Why is it when we consider carbon dioxide emissions, we only ever look at one side of the balance sheet? In other words, why is it we only ever consider liabilities (emissions) and never talk about our assets (carbon sinks)?
These are the provocative questions raised in a Financial Post column in March by F. Larry Martin, former deputy minister in Saskatchewan. It is now one of the most viewed articles on the site. And for good reason.
I spoke to Martin about the need to return to a scientifically sound, environmentally sustainable, financially realistic, global, comprehensive and holistic approach to addressing carbon dioxide emissions. In other words, the opposite of what we have right now.
He reminded me of what I learned in Grade 7 science class about the carbon cycle. Environmentalists assert that the only sustainable way to live is to use biofuels because it is a closed cycle – carbon is released from burning the fuels then absorbed with new plant growth. The argument is that fossil fuels mess with this natural balance because they are dug up and burned, overwhelming the natural cycle.
I’ve always found this argument unsatisfactory because, let’s face it, a plant doesn’t know whether it is absorbing carbon dioxide from biofuels or fossil fuels.
If we focused on absorption it stands to reason that there are numerous ways to manage our forests, grass, crops and soil to pull more carbon dioxide out of the air. In fact, in Canada we are doing a good job of this already.
If we considered the asset side of our carbon balance sheet, Canada would be a global hero rather than the target of attack. Martin calculates that Canada absorbs 20-30% more CO2 than we emit, meaning we are providing a massive carbon sink to the rest of the world for free. Meanwhile, the Big 4 emitters – the United States, China, European Union and India – only absorb 10% of the CO2 they produce.
Why aren’t we getting any credit for this global public service? An even better question is why aren’t we getting any money for it?
Martin calculates at a $40 carbon price, selling off our excess carbon absorption capacity would generate an estimated $10 billion a year; at $50 we would generate more than $12 billion. He said that Canada needs to form a new political voting block with other “net absorber” nations – Russia, Brazil, Argentina, Peru, etc – and push to adopt a more rational, science-based approach to global carbon policy that considers the entire carbon cycle.
Eric, one of our listeners, was so enthused by Martin’s suggestion he calculated the “net absorber” status of his 320 acre farm. Comparing the small amount of carbon dioxide he emits to the large amount that he absorbs, Eric figures he’s owed about $64,000 for the carbon absorption service he is providing to the world. So, who is going to pay up?
You can read F. Larry Martin’s full column by clicking the image below or listen to the full interview below.