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