al or Decent Decentralized) ralized)

Ve

Verification and Validation Systems rification and Validation Systems

To

Tools for Assessin

ls for Assessing Trade-Offs

g Trade-Offs

Economic

mic valuat

valuation ion

Cost-benefi

Cost-benefit anal analysis ysis

Knowledge

Knowledge Network Network – – (build build on

n Innovation

Innovation St Strategy and AET rategy and AET – – LUS model) LUS model)

Policy Evaluati

Policy Evaluation

n

Components to Support a Market-Based Approach Components to Support a Market-Based Approach

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Defining Environmental Objectives: Defining Environmental Objectives:

Clearly defined environmental ob

Clearly defined environmental objectives o jectives or polic policy goals – y goals – the he basis for determi basis for determining the ap g the approach for achieving the proach for achieving the

bjective.
bjective.

Objective-setting processes

Objective-setting processes - parti articipatory in nature. cipatory in nature.

Clear objectives are fundamental to the success of an

Clear objectives are fundamental to the success of an Ecosystem Services Ma Ecosystem Services Market Policy Framework rket Policy Framework

BUT setting objectives is OUTSIDE the scope of the

BUT setting objectives is OUTSIDE the scope of the Framework. Framework.

Alberta has other processes to de

Alberta has other processes to devel velop environmenta p environmental objecti

bjectives:

es:

region regional plans developed as part of the al plans developed as part of the Land-us Land-use Framework Framework

bjectiv
bjectives in

es in Water for Life Water for Life and others. and others.

Requirements for Policy Development

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Regional plans that set thresholds and limits to

Regional plans that set thresholds and limits to future industrial footprint future industrial footprint

The IAFE policy framework to coordinate policy

The IAFE policy framework to coordinate policy instruments and support mechanisms. instruments and support mechanisms.

Regulatory dr

Regulatory driv iver (regio er (regional plan nal plans, Water Act, A s, Water Act, AEPA, etc); PA, etc);

Regulatory modernization /review

Collaborat

Collaboratio ion and co n and cons nsultation mechanism ultation mechanism

Review of existing policies that

Review of existing policies that adversely impact ecosystem adversely impact ecosystem services services

A range of instrument options.

Monitoring and evaluation system

Applying this Concept in Alberta

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Be outcome or performance bas

Be outcome or performance based, d, not practice based, focusing on not practice based, focusing on results ra results rather than ac ther than activities. tivities.

Focus on measurable results that

Focus on measurable results that enhance the provision of ec enhance the provision of ecosystem

system

service services, bey , beyond what wh nd what which wo ich would have oc uld have occurred otherwise. curred otherwise.

Support and enc

Support and encourage c urage continuous im ntinuous improvement in the provision of provement in the provision of all all ecosystem services and in ecosystem services and in business performance. business performance.

Avoi

Avoid the crea d the creati tion of incenti

n of incentives that may have unintended

es that may have unintended consequences for the environment or consequences for the environment or the competitiveness of a sector, the competitiveness of a sector, by respect the interdependence of ai by respect the interdependence of air, water, land and bio r, water, land and biodiv iversity, ersity, and the economy. and the economy.

Principles Principles

Policies and actions associated wi Policies and actions associated with th the implementation the implementation of this

f this

framewo framework will: rk will:

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Ensure that, where possible, all

Ensure that, where possible, all players influencing a specific players influencing a specific ecosystem service are incorp ecosystem service are incorporated into the market.

rated into the market.

Enable creativity and innovation in

Enable creativity and innovation in systems, processes, technology, systems, processes, technology, and institutions that a and institutions that add value to Alberta’s reso dd value to Alberta’s resource-based industries urce-based industries and the way they enhance ecosys and the way they enhance ecosystem services, while generating tem services, while generating improved economic return improved economic returns. s.

Seek simplic

Seek simplicity in the selection an ty in the selection and implementation of policy tools. d implementation of policy tools.

Achieve multiple desired outcomes

Achieve multiple desired outcomes through bundling and integration through bundling and integration

f ec
f ecosystem ser
system services on a

ices on a l landsc ndscape basis, thereby ensuring that ape basis, thereby ensuring that businesses have access to a range of businesses have access to a range of tools and options to facilitate tools and options to facilitate their effective particip their effective participation in th ation in the market. e market.

Offer

Offer flexi flexible a le appr proa

aches to a

ches to achi hieving environmental compliance, eving environmental compliance, thus hus enhancing opportunities for enhancing opportunities for improv improved competitiv ed competitiven enes ess. s.

Principles Con’t Principles Con’t

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Fina

Finalize the Ec lize the Ecosystem Servic

system Services Market Policy Framework

es Market Policy Framework

Develop the Stra

Develop the Strategies for Implementa tegies for Implementation tion

Team -

Team - Policy experti

licy expertise wi

se within thin an and ou d outside of GoA tside of GoA

Framework and its Critical Components

Framework and its Critical Components

Transition Plan

Transition Plan

Communications

Communications

Publi

Public

Engagement

Engagement

Industry

Industry

EN

ENGO’s GO’s

Federal gover

Federal governmen ment

Leg

Legislative/Reg slative/Regulat lations s

Capacity

Capacity

Busin

siness Mo ss Model del

Next Steps

By March 31, 2010: By March 31, 2010:

SLIDE 40

Rec

Reception to GoA n to GoA and the IA nd the IAFE mand mandate has been extr ate has been extremel emely positiv y positive. .

Significan

Significant recognition t recognition an and in d interest lo terest locally, nationally an cally, nationally and inte d internationally. rnationally.

Alberta

Alberta is seen s seen as lead as leadin ing in g in this area – this area – inn nnovative

vative.
Huge

Huge opportunity, sets high expect

pportunity, sets high expectations for follow through and

ations for follow through and implementation. implementation.

Lots of inter

Lots of interest from th st from the ag e agricul cultur ure, e, for forestry an and environme d environmental c ntal commun mmunities, ties,

ther provin
ther provinces, feds an

ces, feds and intern d internation ationally ( lly (USA, Australia) SA, Australia).

Lots of support, encourag

Lots of support, encouragem ement, and willingne t, and willingness to ss to w work rk wit with, en , engage gage, and , and share i e idea eas wi with the IA th the IAFE. .

Alberta is seen

Alberta is seen as taking a new bold as taking a new bold approach and is being recognized and approach and is being recognized and comm commended for i ded for it. .

Ther

There is a huge oppor e is a huge opportunity for Alberta to be unity for Alberta to be a global leader. We a global leader. We need to take it need to take it and run with it! and run with it!