9. How to Get started in ERC Trading

1. Determine the on-farm sources of emissions and emission reductions. This can be done by using the CCA GHG Calculator. The calculator will give the producer an estimate of the emission associated with all major activities on the farm in 1990, today and in the future based on the producer’s input of production methods used in the past and present and planned for the future.
       
2. Determine whether it is worth the effort to prepare an offer to sell ERCs. The producer will need to take into account all the costs and risks noted above as well as potential revenue to be gained.
     
3. Verify that the emission reductions have been achieved and are real. Most likely the verification will include documentation of the change of production method, how many acres or animals the change applied to, and when and how long the change took place. It is not known if every producer will be required to actually measure the emission reductions. Perhaps those reductions could be correlated to the production method at research institutions and possibly a selection of representative farms across Canada. That information may be sufficient to allow buyers and sellers to be confident that emission reduction amounts are valid for specific changes in production methods.
       
4. Seek out ERC buyers, aggregators or brokers and negotiate trade. Canadian corporations who may be in the market to buy ERCs are typically in the “large industrial emitter” group and most have filed voluntary emission reduction action plans with the Voluntary Challenge and Registry Inc. These include the amount of emission reductions a corporation has targeted for, and any intent to purchase ERCs.

Today, when the market for ERCs is just starting, it is likely that ERC trades will be partly motivated by the desire to learn how to do a trade and what the implications are, without assuming a lot of risk.

So producers who wish to be involved in an early transaction will likely find that a pilot transaction directly negotiated with a buyer or involving an aggregator who is trusted by the producer will be most beneficial.