7. Implications of trading for the Canadian Cattle
The Canadian cattle industry could be a seller or a
purchaser of ERCs depending on the regulatory regime developed in Canada.
The current national plan for emission reductions leans towards the beef
industry as sellers of ERCs. If cattle producers choose to participate it
could result in another source of revenue, for little if any incremental
Many of the methods which are suggested to reduce
are also those which improve the efficiency of beef production (such as
improved feed conversion, shelter and bedding).
These methods have the potential to reduce costs, improve net revenue from
the sale of beef and incrementally to add revenue from the sale of ERCs.
The amount of incremental benefit is speculative given the
uncertainties mentioned above and the fact that the market price for ERCs
in 2008 is unknown.
Estimates of ERC value in 2008 range from $6.00 to $15.00
per tonne of CO2e. If a cattle producer is able to reduce emissions from
his operations by 0.5 to 1 tonne CO2e per head per year then the
incremental revenue from selling the resulting ERCs would translate to
between $3 and $15 per head.
There may be other benefits for producers who participate
in reducing emissions by improving production efficiency. It will improve
or at least maintain their competitiveness both in Canada and in the
export market and provide additional branding opportunities (improving the
economy and the environment at the same
time). It will also give the cattle industry new knowledge and expertise
which has the potential to be exported to other countries in return for