carbon markets for landowners
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Carbon Markets for LandownersAgriculture, Forestry, and Biocarbon
Teresa Koper
About The Climate Trust
501(c)(3) nonprofit Over 16 years of carbon financing
experience
Mission:Provide expertise, financing, and inspiration to
accelerate innovative climate solutions that endure
www.climatetrust.org
Resilience and Adaptability
Benefits of Climate Friendly Practices
• Benefit financially by earning environmental credits
• Co-Benefits: • e.g. build soil fertility and resilience, while
improving water quality
• Mitigate climate instability• Be part of the solution for
others
Introduction to Carbon Markets
• Rewarding greenhouse gas (GHG) emission reductions and/or sequestration practices
• Market purpose?• Why Carbon?
Carbon Markets
• Voluntary Markets• Compliance Market - CA
Cap and Trade • Pacific Coast Climate Action
Plan CA, OR, WA, BC Agree to put a price on Carbon
Standards
Voluntary Standards• American Carbon Registry (ACR)• Climate Action Reserve (CAR)• Verified Carbon Standard (VCS)Compliance Standard• California Air Resources Board
(CARB)
Carbon Accounting Rules
• Baseline – business as usual scenario• Additionality – reducing GHG
emissions to below the baseline (additional to business as usual)
• Permanence – permanent reduction of emissions
• No Leakage – direct emissions elsewhere caused by the emission reduction in the project/program
Agricultural Method Types
• Nutrient Management• No-till or low-till farming• Avoided Land
Conversion• Improved livestock
grazing on rangeland
Soil has great potential to capture GHG
• Carbon Sequestration• Undisturbed land • Soil building practices–
• no-till • compost • biochar soil amendment
Avoided Conversion of Land
• Keep undisturbed soil/vegetation intact
• Conservation Easements (timing matters)
• While Federal funds for conservation may be decreasing, environmental markets are picking up momentum
COMET Farm – explore scenarios
• See what specific practices save, in terms of GHG emissions and sequestration
• Whole farm and ranch – carbon and greenhouse gas accounting
• cometfarm.nrel.colostate.edu
ForestryForests sequester large amounts of
GHGs• Avoided Conversion• Improved Forest
Management• Afforestation/Reforestation• Reduced Emissions from
Deforestation and Degradation (REDD)
Many commonalities across Standards, but differences matter
• Project Start Date and timing of first and subsequent Verifications
• Included carbon pools• Length of commitment, flexibility
mechanisms• Forest Certification requirements• Treatment of Aggregation
Biocarbon natural systems play an essential role in climate stability
• Compost• Dairy Waste Digestion• Organic Waste Digestion• Biochar and Biofuels
Production• Carbon Sequestration
Projects that digest eligible feedstocks and combust biogas can earn carbon
credits for avoided methane emissions.
Avoided Methane Carbon Credit
Livestock Protocol Organic Waste Digestion Protocol
• Dairy or swine manure • Post-consumer food waste• Industrial waste previously managed in an anaerobic lagoon
Eligible Feedstocks
Avoided Methane Carbon CreditRule of Thumb: 2,500 cow digester
generates ~3.5 credits per cow per year or 8,750 credits/yr
Carbon price Voluntary$4.00
Pre-Compliance$8.50
Compliance$15.00
Average Annual Net Revenue
$25,000 $64,000 $120,000
Net Present Value(10 years, 7%)
$163,000 $440,000 $840,000
% of Capital Cost(~ $2.1 million)
8% 20% 40%
Net Carbon Revenue=
Creditsx
Carbon Price-
Transaction Costs
Transaction Costs
1. Meters2. Monitoring3. Registry fees4. Verification-
$8,500 every 12-24 months
Renewable Energy Certificates
Renewable IdentificationNumber
Nutrient Management Carbon Credits
Methane Avoidance Carbon Credits
How to receive credits for a practice
1. Project developer prepares project development plan
2. Register the project with a standard body under a specific methodology
3. Third party validation and verification process to ensure the project will “additionally” reduce/sequester GHG emissions, not cause “leakage”, be “additional” and “permanent”
4. Be periodically monitored and credited
Credits Received – then what?
• Credits can then be sold• Credits are only worth what
the market is willing to pay for them
• Dependent on market demand from a compliance buyer or have a voluntary buyer
Key takeaways:• Carbon projects work best when they fit
overall land management goals.• Carbon projects need to make business
sense: Costs Carbon offset volumes Timing matters
• Identifying a buyer willing to make a contractual commitment to purchase offsets at volume and terms sufficient to cover the costs of developing and maintaining the project is critical
For more information:
Tkoper@climatetrust.org
503-238-1915 x214www.climatetrust.org
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