Building Back Better with nature-based climate solutions


The history of Canada and its people is largely written in the history of its agricultural and forestry ecosystems, and the “pandemic pause” provides an opportunity to assess the health and sustainability of those ecosystems and the economic activity that depends on them. The total industrial harvest of wood in Canada peaked in 2004, and the pandemic hit when the forest industry was in decline. Agricultural practices are clearly not sustainable, and the pandemic has revealed the vulnerability of our food production and supply chains. Forestry and agriculture are both susceptible to the ravages of extreme weather and a destabilized climate, but both sectors have great potential to contribute to a rebalancing of the climate system and the establishment of a green economic recovery.

Canada, with its vast areas of forests, wetlands and farmland, has abundant opportunities to adopt nature-based climate solutions. Conservation, restoration and land management actions can help store carbon and avoid climate-changing greenhouse gas (GHG) emissions. Approximately 84% of land in Canada is forested (857 million acres), of which 55% (558 million acres) is managed forests. An additional 158 million acres are dedicated to agriculture. Because forests and land can sequester carbon and because of the sheer scale of Canada’s land mass, nature-based climate solutions can have a material impact on both the climate and biodiversity crises.

Globally, more than 11.3 billion tonnes of GHG emissions per year could be avoided or offset by nature-based climate solutions (that is a full third of annual GHG emissions), including afforestation (in areas where there was no previous tree cover), reforesting degraded forests, engaging in responsible forest management and improving cropland and peatland management.

Canada has already committed to a $3 billion Natural Climate Solutions fund: $2 billion to plant 200 million trees per year over 10 years and $1 billion to support other projects that improve the storage of carbon through stewardship of Canada’s forests, wetlands and farmlands. The goal of the fund is to achieve annual emissions reductions of 30 million tonnes by 2030.

According to the International Union for Conservation of Nature (IUCN), 7% of 857 million acres, or about 59.3 million acres of Canadian forest, are under some form of conservation. The federal government has committed to protecting 25% of Canada’s land and 25% of our oceans by 2025 – with an ambition of 30% of each by 2030. If achieved, these new protected areas could also contribute to Canada’s efforts to tackle climate change and form the basis of tourism that enables us to deepen our connection with the land as we stay closer to home for recreation and holidays during the COVID-19 pandemic and into the future.

Also firmly rooted in the land and nature, Canada’s agricultural sector is a vitally important part of our economy and our food security. A robust agricultural sector is essential to Canada’s economic recovery. A recent Intergovernmental Panel on Climate Change (IPCC) Special Report, Climate Change and Land, stresses that to keep global temperatures within safe levels we need to transform the way we produce food and manage land. Canada reports that the sector accounts for a 10th of the country’s GHG emissions – the majority of those emissions are traceable to beef and overuse of nitrogen fertilizer. If all the parts of our food system are included, from farm inputs to the emissions resulting from wasted food, 25 to 30% of global GHG emissions are attributable to the system that generates our food.

The COVID-19 pandemic has exposed the risks of our heavy reliance on global supply chains and brought heightened awareness to the value of producing food in Canada. For livestock farmers, the pandemic has meant that many of the chickens, pigs, cows and sheep that were bred and raised for food are not finding markets, as meat processing plants are shut down and restaurants, hotels, convention centres and sports venues are shuttered because of the pandemic.

Before COVID-19, about 58% of food produced was lost or wasted, and 32% of this food could have been rescued to support communities across Canada. This is the goal of the federal government’s recently announced $50 million fund to purchase and divert surplus food. COVID-19 has also clearly exposed the reality that many Canadians cannot always afford healthy and nutritious meals, leading to greater reliance on food support programs. The number of Canadians experiencing food insecurity is highest among Black and Indigenous Canadians. With increased poverty caused by COVID-19, the number of Canadians experiencing food insecurity is expected to double from 4.4 to 8.8 million. At a time when so many Canadians are deeply concerned about putting food on the table, it’s striking that the federal relief program for farmers ($252 million) was 15% of the amount announced to subsidize the safe shut-in of wells illegally abandoned by oil and gas companies ($1.7 billion).

Creating incentives for farmers to adopt practices that reduce emissions and conserve biodiversity can make Canadian farms more resilient while creating jobs in local communities. Healthy ecosystems on farmlands provide both ecological goods and services (EGS), with direct economic and cultural benefits, including food, water and timber, as well as services such as  water filtration, flood protection, wildlife habitat and GHG sequestration. Where crops can’t be produced profitably, agricultural land can be put to use for EGS as part of Canada’s green stimulus plan. Doing so will put money in farmers’ pockets and keep much-needed Canadian farms in business.

Planting trees on marginal agricultural lands reduces atmospheric carbon dioxide levels by sequestering carbon. So does restoring wetlands and converting marginal cropland to perennial grassland cover. These are all examples of land use that delivers essential ecological services to society.  Beyond sequestering carbon, they deliver cost-effective natural infrastructure, reducing the impacts of flooding and drought and making water treatment less expensive. Climate-related water disasters are costly, rising to $28 billion between 2000 and 2017. Restoring natural infrastructure also saves money by decreasing damage to roads and other built infrastructure. Communities struggling with the tax revenue losses of COVID-19 can’t afford to spend 80% of their budgets on road maintenance with costs rising due to climate change. Natural infrastructure can help protect roads from flash floods and keep repair costs down.


The EU Green Deal’s approach to natural ecosystems 

As an example of international developments on natural ecosystems, the EU Commission (the executive branch of the EU) has included preserving and restoring ecosystems and biodiversity as well as a fair, healthy and environmentally friendly food system as two of the 10 planks of the EU Green Deal. In March of this year, the EU Commission proposed that regulatory and non-regulatory initiatives would enable the achievement of these objectives.

As an indication of the political support the EU Green Deal has garnered, in May the EU Parliament (the legislative branch of the EU) passed a motion with all-party support framing the EU Green deal as the foundation of the EU’s next seven-year budgetary cycle starting 2021. It also stressed the need for new sources of funding above and beyond existing sources and stated that “Parliament has been adamant that the Green Deal and the European digital agenda be a priority in the next long-term budget and the recovery strategy. If its demands are not met, Parliament warns it will make use of its veto powers.”



The Proposal

Given the important role of our forests, wetlands and farmlands for rural employment and in the transition to a net-zero economy, the federal and provincial governments should establish policies and investments that support them if we’re to meet our climate commitments in economically sound ways. These range from protecting larger swaths of forests, wetlands and marine areas, to improving logging and farming practices, to determining credible carbon-offset frameworks. These will take time. In the short term, there are opportunities for Canadians to Build Back Better through Natural Climate Solutions.

Here we focus on three core proposals that can play a role in a resilient recovery:


1. Incentivize farmers to adopt practices that sequester carbon on marginal agricultural land



Of Canada’s 158 million acres of farmland, 93 million are dedicated to crops. A quarter of Canada’s farmland is considered to be marginal land. The potential for sequestering carbon on marginal agricultural land depends on the willingness of farmers across the country to commit to, and invest in, afforestation, restoration and conservation efforts. Such incentive-based programs for farmers and rural-land managers do double duty by both sequestering carbon and delivering valuable natural infrastructure services like flood and watershed protection for nearby large cities and rural towns.

An investment of $400 million per year ($4 billion over 10 years) to support farmers in converting 10 million acres of marginal agricultural land to deliver ecological goods and services (EGS) that would sequester  22 million tonnes of GHG emissions annually by 2025 and create 5,600 jobs annually.

Farmers are already being supported to convert marginal land into new uses that deliver multiple benefits. For example, ALUS Canada works with farmers and ranchers on 27,000 acres of Canadian farmland to produce valuable ecological services, including clean air, clean water, flood mitigation, climate adaptation, carbon sequestration, habitats for species at risk and support for our native bees and pollinators.

During the COVID-19 pandemic, other noteworthy positive impacts of these investments in natural infrastructure include:

  • creating more liveable communities and supporting residents;
  • retaining and attracting highly educated young professionals to jobs in rural communities;
  • engaging rural volunteers;
  • introducing urban Canadians to rural communities and farming through media coverage of the important services that farmers and rural communities are providing; and
  • increasing property values.



2. Incentivize farmers to use less nitrogen fertilizer, save money and reduce emissions


An additional investment of $200 million over the next 18 months to optimize and reduce nitrogen use on Canadian farms, create 2,800 jobs in hard-hit agricultural communities and reduce GHG emissions by 3.75 million tonnes annually.

Nitrogen fertilizer is the largest source of on-farm emissions. Nitrogen use in Canada has doubled since 1993, driving emissions higher; more than a quarter of all GHG emissions in agriculture stem from fertilizer derived from natural gas. Farmers need help to reduce fertilizer use while maintaining yield by implementing alternatives such as enhanced crop rotations that include more nitrogen-fixing legumes – nature’s fertilizer. Because lowering fertilizer use reduces costs, this investment would in time return $850 million per year to farmers through a 15% reduction in fertilizer use, with commensurate reductions in emissions. Paired with efficiency measures, this 15% reduction in tonnage would have little or no effect on yields. The immediate need is to hire hundreds of independent agrologists who can work in the countryside to help farmers reduce nitrogen use and attendant emissions.



3. Plant 10 billion trees by 2030


Canada has committed to planting two billion trees by 2030. Conservatively estimated, this will reduce emissions by three megatonnes by 2030 and six megatonnes by 2050, with an estimated average cost of $20/tonnes CO2e, and create an estimated 3,500 seasonal jobs each year.

While there are economies of scale involved in tree planting, it’s generally assumed that the cost-per-tonne of carbon emissions avoided rises with the ambition of a tree planting program due to varying absorption capacities of land across Canada.

Assuming that the costs rise in a more ambitious scenario, where the federal government is paying to plant a billion trees per year (an increase of 800 million from the current planned levels of 200 million per year, compared to the forestry industry’s current replacement planting of 500 million trees per year), Dave Sawyer, chief economist for the Canadian Institute for Climate Choices, estimates that the cost per tonne of reduced emissions on an annualized basis between 2020 and 2050 would be about $30/tonne CO2e.


The carbon benefits from planting trees will start slowly but grow quickly in the critical 2030 to 2050 period, when they can make an important contribution to flattening the GHG-emissions curve. Planting trees can also help restore degraded lands, increase tree cover in urban areas and improve ecosystem function on marginal agricultural lands. If the right types of land are targeted, that planting can create habitat for species at risk and other wildlife, provide relief from floods and prevent soil erosion, all in addition to sequestering and storing carbon. Urban forests can reduce temperatures in the summer (thus helping cities adapt to climate change), clean the air, improve water filtration, reduce stormwater runoff, promote physical activity and mental well-being, and reduce buildings’ heating costs.

As part of a resilient recovery, the commitment to plant two billion trees by 2030 could be scaled up to 10 billion trees. This could be done by putting an additional $16 billion into the Natural Climate Solutions fund over the next 10 years to plant an additional 800 million trees per year. 

To give an indication of the impact this would have, using data from Forests Ontario that attributes 8.2 jobs per million dollars invested in tree planting, a $1.6 billion federal spend to plant the additional 800 million trees per year would generate 15,000 full-time jobs per year, including 8,000 seasonal jobs for young tree-planters.

The effectiveness of an expanded tree-planting program will depend on carefully identifying where to plant. The impact of tree planting on the albedo effect (solar radiation reflected by surfaces) in northern areas, and the impact of increased forest fires as a result of climate change, need to be factored in. Also, biodiversity considerations need to be paired with climate considerations – reforesting a degraded area that was previously forested can have a positive impact on both, whereas foresting a native grassland can have both a positive climate impact and a significantly negative biodiversity impact. As well, the ability of trees to grow and thrive where planted, the degree to which planted trees are protected into the future and the ability of seedling suppliers to scale up all need to be incorporated into the design of the program.


Complementary policies

In addition to these two proposed investments, implementing other policies to support nature-based climate solutions will be important for achieving our climate and biodiversity goals.

First, the federal government needs to deliver on its commitment to protect 25% of Canada’s land and 25% of our oceans by 2025 – with an ambition of 30% of each by 2030. This will protect important ecosystems and biodiversity and contribute to Canada’s efforts to fight climate change. Protecting more of our land and oceans can also support nature-based tourism, for which there may be a growing market among Canadians following the pandemic’s impact on air travel. As with the recommendations we made in the industry white paper (to pay a carbon rebate of $100/tonne of avoided emissions for steel used in public infrastructure), the federal government could extend a similar premium for Forest Stewardship Council–certified wood products to reflect the locked-in carbon savings versus conventional materials.

Indigenous Protected and Conservation Areas – lands and waters where Indigenous governments have the primary role in protecting and conserving ecosystems through Indigenous laws, governance and knowledge systems – will be an important part of achieving the commitment. They represent a modern application of traditional values, Indigenous laws and Indigenous knowledge systems, an exercise in cultural continuity on the land and waters and a foundation for local Indigenous economies.

Second, in addition to tree planting, the Natural Climate Solutions fund is intended to support projects brought forward by communities, provinces, private landowners and businesses to reduce emissions from forests, wetlands and farmland. This is an opportunity for the federal government to support innovative projects that can be good for the climate, biodiversity and local communities. It could build from the example of the Great Bear Initiative, led by the Coastal First Nations in B.C., where conservation, local economic development and carbon management have been achieved in tandem. It has resulted in a first-of-its-kind carbon offset project, where the First Nations have the ownership and right to sell carbon offsets from their territories.

Projects supported by the Natural Climate Solutions fund will need to result in emissions reductions that are real, permanent, additional, verifiable and avoid leakage.

Research suggests that care must be taken to ensure that new climate-related agricultural policies are grounded in science. The National Farmers Union estimates that agricultural emissions could be cut by 30% by 2030 and 50% by 2050 using practices and technologies that exist today. These include changing the way farmers seed, control weeds, manage soil health, till and plough; moving from gas to electricity to power on-farm vehicles and equipment; and changing how livestock graze and how compost and manure are handled.

These changes can also boost farm profitability by cutting costs, increasing employment with more labour-intensive practices and improving water quality and soil health.

Forestry and agriculture sustained life in Canada long before the arrival of Europeans and long before the disruption of the fossil fuel era. As we turn our attention to how we can rebuild our economy, foresters and farmers have critical roles to play. For as little as 0.1% of annual GDP, Canada can rejuvenate its forest and agricultural ecosystems while at the same time creating thousands of jobs in hard-hit rural communities as we Build Back Better.


Ralph Torrie is senior associate with Sustainability Solutions Group and partner at Torrie Smith Associates.


Céline Bak is the founder and president of Analytica Advisors.


Notice to reader: Please be aware some of the figures and other details in this white paper have been updated in the Final Report to reflect feedback.


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