Two organizations with a shared interest in improving the Chesapeake Bay watershed are divided over a draft nutrient trading bill in Pennsylvania, with supporters foreseeing a slash in the cost of Bay cleanup and opponents seeing technology that isn’t cost-competitive or compliant with state and federal regulations.
4 September 2013 | Ed Schafer and Harry Campbell both say they want to clean the Chesapeake Bay. They even seem to agree on the need to stifle the flow of animal waste into the Bay from farms. What they can’t agree on, however, is how Pennsylvania should structure its nutrient trading program, and specifically whether technologies like manure treatment should be recognized in that program.
Proponents like Schafer want to create a competitive bidding process designed to recognize the most effective method of reducing nutrients, and they claim Senate bill 994 will produce better ecological results than techniques being used currently while cutting the cost of Bay cleanup for taxpayers by up to 80%.
But opponents like Campbell argue this competitive bidding process allows for nutrient reduction strategies that don’t comply with state and federal regulations, which means they will generate credits that companies can’t use to meet their nutrient reduction requirements.
Why the Fuss Over Manure?
Manure treatment technologies use a combination of biological, chemical and physical processes to neutralize the negative effects of animal manure, which is a major source of nitrogen flowing into the Bay. Despite the technology’s high cost, it’s likely to be a bid winner in Senate 994’s competitive bidding program because it will generate a high amount of nutrient reductions as well as local environmental benefits-two significant factors in determining initiatives that will win bids.
Opponents of the bill say the technology’s high cost will drive up the cost of nutrient trading credits. These technologies also haven’t been approved by the Environmental Protection Agency (EPA) as a nutrient reduction method, although they are on an EPA list of potential methods and will likely be reviewed this fall.
The debate over using this technology and Senate bill 994 as a whole has only intensified as both sides are intent on making their voices heard. Two organizations in particular have been especially vocal about their approval and disapproval of the bill.
The Two Sides
Campbell is the Executive Director of the Pennsylvania branch of the Chesapeake Bay Foundation (CBF), a non-profit organization working to restore and protect the Bay.
Schafer, a former US Secretary of Agriculture, heads the Coalition for an Affordable Bay Solution, (CABS) a collaborative organization formed to support the creation of a competitive bidding process for nutrient trading in Pennsylvania. They have been major supporters of the bill since its beginning. Two founding members of CABS are Bion Environmental Technologies, which is a supplier of manure-treatment technologies, and Krieder Farms, which has one such manure facility located on its farm.
The Bill
Senate Bill (SB) 994, or the Major Watershed Improvement Act, was introduced to the Pennsylvania Senate in June.
The bill promotes a competitive bidding approach where any source of pollution- like wastewater or livestock manure-and any practice, such as manure treatment technology, can participate so long as the nutrient reductions it causes are verified by the Pennsylvania Department of Environment (DEP). The state will accept bids from farms and other sources of pollution and then agree to purchase nutrient reduction credits from the entities with the winning bid. The bids’ are evaluated based on the cost and environmental benefits of the proposal as well as the amount of nutrient reductions it generates, according to the bill’s text.
According to a study by Pennsylvania’s Legislative Budget and Finance Committee, a shift to a competitive bidding program that relies less on agricultural and urban stormwater to achieve nutrient reductions could result in the 80% reduction in the cost of Bay cleanup.
The Arguments
Campbell says he doesn’t dispute the importance of manure technology and the role it plays in cleaning up the Bay.
“We do commend Senator Vogel and the other senators who are interested in thinking outside the box as to how we can more cost-effectively deal with the problems at hand,” says Campbell.
However, if a new plan doesn’t mesh with the state’s regulatory system, then time, funds and energy are wasted on an initiative that doesn’t deliver needed results, Campbell says. Pennsylvania’s current regulations focus on certified stormwater entities and wastewater treatment plants as well as compliance with the Clean Water Act and Pennsylvania’s Clean Streams Law-which a new system would have to be in coordination with.
There are entities in Pennsylvania under regulatory obligations to reduce their nutrient pollution, and if Pennsylvania creates credits that aren’t meeting these requirements, those reduction credits are of no use to the entities.
“We can’t use these reductions toward regulatory obligations and we can’t use them to demonstrate progress as a state,” says Campbell. He adds that this may change in the future as Campbell believes it should, but as of right now, those reductions don’t fit into Pennsylvania’s regulatory construct.
An open discussion on integrating manure technology that isn’t convoluted with misleading or confusing language is needed, Campbell says. “This bill suffers from ill-defined definitions and inappropriate language,” he says.
Misleading language like, ‘verified,’ and, ‘certified,’ in front of the term, ‘TMDL parameter’, which has regulatory implications linking it to Pennsylvania’s nutrient trading system, says Campbell. This implies that the credits generated can be used toward fulfilling a regulatory obligation, he says.
“If you use those terms and intermix those terms, yet don’t tie them to the regulatory construct, then you’re not creating a real or marketable credit, even if it happens to be a reduction,” he says. Despite the fact that the terms in the bill’s text relate or link it to these obligations, an entity like a wastewater treatment plant can’t use the credits generated, Campbell explains.
Campbell says that Pennsylvania already has an established marketplace for nutrient trading and if the manure treatment technology works and is cost effective, it should be incorporated into the already existing system. CBF has also argued that this technology is expensive. Presently, the cost of nutrient credits is sold for $2.98 to $3.05 per credit (each credit represents one pound of pollution reduction), according to the CBF. But credits generated via manure-treatment don’t become cost effective below $8 to $10 each.
Schafer, on the other hand, doesn’t dispute the technology is expensive. But he does argue the current program Pennsylvania is using isn’t working.
“The CBF isn’t making any improvements in the Bay,” he says. “What we want is something that works at the lowest cost.”
This includes wastewater treatment plants, manure-treatment technologies or people trucking manure off of farms, he says. Schafer says the bill brings in the ingenuity of the private sector with technology that works and can prevent a sizable portion of nutrients from entering the watershed.
Currently, solving the problem is directed to municipal wastewater treatment plants. But Schafer argues the problem of nitrogen pollution could be solved on the farm before it enters forests and flows through wetlands into the treatment plants. The source of the pollutant isn’t important, he says, so long as real nutrient reductions are accomplished.
“What a lot of people don’t realize is 50% of nitrogen from animal manure is airborne,” he says. But the point of this pollution isn’t attributed to agriculture but rather to stormwater runoff or from industrial sources.
This pollution source could be halted on the farm. “If the nutrients are taken out on the farm, then you have a local benefit of not having the nutrients impact other areas,” Schafer says.
But in order for farmers to tend to animal manure before it spreads, they need to be properly equipped, and so an investment mechanism is needed to raise the necessary funds, Schafer says. This is where SB 994 comes in with the competitive bidding program. According to Schafer, the DEP will verify that the nitrogen has actually been removed. Farmers can then sell their verified nutrient reductions as credits directly to the state.
Ideally, the design enables farmers to obtain funding for nutrient reduction projects from banks more easily, Schafer says. A farmer figures out the cost of a nitrogen reduction project, receives assurance from the state that they will buy the reduction credits and-based on that guarantee-is able to secure funds for the proper technology or tools.
While the legislation would need to be tailored locally, Schafer believes it could serve as a precedent for the nation’s other ailing waterways like the dead zone in the Gulf of Mexico. SB 994 is based off of the Colorado River Basin Salinity Control Program, which was created to reduce salinity using a competitive bidding program.
But in terms of the Chesapeake Bay watershed, Schafer points out that the CBF can bid in the program using their initiatives along with everyone else, although he suspects CBF is concerned their bids won’t win because their projects aren’t working as well.
If CBF can’t match the bids, it’s going to show that they have been failing for the past 20 years, Schafer says.
On the other hand, Campbell notes considering who will gain substantially from the passing of SB 994 and who the supporters of the bill are, like Bion Environmental Technologies.
“You have to consider the source and the original promoters of the bill, in particular,” Campbell says.
The bill’s prime sponsor is Senator Elder Vogel of Pennsylvania’s Beaver County. The legislation was voted out of the Senate’s Agriculture and Rural Affairs Committee by an 8-3 vote. As of right now, SB 994 sits in the Appropriation Committee.
The bill will move to the floor for a full vote this month when the legislature returns after a two month recess. If SB 994 passes, then it will move to the House. Supporters hope to have the bill approved this fall, although implementation will take a few years.
This week is World Water Week in Stockholm with this year’s theme focusing on water cooperation and building partnerships. Seminars, interviews and other features will be available online. Meanwhile, wildfires in the US west is bringing water-energy-food nexus thinking to the fore as the areas’ energy and water supplies are vulnerable to the fires and overall climate risk.
This article was originally published in the Water Log newsletter. Click here to read the original.
3 September 2013 | Greetings! Maybe it’s all the smoke outside, but we’ve been thinking about the water-energy-food nexus a lot recently. With California’s Rim Fire – the largest in Sierra Nevada history – still only about 30% contained as of the last report, the vulnerability of the state’s forested watersheds and snowpack to rising wildfire and climate risk has been put into sharp focus.
Millions of people rely on these landscapes for water and energy supplies, and yet lawmakers hammering out state water policy seemed stuck on the same old responses to water problems. “In Sacramento, the talk is of dams, tunnels and delta pumps, but ignores the upper watersheds and forests that are essential to making the entire California water and power system work,” writes Robert Frisch in an opinion piece published in the San Francisco Chronicle this week.
Understanding the cross-cutting risks and relationships that exist between sectors, people, and some of our most “wicked” problems is also this focus of this year’s World Water Week, which takes as its theme “Water Cooperation: Building Partnerships.”
If you’ll be in Stockholm next week, please stop by session four of the Cooperation for Sustainable Benefits and Financing of Water Programmes workshop: our own Jan Cassin will be discussing Forest Trends’ work on blending green & grey infrastructure to solve complex water challenges.
If you can’t make it to World Water Week in person, did you know that many of the seminars will be streamed live via webcast?You can watch them here, along with interviews and features from the conference courtesy of the Stockholm International Water Institute.
Charlie Broussard, a shrimper on the docks in Cocodrie, Louisiana, has seen the wetlands he paddled through as a kid shift dramatically – literally. In fact, the Louisiana coastline is changing so quickly that fisherman and oil rig workers who have spent their lives navigating the bayou by boat sometimes get lost as familiar landmarks are drowned. In Louisiana, 1,880 square miles of land has vanished since the 1930s, and the current rate of land loss is equivalent to a football field every 38 minutes.
To begin to address these vulnerabilities, Louisiana’s 2012 Coastal Master Plan prioritizes 109 coastal restoration projects, at a price tag of $50 billion. But, with 85% of Louisiana’s coast controlled by private landowners, others are looking to the private sector to support wetland restoration.
In September 2012, the American Carbon Registry approved a wetlands methodology that will allow landowners to quantify the carbon sequestered by restoration projects and then sell verified emissions reductions (i.e. carbon offsets) to voluntary offset buyers.
Entergy, a utility with 2.8 million customers in the Gulf and the company that invested $150,000 to help develop the wetlands methodology, has the right of first refusal on the Luling project and is planning to purchase some of the carbon offsets produced by the restoration work. The company sees wetlands as a kind of natural insurance that will buffer their infrastructure in an uncertain climate future.
Louisiana Wetlands: Why We All Need Them, And Why Oil Companies Aren’t The Only Ones On The Hot Seat
Author John Barry is best known for his eminently readable accounts of scientific advances, while humorist Harry Shearer is best known for his improv and voice acting skills. Barry, however, is also vice president of the Southeast Louisiana Flood Protection Authority – East, (SLFPAE) which was created after Hurricane Katrina to protect the east bank of the Mississippi River in the greater New Orleans area, while Shearer also hosts the weekly radio program Le Show on National Public Radio.
“We don’t blame the oil and gas industry for all of the land loss,” Barry says. “We do say they are responsible for some of the land loss. We’re just asking them to pay for the part that they’re responsible.”
Note to California Lawmakers – Your Nexus is On Fire
California’s Rim Fire is officially the largest in history in the Sierra Nevadas, and it’s making San Francisco city officials a bit nervous. 2.6 million people in the city depend on the Hetch Hetchy reservoir for their water supplies, and the reservoir is now at risk of being clogged with ashes from the fire, which can either fall in or be washed in by later rains. So far the reservoir is safe, but officials are developing contingency plans just in case.
And yet, as the San Francisco Chronicle notes, at a state level legislators still seem oblivious to natural infrastructure risks like forest fires or declining snowpack. “Water policy leaders seem fixated on the big engineering fixes. The talk is of dams, tunnels and delta pumps, but ignores the upper watersheds and forests that are essential to making the entire California water and power system work,” writes Steve Frisch, president of the Sierra Business Council. “Investing in the state’s ‘free’ reservoir of snowpack and watersheds is the first step in a series of linked actions needed over the next 10 to 20 years to effectively address the state’s water needs.”
A recent study by Resources for the Future, “Floodplain Conservation as a Flood Mitigation Strategy,” offers a cost benefit analysis of floodplain conservation along the Meramec River in St. Louis County, Missouri. The study evaluated conservation investments by looking at opportunity cost and avoided flood damages from maintaining the land as open space. The analysis concludes that benefits outweigh costs when avoided flood damages and property value increases are taken into account. Additionally, special targeting of conservation activities can increase net benefits. The study finds total property-related avoided damages to be $24.37 million per year, and the benefits from increased property values at an estimated $23.64 million per year. In comparison, annual opportunity costs of protected lands in the area were valued around $41 million.
Illinois Law Gives Municipal Green Infrastructure a Boost
Earlier this month Illinois enacted a new law that will likely be a shot in the arm for green infrastructure. The new law allows municipalities to upgrade their storm water management systems by building and investing in green infrastructure, expands the list of green infrastructure solutions that can be implemented, and provides greater flexibility regarding the way these features can be financed. Green roofs, rain gardens, native planting and constructed wetlands can now be funded more aggressively with tax dollars.
A new study published in Nature Climate Change assessing flood risk in the world’s largest coastal cities estimates that flooding could cost cities as much as $1 trillion per year by 2050 – and US$60 billion per year even if risk doesn’t increase at all. Developing countries experience the bulk of the damages; among the top 20 cities with highest relative losses, only three are in developed countries. Estimates for the highest losses in 2050 include Jakarta in Indonesia, Alexandria in Egypt, Algiers in Algeria, and Barranquilla in Colombia. This is assuming current levels of defenses and an optimistic view of sea-level rise. The study also includes policy recommendations: investment in adaptation and preparation for larger floods and disasters by improving early warning systems and comprehensive insurance schemes for post-disaster recovery. It is estimated that on average adaptation will cost around US$350 million a year per city.
Earlier this month, a video from the International Union for Conservation on Nature (IUCN) and the International Water Association (IWA) was released, stemming from a series of workshops discussing the nexus between water, energy, and food policy and management. This first video is based on the “Nexus Dialogue” on Water, Energy, and Food that took place in Nairobi, Kenya. The premise of the conference is that all these sectors are intricately connected and a greater need for integrated management is required.
This is a particularly relevant issue for the region, where approximately 45 percent of slum-dwellers in Nairobi have no access to safe drinking water or food, and over 30 percent of Kenya’s population is food insecure. The “Nexus Dialogues” bring together high level private and public experts across Africa to create consensus on a nexus-based approach. Concrete project examples from the region are discussed, as well as national and international policy developments. Two other regional workshops are planned for Latin America and Asia. The first will take place in Bogotí¡, Colombia, in September and the second in Bangkok, Thailand, in November.
Pierce County, WA has a bit of a flood risk problem. To meet Federal Emergency Management Agency (FEMA) standards, the county would need to invest more than $300 million on levee and bank stabilization projects. A new report from Earth Economics examines whether a different strategy – one that stops “fighting the river” with levees and instead employs a mix of engineered solutions and green infrastructure – would get similar risk reduction benefits for a lower price tag. Through a series of case studies, Return on Investment Analysis of Flood Risk Management Solutions for Pierce County shows that “fight the river” approaches combine steep project costs with equally high lost ecosystem benefits, leading to total costs/lost benefits of $52-$408 million and $32-$433 million in two different cases presented. Meanwhile, in another example, using a softer approach – simply preserving open space as a buffer against flooding – added ecosystem values estimated at $52,000 to $2.7 million.
Put $11 million into green infrastructure projects in Northeast Ohio, and you’ll get $23 million in economic activity and 219 new jobs, according to a new Green for All report. With the Northeast Ohio Regional Sewer District (NEORSD), the City of Cleveland, and private investors all eyeing green infrastructure projects in the future, the study takes a look at direct and ripple effects of installing and maintaining all those bioswales and green roofs in the period from 2020 to 2024. That’s good news, but right now workforce development and training programs for all these future workers don’t really exist, say the authors – but an opportunity exists: “Green infrastructure jobs…represent future potential to create a workforce development program that can target specific populations with historic barriers to employment in the Cleveland area.”
Vietnam’s National PES Program Gets its First Report Card
In 2010, Vietnam launched a nationwide payments for ecosystem services (PES) program, building on the success of two provincial pilots. Users of key ecosystem services are required by law to make payments reflecting their usage of those services, based on sector-specific formulas. Funds go to provincial Forest Protection and Development Funds, which in turn administer payments to local ‘suppliers’ which can be individuals, households, or community groups.
A few years in, the Center for International Forestry Research (CIFOR) has published a brief reviewing the performance of the new PES policy. Using semi-structured interviews and seminar meetings, the authors conclude that there’s some room for improvement. The good news: payments for watershed protection and landscape beauty are up and running, with the watershed services framework boasting the “most advanced legal setting.” Altogether VND 1,782 billion (US $85 million) of conservation finance has been delivered, with hydropower plant payments accounting for almost 98%, water companies for about 2% and tourism for 0.1%.
But forest carbon sequestration and forest aquaculture payments are stalled in the absence of clear guidance and institutional frameworks. What’s more, “only 46% of the total revenues collected to date” have been disbursed, and some “local communities have become discouraged… because they do not have legal status to enter into agreements.” The authors also note that the system for setting payment levels could be improved, high value areas should be prioritized, and that monitoring & evaluation needs a lot of work.
Earlier this month, Western Australia announced a new initiative to recharge Perth’s groundwater using recycled municipal and industrial wastewater. Public utility Water Corporation of Western Australia’s been trialling the process for three years and made it past 254 different health guideline requirements, and now they’ve gotten the full go-ahead.According to government officials, groundwater recycling would initially supply 7 million m ³ of water every year. Recharge efforts are expected to begin by 2016 but won ´t be completed until 2022.
“Groundwater replenishment will underpin Perth’s water security at a time of reduced rainfall. It adds another water supply option for the city, building diversity for the future and complementing other initiatives, such as desalination,” said state water minister Terry Redman. The area already has two large seawater desalination plants – which use twice the energy that wastewater recycling does.
A watershed development project in tiny Khondla Village in Chhattisgarh may be blazing a new path for all of India, according to a new piece from Circle of Blue’s Choke Point: India series. Bharatiya Agro Industries Foundation is working with farmers to promote improve irrigation systems and conserve water in the village. Participants in the 797,000 rupees (US $159,400) pilot have installed check dams, ponds, and channels to capture rainfall and let it infiltrate into groundwater. Their efforts are delivering higher agricultural yields and additional cash wages.
The locally-focused, low-overhead project stands in stark contrast to India’s tradition of top-down, highly centralized industrial-style development. That’s led to large strides in food security and economic development for the country, but “new data about static coal production, diminished economic performance, and rising state and federal deficits indicate that India’s development strategy is faltering while ecological havoc mounts,” Circle of Blue writes. “That is precisely what the water conservation project here in Khondla represents: a change from big to right-sized and right-priced for its context.”
A new report from Natural England gives us the latest on its South Pennines pilot, which is assessing multiple payment streams for peatland carbon, water quality, flood risk reduction, biodiversity, and other ecosystem services from an uplands landscape. The project developers note that their work “differs from more academic approaches…The research focuses on what is saleable, and how to measure it.” That means a hard-nosed look at potential revenue streams: like an estimated £38 per hectare for water quality improvements through agri-environmental funding and direct contributions from water utilities. Restoration of peatlands could net carbon revenues of £600/ha/year, or £10,000 per hectare via forward sales of carbon credits under a 30 year agreement. Biodiversity credits look a less likely prospect given low demand for blanket bog habitat credits. Interestingly, the authors note that the UK Woodland Carbon Code could help channel funding for flood risk mitigation via financing tree planting projects. Voluntary contributions for recreational services are even considered – a nearby scheme has netted upwards of £42,000 a year. All this data lets the authors develop a number of scenarios for bundling and stacking payment streams and assess their feasibility and relative benefits.
Are water footprint labels on your blue jeans or wine bottle right around the corner? UN-Water chari Dr Zafar Adeel tells the Guardian he thinks the practice could be commonplace in “five to ten years.” But Alistair Knox of the Association of Suppliers to the British Clothing Industry wonders how useful that kind of labeling would be. Tracking water usage across modern supply chains ranges “from difficult to impossible,” he says. “Where do you draw the line? Say you get a delivery of raw materials to the factory gate and then you add the water footprint of the truck that delivered it, or the gas that powered the truck … It just becomes a bit crazy,” adds Simon Davidoff, senior director of strategy for industrial services at Siemens. Moreover, a volumetric product footprint doesn’t take context into account – like the relative contribution of water use impacts to water stress in a given region.
The city of Saskatoon has a novel way of meeting its nutrient discharge limits: a brand new commercial nutrient recovery facility. The project is the first commercial plant of its kind in Canada. The facility uses a proprietary process to recover 75 percent of phosphorus and 10 percent of nitrogen from the wastewater stream. The recovered nutrients will be transformed into a slow-release efficiency fertilizer. The facility cost $4.5 million; besides its water quality benefits, it will produce 730 metric tons annually of fertilizer entirely made from renewable resources.
World Water Week is hosted and organised by the Stockholm International Water Institute (SIWI) and takes place each year in Stockholm. The World Water Week has been the annual focal point for the globe’s water issues since 1991. Every year, over 200 collaborating organisations convene events at the World Water Week. In addition, individuals from around the globe present their findings at the scientific workshops. Each year the World Water Week addresses a particular theme to enable a deeper examination of a specific water-related topic. While not all events during the week relate to the overall theme, the workshops driven by the Scientific Programme Committee and many seminars and side events do focus on various aspects of the theme. 2013 theme is Water Cooperation – Building Partnerships. 1-6 September 2013. Stockholm, Sweden.
The WaterSmart Innovations Conference and Exposition
The WaterSmart Innovations Conference and Exposition, presented by the Southern Nevada Water Authority and numerous forward-thinking organizations, is the largest urban-water efficiency conference of its kind in the world. Last year, WSI drew more than 900 participants from 34 states and the District of Columbia, as well as seven foreign nations. This year, as it has for the last five years, WSI will feature featured a full slate of comprehensive professional sessions and an expo hall highlighting the latest in water-efficient products and services. The event also will feature several affordable pre-show workshops (which are not included with the WSI registration fee) on Tuesday, October 1. 2-4 October, 2013. Las Vegas, USA.
2nd International Conference on Ecosystem Conservation and Sustainable Development
Environmental degradation, particularly climate change, is augmenting the impact of natural disasters, thus seriously affecting food security ensured through the sustainable production of agricultural crops, livestock and fisheries. Sustainable development is a certain compromise among environmental, economic, and social goals of community, allowing for wellbeing for the present and future generations. Designing appropriate policies and strategies that lead to conservation of natural ecosystems and biological diversity and ecologically sustainable development in the era of climate change is not an option but a necessity. ECOCASD 2013 will be a rendezvous of those researchers and academicians working on cutting edge areas of ecosystem management and sustainable development and is a platform to share innovative ideas on ecosystem conservation, climate change adaptation and mitigation and sustainable development. 3-5 October 2013. Kerala, India.
The SER2013 World Conference on Ecological Restoration: Reflections on the Past, Directions for the Future will bring together more than 1,200 delegates from around the world interested in the science and practice of ecological restoration as it relates to natural resource management, climate change responses, biodiversity conservation, local and indigenous communities, environmental policy and sustainable livelihoods. 6-11 October 2013. Madison WI, USA.
Land and water has always been the immediate surroundings of peoples in all existences and continents. It has always been the base on which Man depends on for his existence. Land serves as home, a nutrient-filled and agricultural base, a thoroughfare, a religious base, et cetera. Water is all important beginning with the human body made up of water, water also serves as nourishment, used for cooking and the rivers, streams and oceans are home for very many habitats necessary for life. Wars have been fought to protect and preserve land and water space meaning that they are fundamental resource for human survival. Prevailing civilizations and epochs are chronicled with the effects these constituents have on human life. The conference therefore would like to explore these great connections from the humanities, science and social science perspectives. The hope of the conference is to discuss the interconnectedness or relatedness of these three theatres of life for existence/ living and chart a model or value system for the preservation of the resources and sustainable use by the human society. Deadline for Abstracts is October 6th!3-6 November 2013. Contonou, Republic of Benin.
Presenting solutions for balancing the benefits of conservation with the costs, managing infrastructure, developing robust supply models and watershed management plans, water reuse, resource management, green infrastructure and more. 30 March – 2 April 2014. Denver CO, USA.
The Director of Finance and Operations provides financial and operational management for the Moore Center for Science and Oceans Division with a focus on budget oversight and development, financial monitoring and operations (including human resources, administrative resources and legal services) for the Science teams within the division. The position directly manages an annual budget of over $15 million. The Director of Finance and Operations provides guidance on financial and operational strategy to the division’s leadership team as well supporting the 40+ staff members on the Moore Center team. The director will also advise on resource allocation and prepare complex financial analysis to ensure the division’s long term financial sustainability.
The director ensures compliance with CI and donor legal, accounting and reporting standards, provides financial analysis, fundraising support and oversee the internal compliance of operational policies and procedures in the division. S/he will effectively participate as an integral team member, participating in and/or leading projects and initiatives (i.e. process improvement, cross-divisional proposals, project management and implementation etc.). S/He provides direct value-added expertise to the SVP on operational processes and manages and leads projects as assigned.
Ecosystem Marketplace’s Spanish language sister site is seeking a part time program assistant. The position will run for an initial 4 month contract, beginning as early as September 2013, with potential for extension.
Ecosystem Marketplace, a project of Forest Trends, is a leading source of news, data, and analytics on markets and payments for ecosystem services (such as water quality, carbon sequestration, and biodiversity). We believe that by making accessible information on policy, finance, regulation, science, business, and other market-relevant factors, payments and markets for ecosystem services will one day become a fundamental part of our economic system, helping give value to environmental services that, for too long, have been taken for granted.
Valorando Naturaleza launched in March 2013, and like the Ecosystem Marketplace, produces original news articles, news briefs, and aggregates content for daily news, a resource library, regional events and opportunities related to ecosystem services. For more information, visit www.valorandonaturaleza.org.
Ecosystem Marketplace is a project of Forest Trends a tax-exempt corporation under Section 501(c)(3).The non-profit evaluator Charity Navigator has given Forest Trends its highest rating (4 out of 4 stars) recognizing excellence in our financial management and organizational efficiency.
The California Air Resources Board (ARB) tabled its rice cultivation protocol for consideration next spring. While disappointed by the delay, many groups understood the need for better environmental safeguards and robust stakeholder engagement, as this protocol is set to be the first land-based offset protocol adopted by the ARB.
This article was originally published in the Forest Carbon newsletter. Click here to read the original.
28 August 2013 | The California Air Resources Board (ARB) disappointed many stakeholders in its cap-and-trade program with news that its planned rice cultivation protocol – expected to go before the board this October for approval – was tabled for consideration next spring, while the mine methane capture protocol remains on track.
Many were hoping to see draft versions of both protocols, but the ARB explained that the recent stakeholder process raised several issues with the current rice cultivation protocol. Environmental groups are particularly concerned about the impact of early drainage activities on late broods, mosquito abatement and the wetlands and the rice straw baling effects on bird populations.
The general sense is that the protocol, while delayed, will still go through. Harold Buchanan, CEO of CE2 Carbon Capital, says the rice cultivation protocol is not expected to provide a material volume of offsets to the California market – suggesting the delay is unlikely to significantly impact the shortage of offset supply projected for the second and third compliance periods of the state’s cap-and-trade program.
While disappointed by the delay, many groups understood the need for better environmental safeguards and robust stakeholder engagement, as this protocol is set to be the first land-based offset protocol adopted by the ARB.
Belinda Morris, California director for the American Carbon Registry, cited advantages to the delay, including being able to incorporate the latest growing season data into the protocol and further examining cost-effective aggregation mechanisms for projects.
Robert Parkhurst, the Director of Agriculture Greenhouse Gas Markets for the Environmental Defense Fund, noted that the success of the offset program rests on its integrity, and this delay “reflects the fact that they are committed to carefully considering the range of issues, doing it right, and not cutting corners.”
Meanwhile, the mine methane capture protocol will be considered by the ARB board at the October 24-25 board meeting; if adopted, it could be effective as early as next year. But the debate continues over the ARB’s draft version of the protocol, which currently restricts early action activity to projects produced under the Climate Action Reserve versions. Stakeholders countered that mine methane projects produced under the Verified Carbon Standard (VCS) could easily find a place in the compliance program, an argument that the ARB appears willing to embrace.
These and other stories from the forest carbon marketplace are summarized below, so keep reading!
With the redesign of our Forest Carbon Portal and continued expansion of our Spanish language sister website Valorando Naturaleza, Ecosystem Marketplace hopes to continue to bring you this kind of fresh information in the second half of 2013! If you value what you read, consider supporting Ecosystem Marketplace’s Carbon Program by contacting Molly Peters-Stanley. We’re $50k away from being able to publish this year’s State of the Forest Carbon Markets report in a few months’ time – can we count on your support?
Here at Ecosystem Marketplace, we are transitioning from data collection to report-writing mode in order to bring you this year’s State of the Forest Carbon Markets report. For those of you developing forest carbon offset projects, if you have not yet responded with data and wish to participate in the survey, please notify Daphne Yin.
A big thank you to the following organizations that have most recently contributed data to this year’s State of the Forest Carbon Markets report, including: WM Beaty.
—The Ecosystem Marketplace Team
If you have comments or would like to submit news stories, write to us at [email protected].
U.S. Markets
Offsets seen eluding capture by EPA
Forestry, land use and other types of offsets are likely to be shut out of the carbon pollution standards on new and existing power plants soon to be proposed by the US Environmental Protection Agency. But the Obama administration will be supporting offsets through other programs as part of its efforts to ensure the US follows through on its emissions reduction pledge. Obama’s Climate Action Plan more broadly highlights REDD+ and addresses the role of the US in curbing carbon emissions by reducing agriculture-driven deforestation, and US agencies such as the Forest Service and the Department of Agriculture (USDA) run a range of programs designed to increase soil sequestration and to protect forests that could support offset projects.
Project Development
REDD-y for the next validation
Zambia’s first REDD+ project just passed its validation with flying colors, with a “Gold Level” designation awarded from the Climate, Community and Biodiversity Alliance (CCBA) Standards. The BioCarbon Partners’ (BCP) Lower Zambezi REDD+ Project is among the first REDD+ projects in the South African Development Community to achieve all three Gold Level validation criteria in communities, biodiversity and climate change adaptation. The project combats deforestation through 18 community-based interventions such as conservation farming and eco-charcoal harvesting. Strong community involvement is credited with the project’s success. Local traditional leaders and government authorities even wrote letters of support to the CCB auditors. BCP now aims to achieve VCS validation by the end of 2013.
Leveraging Laos Forests
The World Bank just signed a grant agreement to give $31.83million for Laos’ Scaling-Up Participatory Sustainable Forest Management (PSFM) Project. The project seeks to expand sustainable forest management by increasing areas under PSFM plans and pilot project areas under REDD+ and a landscape approach to forest management. Nineteen million of the grant comes from the International Development Association and $12.83 million from the Strategic Climate Fund’s Forest Investment Program. The grant is in line with Laos’ 2020 Forestry Strategy, which aims to improve the quality and quantity of forest areas in addition to developing sustainable forestry products.
In Kalimantan, Indonesia, local communities are looking for alternatives to palm oil concessions, which currently cover more than 17% of the land. An opinion piece in the Jakarta Post covers the work of Central Kalimantan community co-operative, the United Rainbow of Kotawaringin Barat, which is developing its proposed Lamandau River REDD+ project that could become the largest REDD+ project in Indonesia. Unlike prior REDD+ projects, which relied on consulting firms and international experts, the community-initiated Lamandau Project will allow local community management. Research from the Center for International Forest Research (CIFOR) supports the model, noting that community groups are best at managing their own land. However, challenges remain as the project has not yet received the necessary permits over the past 16 months.
Ushering in the Brown Revolution
Clay Pope of the Oklahoma Association of Conservation Districts recently crossed state borders to share the organization’s ECOpass concept with the 2013 National Rural Assembly. Under the Oklahoma program, the public can voluntarily buy ECOpasses in $5, $30 and $50 denominations equal to different levels of carbon credits created by practices such as no-till farming, grass and tree plantings, and improved pasture management. Farmers applying these practices to their lands who have signed up for the Oklahoma Carbon Initiative – with verification provided by the Oklahoma Conservation Commission Carbon Program – can then receive payment for their efforts.
Sustainable plantations get a second wind
EcoPlanet Bamboo – the largest owner and operator of commercial bamboo plantations outside of China – recently wrapped up its first phase of growth in which it reforested 10,000 acres of highly degraded land in Central America and Southern Africa into bamboo plantations. During this phase, the firm achieved dual validation from the VCS and the Climate, Community, and Biodiversity (CCB) Standards on top of Forest Stewardship Council (FSC) certification for its plantations in Nicaragua, and was the first offset project developer to contract the World Bank’s Multilateral Investment Guarantee Agency to tap into political risk insurance. The firm now plans to pursue a second-phase goal of reforesting 1 million acres of degraded land in Southeast Asia, Brazil, and Africa, with some of its new work to potentially include an offset component.
A blue outlook for BluForest investors
A new post in the REDD Monitor investigates BluForest, a publicly traded firm that reportedly owns 135,000 hectares of Ecuadorian forest from which it plans to “sell carbon offsets through [its] website to voluntary markets where no verification is required.” This atypical view of verification may be explained by research from REDD Monitor, which found that BluForest has no previous experience in forest conservation or carbon markets. Instead the company has a history of being involved in mining, oil and gas, as well as in pump-and-dump share scams under its former identity, Greenwood Gold Resources. Last month, investor George Sharp filed a civil action against BluForest for alleged fraud and negligent misrepresentation. According to BluForest’s Securities and Exchange Commission filing, the firm pre-sold 74,300 tonnes CO2 (tCO2e) in credits to two companies in late 2012.
National Strategy & Capacity
Resisting REDD
As Cameroon moves ahead on its Readiness Preparation Proposal approved by the World Bank’s Forest Carbon Partnership Facility in January, local communities worry over losing their property rights and access to forest land. While the government of Cameroon already has several platforms to support indigenous and equal gender participation and is currently educating communities about REDD+ through presentations, misunderstandings about REDD+ remain. In addition to highlighting the complexity of raising community awareness and participation, the continued suspicion of REDD+ projects points to the need for clearer land tenure rights. One local NGO worker succinctly summed up the importance of this issue, stating, “Even if REDD+ doesn’t bring the money, let it bring good governance.”
Australian carbon farming in the weeds
Researchers have pinpointed invasive weeds such as gamba grass as a potential threat to landholder involvement in savanna burning, one of the eligible offset project types under Australia’s Carbon Farming Initiative (CFI). “There’s a large disparity between the profits generated from savanna burning – $1.92 per hectare – and the costs of managing gamba grass – $40 per hectare – meaning that much more savanna needs to be enrolled for carbon farming to cover the costs of weed eradication,” says study co-author Vanessa Adams. More broadly, Australia’s recent decision to transition early to an emissions trading scheme in July 2014 and coinciding linkage with the EU Emissions Trading Scheme (ETS) has raised concerns about whether the market price would be enough to support domestic offsetting under the CFI.
Forests in the thick-of-et
Accusations have flown in New Zealand regarding its ETS treatment of forestry. A new report revealed the scheme is damaging the forestry sector, as cheap foreign carbon credits continue to flood the national market and drive down New Zealand Unit prices. The Labour Party has pounced on this opportunity to denounce the current government’s actions and promise a stronger ETS under its leadership. The government defended itself by asserting that the international market price is fairer for New Zealand emitters and that the Forest Owners Association is trying to ratchet up the price for its own self-interest to which the association responded that it merely reported facts about the current market.
Turning a new leaf
Ghana will soon receive $50 million from the Forest Investment Programme dedicated to addressing deforestation causes and improving forest management and benefit-sharing programs. Many historical attempts to reduce deforestation failed to include local rural communities. As a result, many community members engaged in illegal poaching, logging and other forms of trespassing. However, hopes are high that new funding will turn a new leaf for better forest management. The African Development Bank and World Bank aim to unify Ghana’s forest and land use programs, identify investments to prevent further deforestation, promote community participation and support climate-resilient economic development, such as through REDD+ activities. The funding is set to run through 2016.
Receipt to follow in new partnership
Early August, Ethiopia and Norway signed a bilateral REDD+ partnership agreement. The agreement does not promise a specific budget. Instead, payments will be based on results and will be decided as verified results appear. The agreement will primarily help develop Ethiopia’s forest sector, particularly the development and implementation of Ethiopia’s REDD+ strategy. Additionally, programs will benefit as part of Ethiopia’s broader Climate Resilient Green Economy Strategy and related green economy development.
Testing climate intelligence
Climate-smart agricultural projects by the UN FAO showcase the difficulties and opportunities of transitioning to new farming techniques. So far, the FAO’s Economics and Policy Innovations for Climate-Smart Agriculture Programme has spearheaded a €5.3-million project in Malawi, Vietnam and Zambia. These climate-smart projects attempt to reduce emissions from agriculture and enhance crops’ resilience to climate change. Studies of conservation agriculture in Zambia and Malawi and sustainable land management practices in Vietnam show that some farmers struggle with overhead costs in adapting to new methods, while others come up with innovative solutions. To broaden options available to farmers, the FAO stresses the need for increased investment from both traditional agricultural finance and emerging climate finance vehicles such as the Green Climate Fund.
Paradise lost in Ecuador
In 2007, the government of Ecuador had a daring proposal: in return for $3.6 billion, Ecuador would leave 840 million barrels of oil situated in pristine rain forests untouched. The proposed price was half the market price that the oil could fetch and the government hoped that countries concerned about climate change would pay for this opportunity. Unfortunately, the Yasuni-ITT Initiative has largely failed, with only $336 million raised and contributions from the largest gas guzzling nations – the United States, China and Japan – non-existent. While Ecuadorian President Correa recently announced the dissolution of the initiative, local support remains high and the government will try to minimize the amount of development in the area.
Methodology & Standards Watch
Do you have the smarts for agriculture?
As the Gold Standard expands into forestry and land use, the standard is seeking members to join its advisory panel on climate-smart agriculture, to inform the development of social and ecological criteria for the standard’s new climate-smart agriculture scope. The panel is open to Gold Standard Supporters, Fairtrade-related organizations, and market experts experienced in social and ecological issues, governance of standards and/or technical expertise in climate-smart agriculture. The deadline for submissions is September 6.
Un-till a market signal
A new article in the Scientific American revisits the history behind soil carbon management in US agriculture. One of the few historical efforts to encourage farmers across the US to participate in no-till agriculture was the voluntary Chicago Climate Exchange (CCX), whose exchange platform closed in 2010 but in its heyday covered 810,000 hectares of farmland with plans to generate and sell millions of carbon offsets into a proposed nationwide cap-and-trade program.
Despite the exchange platform shutting down, over-the-counter transactions of existing CCX credits have continued on a piecemeal basis, seeing 8.3 MtCO2e transacted in 2012, according to Ecosystem Marketplace’s 2013 State of the Voluntary Carbon Markets report. A third of this volume came from agriculture, forestry, and other land use projects in the US.
On the side, the USDA has gone on to roll out conservation programs to help farmers sequester more soil carbon. Late last year, VCS approved a soil carbon methodology developed by The Earth Partners (TEP) for use on agricultural offset projects, based on decades’ worth of USDA science. In past interactions with The Earth Partners, California’s ARB reportedly reviewed the soil carbon methodology and acknowledged soil carbon as a potential future project type for its cap-and-trade program. TEP hopes to reengage with the ARB to push for a regional protocol on soil carbon now that the method is VCS-approved and a pilot project is underway.
Finance & Economics
Tracking REDD+ tracking (continued)
Forest Trends’ REDDX and the Overseas Development Institute’s Climate Funds Update recently launched Parts III and IV of the organizations’ collaborative series that explains existing REDD+ finance tracking projects – including Forest Trends’ own new REDDX expenditures tracking initiative– while identifying niches and possible cross-over areas to directly support more comprehensive assessments of REDD+ policy and finance gaps and needs.
Part III, Lessons from the US: The Tropical Forest Group shares findings from tracking US REDD+ spending and the difficulties in following finance which is managed across a number of different agencies and in very different ways. Data from 2008-2011 reveals that US REDD+ finance has focused primarily on forest nations with large forests, relatively high GDP, and the smallest overall capacity gaps for executing national forest monitoring systems that can link with an international REDD+ framework.
Part IV, What do we know about the private sector contribution? The United Nations Environment Programme Finance Initiative discusses the need for stronger engagement with private sector players, clearer definitions of what constitutes REDD+ private sector finance (do investments into activities that contribute to REDD+ but aren’t directly linked to REDD+ verified emissions reductions (VERs) , and more strategic targeting of public sector dollars in order to improve the financial attractiveness of REDD+ for the private sector.
Human Dimension
Drawing Connections with Cartoons
Transparency International (TI) uncovered a major lack of communal awareness in REDD+ projects during a recent trip to Papua New Guinea. TI employees traveled to the country with the purpose of learning about villagers’ experiences with PNG’s REDD+ pilot projects. Instead, they ended up having to explain basic concepts of REDD to those same villagers. Using hand-drawn illustrations, the NGO’s employees outlined REDD+, community benefits and corruption. The Leileiyafa community, home to one of five pilot sites for REDD+, reported that a Forestry Department official had stopped by and promised them money for keeping the trees – six months ago. However, there had been neither follow up nor any discussions about when, how much or who would receive this cash. Lack of local consultations and lack of awareness about REDD+ highlight the problems faced when implementing REDD+ in many countries.
Challenging traditional development norms
Challenging the “teach a man to fish” motto, the EU-funded Community Owned Best Practice for sustainable Resource Adaptive management(COBRA) project offers a new adage: “show a community how to catch fish, and you feed them for as long as they have the support to buy the equipment. Promote locally-owned solutions and skills to produce local food and they will be able to survive sustainably with minimal external support.” COBRA has worked with indigenous groups primarily in Guyana and Brazil over the past two years. They seek to identify community best practices for adapting to environmental challenges, ultimately hoping to scale up these practices to the national and international level to be used in global environmental policies such as the UN REDD+ scheme.
Science & Technology Review
Painting the future
A new laser technology can map forests in almost artistic representations. The $1.5 million laser, nicknamed Echidna 2, allows scientists to map individual trees down to their leaves. Created jointly by Boston University and CSIRO, this ground-based laser sends out wavelengths to map the forest canopy. The difference is in the details: unlike previous models, the Echidna 2 records individual trees data down to the leaf size. The data can accurately measure the size and health of forests and answer previously difficult questions about CO2 absorption. While it would be difficult to map every forest using a ground-based laser, samples taken can help improve the accuracy of airborne- and satellite-based laser data.
Copying the Jurassic forest
As deforestation and degradation continue, one group is bringing trees back. The Archangel Ancient Tree Archive hopes to clone ancient trees before they disappear completely. For ancient trees that have weathered fires, drought, and disease, their survival is embedded in their genetic memory. The group believes that newly cloned trees could provide important mitigation services if they are reforested on a large scale. One such project recently planted cloned sequoias resilient to warming conditions. Saplings have also been planted in other environmental cleanup projects and protected areas. However, cloning is no easy task. With a 2% success rate considered promising, collected cuttings rarely push out initial growth.
Publications & Tools
REDD+ in a Green Economy: Global Symposium Report
The Global Symposium on REDD+ in a Green Economy, convened June 19-21, provided a discussion for the business case in restoring forests in developing countries and for linking REDD+ planning with budding green economy efforts. The new report summarizes plenary and working group sessions around four main topics: setting the scene and international context for REDD+ in a green economy; reaching out to the private sector; REDD+ country experiences; and the findings of three working groups on national support, research and development, and coordination.
The Forests Dialogue : Scoping Dialogue on REDD+ Benefit Sharing Co-Chairs’ Summary Report
The Forests Dialogue hosted an event at the World Bank on March 23-24 on REDD+ benefit sharing. They have now released the dialogue in report format, which discusses key issues and questions surrounding benefit sharing along with experiences and perspectives. The report shares perspectives from governmental organizations, non-government organizations, indigenous peoples and community members.
Mapping the Potential for REDD+ to Deliver Biodiversity Conservation in Vietnam
UNEP and the SNV REDD+ Programme just released a report analyzing Vietnam’s existing and future potential for REDD+ to include biodiversity conservation. On a broader note, the report looks at Vietnam’s past three years of REDD+ readiness efforts and concludes that the country is only now beginning to consider coherent policy responses in addressing and respecting environmental and social safeguards.
Jobs
Program Assistant – Ecosystem Marketplace’s Valorando Naturaleza
Based in Washington D.C., Ecosystem Marketplace’s Spanish language sister site ValorandoNaturaleza.Org is seeking a temporary part-time program assistant. The position will run for an initial 4-month consulting contract, beginning as early as September 2013, with potential for extension. The Program Assistant will help maintain the website by managing content, researching news and events and supporting the development of a news brief. Candidates should have native Spanish with strong English communication skills and excellent Spanish writing skills and basic knowledge of the carbon markets or other ecosystem services finance mechanisms. Read more about the position here.
Carbon Sourcing Manager – The CarbonNeutral Company
Based in London, the Carbon Sourcing Manager will conduct technical due diligence, commercial deal structuring/negotiation and sourcing of emission reduction projects in coordination with sourcing director. Candidates should have a postgraduate degree, ideally with training in engineering, emission reduction technologies, economics and 2-3 years working within the carbon markets. Read more about the position here.
Manager, Climate Change – The Skoll Global Threats Fund
Based in California, the Climate Change Manager will work closely with both the Climate Change Director and the Director of Policy and Communications to serve as a strategic collaborator to advance initiative planning and explore future opportunities to innovatively address the climate crisis. Candidates should have a Master’s degree in public policy, social or environmental science and at least 10 yearsexperience working on climate change issues, either in advocacy, policy or research. Read more about the position here.
Research Fellowship, Agriculture and REDD+ – Climate Focus
Based in Washington D.C., the Research Fellow will work on national and international climate and agriculture policy, climate finance, climate smart agriculture and other legal and regulatory advice with Climate Focus senior staff. A significant portion of the applicant’s time will be to support the Climate Focus Colombia office, in particular towards a project in Nicaragua working on building capacity and developing best practices for agriculture and climate change adaptation. Candidates should have a Bachelor’s degree with related experience in natural resource management, forest and/or agriculture policy and be fluent in Spanish. Read more about the position here.
Project Field Coordinator, Mangroves and Markets – International Union for Conservation of Nature
Based in Bangkok, the Project Field Coordinator will support the “Promoting Ecosystems-Based Adaptation through Mangrove Restoration and Sustainable Use in Thailand and Vietnam” project implementation, management and administration. Candidates should have a Master’s Degree in Natural Resource Management or a related subject and at least 3 years of experience in a similar role, including project coordination and management experience. Read more about the position here.
Communications Coordinator – Amazon Conservation
Based in Washington D.C., the Communications Coordinator will write, format, and design communications materials on Amazon Conservation’s activities, including published materials, website text, and e-newsletters. Candidates should have a Bachelor’s degree, at least 2 years of relevant work experience, and excellent oral, written, and organizational skills. Fluency in Spanish is strongly preferred. Read more about the position here.
Forest Programme Manager – WWF Democratic Republic of Congo
Based in Kinshasa, the Forest Programme Manager will be responsible for coordinating the implementation of WWF policies for conservation and sustainable management of forest ecosystems for the Democratic Republic of Congo. Candidates should have a Master’s Degree in Forest with a minimum of 7 years of combined experience on project management, forest certification and REDD+. Read more about the position here.
Program Fellow, Andes-Amazon Initiative – Gordon and Betty Moore Foundation
Based in California, the Program Fellow will identify interventions to reduce the impact of agricultural commodities across natural habitats in South America, with a focus on Brazil and Argentina, through research, data analysis and synthesis, and working with Foundation staff and external experts. Candidates should have a Master’s or Doctorate degree in Agricultural Economics, Natural Resource Economics and a background in sustainable agriculture (5-7 years) in the Amazon, Cerrado or Chaco regions. Read more about the position here.
Carbon Sourcing Manager – The CarbonNeutral Company
Based in London, the Carbon Sourcing Manager will conduct technical due diligence, commercial deal structuring/negotiation and sourcing of emission reduction projects in coordination with sourcing director. Candidates should have a postgraduate degree, ideally with training in engineering, emission reduction technologies, economics and 2-3 years working within the carbon markets. Read more about the position here.
Chief of Party, Sustainable Forests and Climate Adaptation Project – Tetra Tech ARD
Based in India, the Chief of Party will be responsible for an active USAID-funded climate change adaptation and REDD+ project in India. Candidates should have an advanced degree in forestry, climate change, natural resource management and 10+ years of experience working on forest conservation and sustainable management of forests, climate change adaptation, REDD+ methodologies, and/or clean energy projects. Read more about the position here.
ABOUT THE FOREST CARBON PORTAL
The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.
ABOUT THE ECOSYSTEM MARKETPLACE
Ecosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].
We also have some good news, and some bad news, from Australia. New South Wales recently reformedits biodiversity offsets framework, establishing a fund to channel money from the mining industry and other developers into the “bio-banking” system and making the offsetting methodology more transparent. On the other hand, the federal government’s announcement that it’ll introduce carbon emissions trading ahead of schedule has had the side effect of defunding the national Biodiversity Fundby AUD$231 million – or by about one-fifth.
We’re hiring! Our sister site Valorando Naturaleza is searching for a program assistant. Take a look at the job description in the newsletter below or click here.
Finally, if you enjoy your monthly MitMail, consider making a small donation. As a not-for-profit organization, it’s our mission to provide top-notch, freely available information on environmental markets and conservation finance, and we rely on our supporters to be able to do so. Just $150 gets you a place of honor on our sidebar, and helps us keep the lights on. Click here to donate.
—The Ecosystem Marketplace Team
If you have comments or would like to submit news stories, write to us at[email protected].
A Six-Step Approach To Determining What Can And Cannot Be Offset
Little guidance is provided on the complex issue of biodiversity offsetting and considering which impacts are offsetable. That is why a group of thought leaders from the biodiversity space have outlined an offsetability evaluation process that determines the success and appropriateness of specific offsets. The process was recently presented in a webinarhosted by Forest Trends’ collaborative initiative on biodiversity offsets and conservation banking systems, the Business and Biodiversity Offsets Programme(BBOP).
Clearer Rules On Mitigation Needed To Boost Renewable Energy Projects
US President Barack Obama’s recent climate change planhighlights renewables with ambitious goals. These targets include doubling the amount of electricity generated by wind and solar power by 2020 and generating 3 gigawatts of renewable energy on military installations by 2025, according to the plan.
But these goals will only be achieved if they are in line with mitigating wildlife impacts. Several clean energy projects are currently stalled over endangered species permitting requirements and Obama’s plan doesn’t take any steps to clarify, systematize or standardize this permitting process.
When a landowner develops a piece of land, ecosystems that are unavoidably disrupted or ruined must be replaced through compensatory mitigation. But compensatory mitigation laws are complex and, as of right now, in no condition to take on the expected rise in renewable energy projects due to Obama’s recent push.
Charlie Broussard, a shrimper on the docks in Cocodrie, Louisiana, has seen the wetlands he paddled through as a kid shift dramatically – literally. In fact, the Louisiana coastline is changing so quickly that fisherman and oil rig workers who have spent their lives navigating the bayou by boat sometimes get lost as familiar landmarks are drowned. In Louisiana, 1,880 square miles of land has vanished since the 1930s, and the current rate of land loss is equivalent to a football field every 38 minutes.
To begin to address these vulnerabilities, Louisiana’s 2012 Coastal Master Plan prioritizes 109 coastal restoration projects, at a price tag of $50 billion. But, with 85% of Louisiana’s coast controlled by private landowners, others are looking to the private sector to support wetland restoration.
In September 2012, the American Carbon Registry approved a wetlands methodology that will allow landowners to quantify the carbon sequestered by restoration projects and then sell verified emissions reductions (i.e. carbon offsets) to voluntary offset buyers.
Entergy, a utility with 2.8 million customers in the Gulf and the company that invested $150,000 to help develop the wetlands methodology, has the right of first refusal on the Luling project and is planning to purchase some of the carbon offsets produced by the restoration work. The company sees wetlands as a kind of natural insurance that will buffer their infrastructure in an uncertain climate future.
Ecosystem Services Front And Center As Lawsuit Seeks Restitution For Destroying Louisiana Wetlands
The coastal lands along the Gulf of Mexico have created a natural protective buffer against damaging weather events. The buffer took 6,000 years to form, but it’s at the brink of destruction, with hundreds of thousands of acres now gone because of the activities of the oil and gas industry, according to a new lawsuit. The lawsuit filed against about 100 industry players says it’s now time for these companies to pay up.
The lawsuit was filed on July 24 by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans. The authority monitors the integrity of coastal lands, considered a necessary complement to the entity’s flood protection system, but its job has become increasingly more challenging because of the deterioration and disappearance of the state’s coastal lands, according to the lawsuit.
“This is a very interesting next step in climate change asserting itself into the legal system and the political system,” says John Nevius, chair of the Environmental Law Group of Anderson Kill & Olick. “It seems like kind of a new front in the effort to focus people on this issue.” Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
Louisiana Wetlands: Why We All Need Them, And Why Oil Companies Aren’t The Only Ones On The Hot Seat
Author John Barry is best known for his eminently readable accounts of scientific advances, while humorist Harry Shearer is best known for his improv and voice acting skills. Barry, however, is also vice president of the Southeast Louisiana Flood Protection Authority – East, (SLFPAE) which was created after Hurricane Katrina to protect the east bank of the Mississippi River in the greater New Orleans area, while Shearer also hosts the weekly radio program Le Show on National Public Radio.
“We don’t blame the oil and gas industry for all of the land loss,” Barry says. “We do say they are responsible for some of the land loss. We’re just asking them to pay for the part that they’re responsible.”
Power company Entergy got a stark wake-up call about climate risks and the need to mitigate them when Hurricanes Katrina and Rita blew through its service area in 2005, and the company lost its New Orleans headquarters for a year. That rude awakening has morphed into a wide-ranging effort to identify and address the risks that climate change present to the company’s customer base, service area, and utility infrastructure, most of which are located in the Gulf Coast region.
“We want to make sure we identify the risks facing us so that we don’t get caught unprepared, as I feel we were after Katrina,” says Brent Dorsey, the company’s director of corporate environmental programs.That’s spurred the company into backing wetland restoration in the Gulf, strengthening its infrastructure, and even relocating entire departments to reduce climate risk exposure.
Colombia Takes Lead In Latin American Biodiversity Offsetting
Colombia, Períº, Ecuador and Chile are all wrestling with ways to balance economic growth with environmental protection, and representatives from all four countries last month participated in talks hosted by Peruto explore biodiversity offsetting mechanisms from around the world and see which, if any, could work best for them.
“The tremendous growth in interest worldwide over the last three years in rigorous mitigation measures, including biodiversity offsets, is now visible in Latin America,” says Kerry ten Kate, Director of Forest Trends’ Biodiversity Initiative. “As elsewhere, it’s spurred by new regulations, tighter loan conditions by financial institutions and the voluntary business case”.
Of the four, Colombia has most clearly embraced biodiversity offsets. Recent policy developments there require planned development projects such as mining, oil and gas infrastructure to offset residual biodiversity impacts by restoring or protecting an equivalent habitat elsewhere. Thenew regulation is based on two key principles: no net loss and ecological equivalence. Furthermore, it establishes offset ratios that range from 1:4 to 1:10.
Peruvians Aim For Regional Cohesion On Biodiversity Offsets
Late last year, Colombia enacted a “no net loss” policy on a whole range of planned development projects – meaning that any roads, mines, and pipelines that damage habitat must restore habitat of equal or higher value nearby or face penalties. It’s a clear response to the surge in construction and mining there, and a first step towards creating biodiversity offsets.
With gold prices hovering around $1,300 per ounce, energy demand on the rise, and infrastructure investments as high as they’ve ever been, Colombia, Peru and Chile all face growing threats to their rich natural heritage, and each is exploring ways of ensuring that any loss of habitat is offset by a gain. Last month, the Peruvian Ministry of Environment (MINAM) hosted a meeting in Lima designed to help the three compare, contrast, and perhaps even harmonize their approaches to compensatory mitigation banking.
NSW Takes Its Biodiversity Offsets System for a Tune-Up
Reforms to biodiversity offsets in New South Wales (NSW), Australia, promise to streamline and clarify the system. Central to changes is a new biodiversity offsets fund. Developers will now be able to pay a fee into the fund, which the state government will then direct toward conservation efforts through the existing “bio-banking” framework.
NSW officials say that the fund will help to simplify offsetting for industry and other developers. “The new fund will see money directed for environmental improvements where they are most needed; while relieving developers of the responsibility to make environmental decisions for the state,” said NSW Environment Minister Robyn Parker.
The reforms additionally set out clear offset principles and calculation methods, and introduce a ‘tiered approach’ that lets developers fund restoration projects or wildlife recovery efforts as supplemental alternatives to land-based offsets. The new rules also suggest that an offset ‘discount’ can be applied to projects that offer “significant social and economic benefits to NSW.”
Australia’s federal government announced last month that it plans to introduce carbon emissions trading in July 2014, a year ahead of schedule. That replaces the fixed-price carbon tax with a floating carbon price. It’ll bring the price of carbon down from $25/ton to an estimated $6/ton – but it will also create a AUD $3.9 billion shortfall in government tax revenues, including support for the Biodiversity Fund,which is funded by the carbon tax.
The Biodiversity Fund, established in 2012 with nearly a billion dollars allotted, has already committed somewhat more than AUD $200 million to projects supporting an array of conservation issues, including endangered species recovery, wetlands protection, and improving habitat connectivity. Now, Treasurer Chris Bowen says the government has no choice but to reduce funding by AUD $231 million. A floating carbon price, with the introduction of cheaper European credits, will also likely signal the end of the Carbon Farming Initiative,which promotes soil carbon credits generated by Australian farmers and landowners. Ouch.
This week, Mission Markets announced its latest venture: Mission Crowdfund, a platform that lets the public buy environmental credits and fund other ventures. Offerings right now include “adopting” a Utah prairie dog(via habitat enhancement projects), buying a water offset certificatefrom the Bonneville Environmental Foundation, or helping to pay for solar-powered vaccine refrigeratorsin Kenya. The idea is to link everyday people (and their pockets) to environmental markets and other worthy causes. “Often financing solutions are limited to sophisticated investors,” said Ken Marienau, CEO of Mission Markets.
How to Explain Conservation Banking to Your Grandmother
An opinion column in USA Today makes the case for conservation banking to the general public. The piece, penned by Wayne Walker of Oklahoma-based Common Ground Capital, sets out the basic process and principles of banking, which, Walker writes, “bring[s] together competing environmental and economic growth forces” to protect the lesser prairie chicken and other imperiled species. “As one who has spent his career in the private energy sector and has attended numerous meetings and workshops with government, energy and environmental groups on the chicken, it is clear the one thing all sides most want is certainty,” he says.
Last year, the Brazilian Business and Ecosystem Services Partnership(PESE) formed over a commitment to evaluate and manage ecosystem impacts and dependencies in Brazil. Members, including Walmart, Danone, PepsiCo, mining companies, a cosmetics firm, and agribusiness, agreed to apply the World Resource Institute’s Corporate Ecosystem Service Review (ESR).
A recent article in GreenBiz gives us an update on PESE: armed with knowledge from the ESR, Walmart is targeting its beef supply chain to acheive zero deforestation by 2015. Danone is looking at improving biodiversity and soil quality at the dairy farms from which it sources milk. Mining companies now consider ecosystem services in their impact assessments. All of these initiatives are in early stages, but the firms and their partners believe that they’re proving that “Brazil’s business sector can be both sustainable and profitable.”
Here’s a New One: Payments for Ecosystem Services…Monitoring
Yesterday, the San Miguel, Colorado county government released a report detailing recent efforts to compensate private landowners in exchange for permitting researchers to access their land for field surveys. The project, carried out with financial and technical support from Colorado State University, focused on imperiled rare plant species. Ultimately the county contracted with seven landowners, who collectively received $3,350 in payments. Two new populations of the target species were discovered. Next up: a similar project to gather data on the endangered Gunnison Sage-Grouse.
Some bad news out of Ecuador: the clock has run out on President Rafael Correa’s promise to protect biodiversity hotspot Yasuni National Park from oil exploration in exchange for international aid to the tune of $3.6 billion (roughly half of the estimated value of oil underlying Yasuni). Though some national governments and celebrities kicked in funding, the effort has gone nowhere. Last week, Correa announced that he will allow oil drilling in the park to proceed, though he downplayed its effects, saying drilling would only impact 0.1 percent of the Yasuni basin (where, scientists say, “any football-field-sized area of Yasuni has more species of trees than the U.S. and Canada combined”).
We have news that Environmental Banc & Exchange has received approval for its 754-acre Waccamaw wetland bankin South Carolina – with approval received in under eighteen months, which may be a record. The tract of land was donated to the SC Department of Natural Resources,expanding the surrounding Lewis Ocean Bay Heritage Preserve/Wildlife Management Area.
Meanwhile, a habitat conservation plan including offsite mitigation elements for the Indiana bat got a nod from regulators, who also issued an incidental take permit to Buckeye Wind LLC for a new wind project.
Low Carbon Technologies International says it expects its The Gulf Coastal Plains Wetland Mitigation Bank to deliver more than $96 million in revenuesfor the company.
A new bank’s been proposedin Chippewa County, WI, to help meet a statewide shortage of credits – the Chippewa bank is estimated to generate 104.
Organised by the Ecosystem Services Partnership (ESP) and convened by the World Agroforestry Centre (ICRAF) and CGIAR Research Program: Forests, Trees and Agroforestry in collaboration with the Sub Global Assessment Program coordinated by UNEP’s World Conservation Monitoring Centre, the UNCCD-Global Mechanism, The Economics of Ecosystems and Biodiversity (TEEB), the International Association for Landscape Ecology (IALE), A Community on Ecosystem Services (ACES), and other ESP partners. 26-30 August 2013. Bali, Indonesia.
The annual Biodiversity Institute Symposium this year will tackle the subject of Biodiversity Resilience. Factors leading to the loss of resilience in social-ecological systems are the focus of many excellent on-going research programmes and symposia. However, this two-day symposium aims to highlight the other side of the resilience research agenda – namely factors that promote and lead to resilience of biodiversity. The symposium will showcase ongoing research that examines the biotic and abiotic processes and mechanisms responsible for biodiversity resilience (ranging from genomics to landscape-scale), through to policies and management that ensure resilience of biodiversity now and in the future.2-3 October 2013. Oxford, UK.
Responsible Business Forum on Sustainable Development
The Responsible Business Forum on Sustainable Development will bring together business leaders, NGOs and policy-makers from around Southeast Asia to discuss commitments and policy recommendations to increase sustainability across seven sectors – agriculture & forestry, palm oil, consumer goods, mining, financial services, building & urban infrastructure and energy.The forum will discuss the transformational journey to the green economy and offer practical ways to accelerate business solutions and policy frameworks for a more sustainable world. 18-19 November 2013. Singapore.
The inaugural World Forum on Natural Capital will be the first major global conference devoted exclusively to turning the debate on natural capital accounting into action. It will build on the enormous private sector interest shown at the United Nations Earth Summit in Rio in June 2012 and the many developments that have taken place since. The World Forum on Natural Capital will bring together world-class speakers, cutting edge case studies and senior decision makers from different sectors, in order to turn the debate into practical action. Lively plenaries and interactive breakout sessions in four conference streams will explore the risks and opportunities for business, allow access to the very latest developments and provide an opportunity to help shape the debate through dialogue between policymakers, business leaders and prominent experts in the field. 21-22 November 2013. Edinburgh, Scotland, UK.
2014 National Mitigation & Ecosystem Banking Conference
The only national conference that brings together key players in this industry, and offers quality hands-on training and education sessions and important regulatory updates. Learn from & network with the 400+ attendees the conference draws, offering perspectives from bankers, regulators, and users. Submit proposals for panels and presentations online by October 1st! 6-9 May 2014. Denver, Colorado.
Conference on Ecological and Ecosystem Restoration
CEER is a Collaborative Effort of the leaders of the National Conference on Ecosystem Restoration (NCER) and the Society for Ecological Restoration (SER). It will bring together ecological and ecosystem restoration scientists and practitioners to address challenges and share information about restoration projects, programs, and research from across North America. Across the continent, centuries of unsustainable activities have damaged the aquatic, marine, and terrestrial environments that underpin our economies and societies and give rise to a diversity of wildlife and plants. This conference supports SER and NCER efforts to reverse environmental degradation by renewing and restoring degraded, damaged, or destroyed ecosystems and habitats for the benefit of humans and nature. CEER is an interdisciplinary conference and brings together scientists, engine
The California Air Resources Board has postponed plans to add a rice cultivation protocol to its cap-and-trade program until spring 2014, but it will move forward with consideration of a mine methane protocol this year. Here’s what participants and observers have to say.
20 August 2013 | Despite concerns about future offset shortages, the California Air Resources Board (ARB) has delayed the potential adoption of a rice cultivation protocol until next spring.
ARB staff plans to proceed with consideration of the proposed mine methane capture (MMC) protocol in October as planned, but the rice cultivation protocol will not be submitted for board consideration until spring 2014 even though both protocols were expected to be debated by the board this year.
The rice cultivation protocol would provide methods for quantifying reductions in methane emissions from flooded rice fields. Projects would be limited to the major rice growing regions in California and the Mid-South (Arkansas, Louisiana, Mississippi, Missouri and Texas).
But several issues were identified during the stakeholder process for the rice cultivation protocol, namely the impact of early drainage activities on late broods, mosquito abatement and the wetlands and the rice straw baling effects on bird populations.
“That process has raised some questions that require more time to address,” said Jessica Bede, the ARB’s Staff Lead on the MMC protocol.
While another delay is possible, the ARB is targeting consideration of the rice cultivation protocol next spring after receiving more input on its environmental impacts and using the additional time for calibration and validation of the computer simulation model used in the protocol, according to ARB staffers.
“It’s highly unlikely to be delayed further,” said Greg Mayeur, Manager of ARB’s Program Operations Section.
Belinda Morris, California director for the American Carbon Registry (ACR), said ACR was disappointed that it was not possible to put the protocol up for consideration this October, but cited specific advantages to the delay, including modification of the protocol based on the latest growing season data and further examination of cost-effective aggregation mechanisms for these projects.
“We support the decision to postpone until the spring and we think we’ll end up with a much stronger protocol in the end,” she said.
Gary Gero, President of the Climate Action Reserve (CAR), said CAR was hoping to see the draft version last week, but understands the ARB’s need to more fully assess environmental impacts.
“We agree that it is more productive to see a draft that works with the cap-and-trade program, even if it means a slight delay,” he said.
Peter Miller, Senior Scientist, Energy & Transportation Program, Natural Resources Defense Council, had urged the ARB to adopt the rice cultivation protocol because of the significant potential for co-benefits from these projects, the substantial opportunities to develop projects in California and the ability to utilize these projects to examine issues associated with agricultural offsets.
“I was initially sad to see it wasn’t coming out at the same time (as the MMC protocol), but glad to see it’s still on track to come out this spring,” he said.
Robert Parkhurst, Director, Agriculture Greenhouse Gas Markets, Environmental Defense Fund, noted that the success of the offset program developed under California’s landmark Greenhouse Gas Reduction legislation, commonly known as AB 32, rests on its integrity.
“ARB has a big agenda for October and the proposed scheduling of the rice protocol for the spring reflects the fact that they are committed to carefully considering the range of issues, doing it right, and not cutting corners,” he said. “The rice protocol will be the first land-based offset protocol adopted by the ARB and it sets an important precedent. To be fully functioning, it’s vital for the agency to finalize the work necessary to finish the protocol and make a final decision before the start of the next growing season.”
An analysis by utility Pacific Gas & Electric found that the supply of offset credits available in the second and third compliance periods of California’s cap-and-trade program will fall short of the 8% cap on offset use by regulated entities, leading to rising compliance costs in California and Quebec.
But it is unlikely that the rice cultivation protocol, even if ultimately approved by the ARB next year, would provide a material volume of offsets to the California market, said Harold Buchanan, CEO, CE2 Carbon Capital.
“From our perspective, it won’t have a meaningful impact on the market, included or not, and frankly it may just be a gesture to the farm interests in the state of California as opposed to a meaningful attempt at a significant number of offsets,” he said. “But our interest is increasing the number of valid protocols that are used so we don’t have a problem with that.”
Mine methane protocol moves full steam ahead
The MMC methodology quantifies the emissions reductions generated by capturing and destroying methane from mines through the following activities: active underground mine ventilation air methane activities, active underground mine methane drainage activities, active surface mine methane drainage activities and abandoned underground mine methane recovery activities.
The protocol allows for credits to be issued for reductions from the installation and operation of a device or set of devices that capture and destroy methane. If the board adopts the MMC protocol at the scheduled October 24-25 board meeting, it will have an effective date in 2014, Bede said.
In 2011, mining methane emissions reached 69.9 million metric tons of carbon dioxide equivalent and constituted about 1% of total US greenhouse gas (GHG) emissions. The ARB’s mine methane protocol will incentivize the reduction of GHG emissions from mining activities in the US and quantify GHG emission reductions from capture and destruction of methane resulting from mining operations, she said.
MMC projects would be allowed throughout the US. All projects must have started after December 31, 2006, per the cap-and-trade regulation. Certain activities would be specifically excluded from eligibility such as mountaintop removal, which the ARB determined was not technically feasible, Bede said.
The NRDC had previously raised concerns about the MMC protocol, including that the availability of offset credits could make coal mines more profitable and increase the amount of coal mining, that these projects do not provide co-benefits, unlike rice cultivation, and that the protocol would not generate in-state projects because California has no coal mining. In addition, the organization praised the ARB’s exclusion of mountaintop removal mines from the list of eligible projects, but said the inclusion of active mines presented serious environmental concerns.
The ARB staff proposed that the board accept CAR’s coal mine methane project protocol versions 1.0 and 1.1 for early action credits from projects that achieved verified GHG emission reductions between January 1, 2005 and December 31, 2014. But the Verified Carbon Standard’s (VCS) abandoned coal mines protocol, which quantifies the emissions reductions generated by capturing and destroying methane from abandoned or decommissioned coal mines, will not be eligible as a source of early action credits under the proposed protocol. Bede attributed the exclusion to the fact that the VCS protocol is based on a Clean Development Mechanism protocol that credits the displacement of fossil fuels in electricity generation.
“We can’t be crediting displaced carbon dioxide per the regulation,” she said.
But several stakeholders pushed back against the blanket exclusion of mine methane project types developed under the VCS protocol. In response, Mayeur said the ARB staff would take the issue of whether they could consider including VCS projects as potential early action credits under consideration.
The VCS protocol formed the basis for the sections on abandoned and surface mines featured in ARB’s draft MMC protocol, but agency staffers were concerned about the provision of the VCS protocol that allows projects to request credits for fossil fuel displacement. However, market participants have alerted ARB officials to the fact that the majority of the coal mine methane projects developed under the VCS protocol do not use that provision and are urging the agency to allow these VCS projects to provide credits as long as they do not receive any credits from displacement activities. ARB staffers have been receptive to this argument and appear willing to make a potential change prior to the protocol being officially adopted in October.
“I think it’s a very positive sign to see that they’re working on potentially including a VCS protocol,” CE2’s Buchanan said. “I think there was a minor oversight and I think that ARB is willing to correct that. I think that it’s good that they’re willing to listen.”
Including coal mine methane credits developed under the VCS protocol is critical in addressing the expected offset supply shortages in California’s cap-and-trade program, stakeholders say. These VCS projects could provide 1.6 million tonnes, as opposed to the less than 300,000 tonnes eligible from CAR’s early action protocols.
“It’s important in a market that’s very short that these offsets be included,” he said.
News emerged during the meeting that the VCS is now officially approved as an Early Action Offset Program (EAOP) by the ARB, joining CAR and the American Carbon Registry (ACR) in being allowed to transition eligible existing offset credits under approved voluntary methodologies to ARB offset credits. Unlike CAR and ACR, however, the VCS has not yet been designated an Offset Project Registry, which would allow it to oversee the registration and issuance of registry offset credits developed using the ARB’s compliance protocols and transition those credits into the cap-and-trade program.
The impact of the VCS approval as an EAOP is limited because they are not yet able to list projects under the ARB’s compliance protocols. Companies are not developing early action projects anymore, but rather focusing on transitioning those credits and submitting new projects for compliance under the ARB protocols rather than using the previous protocols. But it is seen as a positive development in terms of recognizing the role the VCS could play in California’s program and diversifying away from CAR to other registries.
“VCS would be a nice addition,” Buchanan said. “It’s great news.”
A VCS spokesman said it would be premature for the organization to comment on the exclusion because it is still very early in the process. “However, we are excited to see ARB move forward and take concrete steps to address mine methane,” he said. “We have developed a close relationship with ARB, and look forward to continuing to work in concert to ensure that any protocols adopted will be as effective as possible.”
Forestry, land use and other types of offsets are likely to be shut out of the carbon regulations soon to be proposed by the US Environmental Protection Agency. But the Obama administration will be supporting such projects through other programs as part of its efforts to ensure the US follows through on its emissions reduction pledge.
9 August 2013 | Power plant owners will have plenty of options to comply with whatever carbon regulations the US Environmental Protection Agency (EPA) releases next month, but offsetting will not be one of them, according to a Natural Resources Defense Council (NRDC) official.
The US has committed to reducing its greenhouse gas (GHG) emissions by 17% from 2005 levels by the end of this decade. In June, President Barack Obama laid out his vision for ensuring that the US can meet this goal, using his executive authority in light of inaction on climate policy by Congress, and making it “very clear that addressing climate change really is a key priority for his second term,” says Dan Lashof, Director of the NRDC’s climate and clean air program.
Obama has directed the EPA to complete carbon pollution standards for both new and existing power plants in recognition of the fact that power plants are the largest concentrated source of US emissions, accounting for about one-third of domestic GHG emissions.
The presidential memorandum instructed the EPA to issue a new proposal for regulation of new units by no later than September 20, 2013. “It’s a quite ambitious schedule, but I think it’s one that they will meet because it has the president’s signature on it,” Lashof said Thursday at an event sponsored by consultancy ICF International.
The EPA released initial rules for these new facilities in March 2012, but they had not been finalized. The regulations would have required new plants emit no more than 1,000 pounds of carbon dioxide (CO2) per megawatt-hour (lb/MWh). Coal power plants typically produce about 2,100 lb/MWh, while natural gas-fired plants emit 1,000 lb/MWh or less.
The new proposal reportedly could feature structural changes such as the possible inclusion of subcategories for coal and gas-fired plants rather than the uniform approach the EPA took in its original proposal.
“But we don’t expect the overall performance levels to change substantially and we don’t expect it will change the impact of the new source standards, which will make it illegal to build new coal plants that don’t capture at least part of their CO2 emissions,” he says. “Given that the market has already basically moved away from coal, the real importance of the new source standard is the legal predicate for regulating existing power plants.”
Obama requested that the EPA issue proposed standards, regulations or guidelines for existing facilities by June 1, 2014, with the final requirements published no later than June 1, 2015, and states submitting their implementation plans to the agency no later than June 30, 2016.
The president’s speech and the accompanying Climate Action Plan document did not provide many details about the upcoming EPA regulations, which would be developed as New Source Performance Standards (NSPS) under Section 111(b) for new plants and Section 111(d) for existing plants under the Clean Air Act.
In December 2012, the NRDC offered “the first and still only definitive proposal” outlining a potential vision for NSPS regulation of existing power plants under Section 111(d), ICF vice-president Steve Fine notes. “The proposal has engendered some criticism, but it has also engendered some support,” he says.
The NRDC suggested the EPA set state-specific emissions rates and give power plant owners and states broad flexibility to meet standards in the most cost-effective way. Under the proposal, the EPA would first tally up the share of electricity generated by coal and gas-fired plants in each state during the baseline years of 2008-2010 and then set a target emission rate for each state for 2020, based on the state’s baseline share of coal and gas generation. A state such as North Dakota, where coal represents 82% of the generation mix, would have a baseline standard of 1,500 lb/MWh, while California, where natural gas has the dominant share of the energy mix at about 50%, would have a 1,000 lb/MWh standard.
The proposal outlines a number of compliance options, including plants reducing their own CO2 emission rates by retrofitting with more efficient boilers. “The problem with that is that it’s a pretty expensive way to get emissions reductions … and it just doesn’t get you very far,” Fine says.
Owners of multiple power plants could also average the emissions rates of their plants, meeting the required emission rate on average by running coal plants less often, and ramping up generation from natural gas plants or renewable sources instead, according to the NRDC proposal. They could retire coal plants and build new natural gas and renewable capacity, with low or zero-emitting sources such as wind and solar earning credits that generators could use to lower their average emissions rate. But this part of the proposal has earned criticism from observers who believe that Section 111(d) cannot be used to establish a crediting system that involves renewable energy sources.
“They’re not regulated and they’re not regulated under our proposal, but they directly result in a reduction in the emissions from the fossil fleet,” Lashof responds.
The NRDC plan also allows trading of credits between companies within a state and across state lines among states that allow it, which lowers the cost of compliance. The organization is urging the EPA to allow states to join multi-state compacts that would allow them to trade credits across state borders, he says. The president explicitly acknowledged state leadership in forming cap-and-trade programs in his speech, providing an apparent boost to compliance markets in California and the Northeast’s Regional Greenhouse Gas Initiative that could be submitted by the participating states as achieving equivalent or greater reductions than the federal template.
“We don’t necessarily think the EPA should mandate that, but we think they should encourage it,” Lashof says.
The NRDC also recommended that state-regulated energy efficiency programs earn credits for avoided power generation and avoided pollution, with generators allowed to purchase and use those credits towards their emissions compliance obligations. This would effectively lower their calculated average emissions rate and provide a cost-effective compliance option to slash emissions, according to the proposal.
But despite the professed support for compliance flexibility by the Obama administration, offsetting would not be available as an option under the NSPS regulations developed by the EPA for legal reasons, Lashof says.
“We don’t think EPA can or should allow true offset credits, say offsets from land or emissions reductions from other sectors,” he says. “We think that the universe of measures that have to be considered need to be limited to measures that have a direct impact on the emissions from the fossil fuel generating units.”
However, the president’s Climate Action Plan notes that GHG emissions from deforestation, agriculture, and other land use constitute about one-third of global emissions, highlights REDD+, and addresses the role of the US in mitigating carbon emissions by reducing agriculture-driven deforestation. Other US agencies such as the Forest Service and the Department of Agriculture run a range of programs designed to increase soil sequestration and to protect forests that could support offsetting projects, Lashof says. “I think the overall 17% reduction target is guiding a range of policies,” he says. “Those are important goals and the administration will be pursuing them through other measures.”
The previous proposal for new sources envisioned a significant role for carbon capture and sequestration (CCS) technology, allowing new plants that install CCS to use a 30-year average of CO2 emissions to meet the proposed standard rather than meeting the annual standard every year.
“I believe CCS will still be a key part of the technical basis for the performance standard for coal,” he says.
ICF modeling showed that the NRDC’s plan could result in emissions reductions of 500 million tonnes by 2020 compared to the reference case.
The NRDC estimates the overall compliance cost of its proposal at about $4 billion on an annual basis by 2020 compared to the benefits of reducing CO2 and traditional pollutants such as sulfur dioxide, pegged between up to $25 to $60 billion. The lower end of that range was based on a previous estimate of the costs of social carbon, but in June the Obama administration raised that estimate to $35 per tonne, up from $21/t per tonne.
The plan would also stimulate investments of more than $90 billion in energy efficiency and renewables between now and 2020, according to the NRDC.
Despite the ambitious schedule, the standards are unlikely to come into play until at least 2018, given the implementation work that the states will need to do, Lashof says. However, utilities thinking about potential investments now have a very specific schedule to guide those decisions.
“I think the reality is the fact that some kind of standards are forthcoming has already started to affect the market,” he says. “Now that the president has actually said it and put his name on the schedule, I think they believe it. It would be only prudent to assume there is going to be some kind of cost or penalty for CO2 emissions.”
Part Four: REDD+ Finance Leaves Pilot Projects In Limbo tells the story of a Ghanaian businessman seeking to launch a pilot project but is struggling to find funding from both international donors and private investors.
Every government agency, it seems, has a different way of accounting for REDD+ financing. That’s true for countries, and it’s even true for agencies within the same country. Here a quick look at how the United States does it, with a glance at Norway and the UK.
8 August 2013 | The Tropical Forest Group has been tracking the REDD+ finance flowing from the U.S. in its U.S. REDD+ Finance Database (USRFD). This contains more than 800 data points for REDD or sustainable forestry reported by United States agencies with data transcribed from public documents. Although it is not linked to the US government, the USRFD is the only centralized way to assess US REDD+ finance from USAID, the Treasury Department and the US State Department.
Different US agencies have different reporting styles and different ways for classifying expenditures, which presents a challenge when synthesizing and analyzing reports in the data base. For a variety of reasons, theTreasury and State Departments are required to provide detailed reports and a list of expenditures by country, while USAID provides more general overviews even though it often dispenses more money. Further, since finance flows from multiple agencies, redundancies are common and estimates can be revised after they have been posted. Rarely is there a comparable picture of what is being spent.
Still, we can draw general conclusions. Data from 2008 to 2011 shows US REDD+ finance focused on forest nations with large forests and relatively high GDP and the smallest overall capacity gaps for executing national forest monitoring systems that can link with an international REDD+ framework. Several factors are likely to influence spending, but the trends may be because the US has focused its support on countries that can implement projects and there can be more certainty on the return.
While big picture trends emerge from spending, it is very difficult to link finance to impact. Tracking REDD+ finance would be much more effective if donor nations would strive to:
Report in specific line items with explicitly stated goals
Provide summary information and links to reports that show where and how the climate funds were or are being used;
Work with recipient countries in reporting
The Global Challenge
The US situation is hardly unique, and pinning down what REDD+ finance is can be tough given its variety of forms no matter which donor country you are examining. REDD+ finance might be channeled toward strengthening partnerships between local people and forest governments in one instance, and developing methods and technologies for forest carbon inventory and mapping in another.
This creates difficulties as many readiness activities are not fundamentally different from activities funded historically in forest conservation. Actors therefore count different things as REDD+ finance. Pulling apart what is REDD+ finance or how much finance can be attributed to any one activity is complex as much funding arrives with multiple objectives, or as part of national country programs.
Multiple Channels
Finance for REDD+ is also delivered in many different ways. Some countries, such as Norway, have a number of high value bilateral agreements and also tend to focus on emission-reductions as an outcome, such as for the Amazon Fund. The UK, in contrast, funds REDD+ mostly through multilateral REDD+ funds such as the Forest Carbon Partnership Facility or Forest Investment Program. The instruments through which finance is delivered can also differ, including: grants, loans, equity, loan forgiveness, insurance, and private investments, which affects the way finance is accounted for (is a grant the same value as a loan?).
These channels don’t all converge to a central point in country either. Forest, environment, or agriculture ministries, international or local NGOs, and other various intermediaries can be engaged as intermediaries and in implementing REDD+ projects. Where centralized reporting does not exist or function effectively, it is hard to establish the total amounts of REDD+ finance arrive in recipient countries as no one is counting everything.
Why it Doesn’t Always Add up
Aside from making aggregate figures on REDD+ finance elusive, variety in activities, channels and reporting of REDD+ finance, leads to discrepancies between contributor and recipient countries. The Voluntary REDD+ Database of the REDD+ Partnership, for example, reports US$3.35 billion from contributor countries through bilateral flows, while recipients report only US$1.44 billion. This occurs because the Voluntary REDD+ Database receives information from both bottom-up and top-down, whereas, most other initiatives seek just one data source.
While there may be political motivations for contributors to report significant amounts of spending, the differences are also likely to be a function of large bureaucracies not speaking the same language or following the same reporting process. There is also, often, a significant time-lag that exists between when a contributor country declares money spent (typically when it is allocated) and when a recipient nation recognizes it’s delivery (typically when it lands in a bank account). The regularity with which it is reported in a REDD+ finance database also comes into play. This makes it difficult to square reports across nations at any given time. Countries’ different fiscal years compound the problem.
Despite formidable challenges, the ability to more accurately track climate finance is critical to moving REDD+ forward. Being able to accurately track REDD+ finance also enables us to link expenditures to actual impacts so we can assess the effectiveness of a particular strategy, something critical to evolving REDD+ at this relatively early stage in the game. Ultimately, REDD+ finance, as well as climate finance more generally, will depend on trust and accountability. Without a way to accurately measure progress against commitments, neither is on solid footing.
This series of blogs on REDD+ finance intends to create a forum for debate and exchange of ideas, this blog reflects the opinions of Jeff Metcalfe of the Tropical Forest Group, and should not be understood to reflect the views of ODI, Forest Trends, REDDX or Climate Funds Update.
Most of Louisiana’s oil and gas companies are on the defensive after a state entity sued nearly 100 of them for damages they caused by destroying protective wetlands. A handful of companies, however, have identified wetland restoration as a major goal – for their protection and the protection of the state. Here’s a look at one of the biggest.
7 August 2013 | Power company Entergy got a stark wake-up call about climate risks and the need to mitigate them when Hurricanes Katrina and Rita blew through its service area in 2005, and the company lost its New Orleans headquarters for a year. That rude awakening has morphed into a wide-ranging effort to identify and address the risks that climate change present to the company’s customer base, service area, and utility infrastructure, most of which are located in the Gulf Coast region.
“We want to make sure we identify the risks facing us so that we don’t get caught unprepared, as I feel we were after Katrina,” says Brent Dorsey, the company’s director of corporate environmental programs.
In 2010, Entergy and America’s Wetland Foundation released a study that found that Gulf Coast communities could suffer more than $350 billion in economic losses over the next 20 years due to growing environmental risks. The study, Building a Resilient Energy Gulf Coast, found that the economic losses could increase up to 65% by 2030 due to economic growth and subsidence, as well as the impacts of climate change. On average, the Gulf Coast region already faces annual losses of nearly $14 billion.
But the study also found that there are several adaptation measures that can reduce these risks such as improved construction codes and restoration of wetlands, which have strong co-benefits such as biodiversity protection, ecosystem services or second-order economic effects – meaning risk aversion that encourages economic growth.
The destruction of the wetlands has been a major topic of conversation in recent weeks due to a lawsuit filed against nearly 100 oil and gas companies two weeks ago by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans, the Lake Borgne Basin and East Jefferson in Louisiana. The lawsuit asks a Louisiana state court to hold these companies liable for the abatement and restoration of the coastal lands.
“Wetlands provide a natural defense against storm surge,” Dorsey says. “A lot of the deterioration of the wetland is due to the levee system that was put on the Mississippi River.”
Restoring the wetlands is a major component of Entergy’s efforts. Coastal Louisiana suffers one of the fastest rates of wetland loss in the world, with restoration costs estimated in the tens to hundreds of billions of dollars, the company notes, requiring industries and communities to be resilient to survive.
In September 2012, the American Carbon Registry approved a wetlands methodology that will allow landowners to quantify the carbon sequestered by restoration projects and then sell verified offsets on the voluntary carbon markets. Entergy, through its Environmental Initiatives Fund, financed the development of the methodology, as well as the first pilot project being developed.
“We’re really interested in wetland restoration because we see the wetlands as a natural barrier,” Dorsey says.
The company has also taken such steps such as replacing wooden poles with stronger concrete structures and raising the levees around its substations to ensure that its infrastructure is more resilient. In addition, Entergy has relocated entire departments, moving its transmission headquarters to Jackson, Mississippi, where the company temporarily moved its headquarters after Katrina, and its accounts payable department to Hammond, Louisiana.
“We saw we were physically at risk to the impacts of climate,” Dorsey says. “We know we are going to have to adapt.”
Leading from Behind
Unfortunately for many companies, the reality of climate risks and the need to mitigate and adapt to the challenges they present fails to take hold until a significant weather event occurs, whether it be the devastation caused last year in Connecticut, New Jersey and New York by Superstorm Sandy or the unusual derecho event in the Washington, DC area, he says. But these weather events have led officials to become more proactive in their planning efforts.
In March, the Center for Clean Air Policy Center hosted a workshop called Severe Weather & Critical Infrastructure Resilience: Preparing Washington D.C. to help identify potential climate-related risks for the DC area. One key issue discussed was the vulnerability of the Washington Metropolitan Area Transit Authority (Metro) to severe weather impacts. Equipment damage from flood prone vent shafts are one area of particular and immediate concern and Metro is currently conducting an analysis of its vent shafts, which will be required for certain vital locations to protect the entire system from significant damage and the region from major service disruption, the workshop report noted.
In June, outgoing New York City Mayor Michael Bloomberg proposed a $20 billion climate change adaptation plan. A Stronger, More Resilient New York puts forward a comprehensive plan that contains recommendations both for rebuilding the communities impacted by Sandy and increasing the resilience of infrastructure and buildings across the city.
“There’s nothing like experience to get your attention,” Dorsey says. “We are trying to share our experience and people are listening.”
A Department of Energy report released in early July examined the US energy sector’s vulnerabilities to climate change and extreme weather, with the report noting that increasing temperatures, decreasing water availability, more intense storm events, and sea level rise will each independently, and in some cases in combination, affect the ability of the US to produce and transmit electricity from fossil, nuclear, and renewable energy sources.
“I think the energy industry has made great strides in trying to prepare for this sort of thing,” he continues. “But it took a variety of hurricanes taking a lot of energy production out of service.”
The power plants operated by Entergy and its counterparts in the electricity industry, for example, are at risk from decreasing water availability and increasing ambient air and water temperatures, which can reduce the efficiency of their cooling operations and increase the risk of partial or full shutdowns of generation facilities.
“There are all these other kind of hazards that are climate-related that need to go through the adaptation and resiliency lens,” Dorsey says
Ideally, efforts to mitigate and adapt to climate change would be driven by federal greenhouse gas regulation, which Entergy continues to advocate for because the absence of a price on carbon limits the impact of these individual efforts, he says.
“We would like to see mitigation first, but with climate being a third-rail issue, adaptation seems to be a safer issue to talk about,” he says. “Clearly, those two are preferably to the suffering of people.”
The California Air Resources Board (ARB) is scheduled to sign off on a proposal to shift the invalidation risk away from forest owners to the buyers of offset credits from approved forestry projects next month. The regulators are aiming for consistency, but at least one major emitter is concerned that making buyers responsible for the risk will make it more difficult to purchase forestry offsets.
9 September 2013 | The California Air Resources Board (ARB) will have a lot on its plate at its October board meeting, including the anticipated addition of a coal mine methane protocol for use in the state’s cap-and-trade program. One proposal that has flown under the radar would shift the risk of invalidation for forestry offsets away from forest owners to regulated emitters that submit the credits for compliance.
The so-called buyers’ liability provisions featured in the cap-and-trade regulations allow the regulators to invalidate credits that are found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. Currently, forest owners are responsible for the invalidation risk, but the buyers bear the risk for the other project types eligible for the California program. In amending its regulations, the ARB is aiming for consistency in its rules governing the invalidation risk, a spokesman said.
The buyers’ liability provisions have been the bane of existence for market players since the ARB insisted on including them in the trading system, despite significant pushback from industry players who argued that no compliance program has ever featured such provisions and that they would only serve to stifle offset transactions. That prediction proved true in 2012, as the provisions were cited by market participants as one of the key reasons that pre-compliance activity in the North American market remained flat despite the scheduled January 2013 launch of the program, according to Ecosystem Marketplace’s 2013 State of the Voluntary Carbon Markets report.
General support exists for the ARB’s efforts to ensure uniformity of the invalidation rules across all project types, according to stakeholders.
“By bringing consistency to the program and having it at the buyer level, it will probably actually lead to more project development,” says Gary Gero, president of the Climate Action Reserve (CAR). “I think probably on an overall basis it’s a good thing for the forest carbon sector because forest owners will be willing to have projects move forward if they’re not going to be the ones who have to replace invalidated credits.”
“It makes sense for the ARB to bring the invalidation rules in line for these projects because the invalidation rules are actually a good idea,” says Julian Richardson, CEO of Parhelion Underwriting Ltd, an insurer offering policies to cover the invalidation risk for California-bound offsets. “The ARB had the benefit of learning from Kyoto and the (European Union Emissions Trading Scheme). It’s that learning that has led them to write the invalidation rules and it’s one of the ways they ensure robust and rigorous environmental integrity in the offset system.”
The larger compliance entities generally have robust risk management staffs and strategies and should be able to manage what is essentially just another element of risk with relative ease, Gero says. “I think for the large buyers this is not a sea change,” he says.
Chevron Pushes Back
At least one major emitter has expressed concerns about the proposed shift. In comments submitted to the ARB in early August, oil major Chevron states that the ARB’s proposal to shift the invalidation risk for forestry projects raises a number of serious issues.
“ARB’s existing rule places responsibility with forestry owners because forests are a unique type of offset,” says Lloyd Avram, Chevron’s manager of state government affairs. “The forest owner has control over the forest and can manage it in accordance with the requirements or choose not to do so.”
Chevron declined a request for a follow-up interview.
“We are concerned that by changing the invalidation risk to the covered entity that uses the offset, ARB is adding unworkable burden and risk to forestry offset buyers which will ultimately discourage use of this important resource to reduce greenhouse gases (GHG) under ARB’s cap-and-trade program,” he says in the comments.
The proposal would result in a significant change in risk transfer for existing transactions that were negotiated and priced based on the current regulations, according to Avram. At a minimum, the ARB should not enforce the amended provision retroactively, he says.
“Applying the change to previously negotiated or listed projects would introduce further uncertainty to the nascent offset market, a particularly vulnerable time for any market,” he says. “Changing rules after a market has begun punishes early market participants that have already made investments and undertaken significant risk to create a market that furthers the program’s objectives – contrary to AB 32’s directive to encourage early action to reduce GHG emissions.”
AB 32 is the common name of California’s Global Warming Solutions Act, the legislation that set the target of reducing the state’s GHG emissions to 1990 levels by 2020 and paved the way for the trading program.
Reforestation, improved forest management, avoided conversion and urban forestry projects are currently eligible for California’s cap-and-trade program. The ARB is also expected to develop regulations to allow reduced emissions from deforestation and forest degradation projects into the program although the timeframe is still unsettled.
The ARB has given plenty of notice that it is preparing to make the invalidation change for forestry projects, but while the goal of consistency is a noble one, changing the rules after the fact does create uncertainty for project developers, according to another market participant.
“I think it’s problematic that they are changing it midstream, but I don’t necessarily see it as problematic on the face of it,” the participant says. “If people had been developing their projects with that in mind, it wouldn’t be as much of a negative impact as them thinking it was going to be a different way and then having it change after they’ve already started project development.”
Insurance to the Rescue
The shift may be problematic for medium-size entities that are seeking to reduce their risk as much as possible by purchasing golden California Carbon Offsets – which require the seller to replace invalidated offsets with allowances or replacement offsets – or insurance to address the invalidation risk, Gero says.
“That makes them think a little bit harder about forest carbon, but they’re already thinking hard about the risks associated with the other project types because that risk is already on them,” he says.
Parhelion, a specialty insurer focusing on the climate finance sector, is ready to step in to insure forest carbon projects against the invalidation risk if the ARB implements the change, Richardson says. Earlier this year, the insurer began offering a policy to insure against invalidation of livestock and ozone-depleting substances (ODS) offsets that are transitioned from credits originally issued by CAR to California’s compliance program.
The company initially decided not to offer the coverage to forestry projects because the structure of the invalidation risk as it currently applies to forestry would not have triggered demand for the product from developers or buyers as it would for the other project types. “Therefore, we didn’t feel it was a priority sector for us,” he says.
However, the insurer is already fielding inquiries from forest carbon project developers and buyers about its intentions to expand coverage of the invalidation risk if the ARB goes through with the change, Richardson says.
Although it is unclear what the final rules will say, Parhelion does not anticipate major differences in the policies it would write for forestry projects compared to the ones it is working on for livestock and ODS projects. The insurer has yet to finalize policies for those two eligible offset project types, but Richardson hopes the first policy will be issued by the end of the year.
Permanence Comes First
Forest owners are already facing a number of uncertainties about their forest projects, not the least of which is that they are on the hook for maintaining that forest carbon for 100 years, Gero says.
“I think that by removing the invalidation risk from the forest owner, that’s one less thing that forest owners and project developers have to worry about,” Gero says. “Of course, it’s one more thing that a buyer of credits does have to worry about.”
Shifting the invalidation risk to the buyer is “probably the right thing to do,” but landowners interested in participating in California’s program are far more concerned about the impact of the permanence requirements on their ability to manage their lands than they are about the invalidation risk, says Chandler Van Voorhis, Managing Partner, project developer C2I.
“(The invalidation risk is) an issue that comes way down the line as a landowner is looking at it,” he says. “It’s not a big hurdle.”
The permanence requirements for forestry projects are particularly complicated considering that the cap-and-trade program is only scheduled to run through 2020 at this point, stakeholders say.
“The issue of 100 years has always been a challenge,” Van Voorhis says.
For the sake of forest owners, a signal should be sent as early as possible about the future of the program beyond the scheduled 2020 conclusion, Gero says.
“Forest owners don’t go into these projects lightly and they need to have a great deal of certainty that the projects are going to generate credits,” he says. “I think having that kind of signal will foster even more forest owners to come in.”
The Obama administration’s pledge to ramp up renewable energy can be accomplished only if it is in coordination with the mitigation efforts for habitat and species impacts. But right now mitigation rules are a patchwork of good, bad, and just plain confusing. Here is a rundown on the complex state of compensatory mitigation and renewable development.
5 August 2013 | The sun shines on the vast terrain of the Mojave Desert in the southwest US almost every day of the year, making this flat land a seemingly perfect spot for solar power development.
Except for the fact that the Mojave Desert provides habitat for a number of plants and wildlife, some of which are endangered, and installing solar panels could be putting the ecosystem in jeopardy.
Renewable energy like solar and wind power can offer huge benefits in terms of reducing harmful greenhouse gases in the atmosphere and minimizing the impacts of climate change. US President Barack Obama’s recent climate change plan highlights renewables with ambitious goals. These targets include doubling the amount of electricity generated by wind and solar power by 2020 and generating 3 gigawatts of renewable energy on military installations by 2025, according to the plan.
But these goals will only be achieved if they are in line with mitigating wildlife impacts. Several clean energy projects are currently stalled over endangered species permitting requirements and Obama’s plan doesn’t take any steps to clarify, systematize or standardize this permitting process.
When a landowner develops a piece of land, ecosystems that are unavoidably disrupted or ruined must be replaced through compensatory mitigation. But compensatory mitigation laws are complex and, as of right now, in no condition to take on the expected rise in renewable energy projects due to Obama’s recent push. A balance is needed between preserving species’ habitat and natural areas and developing the renewable energy industry. If this issue isn’t resolved, then valuable and beneficial clean energy projects won’t get past the permitting phase or negative ecological impacts will occur in the developed areas.
Scaling Up Renewables and Impacts on Wildlife
According to the International Energy Agency (IEA), renewable power will be the second most used source of energy by 2016. The Obama administration’s 2014 budget commits to a 30% funding increase for clean energy technology. Since 2009, the administration says it has approved 25 utility-scale solar facilities, 9 wind farms and 11 geothermal plants, which will provide electricity for 4.4 million homes.
To date, the majority of wind projects have happened on private land. This most likely will change due to Obama’s new plan which calls for developing projects on public land. It directs the Department of Interior (DOI), which includes the Bureau of Land Management (BLM) that administers public land, to permit enough renewable energy projects to power 6 million homes. The BLM estimates there are 20.6 million acres with wind energy potential, and 29.5 million acres suitable for solar energy development.
As of August 2011, the BLM received over 300 right-of-way (ROW) applications, which authorizes the use of a piece of public land for a specific activity over a period of time, for utility-scale solar facilities. In 2010, the BLM received 199 applications for solar projects.
What this expansion of the renewables industry means for wildlife varies between region and sector. The sheer size of the utility-scale solar projects cause habitat loss and fragmentation. Some proposed solar developments could impact over 8,000 acres of desert habitat, according to a report by the environmental non-profit, Defenders of Wildlife. Habitat loss and fragmentation causes species to live on smaller parcels of land – often of a lower quality – where it is more difficult for them to find necessities like food, water and shelter. The desert tortoise population, for instance, of the Mojave Desert has declined by 90% since the 1980s due to loss of hospitable habitat, predators and disease.
Wind energy development fragments and reduces the quality of habitat as well. It also disrupts the population distribution of an area by creating perching spots for birds like eagles and hawks which causes grassland birds – like the lesser prairie chicken – to move away from the area. The turbines themselves can be a threat to species also. Birds and bats have been killed flying into them.
Both forms of renewable energy disrupt vegetation and require access roads and transmission infrastructure that impacts the ecosystems and species.
The State of Mitigation
Regulators and developers have focused on avoiding and minimizing impacts to date; mitigation remains relatively rare. This is in part because there isn’t much of a regulatory structure when it comes to renewables’ impacts on wildlife, according to a study on wind development and mitigation from the University of Wyoming. In order for a ramp-up of renewables to be successful, a regulatory structure that solves many of the challenges facing the industry remains to be laid out.
Another challenge is figuring out how much mitigation is going to cost when impacts aren’t well understood at the outset. There aren’t many publically-available numbers out there, but existing data suggests a range from the very high to the pretty reasonable.
It’s estimated, for example, that the Ivanpah solar thermal project in the Mojave Desert spent upward of $60 million in mitigating the project’s impact on the desert tortoise, according to Solar Industry magazine.
Meanwhile, a 2011 study researching the impact of wind energy development on Kansas wildlife habitat found mitigation costs for impacts to various grasslands – prime habitat for prairie chickens – would cost between $825 to $1,432 per hectare. The Kansas study also found that the cost of wind turbine development is roughly $4 million per turbine, so the median cost of mitigation is roughly equal to 0.57% of development costs.
A lot of land is required in developing renewable energy, and thus a lot of land will be involved with mitigating its impacts. For example, with a mitigation ratio of 3:1, 3 units of mitigation is required for every unit of impact to habitat or a wetland – meaning a lot of land will be needed to compensate for renewables.
For instance, the solar power project, Palen, created by BrightSource Energy, is located on 3,800 acres in Riverside County, California. A lot of this land is prime desert tortoise habitat. The mitigation ratio for critical habitat is 5:1 and 1:1 for land outside the critical zone, according to a report by the California Energy Commission. BrightSource Energy will have to buy 4,683 acres of comparable desert tortoise habitat to mitigate their impacts.
In certain regions, it may be difficult to find enough high-quality habitat for mitigation. Prime land for projects often overlaps with prime habitat, after all.
Perhaps nowhere is this better illustrated than at the Sweetwater River Conservancy in Wyoming, which was turned into a mitigation project after initial plans to use the site for wind energy. It turned out much of the area suitable for wind was also habitat for the greater sage-grouse. The sage-grouse is a candidate for listing under the Endangered Species Act, and thus potentially a major trigger for mitigation requirements. Learning this, the developer switched to creating a mitigation bank that aims to serve the wind industry, generating conservation bank credits that other developers can use to offset their own habitat impacts.
For Project Developers, Uncertainty Everywhere
In every region, scientific and regulatory uncertainties make it difficult to evaluate sites for renewable projects as well as for environmental impacts. These uncertainties slow down permit approvals for projects on both public and private land, and mean that it’s difficult to tell whether effective mitigation is actually taking place.
The impacts themselves are another source of confusion. Outside of threats to bats and the songbird and raptor bird types, little is known about the impacts these energy projects are having. The majority of studies done so far on the topic focus on those species. Other species and indirect impacts aren’t well understood yet, making it hard to plan for or perform proper mitigation – another factor in slow permitting processes.
And the regulatory guidance on mitigation itself is often unclear and inconsistent. There are inconsistencies in the rules for compensatory mitigation as well as in the process to complete an environmental statement and in determining acceptable impacts. Importantly, guidelines for choosing the appropriate level of mitigation and the type of mitigation seem to be missing. For example, conservation banking can potentially offer the highest-quality of mitigation but it isn’t always listed as an option for developers to choose from when deciding on a mitigation type.
In fact, a 2012 study from the University of Wyoming found just twelve cases of compensatory mitigation for wind in the United States to date, and only one which used conservation bank credits to mitigate impacts – more commonly, the developer established conservation areas on their own lands , purchased conservation easements off-site, or paid public agencies or NGOs for conservation actions.
Aside from guidance and impact issues, the actual “first come, first serve” process that the BLM uses to screen applications may also be contributing to the slow down and preventing projects with a high potential for success from being approved. According to the Defenders of Wildlife report, project developers submit an application for a right-of-way to the BLM and keep their spot in line for project reviews by continuing to pay a fee. The quality of the projects isn’t considered as they are in other energy development sectors like oil and gas. Both of those industries use competitive leasing where interested parties bid for a lease to develop on public lands. This may be a more efficient and effective alternative to managing renewable projects, the report says, especially when considering the minimal requirements to qualify for a right-of-way.
Is it possible to simply choose sites for wind and solar projects where impacts will be minimal? Well, maybe. The Kansas study found that of 14.5 million hectares suitable for wind energy development in the state, 7.6 million hectares would likely require compensatory mitigation given the presence of sensitive habitat, and another 4.2 million hectares should be avoided entirely – leaving just 2.7 million hectares where neither avoidance, minimization, nor mitigation would be required. Whether energy development will actually take place in those areas, and whether they’ll be sufficient to meet future demand, is an open question.
Making Progress
The BLM has expressed interest in establishing a process to use competitive leasing for wind and solar development. They are currently using it for geothermal projects.
The BLM also proposes creating regional mitigation frameworks for ‘Solar Energy Zones’ – areas identified as best suited for solar energy projects. These plans, says the BLM, will address mitigation for a variety of spaces such as biological, ecological and cultural, and will simplify and improve mitigation for future solar projects. Mitigation banking is one of several options the BLM proposes.
An innovative initiative moving forward in California is the Desert Renewable Energy Conservation Plan (DRECP). The DRECP is a collaborative effort between state and federal actors that aims to streamline the permitting process for renewable projects while providing binding, long-term endangered species permit assurances. The DRECP covers 22 million acres of the Mojave and Colorado Deserts in California spanning seven counties. But the effort is moving slowly. A draft of the DRECP is expected to be available for public review this year, and approval is expected next year.
Similarly, the BLM is developing an initiative that would also streamline approval and enable strategic planning for conservation at a higher level. The Programmatic Environmental Impact Statement (PEIS) is designed to evaluate utility-scale solar power as well as develop and implement environmental policies and mitigation strategies. The project is prepared by the BLM and several other government agencies, including the Office of Energy Efficiency and Renewable Energy (EERE). It will facilitate solar development in six western states: California, Arizona, Nevada, Colorado, New Mexico and Utah.
The PEIS draft mentions the difficulties of mitigating habitat and wildlife disturbances. While compensatory mitigation isn’t widely discussed in the draft, it is listed as one of the potential strategies. The BLM says it would be used for unavoidable impacts.
Wind development lags behind solar in terms of clear rules regarding compensatory mitigation and streamlining the permitting process. A 2012 National Fish and Wildlife Service report on wind development says little about compensatory mitigation. Guidance from BLM makes little mention of compensatory mitigation, keeping the emphasis on minimization and avoidance.
Wind energy located on federal lands must carry out an Environmental Assessment/Environmental Impact Statement under the National Environmental Policy Act. If the project affects endangered species or wetlands, there are also mitigation requirements under the Endangered Species Act (ESA) or the Clean Water Act. One way to comply with the ESA is with a Habitat Conservation Plan (HCP) which is an agreement between the developer and the government. The project developer agrees to design, implement and fund a plan that minimizes harm to species impacted by the project.
One such plan, the Midwest Wind Energy Multi-Species Habitat Conservation Plan (MSHCP), was developed to create a regional solution to the potential risk of wind projects for birds and bats species-particularly the Indiana bat. The states – Illinois, Michigan, Indiana, Iowa, Minnesota, Missouri, Wisconsin and Ohio – contain a lot of wind power perfect for renewable energy projects.
The MSHCP aims to enhance conservation while streamlining compliance with the ESA. Species covered under the plan include several bat types like the gray bat, little brown bat and the northern long eared bat as well as the Indiana bat. The bald eagle is considered covered under the plan as is other bird types like the least tern and the piping plover.
The MSHCP does allow for conservation bank credits to be used for compensatory mitigation. The plan will publish a public draft this fall with a final draft due out in the spring of 2014.
What Needs to Happen
Moving forward, smart landscape level planning will be needed to make good siting decisions where impacts will be low or completely avoided. Regional conservation plans like the Desert Renewable Energy Conservation Plan can streamline approval while aligning renewable development with conservation goals.
Where impacts are unavoidable, then clear high level policy is needed with better guidance that drives developers toward high-quality mitigation. If conservation banks are delivering superior ecological outcomes, for instance, they should be prioritized as they are under the Army Corps of Engineers’ Final Rule on wetland mitigation. Right now, conservation bankers may be eyeing the market but hesitant to develop credits – a clear signal from regulators would likely be appreciated.
Regulatory certainty, of course, needs to be coupled with scientific certainty. A better understanding of exactly how renewables – and in particular wind energy – impact species and habitats would go a long way toward providing clear permitting requirements and guidance for developers, and maybe help to replace some of the heated politics around wind turbines with hard evidence.
One thing is for certain: Obama’s big plans for renewables are about to put an already overloaded permitting system to the test.
This week is World Water Week and a coalition spanning the US-Mexico border is a perfect example of this year’s theme-water cooperation. The group is thinking outside the box to restore the Colorado River delta – using water rights markets, recaptured wastewater, and a groundbreaking new federal deal – that’s breathing new life into an ecosystem widely assumed to be gone forever.
6 September 2013 | The Colorado River hasn’t reached the sea in fifteen years.
The two-million acre delta where a young Aldo Leopold once paddled his canoe through “a hundred green lagoons” abounding with life (“At each bend we saw egrets standing in the pools ahead…Fleets of cormorants drove their black prows in quest of skittering mullets; avocets, willets, and yellow-legs dozed one-legged on the bars; mallards, widgeons, and teal sprang skyward in alarm…”) today is a vast, empty mud flat.
After all, the free-flowing river itself disappeared at the Morelos Dam a hundred miles upstream, where the meager portion of water left to Mexico after seven US states took their share was then funneled into irrigation canals or off to the residents of the city of Mexicali. No water passed through the dam, much less was left over for the environment: the Colorado is already over-allocated by sixteen percent. Nine-tenths of the original wetlands are gone. Much of the delta has become desert.
But in the 1980s and 1990s, something unexpected happened. During El Nií±o years, sometimes the Colorado ran high, and then water would be released through the dam to prevent flooding upstream. In the aftermath of these floods, the landscape looked palpably healthier. As a team of scientists wrote in the Southwest Hydrology Journal, “riverbanks once choked with saltcedar and other salt-tolerant shrubs have sprouted new cottonwood and willow trees following each flood event. The floods wash salts from the riverbanks and wet the soil, allowing tree seeds to germinate and grow. The trees grow in stands…that correspond to the high water mark of each flood.”
The delta was more resilient than it seemed.
To the east of Morelos Dam, a concrete canal crosses the border. It runs for 75 miles, from the Wellton-Mohawk Irrigation District in Arizona into Mexico’s Sonoran Desert, draining agricultural wastewater from farmlands.
At the mouth of the canal, another startling thing happened. As water began flowing in the late 1970s, a vast wetland appeared. La Ciénega de Santa Clara today has grown from 500 acres to perhaps forty times that size, hosting thousands of songbirds, waterbirds, and fish.
To the astute observer, the message was clear: in the delta, a little water goes a long way.
A Water Trust
In 2008, a coalition of non-profit groups hailing from both sides of the border, including the Sonoran Institute, Pronatura Noroeste, and the Environmental Defense Fund, decided to act on that knowledge, and tap a new source for restoring water to the river: the market.
They created the Colorado River Delta Water Trust (CRDWT), which buys water rights on the open market and effectively retires them, restoring the water to the river (a mechanism known as “instream buybacks” or “water buybacks”).
“We purchase irrigation water rights in the Mexicali Valley from willing sellers, usually farmers,” explains Osvel Hinojosa, Pronatura Noroeste’s Water and Wetlands program director. Under Mexican law, the water right can be separated from the land and the water redirected to uses in other places. Now, instead of irrigating agricultural fields, the water is once again irrigating plantings of native trees and inundating riparian areas to encourage native vegetation growth.
Their biggest goal, though, has been to secure enough water to maintain a small base flow, which means the portion of stream flow in a river contributed by groundwater or other subsurface sources. Baseflows are the sustained background levels present even during dry periods.
No one has ever bought water on behalf of the environment before in Mexico, though similar mechanisms have worked in the United States and Australia. Nor has a water ‘buyback’ mechanism like this ever been carried out across national boundaries, with conservation groups pooling resources to save the river that links their countries. The CRDWT is doing something almost entirely unprecedented, both in conservation finance and in successfully cooperating to restore a transboundary basin.
Working through water markets lets the coalition act quickly, explains Hinojosa. “We saw great potential to reach an allocation of up to 60 million cubic meters per year, and particularly water with very good quality.” Pronatura Noroeste already used treated wastewater and agricultural drainage to feed marshes and estuaries in the delta, but to bring back forests in the riparian zone (i.e. the area along the banks of the river), they needed cleaner water, and the best place to get it was to simply buy it on the market.
The Sonoran Institute estimates that in the long term, the lower Colorado needs 50,000 acre-feet (61.7 million m3) (one acre-foot, or AF, represents the volume of water needed to flood an acre of land to one foot deep, or about twice as much water as a household in the US West uses in a year) for baseflows annually. Buying these rights on the Mexican market will probably cost between US $12-15 million.
Through the market, the water trust has secured about 3200 AF to date and invested about US $1 million. Their goal is to triple that in the next five years.
The buybacks are just one arrow in a quiver. The coalition stays busy: it’s also worked to secure another 6080 AF (7.5 million m3) per year of treated wastewater from the Las Arenitas Waste Water Plant to restore flows in the Hardy River, a tributary of the Colorado. CRDWT has participated in binational negotiations between the US and Mexico to ensure that the agricultural wastewater flows that maintain the Ciénega de Santa Clara wetlands will continue. They’ve protected 25,000 acres (10,000 ha) of mudflats and estuarine habitat in the delta, plus another few thousand along the Hardy and the Colorado rivers, in the El Doctor wetlands, and in riparian corridors. The idea is to create a network of restored sites: if that can be done, much of the habitat functionality for wildlife will return.
Piece by piece, they’re reassembling the delta.
“This as an ecosystem with high resiliency, and we have learned that with a little bit of water we can achieve significant restoration,” says Hinojosa.
Minute 319
It seems the higher-ups are listening. Last November, the CRDWT became a key partner in an agreement between the US and Mexican governments that aims to reconcile management of the Colorado River to certain environmental realities.
Minute 319, as the agreement is known, does a few important things. First, it spreads the effects of drought and flush years more evenly between the two countries. Previously, Mexico’s entitlement was more or less locked in: every year the US was required to send about 1.5 million AF (1.85 billion m3) of water to Mexico annually, except in cases of “extraordinary drought,” which were never defined in the original 1944 treaty between the two countries. Now, there’s a process for revising that allotment downward to reflect drought, and in turn Mexico, which lacks its own storage capacity, can keep its ‘extra’ water in wetter years behind the Hoover Dam for later use.
And for the first time, the two countries have agreed to set aside some water for the environment. Minute 319 dedicates a total of 158,000 AF (1.95 billion m3) over a five-year period: a third will support base flows, the rest a one-time ‘pulse’ flow, to mimic both historical background levels and the large springtime floods that existed in the Colorado in the years before the dams were built.
The Colorado River Delta Water Trust is responsible for securing a third of that water through its water right buybacks.
To deliver the rest, the US has agreed to contribute US $21 million to help pay for infrastructure improvements and environmental projects in Mexico, where irrigation infrastructure was badly damaged in a 2010 earthquake. These conservation projects and irrigation efficiency improvements are expected to create enough water savings for the pulse flow, so existing water entitlements won’t be cut.
An initial pulse flow of 105,000 AF (129.5 million m3) is scheduled tentatively for 2014, and no later than 2016.
“The environmental component was an essential part of the negotiations,” says Hinojosa. “It opened the door and set the table for binational collaboration in more difficult topics, such as shortage criteria, joint investments in infrastructure, and storage of Mexican water in the US.”
“Local communities are the cornerstone of this process”
Within the Mexicali Valley, support runs just as high. “We have been working with these communities for seventeen years, to get them involved and excited about the restoration of the Colorado River delta,” Hinojosa points out.
Restoration projects are creating jobs, for one thing. The Mexican Federal Government provides funding for a temporary employment program in the Valley, which pays about a hundred people each year to clear invasive salt cedar and plant cottonwood, willows, and mesquite in its place.
Locals welcome these jobs, and the water trust’s investments in restoring a natural landscape that many older residents still remember.
“A farmer sold us recently 20 water rights (200,000 m3 or 162 AF per year),” says Hinojosa. “His story is similar to many of the transactions we have done. He moved to the Mexicali Valley in the 1950s, and obtained from the government the land and water rights as part of an ejido [a form of communally held land common in Mexico]. He formed a family and was able to send his children to college in Mexicali, and eventually the family moved to the city. He finally retired and the family is not interested in continuing the farming activity, and placed the water rights in the market.”
“Usually, these water rights are purchased by other farmers in the region, but also by the cities of Tijuana and Mexicali, and then the water goes outside the Valley. Since with our activities, we are keeping the water in the district and for programs that create local benefits, we receive the support from the sellers and the farming community.”
The river stirs to life
These days, the Colorado River basin is locked in the worst drought in a century. But sometime soon – whether in a year or three – the river will be connected with the sea once again during the planned pulse flow.
Long-absent local birds and marine species are expected to come back, along with the 300,000 migrating waterbirds that have historically stopped in the delta for the winter. A wealth of habitats stretching over 60,000 hectares – the forests, marshes, lagoons, mudflats and estuaries that Leopold once explored – will appear once more on the landscape.
Minute 319 is a five-year agreement, and the coalition is already thinking about the next round of negotiations. Hinojosa says at the top of CRDWT’s priorities is demonstrating that their efforts are working, and to learn as much as possible about the ecological recovery process in the delta so they can craft an even better deal next time.
The CRDWT is also exploring new funding sources to ramp up their buyback activities: they’ve moved beyond traditional foundation support to a partnership that channels money from a US buybacks program, Bonneville Environmental Foundation’s Water Restoration Certificates, to purchasing water rights in the delta. They’re also working with the Redford Center, on a public fundraising campaign called Raise The River launching this week.
“There are huge opportunities,” says Hinojosa. Not only for the Colorado River: “This process can set a precedent of international cooperation for the dedication of environmental flows and restoration.”
Forest Trends’ Water Initiative will preview their work on blending green and grey infrastructure at World Water Week later this month. In the meantime, the Ohio River Basin water quality trading program is moving forward on pilot trades and an agency responsible for flood control in Louisiana is suing over 100 oil and gas companies for coastal land degradation in a groundbreaking new lawsuit.
This article was originally published in the Water Log newsletter. Click here to read the original.
1 August 2013 | Greetings! While many of you may be reading this poolside (or perhaps not at all), there is no rest for the Water Logged. We’re excited about an array of research products we’ll be releasing in the next few weeks, including a report for business on nature-based solutions, a white paper on designing interventions for multiple ecological benefits, and a brief on cities and watersheds, looking at opportunities for cost-effective green infrastructure solutions to water challenges. Stay tuned for more news on these.
If you’ll be in Stockholm later this month for World Water Week, consider stopping by the Cooperation for Sustainable Benefits and Financing of Water Programmes workshop: Forest Trends’ Jan Cassin will be offering a preview of some of our work on blending green & grey infrastructure, in session 4.
As for the news – it’s been a busy month. In a groundbreaking new lawsuit, one of the agencies responsible for flood control in the US state of Louisiana is suing more than 100 oil and gas companies for damages caused by degraded coastal lands. The authority is taking the position that the Louisiana wetlands are subject to more frequent and severe storms and rising sea levels, and that the oil and gas companies have a duty under the permits that granted them the right to engage in dredging activities to remedy the damage done to wetlands. Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
On the business front, starting in 2014 the Carbon Disclosure Project will ask all Fortune 500 companies to report on water risk exposure as well. That’s a very good thing for everyone: a recent report found that mining companies that report on (and thus, we assume, think hard about) their water risk management financially outperform those who don’t. And in another score for sustainability, renewable energy beat fossil fuels in a water footprint battle.
Ecosystem Services Front and Center As Lawsuit Seeks Restitution For Destroying Louisiana Wetlands
The coastal lands along the Gulf of Mexico have created a natural protective buffer against damaging weather events. The buffer took 6,000 years to form, but it’s at the brink of destruction, with hundreds of thousands of acres now gone because of the activities of the oil and gas industry, according to a new lawsuit. The lawsuit filed against about 100 industry players says it’s now time for these companies to pay up.
The lawsuit was filed on July 24 by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans. The authority monitors the integrity of coastal lands, considered a necessary complement to the entity’s flood protection system, but its job has become increasingly more challenging because of the deterioration and disappearance of the state’s coastal lands, according to the lawsuit.
“This is a very interesting next step in climate change asserting itself into the legal system and the political system,” says John Nevius, chair of the Environmental Law Group of Anderson Kill & Olick. “It seems like kind of a new front in the effort to focus people on this issue.” Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
Why Disney, BP And Rio Tinto Are Exploring Ecosystem Services
Disney, BP, Rio Tinto and Weyerhaueser represent vastly different sectors. Yet these companies see an increasingly persuasive business case for tracking the impacts and dependencies on biodiversity and ecosystem services (BES). Simply put, the case for corporate action on BES has solidified, with internal and external dimensions that are more and more compelling. Ecosystem services are essential to businesses, as well as to some 450 million people whose livelihoods depend upon their ongoing flow.
This uptake of ecosystem services thinking is underway among a growing range of key corporate stakeholders as well as governments, as documented in a series of reports by BSR’s Ecosystem Services Working Group. For example, more than 16 government agencies around the world either are investing in ecosystem services initiatives or developing related policies.
For companies, all of this interest in ecosystem services means that a new bar is being set on international best practice. In response, the number of private sector players engaged on this issue is rising, with more than 35 companies publicly naming ecosystem services as an issue under consideration. And more are considering natural capital, as the Corporate EcoForum’s 2012 reporton the subject documents.
From Federal to Local, Action on the Water-Wildfire Link
A new partnership between the U.S. Department of Agriculture and U.S. Department of the Interior aims to mitigation wildfire risk in the nation’s forests in order to protect water supplies. The Western Watershed Enhancement Partnership, part of Obama’s Climate Action Plan, builds on earlier deals between the US Forest Service and municipalities to fund forest thinning, controlled burns, and other measures that lower the risk of wildfire, which can burden water utilities with tens of millions of dollars in treatment and restoration costs. An initial pilot project is planned in the Upper Colorado Headwaters and Big Thompson watershed in Northern Colorado. Similar programs are in the works in Arizona, Idaho, California, Washington, and Montana.
At the same time, cities around the west are initiating their own forest management programs. Santa Fe residents recently began funding watershed protection efforts on their water bills – $0.83 per resident each month will translate into a $5.1 million effort over twenty years. Fire is actually critical for biodiversity and ecological function in many western ecosystems, but decades of suppression in the region, coupled with pine beetle kills and a changing climate, mean that fires now tend to burn hotter and bigger – translating into major water risk. “We can’t keep wildfire out of the watershed,” Dale Lyons of the Santa Fe Water Deparment told Circle of Blue. “But we have to make sure that fire is not catastrophic when it does happen.”
Renewables Best Carbon When It Comes to Water Footprint
The Union of Concerned Scientists this month released a study comparing the water footprint of conventional versus renewable energy sources, showing that traditional energy sources can put significant pressure on water supplies. This is particularly relevant given recent severe drought in many states across the US. According to the study, more than twenty states have begun requiring utilities to submit water source plans in order to receive approval for new utilities. In Texas, because of water supply concerns, regulators denied a permit to withdraw from the Lower Colorado River 8.3 billion gallons of water annually for a new coal plant. Investment in renewables and energy efficiency could potentially water withdrawals by about 97 percent by 2050, the study says.
Two weeks ago, heavy rains in Detroit resulted in a nasty mix of sewer and rainwater being discharged into the Detroit River. But in a break from tradition, the city will not be investing in hard infrastructure in order to resolve its combined sewer problems, which according to the director of the city’s Water & Sewerage Department, would cost approximately $1 billion. Instead Detroit will be betting on a “blue infrastructure” plan. This would keep stormwater out of sewers by building retention ponds, rainwater gardens and similar sites. The initiative is part of the Detroit Future City plan released earlier this year, which establishes a roadmap for revitalizing the city over 50 years. The plan relies heavily on using vacant lots as green infrastructure sites, totaling an estimated 20-40 square miles. Details on costs or specifics of the plan are currently unavailable.
No Friendly Welcome for Stormwater Fees in Maryland
New stormwater remediation fees in Maryland kicked in on the first of July amidst a lot of unhappy campers. The fees, required in nine counties and in Baltimore, are part of the state’s efforts to control water pollution in the Chesapeake Bay watershed. But officials and residents are loudly protesting the so-called “rain tax” and in some cases even refusing to implement it. Counties can determine their own fee rates, leading to Frederick County levying 1 ¢ per parcel in protest (which will deliver $487 a year for watershed programs). There have been attempts to veto the law in Anne Arundel county, and public officials in Carroll and Washington Counties say they will also fight the fees, leaving some municipalities wondering how they’re going to pay for stormwater improvements. Meanwhile, Baltimore residents are raising concerns about what they see as clumsily designed incentives to offset fee obligations, such requiring 400 gallons installed capacity to qualify for a $24 rainwater harvesting credit.
Washington DC introduced the country’s first stormwater trading program in mid-July with the release of new stormwater management regulations. Property owners subject to stormwater control regulations are required to install green infrastructure on-site (like a rain garden or green roof), buy stormwater credits, or pay an in-lieu fee to the DC Department of Environment. Offsite mitigation through credits and fees can cover up to half of retention volume obligations. A credit is equal to a gallon of retention per year and can be generated by any property owner that meets crediting requirements. No word yet on how much credits might cost, but in-lieu fees are set $3.50 per year per gallon of off-site retention volume – which is probably a decent proxy. An accompanying technical guidebook includes information on green infrastructure compliance and a stormwater credit calculator. The rule will be fully effective by July 2015 after a transition period.
A new instream buyback effort announced earlier this month gets the state of New South Wales close to meeting its commitments under the Murray-Darling Basin Plan, while getting a nod of approval from at least part of the agricultural community. Under the deal, the Federal government will pay AUD $180 million to New South Wales to buy land and water rights equivalent to 381,000 megalitres (ML) to benefit the Murray-Darling river system. The purchase takes pressure off other areas in the Murrumbidgee Valley where buybacks might have competed more fiercely with agricultural water use.
This agreement comes out at the same time that a new study in the Australian Journal of Agriculture and Resource Economics shows that instream buybacks are the most cost-effective mechanism for restoring the river system to health, especially when the economic structure of the basin has become less dependent on agricultural activities over time.
According to co-author Glyn Wittwer, infrastructure investments cost two to three times as much as buybacks per ML of water delivered, while “modelling indicates that for a given amount of money spent on infrastructure upgrades, three to four times as many jobs will be created if spent on essential services in the Basin.”
CDP Aims to Move Water Risk Reporting to the Mainstream
Starting in 2014, Fortune Global 500 companies will be reporting water risks and opportunities through the CDP Water Disclosure (WD) tool. With this new reporting requirement, the CDP hopes to drive companies to report on risks and opportunities which will hopefully lead to companies creating water risk mitigation strategies. One of the features of WD is that it will include scoring which will help to identify best practices, industry leaders, and provide metrics for investors that will hopefully motivate changes in corporate behavior. According to the CDP WD’s 2012 report, 53% of respondents experienced business interruption or other detrimental water-related business impacts, and 39% required key suppliers to report on water-related risks. The CDP’s 2013 water report will be released in October
Ohio River Basin Trading Launches Its First Pilots
The first interstate water quality trading program in the US has recently reached “active” status, with the participation of five Soil and Water Conservation Districts in a pilot project in Indiana, Ohio and Kentucky. The project pays producers up to 75 percent of the cost of implementing agricultural conservation practices that reduce nitrogen and phosphorus pollution. Among the practices farmers can “install” are cover crops, nutrient management, vegetative filter strips, grass waterways, livestock exclusion, forage and biomass planting, heavy use area protection and conservation tillage. During the pilot trading period, approximately fifteen producers will implement practices that will keep 66,000 pounds of nitrogen and 33,000 pounds of phosphorus out of the Ohio River Basin. Through the pilot project, regulators hope to encourage farmers to voluntarily participate in the Ohio River Basin water quality trading program once it is fully established by 2016.
Tracking Social Impacts of Eco-Compensation in China
As is the case in many places, hard evidence of ecological and socio-economic outcomes of payments for ecosystem services is a rare bird in China. A recent study published in the Journal of Environmental Management, Performance and prospects of payments for ecosystem services programs: Evidence from China, found that economic incentives given to communities in order to change forest use practices and thus reduce deforestation, did achieve environmental benefits: so far, 8.8 million hectares of cropland have been restored to forested lands. However, the study, which focused on a project in the Wolong Nature Reserve, also documented that in certain situations this was at the expense of cultural traditions, particularly loss of access to culturally important forest products. According to the study, $32 billion has been invested over the past decade on programs to return cropland to forests.
Two thirds of major mining enterprises have been feeling water pains in recent years, according to a new report from the Carbon Disclosure Project (CDP) and Eurizon Capital that tracks how firms are managing risks like flooding and drought. The report also highlighted a gap between the movers and the foot-draggers: firms that responded to the survey seem to be the same group that’s working to reduce water risk exposure. That group outperforms non-respondents (who refused to disclose data) financially, and probably environmentally as well, suspects CDP’s head of investor initiatives James Hulse. “With investors’ attention sharply focused on water risks and seeking guidance for engagement, it is of great concern that nearly one third of the metals and mining companies targeted failed to provide information, despite evidence suggesting that sound management of water is linked to better financial performance,” said Hulse.
The Director of Development and Communications is a senior staff position ensuring the achievement of fundraising and communications goals through planning and execution. The individual in this key role will foster a culture of philanthropy within the organization, working closely with key staff and members of the board of directors, and is responsible for the strategic direction and overall management of fundraising and communications initiatives and activities. The incumbent represents the organization at philanthropic-related events and meetings, and is responsible for liaising with the Development Committee of the board of directors. The incumbent will also be responsible for raising gifts from existing and new major donors. As a member of EcoLogic’s Leadership Team, the Director of Development and Communications will also help shape the direction and culture of the organization, while contributing to the overall success in implementing the organization’s Strategic Plan.
The Nature Conservancy is the leading conservation organization working to make a positive impact around the world in more than 30 countries, all 50 United States, and your backyard. Founded in 1951, the mission of The Nature Conservancy is to conserve the lands and waters on which all life depends.
The Project Director for Conservation Investments supports the California chapter’s work in conservation finance, conservation assets (including real estate, commercial fishing quotas, carbon credits and interests in fresh water) and environmental economics. The Project Director conducts finance- and economic-related analyses on TNC projects and serves as an internal consultant to various TNC California teams to bring sophisticated business, financial, and economic expertise to the design and implementation of the Conservancy’s conservation priorities. This position reports to the Director of Conservation Investments and is part of the Conservation Program.
Organised by the Ecosystem Services Partnership (ESP) and convened by the World Agroforestry Centre (ICRAF) and CGIAR Research Program: Forests, Trees and Agroforestry in collaboration with the Sub Global Assessment Program coordinated by UNEP’s World Conservation Monitoring Centre, the UNCCD-Global Mechanism, The Economics of Ecosystems and Biodiversity (TEEB), the International Association for Landscape Ecology (IALE), A Community on Ecosystem Services (ACES), and other ESP partners. 26-30 August 2013. Bali, Indonesia.
Experts in water management and human rights recognize that water stress will only grow with increasing population, urbanization and climate change trends. Most parts of Latin America are facing critical water shortage issues creating an imperative for mining companies to consider either water trading or water recovery and reuse technologies. The coming years are expected to see continuing positive investment trends in mining water and wastewater sector through improved treatment level and resource recovery. 26-28 August 2013. Santiago, Chile.
World Water Week is hosted and organised by the Stockholm International Water Institute (SIWI) and takes place each year in Stockholm. The World Water Week has been the annual focal point for the globe’s water issues since 1991. Every year, over 200 collaborating organisations convene events at the World Water Week. In addition, individuals from around the globe present their findings at the scientific workshops. Each year the World Water Week addresses a particular theme to enable a deeper examination of a specific water-related topic. While not all events during the week relate to the overall theme, the workshops driven by the Scientific Programme Committee and many seminars and side events do focus on various aspects of the theme. 2013 theme is Water Cooperation – Building Partnerships. 1-6 September 2013. Stockholm, Sweden.
The WaterSmart Innovations Conference and Exposition
The WaterSmart Innovations Conference and Exposition, presented by the Southern Nevada Water Authority and numerous forward-thinking organizations, is the largest urban-water efficiency conference of its kind in the world. Last year, WSI drew more than 900 participants from 34 states and the District of Columbia, as well as seven foreign nations. This year, as it has for the last five years, WSI will feature featured a full slate of comprehensive professional sessions and an expo hall highlighting the latest in water-efficient products and services. The event also will feature several affordable pre-show workshops (which are not included with the WSI registration fee) on Tuesday, October 1. 2-4 October, 2013. Las Vegas, USA.
Ecosystem Marketplace is a project of Forest Trends a tax-exempt corporation under Section 501(c)(3).The non-profit evaluator Charity Navigator has given Forest Trends its highest rating (4 out of 4 stars) recognizing excellence in our financial management and organizational efficiency.
31 July 2013 | Charlie Broussard, a shrimper on the docks in Cocodrie, Louisiana, has seen the wetlands he paddled through as a kid shift dramatically – literally. In fact, the Louisiana coastline is changing so quickly that fisherman and oil rig workers who have spent their lives navigating the bayou by boat sometimes get lost as familiar landmarks are drowned. In Louisiana, 1,880 square miles of land has vanished since the 1930s, and the current rate of land loss is equivalent to a football field every 38 minutes.
“The state almost views land loss as an existential threat,” says Alex Kolker, a coastal geologist at the Louisiana Universities Marine Consortium, a research center located ‘at the end of the Earth’—or, more specifically, at the end of LA Highway 56 in Cocodrie.
Charlie Brussard, a shrimper in Concodrie, Louisiana, has seen the coastline change dramatically in his lifetime.
Wetlands restoration ‘at the end of the Earth’
Many Gulf Coast residents—especially those who lived through Hurricane Katrina in 2005—are acutely aware of the fragility of ‘hard’ infrastructure, such as the levee that broke and the floodwalls that failed to stop inundation during the storm. ‘Soft’ natural infrastructure, such as wetlands, can absorb flooding, break waves, and slow storm surge, taking some of the pressure off of levees and other ‘hard’ structures. Without wetlands, coastal areas are much more exposed to hurricanes.
To begin to address these vulnerabilities, Louisiana’s 2012 Coastal Master Plan prioritizes 109 coastal restoration projects, at a price tag of $50 billion. But, with 85% of Louisiana’s coast controlled by private landowners, others are looking to the private sector to support wetland restoration.
A ‘less optimistic’–but plausible–scenario of land loss from Louisiana’s 2012 Coastal Master Plan.
“There is a lot of potential for large-scale impact by working with industry,” says Sarah Mack, the founder and CEO of wetland restoration project developer Tierra Resources.
Wetlands sequester carbon both in life and in death. Like forests, they build carbon as they grow. When the plants die and decay, organic material compacts into soil, permanently storing carbon belowground. In September 2012, the American Carbon Registry approved a wetlands methodology—authored by Mack and two contributors from Louisiana State University—that will allow landowners to quantify the carbon sequestered by restoration projects and then sell verified emissions reductions (i.e. carbon offsets) to voluntary offset buyers.
The first pilot project using the wetlands methodology is now underway at the Luling Oxidation Wetlands Assimilation Pond, a 950-acre wetland 20 miles west of New Orleans that is threatened by subsidence (regional sinking) and saltwater intrusion. To restore the wetland, the project diverts treated municipal wastewater that once flowed into a canal into the wetland, which is thirsty for nutrients and freshwater. Thus, the project turns municipal trash (wastewater) into treasure (wetland food).
With the influx of nutrients, wetland plants will grow, and Tierra Resources estimates that the Luling project will sequester 1,000 to 7,000 metric tons of carbon dioxide (MtCO2e) annually. They are planning to transact offsets in one to two years.
A utility builds its resilience
Entergy, a utility with 2.8 million customers in the Gulf and the company that invested $150,000 to help develop the wetlands methodology, has the right of first refusal on the Luling project and is planning to purchase some of the carbon offsets produced by the restoration work. The company sees wetlands as a kind of natural insurance that will buffer their infrastructure in an uncertain climate future.
“We’re uniquely at risk due to the geographic location of our company and our customers,” says Brent Dorsey, director of corporate environmental programs at Entergy. “Every few years, taking a direct hit from a hurricane is difficult to recover from. Our customers can’t afford for us to keep rebuilding the system.”
In 2010, Entergy hired McKinsey to quantify climate risk across the company’s assets. They used a statistical model by the reinsurance company Swiss Re to simulate 10,000 possible hurricane ‘years,’ looking at the multitude of different pathways that hurricanes could take across the Gulf and how the likelihood and strength of storms might change under different climate scenarios.
Drivers of land loss in the Louisiana Gulf
The largest driver of land loss in coastal Louisiana is subsidence–or sinking due to:
(1) natural sediment compaction and
(2) oil and gas drilling, which sucks out pockets of liquid offshore, creating space for the land to settle.
(3) The channelization of the Mississippi River also means that about 50 percent less sediment is reaching the Gulf, therefore slowing the only process that naturally builds land.
(4) On top of that, climate change is leading to rising sea levels globally and more intense storms, both of which eat away at the Gulf Coast.
Dead cypress trees cover tens of thousands of acres in the Gulf. Without wetlands restoration, even more of the landscape will turn to open water.
The analysis found that Entergy’s infrastructure—which includes 500,000 miles of transmission lines and 300 generation facilities—is vulnerable to storms even without climate change. Under a moderate climate change scenario, cumulative losses from wind, sea level rise, and storm surge could cost Entergy $370 billion (in 2010 dollars) over the next two decades.
Entergy has already been adapting its infrastructure to the impacts of more intense and frequent storms: The company is elevating substations, replacing damaged wooden structures with metal and concrete, and strengthening transmission and distribution lines and conductors. But the severity of climate risks has changed Entergy’s calculus around some of the resiliency measures that might otherwise be considered too expensive.
For instance, wetland restoration comes out at 3.31 on the company’s cost-benefit analysis, meaning that for every $3.31 invested, Entergy would get $1.00 worth of ‘casualty loss reduction’ value. However, when all of the co-benefits of wetlands—water purification, fisheries, recreation, and carbon sequestration—are included, the true value of this natural infrastructure begins to emerge.
Companies such as Entergy are beginning to price out the true value of wetlands, which includes services like carbon storage and storm protection.
“If you can add an economic value, or ‘internalize,’ the environmental services that wetlands provide, then wetland restoration begins to pencil out a little better [on the cost-benefit analysis],” Dorsey says. “This is really the sweet spot to start to bring all of the co-benefits together.”
Entergy’s Environmental Initiatives Fund commits $1 million annually to greenhouse gas reduction projects such as wetland restoration, methane capture, nitrous oxide destruction, and landfill gas-to-energy. Projects such as Luling allow Entergy to invest in climate change mitigation and adaptation at the same time.
Acres to go before we sleep…
Entergy is now working to get other private sector actors interested in leveraging carbon financing for wetland restoration. Tierra Resources’ newest pilot project is a wetland planting initiative with ConocoPhillips. The company has 640,000 acres of wetlands to their name, making them one of the largest private wetland landowners in the United States.
Restoring an acre of wetland can cost up to $150,000—an expense “beyond the capacity of most private landowners,” Mack explains. While carbon financing may not be able to cover all of the per-acre costs for capital-intensive restoration techniques such as river diversions, it may leverage other financing, and ultimately make the difference in restoration decisions. Tierra Resources is also developing other types of restoration techniques that may be able to be fully funded using carbon finance.
Shrimpers in Cocodrie, Louisiana rely on coastal ecosystems for their livelihoods. Carbon finance could give a boost to restore wetland habitat important for shrimp fisheries.span>
Tierra Resources estimates that a healthy wetland sequesters as much as 15 MtCO2e per acre per year, and that 4 million acres of wetlands in the Mississippi River Delta are eligible for carbon-accounted restoration. If future carbon projects were to cover 1 million acres in the Gulf (a quarter of the potential), Tierra Resources estimates that carbon financing could leverage between $5 and $15 billion for wetlands restoration, based on modeling using an offset price of $12-25 per tonne.
The organization is pushing for the wetlands methodology to be included in California’s cap-and-trade compliance market, where wetlands offsets could fill a projected gap in offset supply. Inclusion of the wetlands methodology in the compliance market could mean a steadier demand for wetlands offsets, and higher prices. In 2012, the average carbon offset sold for $5.90 on the voluntary market, compared to an average price for California-bound offsets of $9.30/t, a 16% increase over the previous year. Though companies such as Entergy have stepped up to purchase wetlands offsets voluntarily, a wetlands protocol under California cap-and-trade would create a much larger market for the offsets—and the potential to leverage more financing for restoration.
Sober optimism
Louisiana’s 2012 Coastal Master Plan recognizes for the first time that the state will not be able to save every acre.
“It’s a very big step to come out and say, ‘we can’t save the entire coast,’” Morgan Crutcher, a Technical and Policy Analyst at the Coalition to Restore Coastal Louisiana says. “We’re watching coastal communities go through the grieving process.”
A protest sign in the Louisiana bayou reads: “It’s worth saving.” Gulf residents are losing land at a rapid rate.span>
Kolker, the coastal geologist, views the reality in Louisiana as a precursor for the kind of tough decisions that other states may soon face as ice sheets melt and sea level rise accelerates: “In some ways, we’re already the climate future,” he says.
In the meantime, with every storm in the Gulf, the need for robust coastal wetlands becomes more apparent, the costs of inaction more devastating. The impacts of climate change and the efficacy of natural infrastructure in absorbing some of the impacts of storms have caught the attention of the private sector, and companies such as Entergy are beginning to take action. And on a coast that is disappearing before people’s eyes, (tempered) optimism may be the only way forward.
Allie Goldstein is traveling around the US this summer uncovering stories of climate resilience.
One of the agencies responsible for flood control in the US state of Louisiana is suing more than 100 oil and gas companies for damages caused by degraded coastal lands. Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
30 July 2013 | The coastal lands along the Gulf of Mexico have created a natural protective buffer against damaging weather events. The buffer took 6,000 years to form, but it’s at the brink of destruction, with hundreds of thousands of acres now gone because of the activities of the oil and gas industry, according to a new lawsuit. The lawsuit filed against about 100 industry players -says it’s now time for these companies to pay up.
The lawsuit was filed on July 24 by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans. The authority monitors the integrity of coastal lands, considered a necessary complement to the entity’s flood protection system, but its job has become increasingly more challenging because of the deterioration and disappearance of the state’s coastal lands, according to the lawsuit.
Environmental attorneys say the lawsuit represents a fascinating deviation from the first wave of climate change liability cases, which asserted that companies that emitted carbon dioxide were responsible for remedying the impacts of that pollution, a theory that has been rejected by courts in multiple jurisdictions.
“This is a very interesting next step in climate change asserting itself into the legal system and the political system,” says John Nevius, chair of the Environmental Law Group of Anderson Kill & Olick. “It seems like kind of a new front in the effort to focus people on this issue.”
“It’s very well written,” says Wylie Donald, a partner and co-chair of the climate change and renewable energy practice of law firm McCarter English. “They definitely went out there telling a story.”
But whether that story will result in a successful case that establishes that these companies are liable for restoring the wetlands is another issue, they say. The authority is taking the position that the Louisiana wetlands are subject to more frequent and severe storms and rising sea levels and that the oil and gas companies have a duty under the permits that granted them the right to engage in dredging activities to remedy the damage done to the state’s extremely fragile wetlands.
The Argument
The coastal landscapes act as a natural first line of defense against the flood threat, working in harmony with the levees that serve as the last line of defense of inhabited areas, according to the filing. But a land loss crisis has claimed 1,880 square miles of land since the 1930s, which Louisiana officials have called “nothing short of a national emergency.”
“Unless immediate action is taken to reverse these losses and restore the region’s natural defense, many of Louisiana’s communities will vanish into the sea,” the lawsuit argues.
In 2012, the Louisiana legislature approved a $50 billion Master Plan that aims to substantially increase flood protection and the sustainability of the state’s coastal lands. The lawsuit asked that the court find the energy companies liable and indebted to the authority and the levee districts it governs, but did not specify how much the plaintiffs were looking to collect. The lawsuit claims the oil and gas industry should share in this responsibility because it has benefitted from exploiting the state’s abundant natural resources and ravaged Louisiana’s coastal landscape.
About 100 oil and gas production and pipeline companies are named in the petition, including major players such as Anadarko and Kinder Morgan. The lawsuit seeks to hold these companies responsible for the abatement and restoration of the coastal lands, including backfilling and revegetating of canals dredged and used by the defendants, and abatement and restoration activities such as wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration.
“This case is about the future of south Louisiana,” the lawsuit states.
Chris John, President of the Louisiana Mid-Continent Oil and Gas Association, says the organization will be able to comment after reviewing the details of the case and speaking to its member companies named in the lawsuit. But he pledges the industry will vigorously defend itself against the petition.
“The issue of wetland loss is tragic and one that is very important to the oil and gas industry,” John says. “We live, work and play in and near Louisiana’s wetlands and have been very involved in fighting coastal erosion. The reasons for the loss are complex and involve both natural changes and many man-made activities.”
Both John and Louisiana Oil & Gas Association President Don Briggs say the petition appears to be one that is typical of the litigious state of Louisiana in terms of being a contingency lawsuit where the plaintiff attorneys stand to gain millions of dollars.
“This is just one more group seeking to extort money from the oil and gas industry,” Briggs says. “Many factors contribute to the erosion of Louisiana’s coast,” he continues. “The oil and gas industry’s contribution is but a small percentage of the problem. Yearly hurricanes and the Mississippi River changing paths many times over the decades play the majority role in erosion.”
The authority also has a noteworthy opponent in Louisiana Governor Bobby Jindal, who accused the board of overstepping its authority and hiring the lawyers who filed the lawsuit without his permission.
“We’re not going to allow a single levee board that has been hijacked by a group of trial lawyers to determine flood protection, coastal restoration and economic repercussions for the entire state of Louisiana,” he says.
Rolling the Dice
The lawsuit relies on three different statutes to establish that these activities are governed by a regulatory framework that protects against the harmful effects of these activities, but the authority is not the agency that has permitting power under these statutes.
“That underlines, I think, a weakness,” Donald says.
The defendants are likely to argue that the authority does not have standing to pursue the case and that the permitting authorities are responsible for addressing the issues raised by the lawsuit within existing administrative procedures. The companies will probably also argue that the courts should not weigh in on issues that are the domain of the executive branch, as dictated by the political question doctrine, which refers to courts refusing to hear cases if they present political questions.
“These are arguably political questions, not necessarily legal ones,” Nevius says. “I think trial courts are more ready to clear their dockets and say this is a political question.”
Another potential hurdle is that the authority will have to prove causation, lawyers say. The lawsuit mentions that the oil and gas canal network and the altered hydrology associated with the industry’s activities in general, has been ranked among the primary causes of coastal land loss by the US Geological Survey. But government agencies such as the US Army Corps of Engineers have also been cited as contributing to the extensive land loss. The energy companies are likely to argue that the flood control and navigation system built by the Corps is largely responsible for the loss of sediment and freshwater that has damaged the wetlands.
“The plaintiffs are going to have a difficult time,” Nevius says. “These are complicated questions. At the end of the day, oil and gas companies would agree they are part of the solution, but to focus exclusively on them is to focus on only part of the problem.”
But the lawsuit does have attributes that could help pave the way to a successful judgment, including that it accuses the energy companies of engaging in specific activities that led to a specific event – the destruction of coastal lands – rather than a broad claim that their activities have contributed to climate change.
Given what Governor Jindal and the trade association presidents have acknowledged is a permissive judicial system in Louisiana, a state court might be willing to entertain this kind of legal approach, lawyers say. And the fact that a public entity has filed the lawsuit gives it additional credibility, Nevius says. But given the governor’s stance against the lawsuit, “I would expect continuing political pushback,” he says.
Regardless of whether the lawsuit is dismissed outright or is allowed to proceed, it ultimately succeeded in generating extensive coverage about the damage being done to Louisiana’s wetlands, which may have been the authority’s goal all along, Nevius says.
“It may not be fully successfully judicially, but is likely to be successful in focusing on this issue,” he says. “By focusing attention, it is likely that the plaintiffs will get a large part of what they want.”
Already a major player in the voluntary carbon market, the Walt Disney Company is planning to expand its offset purchasing program to cover indirect emissions related to its operations. Disney has pledged to continue supporting new offset projects, particularly in the forestry sector, and has used the funds generated from its double-digit internal carbon prices to pay above-average prices for the credits.
13 September 2013 | The entertainment giant that runs the “Happiest Place On Earth” is wild about carbon offsets, so much so that the Walt Disney Company will expand its already substantial voluntary offset purchasing program to account for indirect emissions generated by its operations, an effort to be financed by a $11-14 per-tonne internal carbon price the company charges its business units, according to sources close to the program.
In 2009, Disney announced a series of long-term goals to reduce its environmental impact, including a goal of zero net direct greenhouse gas (GHG) emissions, a target that will likely be updated in the next year, says Bob Antonoplis, assistant general counsel for The Walt Disney Company. The multi-media company challenged its business units to reduce their direct emissions through energy efficiency, fuel savings and fuel substitution initiatives and turns to the voluntary carbon markets to offset what it cannot reduce internally.
Disney’s voluntary offset program has covered these Scope 1 direct emissions and the company is planning to expand its offset purchasing in the “near future” to include its Scope 2 emissions, which cover indirect emissions from consumption of purchased electricity, heat or stream, Antonoplis says.
“We’re going to be expanding our program as we fold in our Scope 2 emissions, which will obviously increase the amount of projects that we’ll be involved in,” he told participants in a Climate Action Reserve (CAR) webinar on Thursday.
Since establishing its environmental goals, Disney has since become a major buyer in the voluntary carbon markets. “It was clearly driven by the overall goal that we set for ourselves,” he says. “That’s why we are participating at the scale that we are and then when we fold in our Scope 2 emissions, we’ll be at an even higher scale.”
As part of this effort, Disney established its Climate Solutions Fund, the name given to its internal carbon pricing program. The costs of carbon offset projects are charged back to individual business units at a rate proportional to their contributions to the company’s overall direct emissions footprint. Charging the business units for their GHG emissions raises the capital that is used to invest in third-party emission reduction projects.
When the internal carbon pricing mechanism was first pitched to Disney management, the then European price of $15 per tonne (/tCO2e) was used as the benchmark, Antonoplis says. But the price charged to the company’s internal units has been much lower in practice, varying in the US $11-14/tCO2e range, he says.
By comparison, the average price for voluntary offsets on a global basis was $5.9/tCO2e in 2012, with an average price of $6.7/tCO2e in North America last year, according to Forest Trends’ Ecosystem Marketplace’s 2013 State of the Voluntary Carbon Markets report.
Disney’s four cruise ships pay “a significant chunk” into the fund, while its less energy-intensive movie studio and television divisions are responsible for lower payments, according to Antonoplis.
Forest Lovers
The folks who choose offset projects for Disney have a particular affection for forestry projects.
“We like projects that have co-benefits and side benefits in addition to just pure GHG benefits,” he says. “We’re really drawn to forestry projects and we’re really drawn to reforestation projects in particular that have watershed protection, habitat rehabilitation as well as a GHG component. A bulk of our money is spent on forestry projects.”
With the help of a $3.5 million donation from Disney, Conservation International was able to develop a reduced emissions from deforestation and forest degradation (REDD+) project in the dwindling Alto Mayo Protected Forest in Peru. The project, which Antonoplis calls “fantastic,” has generated 3 million tonnes of emissions reductions (MtCO2e) so far, and delivered a host of benefits for the local populations.
“We’re big supporters of REDD and we’re active in both California and Washington, DC on trying to get REDD into our regulatory programs,” he says.
In 2012, Disney’s direct GHG emissions footprint was 867,353 tCO2e and the company retired 433,677 tCO2e in carbon credits generated by the Peru project to help meet its indirect GHG emissions goal.
Antonoplis is particularly proud of the Cuyamaca Rancho State Park project, for which Disney helped finance the reforestation of 1,075 acres of forest land, which was decimated by the Cedar Fire of October 2003. This was a particularly pricey endeavor compared to other offset projects such as dairy methane, livestock or ozone-depleting substances projects, he notes.
“Even though it was ‘expensive,’ it was just a wonderful project,” he says.
The company has purchased a smaller percentage of carbon offsets from other projects such as energy efficiency, livestock gas capture and landfill gas, with landfill projects in particular an extremely cost effective way to capture methane, which has a much higher global warming potential than carbon dioxide.
“You get a lot of bang for the buck in engineering costs,” Antonoplis says. “It’s cheaper to do them and it keeps the price down.”
Demand will likely continue for lower-priced landfill methane projects via the Chicago Climate Exchange’s offset registry program because of the significant price differential that exists between CCX projects and the higher-priced CAR credits, says Molly Peters-Stanley, associate director of Ecosystem Marketplace.
“Not everybody pays as much for voluntary offsets as Disney does,” she says.
Disney’s preference is to fund new projects rather than purchasing older offsets and to work with long-time NGO partners such as Conservation International, the Nature Conservancy, the Conservation Fund and World Wildlife Fund, with 80-90% of its credits acquired through these relationships.
“They’re friendly contracts to negotiate and we each have kind of a reputational stake in the project working,” Antonoplis says. “It enables us to easily enter into agreements to fund these projects.”
Location of the projects is often a consideration for the company in choosing offset projects. Disney has financed several reforestation projects with the Nature Conservancy in China because of major construction on the upcoming Shanghai Disneyland and its existing theme park in Hong Kong, he says. The company also wanted to engage in projects in California because it is headquartered in the state. But Disney also has projects in Peru and the Lower Mississippi Valley, where it does not have operations.
“We don’t only pick projects based on geography,” he says. “But all things equal, we do like projects in our neighborhood.”
Voluntary Buying Going Strong
The entertainment giant’s offset purchasing strategy assumes that a vibrant voluntary market exists, Antonoplis says. “Obviously that is the case and it’s worked very well to our benefit,” he says. “It’s been a successful program for us.”
In 2012, voluntary actors contracted 101 MtCO2e for immediate or future delivery, a 4% increase over 2011, while the volume purchased domestically in North America increased by 1% to about 30 MtCO2e, according to the Ecosystem Marketplace report.
Ninety percent of offset volumes were contracted by the private sector, where corporate social responsibility (CSR) and industry leadership were the primary motivators, Peters-Stanley says.
For Disney, CSR was “clearly our motivation,” Antonoplis says.
Despite being based in California, the company’s offset purchasing is not motivated by compliance mandates because its operations in the state fall well below the 25,000 tCO2e threshold to be covered under California’s cap-and-trade program. “That kind of frees us up from not having to worry about the offset component of the cap-and-trade program,” he says.
CAR was the most popular offset standard in North America in 2012, with a 30% share of the market, in large part due to preparations for California’s compliance program, which officially launched in January 2013, Peters-Stanley says. Removing compliance-related transactions from the equation, the Verified Carbon Standard (VCS) was hands-down the leading standard for voluntary activities in North America, she says.
“If it weren’t for the voluntary market, the vibrancy of the standards such as VCS and [the American Carbon Registry] and CAR of course, we wouldn’t be comfortable playing in this area,” Antonoplis says. “The vibrancy of the market and the verification standards and the ability to get these projects off the ground and going has really worked well for us.”
The California Air Resources Board (ARB) tabled its rice cultivation protocol for consideration next spring. While disappointed by the delay, many groups understood the need for better environmental safeguards and robust stakeholder engagement, as this protocol is set to be the first land-based offset protocol adopted by the ARB.
This article was originally published in the Forest Carbon newsletter. Click here to read the original.
28 August 2013 | The California Air Resources Board (ARB) disappointed many stakeholders in its cap-and-trade program with news that its planned rice cultivation protocol – expected to go before the board this October for approval – was tabled for consideration next spring, while the mine methane capture protocol remains on track.
Many were hoping to see draft versions of both protocols, but the ARB explained that the recent stakeholder process raised several issues with the current rice cultivation protocol. Environmental groups are particularly concerned about the impact of early drainage activities on late broods, mosquito abatement and the wetlands and the rice straw baling effects on bird populations.
The general sense is that the protocol, while delayed, will still go through. Harold Buchanan, CEO of CE2 Carbon Capital, says the rice cultivation protocol is not expected to provide a material volume of offsets to the California market – suggesting the delay is unlikely to significantly impact the shortage of offset supply projected for the second and third compliance periods of the state’s cap-and-trade program.
While disappointed by the delay, many groups understood the need for better environmental safeguards and robust stakeholder engagement, as this protocol is set to be the first land-based offset protocol adopted by the ARB.
Belinda Morris, California director for the American Carbon Registry, cited advantages to the delay, including being able to incorporate the latest growing season data into the protocol and further examining cost-effective aggregation mechanisms for projects.
Robert Parkhurst, the Director of Agriculture Greenhouse Gas Markets for the Environmental Defense Fund, noted that the success of the offset program rests on its integrity, and this delay “reflects the fact that they are committed to carefully considering the range of issues, doing it right, and not cutting corners.”
Meanwhile, the mine methane capture protocol will be considered by the ARB board at the October 24-25 board meeting; if adopted, it could be effective as early as next year. But the debate continues over the ARB’s draft version of the protocol, which currently restricts early action activity to projects produced under the Climate Action Reserve versions. Stakeholders countered that mine methane projects produced under the Verified Carbon Standard (VCS) could easily find a place in the compliance program, an argument that the ARB appears willing to embrace.
These and other stories from the forest carbon marketplace are summarized below, so keep reading!
With the redesign of our Forest Carbon Portal and continued expansion of our Spanish language sister website Valorando Naturaleza, Ecosystem Marketplace hopes to continue to bring you this kind of fresh information in the second half of 2013! If you value what you read, consider supporting Ecosystem Marketplace’s Carbon Program by contacting Molly Peters-Stanley. We’re $50k away from being able to publish this year’s State of the Forest Carbon Markets report in a few months’ time – can we count on your support?
Here at Ecosystem Marketplace, we are transitioning from data collection to report-writing mode in order to bring you this year’s State of the Forest Carbon Markets report. For those of you developing forest carbon offset projects, if you have not yet responded with data and wish to participate in the survey, please notify Daphne Yin.
A big thank you to the following organizations that have most recently contributed data to this year’s State of the Forest Carbon Markets report, including: WM Beaty.
—The Ecosystem Marketplace Team
If you have comments or would like to submit news stories, write to us at [email protected].
U.S. Markets
Offsets seen eluding capture by EPA
Forestry, land use and other types of offsets are likely to be shut out of the carbon pollution standards on new and existing power plants soon to be proposed by the US Environmental Protection Agency. But the Obama administration will be supporting offsets through other programs as part of its efforts to ensure the US follows through on its emissions reduction pledge. Obama’s Climate Action Plan more broadly highlights REDD+ and addresses the role of the US in curbing carbon emissions by reducing agriculture-driven deforestation, and US agencies such as the Forest Service and the Department of Agriculture (USDA) run a range of programs designed to increase soil sequestration and to protect forests that could support offset projects.
Project Development
REDD-y for the next validation
Zambia’s first REDD+ project just passed its validation with flying colors, with a “Gold Level” designation awarded from the Climate, Community and Biodiversity Alliance (CCBA) Standards. The BioCarbon Partners’ (BCP) Lower Zambezi REDD+ Project is among the first REDD+ projects in the South African Development Community to achieve all three Gold Level validation criteria in communities, biodiversity and climate change adaptation. The project combats deforestation through 18 community-based interventions such as conservation farming and eco-charcoal harvesting. Strong community involvement is credited with the project’s success. Local traditional leaders and government authorities even wrote letters of support to the CCB auditors. BCP now aims to achieve VCS validation by the end of 2013.
Leveraging Laos Forests
The World Bank just signed a grant agreement to give $31.83million for Laos’ Scaling-Up Participatory Sustainable Forest Management (PSFM) Project. The project seeks to expand sustainable forest management by increasing areas under PSFM plans and pilot project areas under REDD+ and a landscape approach to forest management. Nineteen million of the grant comes from the International Development Association and $12.83 million from the Strategic Climate Fund’s Forest Investment Program. The grant is in line with Laos’ 2020 Forestry Strategy, which aims to improve the quality and quantity of forest areas in addition to developing sustainable forestry products.
In Kalimantan, Indonesia, local communities are looking for alternatives to palm oil concessions, which currently cover more than 17% of the land. An opinion piece in the Jakarta Post covers the work of Central Kalimantan community co-operative, the United Rainbow of Kotawaringin Barat, which is developing its proposed Lamandau River REDD+ project that could become the largest REDD+ project in Indonesia. Unlike prior REDD+ projects, which relied on consulting firms and international experts, the community-initiated Lamandau Project will allow local community management. Research from the Center for International Forest Research (CIFOR) supports the model, noting that community groups are best at managing their own land. However, challenges remain as the project has not yet received the necessary permits over the past 16 months.
Ushering in the Brown Revolution
Clay Pope of the Oklahoma Association of Conservation Districts recently crossed state borders to share the organization’s ECOpass concept with the 2013 National Rural Assembly. Under the Oklahoma program, the public can voluntarily buy ECOpasses in $5, $30 and $50 denominations equal to different levels of carbon credits created by practices such as no-till farming, grass and tree plantings, and improved pasture management. Farmers applying these practices to their lands who have signed up for the Oklahoma Carbon Initiative – with verification provided by the Oklahoma Conservation Commission Carbon Program – can then receive payment for their efforts.
Sustainable plantations get a second wind
EcoPlanet Bamboo – the largest owner and operator of commercial bamboo plantations outside of China – recently wrapped up its first phase of growth in which it reforested 10,000 acres of highly degraded land in Central America and Southern Africa into bamboo plantations. During this phase, the firm achieved dual validation from the VCS and the Climate, Community, and Biodiversity (CCB) Standards on top of Forest Stewardship Council (FSC) certification for its plantations in Nicaragua, and was the first offset project developer to contract the World Bank’s Multilateral Investment Guarantee Agency to tap into political risk insurance. The firm now plans to pursue a second-phase goal of reforesting 1 million acres of degraded land in Southeast Asia, Brazil, and Africa, with some of its new work to potentially include an offset component.
A blue outlook for BluForest investors
A new post in the REDD Monitor investigates BluForest, a publicly traded firm that reportedly owns 135,000 hectares of Ecuadorian forest from which it plans to “sell carbon offsets through [its] website to voluntary markets where no verification is required.” This atypical view of verification may be explained by research from REDD Monitor, which found that BluForest has no previous experience in forest conservation or carbon markets. Instead the company has a history of being involved in mining, oil and gas, as well as in pump-and-dump share scams under its former identity, Greenwood Gold Resources. Last month, investor George Sharp filed a civil action against BluForest for alleged fraud and negligent misrepresentation. According to BluForest’s Securities and Exchange Commission filing, the firm pre-sold 74,300 tonnes CO2 (tCO2e) in credits to two companies in late 2012.
National Strategy & Capacity
Resisting REDD
As Cameroon moves ahead on its Readiness Preparation Proposal approved by the World Bank’s Forest Carbon Partnership Facility in January, local communities worry over losing their property rights and access to forest land. While the government of Cameroon already has several platforms to support indigenous and equal gender participation and is currently educating communities about REDD+ through presentations, misunderstandings about REDD+ remain. In addition to highlighting the complexity of raising community awareness and participation, the continued suspicion of REDD+ projects points to the need for clearer land tenure rights. One local NGO worker succinctly summed up the importance of this issue, stating, “Even if REDD+ doesn’t bring the money, let it bring good governance.”
Australian carbon farming in the weeds
Researchers have pinpointed invasive weeds such as gamba grass as a potential threat to landholder involvement in savanna burning, one of the eligible offset project types under Australia’s Carbon Farming Initiative (CFI). “There’s a large disparity between the profits generated from savanna burning – $1.92 per hectare – and the costs of managing gamba grass – $40 per hectare – meaning that much more savanna needs to be enrolled for carbon farming to cover the costs of weed eradication,” says study co-author Vanessa Adams. More broadly, Australia’s recent decision to transition early to an emissions trading scheme in July 2014 and coinciding linkage with the EU Emissions Trading Scheme (ETS) has raised concerns about whether the market price would be enough to support domestic offsetting under the CFI.
Forests in the thick-of-et
Accusations have flown in New Zealand regarding its ETS treatment of forestry. A new report revealed the scheme is damaging the forestry sector, as cheap foreign carbon credits continue to flood the national market and drive down New Zealand Unit prices. The Labour Party has pounced on this opportunity to denounce the current government’s actions and promise a stronger ETS under its leadership. The government defended itself by asserting that the international market price is fairer for New Zealand emitters and that the Forest Owners Association is trying to ratchet up the price for its own self-interest to which the association responded that it merely reported facts about the current market.
Turning a new leaf
Ghana will soon receive $50 million from the Forest Investment Programme dedicated to addressing deforestation causes and improving forest management and benefit-sharing programs. Many historical attempts to reduce deforestation failed to include local rural communities. As a result, many community members engaged in illegal poaching, logging and other forms of trespassing. However, hopes are high that new funding will turn a new leaf for better forest management. The African Development Bank and World Bank aim to unify Ghana’s forest and land use programs, identify investments to prevent further deforestation, promote community participation and support climate-resilient economic development, such as through REDD+ activities. The funding is set to run through 2016.
Receipt to follow in new partnership
Early August, Ethiopia and Norway signed a bilateral REDD+ partnership agreement. The agreement does not promise a specific budget. Instead, payments will be based on results and will be decided as verified results appear. The agreement will primarily help develop Ethiopia’s forest sector, particularly the development and implementation of Ethiopia’s REDD+ strategy. Additionally, programs will benefit as part of Ethiopia’s broader Climate Resilient Green Economy Strategy and related green economy development.
Testing climate intelligence
Climate-smart agricultural projects by the UN FAO showcase the difficulties and opportunities of transitioning to new farming techniques. So far, the FAO’s Economics and Policy Innovations for Climate-Smart Agriculture Programme has spearheaded a €5.3-million project in Malawi, Vietnam and Zambia. These climate-smart projects attempt to reduce emissions from agriculture and enhance crops’ resilience to climate change. Studies of conservation agriculture in Zambia and Malawi and sustainable land management practices in Vietnam show that some farmers struggle with overhead costs in adapting to new methods, while others come up with innovative solutions. To broaden options available to farmers, the FAO stresses the need for increased investment from both traditional agricultural finance and emerging climate finance vehicles such as the Green Climate Fund.
Paradise lost in Ecuador
In 2007, the government of Ecuador had a daring proposal: in return for $3.6 billion, Ecuador would leave 840 million barrels of oil situated in pristine rain forests untouched. The proposed price was half the market price that the oil could fetch and the government hoped that countries concerned about climate change would pay for this opportunity. Unfortunately, the Yasuni-ITT Initiative has largely failed, with only $336 million raised and contributions from the largest gas guzzling nations – the United States, China and Japan – non-existent. While Ecuadorian President Correa recently announced the dissolution of the initiative, local support remains high and the government will try to minimize the amount of development in the area.
Methodology & Standards Watch
Do you have the smarts for agriculture?
As the Gold Standard expands into forestry and land use, the standard is seeking members to join its advisory panel on climate-smart agriculture, to inform the development of social and ecological criteria for the standard’s new climate-smart agriculture scope. The panel is open to Gold Standard Supporters, Fairtrade-related organizations, and market experts experienced in social and ecological issues, governance of standards and/or technical expertise in climate-smart agriculture. The deadline for submissions is September 6.
Un-till a market signal
A new article in the Scientific American revisits the history behind soil carbon management in US agriculture. One of the few historical efforts to encourage farmers across the US to participate in no-till agriculture was the voluntary Chicago Climate Exchange (CCX), whose exchange platform closed in 2010 but in its heyday covered 810,000 hectares of farmland with plans to generate and sell millions of carbon offsets into a proposed nationwide cap-and-trade program.
Despite the exchange platform shutting down, over-the-counter transactions of existing CCX credits have continued on a piecemeal basis, seeing 8.3 MtCO2e transacted in 2012, according to Ecosystem Marketplace’s 2013 State of the Voluntary Carbon Markets report. A third of this volume came from agriculture, forestry, and other land use projects in the US.
On the side, the USDA has gone on to roll out conservation programs to help farmers sequester more soil carbon. Late last year, VCS approved a soil carbon methodology developed by The Earth Partners (TEP) for use on agricultural offset projects, based on decades’ worth of USDA science. In past interactions with The Earth Partners, California’s ARB reportedly reviewed the soil carbon methodology and acknowledged soil carbon as a potential future project type for its cap-and-trade program. TEP hopes to reengage with the ARB to push for a regional protocol on soil carbon now that the method is VCS-approved and a pilot project is underway.
Finance & Economics
Tracking REDD+ tracking (continued)
Forest Trends’ REDDX and the Overseas Development Institute’s Climate Funds Update recently launched Parts III and IV of the organizations’ collaborative series that explains existing REDD+ finance tracking projects – including Forest Trends’ own new REDDX expenditures tracking initiative– while identifying niches and possible cross-over areas to directly support more comprehensive assessments of REDD+ policy and finance gaps and needs.
Part III, Lessons from the US: The Tropical Forest Group shares findings from tracking US REDD+ spending and the difficulties in following finance which is managed across a number of different agencies and in very different ways. Data from 2008-2011 reveals that US REDD+ finance has focused primarily on forest nations with large forests, relatively high GDP, and the smallest overall capacity gaps for executing national forest monitoring systems that can link with an international REDD+ framework.
Part IV, What do we know about the private sector contribution? The United Nations Environment Programme Finance Initiative discusses the need for stronger engagement with private sector players, clearer definitions of what constitutes REDD+ private sector finance (do investments into activities that contribute to REDD+ but aren’t directly linked to REDD+ verified emissions reductions (VERs) , and more strategic targeting of public sector dollars in order to improve the financial attractiveness of REDD+ for the private sector.
Human Dimension
Drawing Connections with Cartoons
Transparency International (TI) uncovered a major lack of communal awareness in REDD+ projects during a recent trip to Papua New Guinea. TI employees traveled to the country with the purpose of learning about villagers’ experiences with PNG’s REDD+ pilot projects. Instead, they ended up having to explain basic concepts of REDD to those same villagers. Using hand-drawn illustrations, the NGO’s employees outlined REDD+, community benefits and corruption. The Leileiyafa community, home to one of five pilot sites for REDD+, reported that a Forestry Department official had stopped by and promised them money for keeping the trees – six months ago. However, there had been neither follow up nor any discussions about when, how much or who would receive this cash. Lack of local consultations and lack of awareness about REDD+ highlight the problems faced when implementing REDD+ in many countries.
Challenging traditional development norms
Challenging the “teach a man to fish” motto, the EU-funded Community Owned Best Practice for sustainable Resource Adaptive management(COBRA) project offers a new adage: “show a community how to catch fish, and you feed them for as long as they have the support to buy the equipment. Promote locally-owned solutions and skills to produce local food and they will be able to survive sustainably with minimal external support.” COBRA has worked with indigenous groups primarily in Guyana and Brazil over the past two years. They seek to identify community best practices for adapting to environmental challenges, ultimately hoping to scale up these practices to the national and international level to be used in global environmental policies such as the UN REDD+ scheme.
Science & Technology Review
Painting the future
A new laser technology can map forests in almost artistic representations. The $1.5 million laser, nicknamed Echidna 2, allows scientists to map individual trees down to their leaves. Created jointly by Boston University and CSIRO, this ground-based laser sends out wavelengths to map the forest canopy. The difference is in the details: unlike previous models, the Echidna 2 records individual trees data down to the leaf size. The data can accurately measure the size and health of forests and answer previously difficult questions about CO2 absorption. While it would be difficult to map every forest using a ground-based laser, samples taken can help improve the accuracy of airborne- and satellite-based laser data.
Copying the Jurassic forest
As deforestation and degradation continue, one group is bringing trees back. The Archangel Ancient Tree Archive hopes to clone ancient trees before they disappear completely. For ancient trees that have weathered fires, drought, and disease, their survival is embedded in their genetic memory. The group believes that newly cloned trees could provide important mitigation services if they are reforested on a large scale. One such project recently planted cloned sequoias resilient to warming conditions. Saplings have also been planted in other environmental cleanup projects and protected areas. However, cloning is no easy task. With a 2% success rate considered promising, collected cuttings rarely push out initial growth.
Publications & Tools
REDD+ in a Green Economy: Global Symposium Report
The Global Symposium on REDD+ in a Green Economy, convened June 19-21, provided a discussion for the business case in restoring forests in developing countries and for linking REDD+ planning with budding green economy efforts. The new report summarizes plenary and working group sessions around four main topics: setting the scene and international context for REDD+ in a green economy; reaching out to the private sector; REDD+ country experiences; and the findings of three working groups on national support, research and development, and coordination.
The Forests Dialogue : Scoping Dialogue on REDD+ Benefit Sharing Co-Chairs’ Summary Report
The Forests Dialogue hosted an event at the World Bank on March 23-24 on REDD+ benefit sharing. They have now released the dialogue in report format, which discusses key issues and questions surrounding benefit sharing along with experiences and perspectives. The report shares perspectives from governmental organizations, non-government organizations, indigenous peoples and community members.
Mapping the Potential for REDD+ to Deliver Biodiversity Conservation in Vietnam
UNEP and the SNV REDD+ Programme just released a report analyzing Vietnam’s existing and future potential for REDD+ to include biodiversity conservation. On a broader note, the report looks at Vietnam’s past three years of REDD+ readiness efforts and concludes that the country is only now beginning to consider coherent policy responses in addressing and respecting environmental and social safeguards.
Jobs
Program Assistant – Ecosystem Marketplace’s Valorando Naturaleza
Based in Washington D.C., Ecosystem Marketplace’s Spanish language sister site ValorandoNaturaleza.Org is seeking a temporary part-time program assistant. The position will run for an initial 4-month consulting contract, beginning as early as September 2013, with potential for extension. The Program Assistant will help maintain the website by managing content, researching news and events and supporting the development of a news brief. Candidates should have native Spanish with strong English communication skills and excellent Spanish writing skills and basic knowledge of the carbon markets or other ecosystem services finance mechanisms. Read more about the position here.
Carbon Sourcing Manager – The CarbonNeutral Company
Based in London, the Carbon Sourcing Manager will conduct technical due diligence, commercial deal structuring/negotiation and sourcing of emission reduction projects in coordination with sourcing director. Candidates should have a postgraduate degree, ideally with training in engineering, emission reduction technologies, economics and 2-3 years working within the carbon markets. Read more about the position here.
Manager, Climate Change – The Skoll Global Threats Fund
Based in California, the Climate Change Manager will work closely with both the Climate Change Director and the Director of Policy and Communications to serve as a strategic collaborator to advance initiative planning and explore future opportunities to innovatively address the climate crisis. Candidates should have a Master’s degree in public policy, social or environmental science and at least 10 yearsexperience working on climate change issues, either in advocacy, policy or research. Read more about the position here.
Research Fellowship, Agriculture and REDD+ – Climate Focus
Based in Washington D.C., the Research Fellow will work on national and international climate and agriculture policy, climate finance, climate smart agriculture and other legal and regulatory advice with Climate Focus senior staff. A significant portion of the applicant’s time will be to support the Climate Focus Colombia office, in particular towards a project in Nicaragua working on building capacity and developing best practices for agriculture and climate change adaptation. Candidates should have a Bachelor’s degree with related experience in natural resource management, forest and/or agriculture policy and be fluent in Spanish. Read more about the position here.
Project Field Coordinator, Mangroves and Markets – International Union for Conservation of Nature
Based in Bangkok, the Project Field Coordinator will support the “Promoting Ecosystems-Based Adaptation through Mangrove Restoration and Sustainable Use in Thailand and Vietnam” project implementation, management and administration. Candidates should have a Master’s Degree in Natural Resource Management or a related subject and at least 3 years of experience in a similar role, including project coordination and management experience. Read more about the position here.
Communications Coordinator – Amazon Conservation
Based in Washington D.C., the Communications Coordinator will write, format, and design communications materials on Amazon Conservation’s activities, including published materials, website text, and e-newsletters. Candidates should have a Bachelor’s degree, at least 2 years of relevant work experience, and excellent oral, written, and organizational skills. Fluency in Spanish is strongly preferred. Read more about the position here.
Forest Programme Manager – WWF Democratic Republic of Congo
Based in Kinshasa, the Forest Programme Manager will be responsible for coordinating the implementation of WWF policies for conservation and sustainable management of forest ecosystems for the Democratic Republic of Congo. Candidates should have a Master’s Degree in Forest with a minimum of 7 years of combined experience on project management, forest certification and REDD+. Read more about the position here.
Program Fellow, Andes-Amazon Initiative – Gordon and Betty Moore Foundation
Based in California, the Program Fellow will identify interventions to reduce the impact of agricultural commodities across natural habitats in South America, with a focus on Brazil and Argentina, through research, data analysis and synthesis, and working with Foundation staff and external experts. Candidates should have a Master’s or Doctorate degree in Agricultural Economics, Natural Resource Economics and a background in sustainable agriculture (5-7 years) in the Amazon, Cerrado or Chaco regions. Read more about the position here.
Carbon Sourcing Manager – The CarbonNeutral Company
Based in London, the Carbon Sourcing Manager will conduct technical due diligence, commercial deal structuring/negotiation and sourcing of emission reduction projects in coordination with sourcing director. Candidates should have a postgraduate degree, ideally with training in engineering, emission reduction technologies, economics and 2-3 years working within the carbon markets. Read more about the position here.
Chief of Party, Sustainable Forests and Climate Adaptation Project – Tetra Tech ARD
Based in India, the Chief of Party will be responsible for an active USAID-funded climate change adaptation and REDD+ project in India. Candidates should have an advanced degree in forestry, climate change, natural resource management and 10+ years of experience working on forest conservation and sustainable management of forests, climate change adaptation, REDD+ methodologies, and/or clean energy projects. Read more about the position here.
ABOUT THE FOREST CARBON PORTAL
The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.
ABOUT THE ECOSYSTEM MARKETPLACE
Ecosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].
The UK’s Department of Environment, Food and Rural Affairs has released a green paper on nationwide biodiversity offsets, although the paper has met with criticism from environmental groups arguing offsets should only be used as a last resort after other options have been exhausted. In the US, a land swap in Minnesota between the government and an environmental investment firm could create the country’s largest wetland mitigation bank.
This article was originally published in the MitMail newsletter. Click here to read the original.
12 September 2013 | Greetings! In the US mitigation world, we have a few big headlines this month. A land swap between Ecosystem Investment Partners and Minnesota state and county government would create the country’s largest wetland mitigation bank in St. Louis County. Pennsylvania just got its first commercial bank, while Connecticut finally has an in-lieu fee program. And Restoration Systems is getting into the conservation banking game, with a new partnership with Common Ground Capital recently announced.
Last week, the UK Department of Environment, Food and Rural Affairs (Defra) released a green paper on using biodiversity offsets nationwide, asking for public comment. The proposal is based on two years of pilots and extensive review of offset program design, including an Ecosystem Markets Task Force recommendation noting that offsets could restore and protect 300,000 hectares in the UK over the next two decades.
Still, the green paper’s been met with a wave of bad press. Environmental groups say that offsets could equate to a “license to trash,” and that Defra’s creating a “market ripe for abuse.” But at the less hyperbolic end of the spectrum, many of the greens’ concerns – that offsetting should be a last resort after options to avoid or minimize impacts are exhausted, and that offsets should take place as close to the original impact as possible – are widely-accepted principles of effective offsets, and discussed in Defra’s green paper. (The mitigation hierarchy itself is actually already embedded in the National Planning Policy.)
Defra says it’ll only move forward with offsetting if the mechanism can be shown to deliver net gains for biodiversity, streamline planning, and not put economic burdens on business. The consultation period will end on November 7th.
Happy reading,
—The Ecosystem Marketplace Team
If you have comments or would like to submit news stories, write to us at [email protected].
In The Colorado Delta, A Little Water Goes A Long Way
For years, scientists assumed the Colorado River delta – where a young Aldo Leopold once paddled his canoe through “a hundred green lagoons” abounding with life – was a dead ecosystem. For years, virtually no water was left for environmental health after seven US states and Mexico took their share. The Colorado, over-allocated by sixteen percent, hasn’t reached the sea in fifteen years. Nine-tenths of the original wetlands are gone. Much of the delta has become desert.
But a coalition of non-governmental organizations spanning the US-Mexico border think they can bring the delta back. “This as an ecosystem with high resiliency, and we have learned that with a little bit of water we can achieve significant restoration,” says Osvel Hinojosa, Pronatura Noroeste’sWater and Wetlands program director. Using water rights markets, recaptured wastewater, and a groundbreaking new federal deal, the Colorado River Delta Water Trust is breathing new life into an ecosystem widely assumed to be gone forever.
UK Government Seeking Comments on Biodiversity Offsets Plan
The UK Department of Environment, Food and Rural Affairs (Defra), recently released a document for public comment on how they expect to implement biodiversity offsets. This consultation paper stems from priority recommendations made in the Ecosystems Market Task Force report, Realising Nature’s Value, which was published in March 2013. Through the proposed program, net biodiversity gains are expected by providing an opportunity for farmers and landowners who create or restore wildlife habitats to sell conservation credits to developers who need to offset their environmental impacts. The current proposal builds on lessons learned from other countries and six pilot projects currently underway in England.
The program is being presented to the public as a means for achieving environmental goals and economic development in rural areas. So far, the proposed program has received support from industry and environmental groups although some claim that biodiversity offsets are a license to destroy wildlife. The consultation will last for nine weeks and conclude in early November.
Offsets for the Great Barrier Reef: A Double-Edged Starfish?
A $40 million conservation trust fund directed towards the Great Barrier Reef is being proposed by the Australian government to manage the negative effects of Crown of Thorns starfish and runoff from agriculture. The money for the proposed trust fund would come partly from biodiversity offsets payments, resulting from the environmental approval process for projects that adversely affect the reef under the Environment Protection and Biodiversity Conservation Act and the associated Biodiversity Offsets Policy. Projects already approved under the Act will require some AUD $185 million in offsets – so this could mean a big source of finance for the Great Barrier Reef.
Therein lies the worry for some: that this arrangement will result in approval decisions for development projects based on cash flow needs, and it will result in government disinvestment in conservation initiatives. There’s also some concern over lack of clarity around methods used to calculate offset requirements.
A five-megawatt solar project in England, Tavells Lane Farm, has demonstrated that solar panels and biodiversity can mix well. While this farm used to be a brownfield used as a quarry-cum-landfill site, today solar panels and chamomile flowers have covered the grounds. Research by independent ecologists commissioned by Lightsource Renewable Energy, the developer of the site and the UK’s largest solar energy firm, has confirmed that leaving areas of land passive and fallow for solar farms boosts local biodiversity. Lightsource believes that the moving and turning of the ground during the installation phase, followed by five months of inactivity has created the perfect habitat for the flowers without any planting or seeding. According to this developer, solar farms can be excellent habitat in the sense that once the panels are installed, the property is for the most part. It’s a bright spot of news in an often-contentious relationship between renewable energy and wildlife protection. The full study will be released this autumn.
The town of Gramalote in Colombia has become one of the first examples in the world where natural ecosystems have played a central role in the town’s relocation planning process. This is a town that has been destroyed by heavy rains and mudslides three times in the last two centuries. After the 2010 mudslide, 6,000 of Gramalote’s inhabitants had to be relocated to nearby villages. Today, the new Gramalote is being designed on a site that was chosen based on the most robust models available for understanding ecosystem services in tropical and mountainous conditions, including FIESTA/WaterWorld, Costing Nature, and Tremarctos. Actual construction is expected to begin in 2014 and inhabitants will move in 2015.
Textile Industry Not Happy About India’s Biodiversity Tax
The Indian central government through the Biological Diversity Act (2002) and Rule (2004) has imposed a tax on industries where they have to pay 2% amount of their annual income to the state biodiversity board. Funds will then be invested in environmental conservation activities lead by civic entities. However, industry groups and state governments are resisting the central government tax. The textile industry for example, said that the Act did not apply to them because they use ginned cotton instead of raw cotton. In the State of Madhya Pradesh, the industry minister, Kailash Vijayvargiya has asked industries not to comply until the State cabinet sings its approval. At stake is the potential for collecting Rs 5,000 per year from businesses.
Restoration Systems and Common Ground Capital Announce Partnership
Wetland and stream banking firm Restoration Systems LLC announced this month that it will partner with Edmond, Oklahoma-based Common Ground Capital LLC (CGC). The partnership sets the ground for Restoration LLC, which manages more than 50 banks around the US, to expand its activities in the conservation banking world. CGC has already begun developing Prairie Chicken conservation banks across 86,000 acres of habitat in Kansas, Oklahoma, and Texas.
“I’m excited about having an experienced partner in Restoration Systems to complement our valued relationships with our landowners. We are building a responsible business that implements large-scale conservation projects while delivering meaningful net benefits to the habitat and the wildlife we seek to protect, preserve or restore in the future,” said Wayne Walker, Principal of Common Ground Capital, in a press statement. “We are having great success restoring prairie ecosystems in Texas and think our land management skills and financing will contribute to CGC’s efforts across Southern Plain states and beyond.” added George Howard, Restoration Systems’ Co-Founder and CEO.
The 2014 edition of the State of Green Business report is going to tackle a new topic: natural capital. GreenBiz and Trucost say the report will include a new Natural Capital Leaders Index. Trucost has developed a methodology allowing comparison for both direct and supply chain impacts across sectors, broken out into carbon, water, and waste impacts. The index will capture companies that have “effectively have decoupled the growth from environment impact,” says Richard Mattison, Trucost’s CEO. “In other words, while they’re growing their revenues, their environmental impact and their dependency on natural capital — and therefore their risks of that natural capital not being available, or being degraded — are minimized. So, really what we’re doing is we’re highlighting resource-efficient businesses.”
‘Mountains to Markets’ Project Aims at Biodiversity-Friendly Products in Pakistan
A new GEF/UNDP project in Pakistan, ‘Mountains and Markets’ will build both demand and capacity for biodiversity-friendly products in the country. IUCN Pakistan and the Pakistan government’s Climate Change Division inked the deal last week during the GEF Global Environmental Facility Steering Committee meeting. The project will support voluntary certification of biodiversity-friendly non-timber forest products (NTFP). Biodiversity threats in the region are exacerbated by limited opportunities for sustainable livelihoods; the projects aims to establish 50 biodiversity community enterprises and invest in collaborative forest management approaches, access to technical and financial services, and other capacity building.
Two new tools from Restore America’s Estuaries (RAE) are designed to help coastal managers assess their own “blue carbon” opportunities.A briefing document, Coastal Blue Carbon as an Incentive for Coastal Conservation, Restoration and Management: A Template for Understanding Options, explains the science, management, and market mechanisms behind blue carbon. Wetlands’ carbon sequestration capabilities can make forest carbon look like pretty small beer; but land managers may as yet be unaware of ways to capture blue carbon values. RAE is leading a technical working group developing wetland carbon protocols under the Verified Carbon Standard (VCS). A video on evaluating blue carbon opportunities is also available.
Some news and notes from the wetland mitigation world this month:
Pennsylvania welcomed its first-ever commercial mitigation bankrecently, with the approval of Resource Environmental Solutions LLC’s Upper Susquehanna River Mitigation Bank Phase 1. The Bank covers the Upper Susquehanna River sub-basin.
A land swap between St. Louis County/the Minnesota Department of Natural Resources and Ecosystem Investment Partners would create the largest wetland bank in the US in St. Louis County, MN. EIP would acquire and restore 22,000 acres of drained swamplands in exchange for upland forest property – precise acreage and location TBD. The Conservation Fund is acting as a broker. The deal’s expected to be approved by the county this week.
There’s a new in-lieu fee program in Connecticut,with the National Audobon Society acting as a partner to the Army Corps of Engineers. Previously, only permittee-responsible mitigation has been possible in the state.
EVENTS
Third Meeting of the Global Partnership for Business and Biodiversity
The third meeting of the Global Partnership for Business and Biodiversity, organized jointly with the Canadian Business and Biodiversity Council (CBBC), will provide a platform to strengthen the engagement of business and the private sector, as well as the mainstreaming of biodiversity into sustainable development (Decision XI/22), aligning with the ongoing consultations on the Sustainable Development Goals (SDGs), developed at the UN Conference on Sustainable Development (Rio+20). The meeting’s objectives include: provide businesses and other stakeholders with concrete information and case studies related to CBD COP decisions and sector-specific issues, thereby encouraging and facilitating mainstreaming of biodiversity in their general activities; provide businesses and other stakeholders with a forum for feedback and recommendations for future CBD COPs; and strengthen the Global Partnership by bringing together national and regional initiatives. 2-3 October 2013. Montreal, Canada.
WILD10, the 10th World Wilderness Congress (WWC), is the most recent in what has become the longest-running, international, public conservation project. It is a two-three year process of collaboration between many groups, governments, experts in all fields, community representatives, businesses, scientists, artists and more. Clearly, wild nature is under threat all over the world, and human society needs to change if we are to solve the issues in front of us. There are also good stories to tell, ones that tell us who we are, and where we need to go. We can do it! What makes the WWC…and WILD10…different and effective? First, it is not just a “conference,” rather it is a process of collaboration aimed towards practical results for wild nature and people; using a positive, inclusive approach to problem solving; emphasizing intergenerational solutions; recognizing that culture is equally as important as good policy, effective resource management, and state-of-the-art science; and involving a great diversity of people and professions who understand the importance of wild nature to a healthy and prosperous human society — from tribal communities to heads of state, Nobel Laureates to local activists, scientists and artists, and more. When the 10th WWC actually convenes, part of it may look like a conference, but if the process works then it is much more, and the practical results and outcomes will be matched by a sense of inspiration, hope, and action. 4-10 October 2013. Salamanca, Spain.
The annual Biodiversity Institute Symposium this year will tackle the subject of Biodiversity Resilience. Factors leading to the loss of resilience in social-ecological systems are the focus of many excellent on-going research programmes and symposia. However, this two-day symposium aims to highlight the other side of the resilience research agenda – namely factors that promote and lead to resilience of biodiversity. The symposium will showcase ongoing research that examines the biotic and abiotic processes and mechanisms responsible for biodiversity resilience (ranging from genomics to landscape-scale), through to policies and management that ensure resilience of biodiversity now and in the future. 2-3 October 2013. Oxford, UK.
Responsible Business Forum on Sustainable Development
The Responsible Business Forum on Sustainable Development will bring together business leaders, NGOs and policy-makers from around Southeast Asia to discuss commitments and policy recommendations to increase sustainability across seven sectors – agriculture & forestry, palm oil, consumer goods, mining, financial services, building & urban infrastructure and energy.The forum will discuss the transformational journey to the green economy and offer practical ways to accelerate business solutions and policy frameworks for a more sustainable world. 18-19 November 2013. Singapore.
The inaugural World Forum on Natural Capital will be the first major global conference devoted exclusively to turning the debate on natural capital accounting into action. It will build on the enormous private sector interest shown at the United Nations Earth Summit in Rio in June 2012 and the many developments that have taken place since. The World Forum on Natural Capital will bring together world-class speakers, cutting edge case studies and senior decision makers from different sectors, in order to turn the debate into practical action. Lively plenaries and interactive breakout sessions in four conference streams will explore the risks and opportunities for business, allow access to the very latest developments and provide an opportunity to help shape the debate through dialogue between policymakers, business leaders and prominent experts in the field. 21-22 November 2013. Edinburgh, Scotland, UK.
2014 National Mitigation & Ecosystem Banking Conference
The only national conference that brings together key players in this industry, and offers quality hands-on training and education sessions and important regulatory updates. Learn from & network with the 400+ attendees the conference draws, offering perspectives from bankers, regulators, and users. Submit proposals for panels and presentations online by October 1st! 6-9 May 2014. Denver, Colorado.
Conference on Ecological and Ecosystem Restoration
CEER is a Collaborative Effort of the leaders of the National Conference on Ecosystem Restoration (NCER) and the Society for Ecological Restoration (SER). It will bring together ecological and ecosystem restoration scientists and practitioners to address challenges and share information about restoration projects, programs, and research from across North America. Across the continent, centuries of unsustainable activities have damaged the aquatic, marine, and terrestrial environments that underpin our economies and societies and give rise to a diversity of wildlife and plants. This conference supports SER and NCER efforts to reverse environmental degradation by renewing and restoring degraded, damaged, or destroyed ecosystems and habitats for the benefit of humans and nature. CEER is an interdisciplinary conference and brings together scientists, engineers, policy makers, restoration planners, partners, NGO’s and stakeholders from across the country actively involved in ecological and ecosystem restoration. Dedicated session proposals are due August 30th! 28 July – 1 August 2014. New Orleans, LA.
The Director of Conservation oversees all aspects of conservation planning, applied science, land protection and stewardship and community and partner relations for the Alaska Program of The Nature Conservancy. Provides scientific leadership and support for TNC’s conservation planning work and establishes overall conservation priorities within the context of the strategic plan for Alaska. Supplies strategy, technical and program support to Conservancy field operations. S/he serves as the principle contact to government agencies, other conservation organizations, and the academic community. Serves as a core member of the Alaska Leadership Team. The Director of Conservation also assists the State Director in representing Alaska issues in regional and global programs of The Nature Conservancy.
Senior Program Officer for Climate Change Adaptation
World Wildlife Fund (WWF) – Washington DC, USA
World Wildlife Fund (WWF), the world’s leading conservation organization, seeks a Senior Program Officer for Climate Change Adaptation. Under the supervision of the Managing Director, plans, manages, communicates and implements activities to promote climate change adaptation and disaster risk management, including providing technical support to WWF US programs and WWF field offices to conduct vulnerability assessments and guidance on mainstreaming climate change and disaster risk considerations into conservation strategies.
If you have comments or would like to submit news stories, write to us at [email protected].
In The Colorado Delta, A Little Water Goes A Long Way
For years, scientists assumed the Colorado River delta – where a young Aldo Leopold once paddled his canoe through “a hundred green lagoons” abounding with life – was a dead ecosystem. For years, virtually no water was left for environmental health after seven US states and Mexico took their share. The Colorado, over-allocated by sixteen percent, hasn’t reached the sea in fifteen years. Nine-tenths of the original wetlands are gone. Much of the delta has become desert.
But a coalition of non-governmental organizations spanning the US-Mexico border think they can bring the delta back. “This as an ecosystem with high resiliency, and we have learned that with a little bit of water we can achieve significant restoration,” says Osvel Hinojosa, Pronatura Noroeste’sWater and Wetlands program director. Using water rights markets, recaptured wastewater, and a groundbreaking new federal deal, the Colorado River Delta Water Trust is breathing new life into an ecosystem widely assumed to be gone forever.
UK Government Seeking Comments on Biodiversity Offsets Plan
The UK Department of Environment, Food and Rural Affairs (Defra), recently released a document for public comment on how they expect to implement biodiversity offsets. This consultation paper stems from priority recommendations made in the Ecosystems Market Task Force report, Realising Nature’s Value, which was published in March 2013. Through the proposed program, net biodiversity gains are expected by providing an opportunity for farmers and landowners who create or restore wildlife habitats to sell conservation credits to developers who need to offset their environmental impacts. The current proposal builds on lessons learned from other countries and six pilot projects currently underway in England.
The program is being presented to the public as a means for achieving environmental goals and economic development in rural areas. So far, the proposed program has received support from industry and environmental groups although some claim that biodiversity offsets are a license to destroy wildlife. The consultation will last for nine weeks and conclude in early November.
The California Air Resources Board has postponed plans to add a rice cultivation protocol to its cap-and-trade program until spring 2014, but it will move forward with consideration of a mine methane protocol this year. Here’s what participants and observers have to say.
20 August 2013 | Despite concerns about future offset shortages, the California Air Resources Board (ARB) has delayed the potential adoption of a rice cultivation protocol until next spring.
ARB staff plans to proceed with consideration of the proposed mine methane capture (MMC) protocol in October as planned, but the rice cultivation protocol will not be submitted for board consideration until spring 2014 even though both protocols were expected to be debated by the board this year.
The rice cultivation protocol would provide methods for quantifying reductions in methane emissions from flooded rice fields. Projects would be limited to the major rice growing regions in California and the Mid-South (Arkansas, Louisiana, Mississippi, Missouri and Texas).
But several issues were identified during the stakeholder process for the rice cultivation protocol, namely the impact of early drainage activities on late broods, mosquito abatement and the wetlands and the rice straw baling effects on bird populations.
“That process has raised some questions that require more time to address,” said Jessica Bede, the ARB’s Staff Lead on the MMC protocol.
While another delay is possible, the ARB is targeting consideration of the rice cultivation protocol next spring after receiving more input on its environmental impacts and using the additional time for calibration and validation of the computer simulation model used in the protocol, according to ARB staffers.
“It’s highly unlikely to be delayed further,” said Greg Mayeur, Manager of ARB’s Program Operations Section.
Belinda Morris, California director for the American Carbon Registry (ACR), said ACR was disappointed that it was not possible to put the protocol up for consideration this October, but cited specific advantages to the delay, including modification of the protocol based on the latest growing season data and further examination of cost-effective aggregation mechanisms for these projects.
“We support the decision to postpone until the spring and we think we’ll end up with a much stronger protocol in the end,” she said.
Gary Gero, President of the Climate Action Reserve (CAR), said CAR was hoping to see the draft version last week, but understands the ARB’s need to more fully assess environmental impacts.
“We agree that it is more productive to see a draft that works with the cap-and-trade program, even if it means a slight delay,” he said.
Peter Miller, Senior Scientist, Energy & Transportation Program, Natural Resources Defense Council, had urged the ARB to adopt the rice cultivation protocol because of the significant potential for co-benefits from these projects, the substantial opportunities to develop projects in California and the ability to utilize these projects to examine issues associated with agricultural offsets.
“I was initially sad to see it wasn’t coming out at the same time (as the MMC protocol), but glad to see it’s still on track to come out this spring,” he said.
Robert Parkhurst, Director, Agriculture Greenhouse Gas Markets, Environmental Defense Fund, noted that the success of the offset program developed under California’s landmark Greenhouse Gas Reduction legislation, commonly known as AB 32, rests on its integrity.
“ARB has a big agenda for October and the proposed scheduling of the rice protocol for the spring reflects the fact that they are committed to carefully considering the range of issues, doing it right, and not cutting corners,” he said. “The rice protocol will be the first land-based offset protocol adopted by the ARB and it sets an important precedent. To be fully functioning, it’s vital for the agency to finalize the work necessary to finish the protocol and make a final decision before the start of the next growing season.”
An analysis by utility Pacific Gas & Electric found that the supply of offset credits available in the second and third compliance periods of California’s cap-and-trade program will fall short of the 8% cap on offset use by regulated entities, leading to rising compliance costs in California and Quebec.
But it is unlikely that the rice cultivation protocol, even if ultimately approved by the ARB next year, would provide a material volume of offsets to the California market, said Harold Buchanan, CEO, CE2 Carbon Capital.
“From our perspective, it won’t have a meaningful impact on the market, included or not, and frankly it may just be a gesture to the farm interests in the state of California as opposed to a meaningful attempt at a significant number of offsets,” he said. “But our interest is increasing the number of valid protocols that are used so we don’t have a problem with that.”
Mine methane protocol moves full steam ahead
The MMC methodology quantifies the emissions reductions generated by capturing and destroying methane from mines through the following activities: active underground mine ventilation air methane activities, active underground mine methane drainage activities, active surface mine methane drainage activities and abandoned underground mine methane recovery activities.
The protocol allows for credits to be issued for reductions from the installation and operation of a device or set of devices that capture and destroy methane. If the board adopts the MMC protocol at the scheduled October 24-25 board meeting, it will have an effective date in 2014, Bede said.
In 2011, mining methane emissions reached 69.9 million metric tons of carbon dioxide equivalent and constituted about 1% of total US greenhouse gas (GHG) emissions. The ARB’s mine methane protocol will incentivize the reduction of GHG emissions from mining activities in the US and quantify GHG emission reductions from capture and destruction of methane resulting from mining operations, she said.
MMC projects would be allowed throughout the US. All projects must have started after December 31, 2006, per the cap-and-trade regulation. Certain activities would be specifically excluded from eligibility such as mountaintop removal, which the ARB determined was not technically feasible, Bede said.
The NRDC had previously raised concerns about the MMC protocol, including that the availability of offset credits could make coal mines more profitable and increase the amount of coal mining, that these projects do not provide co-benefits, unlike rice cultivation, and that the protocol would not generate in-state projects because California has no coal mining. In addition, the organization praised the ARB’s exclusion of mountaintop removal mines from the list of eligible projects, but said the inclusion of active mines presented serious environmental concerns.
The ARB staff proposed that the board accept CAR’s coal mine methane project protocol versions 1.0 and 1.1 for early action credits from projects that achieved verified GHG emission reductions between January 1, 2005 and December 31, 2014. But the Verified Carbon Standard’s (VCS) abandoned coal mines protocol, which quantifies the emissions reductions generated by capturing and destroying methane from abandoned or decommissioned coal mines, will not be eligible as a source of early action credits under the proposed protocol. Bede attributed the exclusion to the fact that the VCS protocol is based on a Clean Development Mechanism protocol that credits the displacement of fossil fuels in electricity generation.
“We can’t be crediting displaced carbon dioxide per the regulation,” she said.
But several stakeholders pushed back against the blanket exclusion of mine methane project types developed under the VCS protocol. In response, Mayeur said the ARB staff would take the issue of whether they could consider including VCS projects as potential early action credits under consideration.
The VCS protocol formed the basis for the sections on abandoned and surface mines featured in ARB’s draft MMC protocol, but agency staffers were concerned about the provision of the VCS protocol that allows projects to request credits for fossil fuel displacement. However, market participants have alerted ARB officials to the fact that the majority of the coal mine methane projects developed under the VCS protocol do not use that provision and are urging the agency to allow these VCS projects to provide credits as long as they do not receive any credits from displacement activities. ARB staffers have been receptive to this argument and appear willing to make a potential change prior to the protocol being officially adopted in October.
“I think it’s a very positive sign to see that they’re working on potentially including a VCS protocol,” CE2’s Buchanan said. “I think there was a minor oversight and I think that ARB is willing to correct that. I think that it’s good that they’re willing to listen.”
Including coal mine methane credits developed under the VCS protocol is critical in addressing the expected offset supply shortages in California’s cap-and-trade program, stakeholders say. These VCS projects could provide 1.6 million tonnes, as opposed to the less than 300,000 tonnes eligible from CAR’s early action protocols.
“It’s important in a market that’s very short that these offsets be included,” he said.
News emerged during the meeting that the VCS is now officially approved as an Early Action Offset Program (EAOP) by the ARB, joining CAR and the American Carbon Registry (ACR) in being allowed to transition eligible existing offset credits under approved voluntary methodologies to ARB offset credits. Unlike CAR and ACR, however, the VCS has not yet been designated an Offset Project Registry, which would allow it to oversee the registration and issuance of registry offset credits developed using the ARB’s compliance protocols and transition those credits into the cap-and-trade program.
The impact of the VCS approval as an EAOP is limited because they are not yet able to list projects under the ARB’s compliance protocols. Companies are not developing early action projects anymore, but rather focusing on transitioning those credits and submitting new projects for compliance under the ARB protocols rather than using the previous protocols. But it is seen as a positive development in terms of recognizing the role the VCS could play in California’s program and diversifying away from CAR to other registries.
“VCS would be a nice addition,” Buchanan said. “It’s great news.”
A VCS spokesman said it would be premature for the organization to comment on the exclusion because it is still very early in the process. “However, we are excited to see ARB move forward and take concrete steps to address mine methane,” he said. “We have developed a close relationship with ARB, and look forward to continuing to work in concert to ensure that any protocols adopted will be as effective as possible.”
Forestry, land use and other types of offsets are likely to be shut out of the carbon regulations soon to be proposed by the US Environmental Protection Agency. But the Obama administration will be supporting such projects through other programs as part of its efforts to ensure the US follows through on its emissions reduction pledge.
9 August 2013 | Power plant owners will have plenty of options to comply with whatever carbon regulations the US Environmental Protection Agency (EPA) releases next month, but offsetting will not be one of them, according to a Natural Resources Defense Council (NRDC) official.
The US has committed to reducing its greenhouse gas (GHG) emissions by 17% from 2005 levels by the end of this decade. In June, President Barack Obama laid out his vision for ensuring that the US can meet this goal, using his executive authority in light of inaction on climate policy by Congress, and making it “very clear that addressing climate change really is a key priority for his second term,” says Dan Lashof, Director of the NRDC’s climate and clean air program.
Obama has directed the EPA to complete carbon pollution standards for both new and existing power plants in recognition of the fact that power plants are the largest concentrated source of US emissions, accounting for about one-third of domestic GHG emissions.
The presidential memorandum instructed the EPA to issue a new proposal for regulation of new units by no later than September 20, 2013. “It’s a quite ambitious schedule, but I think it’s one that they will meet because it has the president’s signature on it,” Lashof said Thursday at an event sponsored by consultancy ICF International.
The EPA released initial rules for these new facilities in March 2012, but they had not been finalized. The regulations would have required new plants emit no more than 1,000 pounds of carbon dioxide (CO2) per megawatt-hour (lb/MWh). Coal power plants typically produce about 2,100 lb/MWh, while natural gas-fired plants emit 1,000 lb/MWh or less.
The new proposal reportedly could feature structural changes such as the possible inclusion of subcategories for coal and gas-fired plants rather than the uniform approach the EPA took in its original proposal.
“But we don’t expect the overall performance levels to change substantially and we don’t expect it will change the impact of the new source standards, which will make it illegal to build new coal plants that don’t capture at least part of their CO2 emissions,” he says. “Given that the market has already basically moved away from coal, the real importance of the new source standard is the legal predicate for regulating existing power plants.”
Obama requested that the EPA issue proposed standards, regulations or guidelines for existing facilities by June 1, 2014, with the final requirements published no later than June 1, 2015, and states submitting their implementation plans to the agency no later than June 30, 2016.
The president’s speech and the accompanying Climate Action Plan document did not provide many details about the upcoming EPA regulations, which would be developed as New Source Performance Standards (NSPS) under Section 111(b) for new plants and Section 111(d) for existing plants under the Clean Air Act.
In December 2012, the NRDC offered “the first and still only definitive proposal” outlining a potential vision for NSPS regulation of existing power plants under Section 111(d), ICF vice-president Steve Fine notes. “The proposal has engendered some criticism, but it has also engendered some support,” he says.
The NRDC suggested the EPA set state-specific emissions rates and give power plant owners and states broad flexibility to meet standards in the most cost-effective way. Under the proposal, the EPA would first tally up the share of electricity generated by coal and gas-fired plants in each state during the baseline years of 2008-2010 and then set a target emission rate for each state for 2020, based on the state’s baseline share of coal and gas generation. A state such as North Dakota, where coal represents 82% of the generation mix, would have a baseline standard of 1,500 lb/MWh, while California, where natural gas has the dominant share of the energy mix at about 50%, would have a 1,000 lb/MWh standard.
The proposal outlines a number of compliance options, including plants reducing their own CO2 emission rates by retrofitting with more efficient boilers. “The problem with that is that it’s a pretty expensive way to get emissions reductions … and it just doesn’t get you very far,” Fine says.
Owners of multiple power plants could also average the emissions rates of their plants, meeting the required emission rate on average by running coal plants less often, and ramping up generation from natural gas plants or renewable sources instead, according to the NRDC proposal. They could retire coal plants and build new natural gas and renewable capacity, with low or zero-emitting sources such as wind and solar earning credits that generators could use to lower their average emissions rate. But this part of the proposal has earned criticism from observers who believe that Section 111(d) cannot be used to establish a crediting system that involves renewable energy sources.
“They’re not regulated and they’re not regulated under our proposal, but they directly result in a reduction in the emissions from the fossil fleet,” Lashof responds.
The NRDC plan also allows trading of credits between companies within a state and across state lines among states that allow it, which lowers the cost of compliance. The organization is urging the EPA to allow states to join multi-state compacts that would allow them to trade credits across state borders, he says. The president explicitly acknowledged state leadership in forming cap-and-trade programs in his speech, providing an apparent boost to compliance markets in California and the Northeast’s Regional Greenhouse Gas Initiative that could be submitted by the participating states as achieving equivalent or greater reductions than the federal template.
“We don’t necessarily think the EPA should mandate that, but we think they should encourage it,” Lashof says.
The NRDC also recommended that state-regulated energy efficiency programs earn credits for avoided power generation and avoided pollution, with generators allowed to purchase and use those credits towards their emissions compliance obligations. This would effectively lower their calculated average emissions rate and provide a cost-effective compliance option to slash emissions, according to the proposal.
But despite the professed support for compliance flexibility by the Obama administration, offsetting would not be available as an option under the NSPS regulations developed by the EPA for legal reasons, Lashof says.
“We don’t think EPA can or should allow true offset credits, say offsets from land or emissions reductions from other sectors,” he says. “We think that the universe of measures that have to be considered need to be limited to measures that have a direct impact on the emissions from the fossil fuel generating units.”
However, the president’s Climate Action Plan notes that GHG emissions from deforestation, agriculture, and other land use constitute about one-third of global emissions, highlights REDD+, and addresses the role of the US in mitigating carbon emissions by reducing agriculture-driven deforestation. Other US agencies such as the Forest Service and the Department of Agriculture run a range of programs designed to increase soil sequestration and to protect forests that could support offsetting projects, Lashof says. “I think the overall 17% reduction target is guiding a range of policies,” he says. “Those are important goals and the administration will be pursuing them through other measures.”
The previous proposal for new sources envisioned a significant role for carbon capture and sequestration (CCS) technology, allowing new plants that install CCS to use a 30-year average of CO2 emissions to meet the proposed standard rather than meeting the annual standard every year.
“I believe CCS will still be a key part of the technical basis for the performance standard for coal,” he says.
ICF modeling showed that the NRDC’s plan could result in emissions reductions of 500 million tonnes by 2020 compared to the reference case.
The NRDC estimates the overall compliance cost of its proposal at about $4 billion on an annual basis by 2020 compared to the benefits of reducing CO2 and traditional pollutants such as sulfur dioxide, pegged between up to $25 to $60 billion. The lower end of that range was based on a previous estimate of the costs of social carbon, but in June the Obama administration raised that estimate to $35 per tonne, up from $21/t per tonne.
The plan would also stimulate investments of more than $90 billion in energy efficiency and renewables between now and 2020, according to the NRDC.
Despite the ambitious schedule, the standards are unlikely to come into play until at least 2018, given the implementation work that the states will need to do, Lashof says. However, utilities thinking about potential investments now have a very specific schedule to guide those decisions.
“I think the reality is the fact that some kind of standards are forthcoming has already started to affect the market,” he says. “Now that the president has actually said it and put his name on the schedule, I think they believe it. It would be only prudent to assume there is going to be some kind of cost or penalty for CO2 emissions.”
Stemming from the Navigating the American Carbon World conference in 2012, the newly formed Compliance Offset Developers Association (CODA) seeks to unite project developers and to support an effective cap-and-trade program in California. CODA provides a platform for sharing technical knowledge and ideas as they pertain to the Air Resources Board.
1 July 2013 | The latest cap-and-trade development to come out of California is reflective of the Golden State’s reputation as the prevailing leader in domestic climate policy. The newly-minted Compliance Offset Developers Association (CODA) is an alliance of six project developers – A-GAS RemTec, Camco, Coolgas, Inc, Diversified Pure Chem, Environmental Credit Corp, and Terrapass – working together with regulators and other offset stakeholders to support an effective statewide offset market.
At the 10th anniversary of the Navigating the American Carbon World conference, North America’s largest carbon event, a number of players in California’s offset market recognized the benefits of exchanging ideas and technical know-how related to the Air Resources Board (ARB). Acknowledging ARB’s impact, their own strength in numbers, and a growing need to respond to future technical processes on a collaborative basis, project developers set out to create a forum for technical discussion and knowledge-sharing regarding ARB protocols and the generation of compliance offsets.
As reported by CODA, policies regulating offsets, transparency, and the timely review of project documents are critical aspects for project developers in generating and issuing offsets. An anticipated 200 million offsets will be required by California’s cap-and-trade program by 2020, further highlighting the need for increased capacity through collective efforts such as CODA, according to the group’s members.
Intended to function from a procedural and technical perspective rather than from a political stance, CODA aims to connect project developers to better understand the rules and regulations of the offset market. According to Derek Six, CEO of Environmental Credit Corp, “the project developers involved in CODA face a wide variety of common issues.” The association was formed out of a “desire to see a marketplace that is effective, practical, and efficient,” adds Six.
While CODA is currently only open to project developers that have at least three registered projects under ozone-depleting substances, forestry, or livestock protocols, there may be potential for including project developers involved in other project types in the future.
In reference to prospective protocols such as rice cultivation, coal mine methane, and REDD+, Charles Purshouse, CODA’s elected chairperson, stated, “If approved, we would welcome members developing those projects.” However, for the time being, the “focus is on the drawing board,” as lobbying for REDD+ and other potential protocols “doesn’t fall under the group’s remit,” adds Purshouse.
CODA holds bi-weekly meetings and discussions to formulate strategy. Companies interested in joining CODA can email [email protected].
Most of Louisiana’s oil and gas companies are on the defensive after a state entity sued nearly 100 of them for damages they caused by destroying protective wetlands. A handful of companies, however, have identified wetland restoration as a major goal – for their protection and the protection of the state. Here’s a look at one of the biggest.
7 August 2013 | Power company Entergy got a stark wake-up call about climate risks and the need to mitigate them when Hurricanes Katrina and Rita blew through its service area in 2005, and the company lost its New Orleans headquarters for a year. That rude awakening has morphed into a wide-ranging effort to identify and address the risks that climate change present to the company’s customer base, service area, and utility infrastructure, most of which are located in the Gulf Coast region.
“We want to make sure we identify the risks facing us so that we don’t get caught unprepared, as I feel we were after Katrina,” says Brent Dorsey, the company’s director of corporate environmental programs.
In 2010, Entergy and America’s Wetland Foundation released a study that found that Gulf Coast communities could suffer more than $350 billion in economic losses over the next 20 years due to growing environmental risks. The study, Building a Resilient Energy Gulf Coast, found that the economic losses could increase up to 65% by 2030 due to economic growth and subsidence, as well as the impacts of climate change. On average, the Gulf Coast region already faces annual losses of nearly $14 billion.
But the study also found that there are several adaptation measures that can reduce these risks such as improved construction codes and restoration of wetlands, which have strong co-benefits such as biodiversity protection, ecosystem services or second-order economic effects – meaning risk aversion that encourages economic growth.
The destruction of the wetlands has been a major topic of conversation in recent weeks due to a lawsuit filed against nearly 100 oil and gas companies two weeks ago by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans, the Lake Borgne Basin and East Jefferson in Louisiana. The lawsuit asks a Louisiana state court to hold these companies liable for the abatement and restoration of the coastal lands.
“Wetlands provide a natural defense against storm surge,” Dorsey says. “A lot of the deterioration of the wetland is due to the levee system that was put on the Mississippi River.”
Restoring the wetlands is a major component of Entergy’s efforts. Coastal Louisiana suffers one of the fastest rates of wetland loss in the world, with restoration costs estimated in the tens to hundreds of billions of dollars, the company notes, requiring industries and communities to be resilient to survive.
In September 2012, the American Carbon Registry approved a wetlands methodology that will allow landowners to quantify the carbon sequestered by restoration projects and then sell verified offsets on the voluntary carbon markets. Entergy, through its Environmental Initiatives Fund, financed the development of the methodology, as well as the first pilot project being developed.
“We’re really interested in wetland restoration because we see the wetlands as a natural barrier,” Dorsey says.
The company has also taken such steps such as replacing wooden poles with stronger concrete structures and raising the levees around its substations to ensure that its infrastructure is more resilient. In addition, Entergy has relocated entire departments, moving its transmission headquarters to Jackson, Mississippi, where the company temporarily moved its headquarters after Katrina, and its accounts payable department to Hammond, Louisiana.
“We saw we were physically at risk to the impacts of climate,” Dorsey says. “We know we are going to have to adapt.”
Leading from Behind
Unfortunately for many companies, the reality of climate risks and the need to mitigate and adapt to the challenges they present fails to take hold until a significant weather event occurs, whether it be the devastation caused last year in Connecticut, New Jersey and New York by Superstorm Sandy or the unusual derecho event in the Washington, DC area, he says. But these weather events have led officials to become more proactive in their planning efforts.
In March, the Center for Clean Air Policy Center hosted a workshop called Severe Weather & Critical Infrastructure Resilience: Preparing Washington D.C. to help identify potential climate-related risks for the DC area. One key issue discussed was the vulnerability of the Washington Metropolitan Area Transit Authority (Metro) to severe weather impacts. Equipment damage from flood prone vent shafts are one area of particular and immediate concern and Metro is currently conducting an analysis of its vent shafts, which will be required for certain vital locations to protect the entire system from significant damage and the region from major service disruption, the workshop report noted.
In June, outgoing New York City Mayor Michael Bloomberg proposed a $20 billion climate change adaptation plan. A Stronger, More Resilient New York puts forward a comprehensive plan that contains recommendations both for rebuilding the communities impacted by Sandy and increasing the resilience of infrastructure and buildings across the city.
“There’s nothing like experience to get your attention,” Dorsey says. “We are trying to share our experience and people are listening.”
A Department of Energy report released in early July examined the US energy sector’s vulnerabilities to climate change and extreme weather, with the report noting that increasing temperatures, decreasing water availability, more intense storm events, and sea level rise will each independently, and in some cases in combination, affect the ability of the US to produce and transmit electricity from fossil, nuclear, and renewable energy sources.
“I think the energy industry has made great strides in trying to prepare for this sort of thing,” he continues. “But it took a variety of hurricanes taking a lot of energy production out of service.”
The power plants operated by Entergy and its counterparts in the electricity industry, for example, are at risk from decreasing water availability and increasing ambient air and water temperatures, which can reduce the efficiency of their cooling operations and increase the risk of partial or full shutdowns of generation facilities.
“There are all these other kind of hazards that are climate-related that need to go through the adaptation and resiliency lens,” Dorsey says
Ideally, efforts to mitigate and adapt to climate change would be driven by federal greenhouse gas regulation, which Entergy continues to advocate for because the absence of a price on carbon limits the impact of these individual efforts, he says.
“We would like to see mitigation first, but with climate being a third-rail issue, adaptation seems to be a safer issue to talk about,” he says. “Clearly, those two are preferably to the suffering of people.”
Sidestepping Congress, President Barack Obama finally responded to appeals for his administration to cut carbon pollution from the highest-emitting sources in the US as part of a comprehensive climate plan. The president’s remarks provided an apparent boost to state-based carbon markets such as the Regional Greenhouse Gas Initiative and the program launched by California in January.
27 June 2013 | Advocates of carbon trading are cautiously optimistic following US President Barack Obama’s decision to issue a presidential memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete carbon pollution standards for both new and existing power plants. The president’s explicit acknowledgement of state leadership in forming cap-and-trade programs signals that these programs will be welcomed into a federal regulatory regime and could even instigate an expansion of trading programs to other states.
The US has committed to reducing its greenhouse gas (GHG) emissions by 17% from 2005 levels by the end of this decade. Power plants are the largest concentrated source of US emissions, accounting for about one-third of domestic GHG emissions, according to the EPA. The agency has already proposed, but not yet finalized regulations for new plants, and certain stakeholders have been lobbying the administration to pursue regulations for existing units.
“You can’t really get to the goals you need to get to to protect the climate without reducing power plant emissions,” says Judi Greenwald, vice-president of technology and innovation for the nonprofit Center for Climate and Energy Solutions (C2ES).
The president’s memorandum directed the EPA to issue a new proposal for regulation of new units by no later than September 20, 2013. Obama also requested that the EPA issue proposed standards, regulations or guidelines for existing facilities by June 1, 2014, with the final requirements published no later than June 1, 2015, and states submitting their implementation plans to the agency no later than June 30, 2016 after conducting consultations with the states and all relevant stakeholders.
“A lot of people weren’t paying attention to this because they thought it was not happening anytime soon,” says Tom Lawler, the International Emissions Trading Association’s (IETA) Washington DC representative. “Now it’s front and center.”
The president’s speech and accompanying climate plan document did not provide many details about the upcoming EPA regulations, which would be developed as New Source Performance Standards under Section 111(b) for new plants and Section 111(d) for existing plants under the Clean Air Act. But advocates of carbon trading were particularly encouraged by the president’s statement that he will direct the EPA to be flexible to the needs of different states and his explicit recognition of states that have already implemented or are implementing market-based solutions to reduce GHG emissions, providing an apparent boost to compliance markets in California and the Northeast’s Regional Greenhouse Gas Initiative (RGGI).
Jason Schwartz, legal director of the Institute for Policy Integrity, says the president’s remarks signaled that the regulations on existing power plants to be produced by the EPA will allow these states to comply using their efficient market mechanisms that produce GHG emissions at lower costs.
“The single word we were most excited to hear in the president’s speech and his plan was flexibility,” he says.
“That’s music to our ears,” Greenwald says. “We think that the statute affords substantial flexibility in using market mechanisms.”
Once states receive instructions from the EPA, they are going to evaluate all the compliance tools at their disposal such as renewable energy programs or coal plant retirements, but they may find that joining an existing cap-and-trade program is the most cost-effective option, emissions trading advocates say.
“We think trading is the most efficient tool,” Schwartz says.
RGGI may be able to demonstrate that its cap-and-trade program satisfies the emissions reductions that will be required by the EPA, but the situation will be more complicated in the case of California’s program since it regulates emissions from many sources, not just power plants, according to C2ES.
“It’s just one extra thing to figure out,” Greenwald says. “It’s certainly not a flaw in California’s program.”
“I think (RGGI) can and likely will stand in for any alternative EPA requirements,” says Peter Shattuck, director of market initiatives for NGO Environment Northeast.
Obama prodding Congress to act
The steps outlined by Obama can be taken through executive action, bypassing the Congressional gridlock that has prevented climate legislation from passing both houses in recent years, according to most experts. But he made it clear that he is still urging Congress to develop a bipartisan, market-based solution to climate change. “I still want to see that happen,” he says. “I’m willing to work with anyone to make that happen. But this is a challenge that does not pause for partisan gridlock. It demands our attention now.”
The president’s announcement has the potential to prod some members of Congress to once again pursue a legislative solution rather than allowing the EPA to move forward with regulations, some experts say. The House of Representatives barely passed a comprehensive climate plan that would have included a federal cap-and-trade program in June 2009, but the legislation failed to gain traction in the Senate.
“I think the possibility of a federal scheme is on the table,” says Glenn Unterberger, practice leader of law firm Ballard Spahr’s environmental and natural resources group.
Economists who have been evaluating or advocating for the implementation of a national carbon tax also note that the looming regulatory regime could focus more attention on a potential tax solution to the GHG problem.
“I know from history that sometimes regulatory approaches kind of run off the rails from an efficiency point of view and become quite problematic in terms of their costs and benefits,” says Donald Marron, director of economic policy initiatives and institute fellow for the Urban Institute. “Introducing a carbon tax may let you avoid those extra costs of bringing down carbon emissions.”
“It’s just striking to me that in the face of the significance of the climate problem, the Congress takes such an anti-business stance that forces the administration to take this complex regulatory approach rather than using the power of carbon pricing,” adds Gilbert Metcalf, professor of economics at Tufts University, speaking at a Resources for the Future event on Wednesday.
But others have serious doubts that Congress can be pushed to take action on the climate issue even with the certainty of EPA regulation.
“This has been a very partisan issue,” Lawler says. “I’m just not sure the politics will allow that conversation or the ability to develop a better solution legislatively.”
And the announcement will undoubtedly instigate a backlash from members of Congress and industry officials opposed to EPA action and give rise to litigation contesting the rules ultimately issued by the agency, although efforts to prevent the EPA from acting are likely to continue to fail in Congress, several observers note.
“It’s extremely likely that we will see a challenge in today’s political and legal environment,” Schwartz says. “Anything EPA does is very likely to have a challenge from one side or the other or both.”
While the Obama plan is unlikely to have a direct impact on the voluntary carbon markets, the announcement does have the effect of encouraging countries and companies to start taking concrete action against climate change, says David Antonioli, the CEO of the Verified Carbon Standard (VCS).
“I think it is a good announcement for the market per say, even though it’s not a market solution,” he says. “The more countries take initiative and start to do something concrete about climate change, it starts to permeate around the rest of society. It will mean that more people will become aware that this is a real problem.”
Awareness of the need for corporations to take action will grow despite the absence of a broader requirement for non-utilities to reduce GHG emissions, Antonioli says.
“It will be something that will help the voluntary market continue to grow and that’s why I’m pretty hopeful about it,” he says.
President pledges renewed push for global climate action
Obama also pledged that his administration would redouble its efforts to engage its international partners in reaching a new global agreement to reduce carbon pollution. Major developed and developing countries pledged to reduce emissions at the 2009 United Nations Framework Convention on Climate Change (UNFCCC) and the president noted that the 2015 conference would play a critical role in defining a post-2020 trajectory.
“That’s a sensible thing because it’s not just a national issue,” Unterberger says.
The climate plan also highlighted the Obama administration’s efforts to reduce emissions from deforestation and forest degradation (REDD), with as much as 80% of these emissions coming from the land use sector in some developing countries. In 2012, the US Agency for International Development’s forestry programs contributed to reducing more than 140 million tons of carbon dioxide emissions by supporting multilateral initiatives such as the Forest Investment Plan and the Forest Carbon Partnership Facility, according to the plan.
“It’s encouraging to see President Obama put forward a bold plan to address the challenges of climate change and embrace key provisions like carbon finance and REDD to achieve those goals,” the VCS’ Antonioli says. “Similarly encouraging is his endorsement of the UNFCCC negotiations as is his call to apply the strength of the US government towards the goal of an international agreement by 2015.”
New legislation from California on conservation banking could invigorate the state’s long-running but stagnate industry and serve as a framework for other states and even at the national level. But the conservation banking sector is in disagreement over if the new rule will actually deliver on intended benefits.
25 June 2013 | On June 5th, California passed Senate Bill 1148, so enacting legislation under the Fish and Game Code to set up new rules and processes around how conservation banking is practiced in the state.
The legislation may have been designed to both promote and improve a stagnating state conservation banking industry, but the outcomes of these new rules might not have this desired positive effect and has not been unanimously supported by the conservation banking community.
It started in California…
State-level conservation banking has been practiced in California for18 years and was a real incubator for the wider conservation banking industry now operating at the state level in California, and elsewhere across the US. There are nearly 30 conservation banks approved by state agencies in California. State-listed species from the Swainson’s Hawk to the Giant Garter Snake and the San Joaquin Kit Fox have been successfully conserved to date.
Yet despite the great conservation banking that has been going on in California, seemingly fewer banks have been proposed and established in recent years. This month the California Agriculture journal featured a study of this 18 year-old industry by professors from the University of Davis, near Sacramento, CA. They noticed this declining trend, and wondered how existing banks fit into the State’s wider large-scale conservation planning framework.
The study used interviews with conservation bankers and regulatory agencies and found that, yes, there are some barriers to setting up a state-approved conservation bank in California. They noted a number of potentially problematic issues identified for both conservation bankers and regulators – perhaps an indication of the complexity of the process overall. There are ecological values, site selection, credit determinations and legal issues to resolve. It’s not surprising that most regulators felt getting conservation banks approved is difficult and overwhelming. And judging by the declining number of proposals being made each year, conservation bankers are also feeling the pain of these challenges.
All these challenges have led to an increase in the amount of time it takes for a bank to be approved -sometimes up to seven years. Part of this delay is staff resourcing. Especially since the financial crisis of 2008, regulating agencies have had decreasing resources to draw upon. But the other challenge the UC Davis study revealed was that it was hard to assess the costs and risks of a conservation bank proposal as well as hard to resolve decisions such as site selections, credit allocation or ecology on site.
And this is where California’s new regulations come in: clearer, more useful regulations to guide conservation banking decision-making, and a new approach to the resource shortage and drawn-out permitting process that requires bankers pay fees.
Still Conservation Banking…just better?
These kinds of specifications seem to be something both regulators and conservation bankers have been wanting for a while. Overall, the reforms are needed to help streamline the process, reduce delays and disagreements, and ensure effective and efficient participation from everyone- agencies and conservation bankers alike.
These rules provide better procedures for how to evaluate and approve proposed conservation banks. However, they stop short of actual conservation banking standards which many feel would better ensure real conservation outcomes. It would also allow the prioritization of areas to meaningfully assist in site selection.
These new regulations also provide a mechanism to fund more staffing resources to assist in quicker processing times and better monitoring. This involves charging prospective conservation bankers sizable application fees. Not everyone believes these fees are the most equitable approach. Starting a conservation bank is an expensive process regardless, and additional fees may make small private ranchers and landowners-the groups conservation banking was meant to incentivize toward conservation in the first place-less willing to participate. So fees may still slow approval and frustrate the longevity of the California Conservation Banking Program.
It’s no question greater financial resources are needed to run the program smoothly, but should a state agency be funded by the very sector they are charged to oversee? If the conservation banking sector is funding conservation banking approvals, are they then obliged to some level of service, and what happens if that service is not provided? Put another way, should conservation bankers be ‘paying for the agencies to do their job’? If this opinion holds out, perhaps conservation bankers will decide not to engage and again, the long-term viability of the program will suffer. While not yet clear which of these positions will stand the test of time, fees that will fund the improvement of agency resources is not altogether the panacea sought.
New rules, but not a ‘New Rule’
Despite lingering concerns about the regulations themselves, this new governance of conservation banking in California is an exciting step for the industry nationally and is expected to be a template for other states to follow. Conservation banking occurs in several other states looking to increase their programs. Perhaps California’s move will contribute to this momentum.
Taking it a step further, there is a desire to see conservation banking regulations at the federal level, similar to the Mitigation Banking Rule established in 2008 by the US Army Corps of Engineers to oversee mitigation banking.
California’s new regulations are focused on fixing identified problems, but it’s also abouut keeping a program alive and well. The state’s decision to craft conservation banking legislation to keep up the good work it has been doing is a positive sign regulations at the federal level will be created in the future.
Jemma Penelope is a private consultant to the conservation and species banking industry. She can be reached at [email protected].
The Obama administration’s pledge to ramp up renewable energy can be accomplished only if it is in coordination with the mitigation efforts for habitat and species impacts. But right now mitigation rules are a patchwork of good, bad, and just plain confusing. Here is a rundown on the complex state of compensatory mitigation and renewable development.
5 August 2013 | The sun shines on the vast terrain of the Mojave Desert in the southwest US almost every day of the year, making this flat land a seemingly perfect spot for solar power development.
Except for the fact that the Mojave Desert provides habitat for a number of plants and wildlife, some of which are endangered, and installing solar panels could be putting the ecosystem in jeopardy.
Renewable energy like solar and wind power can offer huge benefits in terms of reducing harmful greenhouse gases in the atmosphere and minimizing the impacts of climate change. US President Barack Obama’s recent climate change plan highlights renewables with ambitious goals. These targets include doubling the amount of electricity generated by wind and solar power by 2020 and generating 3 gigawatts of renewable energy on military installations by 2025, according to the plan.
But these goals will only be achieved if they are in line with mitigating wildlife impacts. Several clean energy projects are currently stalled over endangered species permitting requirements and Obama’s plan doesn’t take any steps to clarify, systematize or standardize this permitting process.
When a landowner develops a piece of land, ecosystems that are unavoidably disrupted or ruined must be replaced through compensatory mitigation. But compensatory mitigation laws are complex and, as of right now, in no condition to take on the expected rise in renewable energy projects due to Obama’s recent push. A balance is needed between preserving species’ habitat and natural areas and developing the renewable energy industry. If this issue isn’t resolved, then valuable and beneficial clean energy projects won’t get past the permitting phase or negative ecological impacts will occur in the developed areas.
Scaling Up Renewables and Impacts on Wildlife
According to the International Energy Agency (IEA), renewable power will be the second most used source of energy by 2016. The Obama administration’s 2014 budget commits to a 30% funding increase for clean energy technology. Since 2009, the administration says it has approved 25 utility-scale solar facilities, 9 wind farms and 11 geothermal plants, which will provide electricity for 4.4 million homes.
To date, the majority of wind projects have happened on private land. This most likely will change due to Obama’s new plan which calls for developing projects on public land. It directs the Department of Interior (DOI), which includes the Bureau of Land Management (BLM) that administers public land, to permit enough renewable energy projects to power 6 million homes. The BLM estimates there are 20.6 million acres with wind energy potential, and 29.5 million acres suitable for solar energy development.
As of August 2011, the BLM received over 300 right-of-way (ROW) applications, which authorizes the use of a piece of public land for a specific activity over a period of time, for utility-scale solar facilities. In 2010, the BLM received 199 applications for solar projects.
What this expansion of the renewables industry means for wildlife varies between region and sector. The sheer size of the utility-scale solar projects cause habitat loss and fragmentation. Some proposed solar developments could impact over 8,000 acres of desert habitat, according to a report by the environmental non-profit, Defenders of Wildlife. Habitat loss and fragmentation causes species to live on smaller parcels of land – often of a lower quality – where it is more difficult for them to find necessities like food, water and shelter. The desert tortoise population, for instance, of the Mojave Desert has declined by 90% since the 1980s due to loss of hospitable habitat, predators and disease.
Wind energy development fragments and reduces the quality of habitat as well. It also disrupts the population distribution of an area by creating perching spots for birds like eagles and hawks which causes grassland birds – like the lesser prairie chicken – to move away from the area. The turbines themselves can be a threat to species also. Birds and bats have been killed flying into them.
Both forms of renewable energy disrupt vegetation and require access roads and transmission infrastructure that impacts the ecosystems and species.
The State of Mitigation
Regulators and developers have focused on avoiding and minimizing impacts to date; mitigation remains relatively rare. This is in part because there isn’t much of a regulatory structure when it comes to renewables’ impacts on wildlife, according to a study on wind development and mitigation from the University of Wyoming. In order for a ramp-up of renewables to be successful, a regulatory structure that solves many of the challenges facing the industry remains to be laid out.
Another challenge is figuring out how much mitigation is going to cost when impacts aren’t well understood at the outset. There aren’t many publically-available numbers out there, but existing data suggests a range from the very high to the pretty reasonable.
It’s estimated, for example, that the Ivanpah solar thermal project in the Mojave Desert spent upward of $60 million in mitigating the project’s impact on the desert tortoise, according to Solar Industry magazine.
Meanwhile, a 2011 study researching the impact of wind energy development on Kansas wildlife habitat found mitigation costs for impacts to various grasslands – prime habitat for prairie chickens – would cost between $825 to $1,432 per hectare. The Kansas study also found that the cost of wind turbine development is roughly $4 million per turbine, so the median cost of mitigation is roughly equal to 0.57% of development costs.
A lot of land is required in developing renewable energy, and thus a lot of land will be involved with mitigating its impacts. For example, with a mitigation ratio of 3:1, 3 units of mitigation is required for every unit of impact to habitat or a wetland – meaning a lot of land will be needed to compensate for renewables.
For instance, the solar power project, Palen, created by BrightSource Energy, is located on 3,800 acres in Riverside County, California. A lot of this land is prime desert tortoise habitat. The mitigation ratio for critical habitat is 5:1 and 1:1 for land outside the critical zone, according to a report by the California Energy Commission. BrightSource Energy will have to buy 4,683 acres of comparable desert tortoise habitat to mitigate their impacts.
In certain regions, it may be difficult to find enough high-quality habitat for mitigation. Prime land for projects often overlaps with prime habitat, after all.
Perhaps nowhere is this better illustrated than at the Sweetwater River Conservancy in Wyoming, which was turned into a mitigation project after initial plans to use the site for wind energy. It turned out much of the area suitable for wind was also habitat for the greater sage-grouse. The sage-grouse is a candidate for listing under the Endangered Species Act, and thus potentially a major trigger for mitigation requirements. Learning this, the developer switched to creating a mitigation bank that aims to serve the wind industry, generating conservation bank credits that other developers can use to offset their own habitat impacts.
For Project Developers, Uncertainty Everywhere
In every region, scientific and regulatory uncertainties make it difficult to evaluate sites for renewable projects as well as for environmental impacts. These uncertainties slow down permit approvals for projects on both public and private land, and mean that it’s difficult to tell whether effective mitigation is actually taking place.
The impacts themselves are another source of confusion. Outside of threats to bats and the songbird and raptor bird types, little is known about the impacts these energy projects are having. The majority of studies done so far on the topic focus on those species. Other species and indirect impacts aren’t well understood yet, making it hard to plan for or perform proper mitigation – another factor in slow permitting processes.
And the regulatory guidance on mitigation itself is often unclear and inconsistent. There are inconsistencies in the rules for compensatory mitigation as well as in the process to complete an environmental statement and in determining acceptable impacts. Importantly, guidelines for choosing the appropriate level of mitigation and the type of mitigation seem to be missing. For example, conservation banking can potentially offer the highest-quality of mitigation but it isn’t always listed as an option for developers to choose from when deciding on a mitigation type.
In fact, a 2012 study from the University of Wyoming found just twelve cases of compensatory mitigation for wind in the United States to date, and only one which used conservation bank credits to mitigate impacts – more commonly, the developer established conservation areas on their own lands , purchased conservation easements off-site, or paid public agencies or NGOs for conservation actions.
Aside from guidance and impact issues, the actual “first come, first serve” process that the BLM uses to screen applications may also be contributing to the slow down and preventing projects with a high potential for success from being approved. According to the Defenders of Wildlife report, project developers submit an application for a right-of-way to the BLM and keep their spot in line for project reviews by continuing to pay a fee. The quality of the projects isn’t considered as they are in other energy development sectors like oil and gas. Both of those industries use competitive leasing where interested parties bid for a lease to develop on public lands. This may be a more efficient and effective alternative to managing renewable projects, the report says, especially when considering the minimal requirements to qualify for a right-of-way.
Is it possible to simply choose sites for wind and solar projects where impacts will be minimal? Well, maybe. The Kansas study found that of 14.5 million hectares suitable for wind energy development in the state, 7.6 million hectares would likely require compensatory mitigation given the presence of sensitive habitat, and another 4.2 million hectares should be avoided entirely – leaving just 2.7 million hectares where neither avoidance, minimization, nor mitigation would be required. Whether energy development will actually take place in those areas, and whether they’ll be sufficient to meet future demand, is an open question.
Making Progress
The BLM has expressed interest in establishing a process to use competitive leasing for wind and solar development. They are currently using it for geothermal projects.
The BLM also proposes creating regional mitigation frameworks for ‘Solar Energy Zones’ – areas identified as best suited for solar energy projects. These plans, says the BLM, will address mitigation for a variety of spaces such as biological, ecological and cultural, and will simplify and improve mitigation for future solar projects. Mitigation banking is one of several options the BLM proposes.
An innovative initiative moving forward in California is the Desert Renewable Energy Conservation Plan (DRECP). The DRECP is a collaborative effort between state and federal actors that aims to streamline the permitting process for renewable projects while providing binding, long-term endangered species permit assurances. The DRECP covers 22 million acres of the Mojave and Colorado Deserts in California spanning seven counties. But the effort is moving slowly. A draft of the DRECP is expected to be available for public review this year, and approval is expected next year.
Similarly, the BLM is developing an initiative that would also streamline approval and enable strategic planning for conservation at a higher level. The Programmatic Environmental Impact Statement (PEIS) is designed to evaluate utility-scale solar power as well as develop and implement environmental policies and mitigation strategies. The project is prepared by the BLM and several other government agencies, including the Office of Energy Efficiency and Renewable Energy (EERE). It will facilitate solar development in six western states: California, Arizona, Nevada, Colorado, New Mexico and Utah.
The PEIS draft mentions the difficulties of mitigating habitat and wildlife disturbances. While compensatory mitigation isn’t widely discussed in the draft, it is listed as one of the potential strategies. The BLM says it would be used for unavoidable impacts.
Wind development lags behind solar in terms of clear rules regarding compensatory mitigation and streamlining the permitting process. A 2012 National Fish and Wildlife Service report on wind development says little about compensatory mitigation. Guidance from BLM makes little mention of compensatory mitigation, keeping the emphasis on minimization and avoidance.
Wind energy located on federal lands must carry out an Environmental Assessment/Environmental Impact Statement under the National Environmental Policy Act. If the project affects endangered species or wetlands, there are also mitigation requirements under the Endangered Species Act (ESA) or the Clean Water Act. One way to comply with the ESA is with a Habitat Conservation Plan (HCP) which is an agreement between the developer and the government. The project developer agrees to design, implement and fund a plan that minimizes harm to species impacted by the project.
One such plan, the Midwest Wind Energy Multi-Species Habitat Conservation Plan (MSHCP), was developed to create a regional solution to the potential risk of wind projects for birds and bats species-particularly the Indiana bat. The states – Illinois, Michigan, Indiana, Iowa, Minnesota, Missouri, Wisconsin and Ohio – contain a lot of wind power perfect for renewable energy projects.
The MSHCP aims to enhance conservation while streamlining compliance with the ESA. Species covered under the plan include several bat types like the gray bat, little brown bat and the northern long eared bat as well as the Indiana bat. The bald eagle is considered covered under the plan as is other bird types like the least tern and the piping plover.
The MSHCP does allow for conservation bank credits to be used for compensatory mitigation. The plan will publish a public draft this fall with a final draft due out in the spring of 2014.
What Needs to Happen
Moving forward, smart landscape level planning will be needed to make good siting decisions where impacts will be low or completely avoided. Regional conservation plans like the Desert Renewable Energy Conservation Plan can streamline approval while aligning renewable development with conservation goals.
Where impacts are unavoidable, then clear high level policy is needed with better guidance that drives developers toward high-quality mitigation. If conservation banks are delivering superior ecological outcomes, for instance, they should be prioritized as they are under the Army Corps of Engineers’ Final Rule on wetland mitigation. Right now, conservation bankers may be eyeing the market but hesitant to develop credits – a clear signal from regulators would likely be appreciated.
Regulatory certainty, of course, needs to be coupled with scientific certainty. A better understanding of exactly how renewables – and in particular wind energy – impact species and habitats would go a long way toward providing clear permitting requirements and guidance for developers, and maybe help to replace some of the heated politics around wind turbines with hard evidence.
One thing is for certain: Obama’s big plans for renewables are about to put an already overloaded permitting system to the test.
Forest Trends’ Water Initiative will preview their work on blending green and grey infrastructure at World Water Week later this month. In the meantime, the Ohio River Basin water quality trading program is moving forward on pilot trades and an agency responsible for flood control in Louisiana is suing over 100 oil and gas companies for coastal land degradation in a groundbreaking new lawsuit.
This article was originally published in the Water Log newsletter. Click here to read the original.
1 August 2013 | Greetings! While many of you may be reading this poolside (or perhaps not at all), there is no rest for the Water Logged. We’re excited about an array of research products we’ll be releasing in the next few weeks, including a report for business on nature-based solutions, a white paper on designing interventions for multiple ecological benefits, and a brief on cities and watersheds, looking at opportunities for cost-effective green infrastructure solutions to water challenges. Stay tuned for more news on these.
If you’ll be in Stockholm later this month for World Water Week, consider stopping by the Cooperation for Sustainable Benefits and Financing of Water Programmes workshop: Forest Trends’ Jan Cassin will be offering a preview of some of our work on blending green & grey infrastructure, in session 4.
As for the news – it’s been a busy month. In a groundbreaking new lawsuit, one of the agencies responsible for flood control in the US state of Louisiana is suing more than 100 oil and gas companies for damages caused by degraded coastal lands. The authority is taking the position that the Louisiana wetlands are subject to more frequent and severe storms and rising sea levels, and that the oil and gas companies have a duty under the permits that granted them the right to engage in dredging activities to remedy the damage done to wetlands. Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
On the business front, starting in 2014 the Carbon Disclosure Project will ask all Fortune 500 companies to report on water risk exposure as well. That’s a very good thing for everyone: a recent report found that mining companies that report on (and thus, we assume, think hard about) their water risk management financially outperform those who don’t. And in another score for sustainability, renewable energy beat fossil fuels in a water footprint battle.
Ecosystem Services Front and Center As Lawsuit Seeks Restitution For Destroying Louisiana Wetlands
The coastal lands along the Gulf of Mexico have created a natural protective buffer against damaging weather events. The buffer took 6,000 years to form, but it’s at the brink of destruction, with hundreds of thousands of acres now gone because of the activities of the oil and gas industry, according to a new lawsuit. The lawsuit filed against about 100 industry players says it’s now time for these companies to pay up.
The lawsuit was filed on July 24 by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans. The authority monitors the integrity of coastal lands, considered a necessary complement to the entity’s flood protection system, but its job has become increasingly more challenging because of the deterioration and disappearance of the state’s coastal lands, according to the lawsuit.
“This is a very interesting next step in climate change asserting itself into the legal system and the political system,” says John Nevius, chair of the Environmental Law Group of Anderson Kill & Olick. “It seems like kind of a new front in the effort to focus people on this issue.” Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
Why Disney, BP And Rio Tinto Are Exploring Ecosystem Services
Disney, BP, Rio Tinto and Weyerhaueser represent vastly different sectors. Yet these companies see an increasingly persuasive business case for tracking the impacts and dependencies on biodiversity and ecosystem services (BES). Simply put, the case for corporate action on BES has solidified, with internal and external dimensions that are more and more compelling. Ecosystem services are essential to businesses, as well as to some 450 million people whose livelihoods depend upon their ongoing flow.
This uptake of ecosystem services thinking is underway among a growing range of key corporate stakeholders as well as governments, as documented in a series of reports by BSR’s Ecosystem Services Working Group. For example, more than 16 government agencies around the world either are investing in ecosystem services initiatives or developing related policies.
For companies, all of this interest in ecosystem services means that a new bar is being set on international best practice. In response, the number of private sector players engaged on this issue is rising, with more than 35 companies publicly naming ecosystem services as an issue under consideration. And more are considering natural capital, as the Corporate EcoForum’s 2012 reporton the subject documents.
From Federal to Local, Action on the Water-Wildfire Link
A new partnership between the U.S. Department of Agriculture and U.S. Department of the Interior aims to mitigation wildfire risk in the nation’s forests in order to protect water supplies. The Western Watershed Enhancement Partnership, part of Obama’s Climate Action Plan, builds on earlier deals between the US Forest Service and municipalities to fund forest thinning, controlled burns, and other measures that lower the risk of wildfire, which can burden water utilities with tens of millions of dollars in treatment and restoration costs. An initial pilot project is planned in the Upper Colorado Headwaters and Big Thompson watershed in Northern Colorado. Similar programs are in the works in Arizona, Idaho, California, Washington, and Montana.
At the same time, cities around the west are initiating their own forest management programs. Santa Fe residents recently began funding watershed protection efforts on their water bills – $0.83 per resident each month will translate into a $5.1 million effort over twenty years. Fire is actually critical for biodiversity and ecological function in many western ecosystems, but decades of suppression in the region, coupled with pine beetle kills and a changing climate, mean that fires now tend to burn hotter and bigger – translating into major water risk. “We can’t keep wildfire out of the watershed,” Dale Lyons of the Santa Fe Water Deparment told Circle of Blue. “But we have to make sure that fire is not catastrophic when it does happen.”
Renewables Best Carbon When It Comes to Water Footprint
The Union of Concerned Scientists this month released a study comparing the water footprint of conventional versus renewable energy sources, showing that traditional energy sources can put significant pressure on water supplies. This is particularly relevant given recent severe drought in many states across the US. According to the study, more than twenty states have begun requiring utilities to submit water source plans in order to receive approval for new utilities. In Texas, because of water supply concerns, regulators denied a permit to withdraw from the Lower Colorado River 8.3 billion gallons of water annually for a new coal plant. Investment in renewables and energy efficiency could potentially water withdrawals by about 97 percent by 2050, the study says.
Two weeks ago, heavy rains in Detroit resulted in a nasty mix of sewer and rainwater being discharged into the Detroit River. But in a break from tradition, the city will not be investing in hard infrastructure in order to resolve its combined sewer problems, which according to the director of the city’s Water & Sewerage Department, would cost approximately $1 billion. Instead Detroit will be betting on a “blue infrastructure” plan. This would keep stormwater out of sewers by building retention ponds, rainwater gardens and similar sites. The initiative is part of the Detroit Future City plan released earlier this year, which establishes a roadmap for revitalizing the city over 50 years. The plan relies heavily on using vacant lots as green infrastructure sites, totaling an estimated 20-40 square miles. Details on costs or specifics of the plan are currently unavailable.
No Friendly Welcome for Stormwater Fees in Maryland
New stormwater remediation fees in Maryland kicked in on the first of July amidst a lot of unhappy campers. The fees, required in nine counties and in Baltimore, are part of the state’s efforts to control water pollution in the Chesapeake Bay watershed. But officials and residents are loudly protesting the so-called “rain tax” and in some cases even refusing to implement it. Counties can determine their own fee rates, leading to Frederick County levying 1 ¢ per parcel in protest (which will deliver $487 a year for watershed programs). There have been attempts to veto the law in Anne Arundel county, and public officials in Carroll and Washington Counties say they will also fight the fees, leaving some municipalities wondering how they’re going to pay for stormwater improvements. Meanwhile, Baltimore residents are raising concerns about what they see as clumsily designed incentives to offset fee obligations, such requiring 400 gallons installed capacity to qualify for a $24 rainwater harvesting credit.
Washington DC introduced the country’s first stormwater trading program in mid-July with the release of new stormwater management regulations. Property owners subject to stormwater control regulations are required to install green infrastructure on-site (like a rain garden or green roof), buy stormwater credits, or pay an in-lieu fee to the DC Department of Environment. Offsite mitigation through credits and fees can cover up to half of retention volume obligations. A credit is equal to a gallon of retention per year and can be generated by any property owner that meets crediting requirements. No word yet on how much credits might cost, but in-lieu fees are set $3.50 per year per gallon of off-site retention volume – which is probably a decent proxy. An accompanying technical guidebook includes information on green infrastructure compliance and a stormwater credit calculator. The rule will be fully effective by July 2015 after a transition period.
A new instream buyback effort announced earlier this month gets the state of New South Wales close to meeting its commitments under the Murray-Darling Basin Plan, while getting a nod of approval from at least part of the agricultural community. Under the deal, the Federal government will pay AUD $180 million to New South Wales to buy land and water rights equivalent to 381,000 megalitres (ML) to benefit the Murray-Darling river system. The purchase takes pressure off other areas in the Murrumbidgee Valley where buybacks might have competed more fiercely with agricultural water use.
This agreement comes out at the same time that a new study in the Australian Journal of Agriculture and Resource Economics shows that instream buybacks are the most cost-effective mechanism for restoring the river system to health, especially when the economic structure of the basin has become less dependent on agricultural activities over time.
According to co-author Glyn Wittwer, infrastructure investments cost two to three times as much as buybacks per ML of water delivered, while “modelling indicates that for a given amount of money spent on infrastructure upgrades, three to four times as many jobs will be created if spent on essential services in the Basin.”
CDP Aims to Move Water Risk Reporting to the Mainstream
Starting in 2014, Fortune Global 500 companies will be reporting water risks and opportunities through the CDP Water Disclosure (WD) tool. With this new reporting requirement, the CDP hopes to drive companies to report on risks and opportunities which will hopefully lead to companies creating water risk mitigation strategies. One of the features of WD is that it will include scoring which will help to identify best practices, industry leaders, and provide metrics for investors that will hopefully motivate changes in corporate behavior. According to the CDP WD’s 2012 report, 53% of respondents experienced business interruption or other detrimental water-related business impacts, and 39% required key suppliers to report on water-related risks. The CDP’s 2013 water report will be released in October
Ohio River Basin Trading Launches Its First Pilots
The first interstate water quality trading program in the US has recently reached “active” status, with the participation of five Soil and Water Conservation Districts in a pilot project in Indiana, Ohio and Kentucky. The project pays producers up to 75 percent of the cost of implementing agricultural conservation practices that reduce nitrogen and phosphorus pollution. Among the practices farmers can “install” are cover crops, nutrient management, vegetative filter strips, grass waterways, livestock exclusion, forage and biomass planting, heavy use area protection and conservation tillage. During the pilot trading period, approximately fifteen producers will implement practices that will keep 66,000 pounds of nitrogen and 33,000 pounds of phosphorus out of the Ohio River Basin. Through the pilot project, regulators hope to encourage farmers to voluntarily participate in the Ohio River Basin water quality trading program once it is fully established by 2016.
Tracking Social Impacts of Eco-Compensation in China
As is the case in many places, hard evidence of ecological and socio-economic outcomes of payments for ecosystem services is a rare bird in China. A recent study published in the Journal of Environmental Management, Performance and prospects of payments for ecosystem services programs: Evidence from China, found that economic incentives given to communities in order to change forest use practices and thus reduce deforestation, did achieve environmental benefits: so far, 8.8 million hectares of cropland have been restored to forested lands. However, the study, which focused on a project in the Wolong Nature Reserve, also documented that in certain situations this was at the expense of cultural traditions, particularly loss of access to culturally important forest products. According to the study, $32 billion has been invested over the past decade on programs to return cropland to forests.
Two thirds of major mining enterprises have been feeling water pains in recent years, according to a new report from the Carbon Disclosure Project (CDP) and Eurizon Capital that tracks how firms are managing risks like flooding and drought. The report also highlighted a gap between the movers and the foot-draggers: firms that responded to the survey seem to be the same group that’s working to reduce water risk exposure. That group outperforms non-respondents (who refused to disclose data) financially, and probably environmentally as well, suspects CDP’s head of investor initiatives James Hulse. “With investors’ attention sharply focused on water risks and seeking guidance for engagement, it is of great concern that nearly one third of the metals and mining companies targeted failed to provide information, despite evidence suggesting that sound management of water is linked to better financial performance,” said Hulse.
The Director of Development and Communications is a senior staff position ensuring the achievement of fundraising and communications goals through planning and execution. The individual in this key role will foster a culture of philanthropy within the organization, working closely with key staff and members of the board of directors, and is responsible for the strategic direction and overall management of fundraising and communications initiatives and activities. The incumbent represents the organization at philanthropic-related events and meetings, and is responsible for liaising with the Development Committee of the board of directors. The incumbent will also be responsible for raising gifts from existing and new major donors. As a member of EcoLogic’s Leadership Team, the Director of Development and Communications will also help shape the direction and culture of the organization, while contributing to the overall success in implementing the organization’s Strategic Plan.
The Nature Conservancy is the leading conservation organization working to make a positive impact around the world in more than 30 countries, all 50 United States, and your backyard. Founded in 1951, the mission of The Nature Conservancy is to conserve the lands and waters on which all life depends.
The Project Director for Conservation Investments supports the California chapter’s work in conservation finance, conservation assets (including real estate, commercial fishing quotas, carbon credits and interests in fresh water) and environmental economics. The Project Director conducts finance- and economic-related analyses on TNC projects and serves as an internal consultant to various TNC California teams to bring sophisticated business, financial, and economic expertise to the design and implementation of the Conservancy’s conservation priorities. This position reports to the Director of Conservation Investments and is part of the Conservation Program.
Organised by the Ecosystem Services Partnership (ESP) and convened by the World Agroforestry Centre (ICRAF) and CGIAR Research Program: Forests, Trees and Agroforestry in collaboration with the Sub Global Assessment Program coordinated by UNEP’s World Conservation Monitoring Centre, the UNCCD-Global Mechanism, The Economics of Ecosystems and Biodiversity (TEEB), the International Association for Landscape Ecology (IALE), A Community on Ecosystem Services (ACES), and other ESP partners. 26-30 August 2013. Bali, Indonesia.
Experts in water management and human rights recognize that water stress will only grow with increasing population, urbanization and climate change trends. Most parts of Latin America are facing critical water shortage issues creating an imperative for mining companies to consider either water trading or water recovery and reuse technologies. The coming years are expected to see continuing positive investment trends in mining water and wastewater sector through improved treatment level and resource recovery. 26-28 August 2013. Santiago, Chile.
World Water Week is hosted and organised by the Stockholm International Water Institute (SIWI) and takes place each year in Stockholm. The World Water Week has been the annual focal point for the globe’s water issues since 1991. Every year, over 200 collaborating organisations convene events at the World Water Week. In addition, individuals from around the globe present their findings at the scientific workshops. Each year the World Water Week addresses a particular theme to enable a deeper examination of a specific water-related topic. While not all events during the week relate to the overall theme, the workshops driven by the Scientific Programme Committee and many seminars and side events do focus on various aspects of the theme. 2013 theme is Water Cooperation – Building Partnerships. 1-6 September 2013. Stockholm, Sweden.
The WaterSmart Innovations Conference and Exposition
The WaterSmart Innovations Conference and Exposition, presented by the Southern Nevada Water Authority and numerous forward-thinking organizations, is the largest urban-water efficiency conference of its kind in the world. Last year, WSI drew more than 900 participants from 34 states and the District of Columbia, as well as seven foreign nations. This year, as it has for the last five years, WSI will feature featured a full slate of comprehensive professional sessions and an expo hall highlighting the latest in water-efficient products and services. The event also will feature several affordable pre-show workshops (which are not included with the WSI registration fee) on Tuesday, October 1. 2-4 October, 2013. Las Vegas, USA.
Ecosystem Marketplace is a project of Forest Trends a tax-exempt corporation under Section 501(c)(3).The non-profit evaluator Charity Navigator has given Forest Trends its highest rating (4 out of 4 stars) recognizing excellence in our financial management and organizational efficiency.
One of the agencies responsible for flood control in the US state of Louisiana is suing more than 100 oil and gas companies for damages caused by degraded coastal lands. Even if the suit fails, it could push the concept of ecosystem services into the mainstream.
30 July 2013 | The coastal lands along the Gulf of Mexico have created a natural protective buffer against damaging weather events. The buffer took 6,000 years to form, but it’s at the brink of destruction, with hundreds of thousands of acres now gone because of the activities of the oil and gas industry, according to a new lawsuit. The lawsuit filed against about 100 industry players -says it’s now time for these companies to pay up.
The lawsuit was filed on July 24 by the Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, a public entity that is responsible for governing the levee districts of Orleans. The authority monitors the integrity of coastal lands, considered a necessary complement to the entity’s flood protection system, but its job has become increasingly more challenging because of the deterioration and disappearance of the state’s coastal lands, according to the lawsuit.
Environmental attorneys say the lawsuit represents a fascinating deviation from the first wave of climate change liability cases, which asserted that companies that emitted carbon dioxide were responsible for remedying the impacts of that pollution, a theory that has been rejected by courts in multiple jurisdictions.
“This is a very interesting next step in climate change asserting itself into the legal system and the political system,” says John Nevius, chair of the Environmental Law Group of Anderson Kill & Olick. “It seems like kind of a new front in the effort to focus people on this issue.”
“It’s very well written,” says Wylie Donald, a partner and co-chair of the climate change and renewable energy practice of law firm McCarter English. “They definitely went out there telling a story.”
But whether that story will result in a successful case that establishes that these companies are liable for restoring the wetlands is another issue, they say. The authority is taking the position that the Louisiana wetlands are subject to more frequent and severe storms and rising sea levels and that the oil and gas companies have a duty under the permits that granted them the right to engage in dredging activities to remedy the damage done to the state’s extremely fragile wetlands.
The Argument
The coastal landscapes act as a natural first line of defense against the flood threat, working in harmony with the levees that serve as the last line of defense of inhabited areas, according to the filing. But a land loss crisis has claimed 1,880 square miles of land since the 1930s, which Louisiana officials have called “nothing short of a national emergency.”
“Unless immediate action is taken to reverse these losses and restore the region’s natural defense, many of Louisiana’s communities will vanish into the sea,” the lawsuit argues.
In 2012, the Louisiana legislature approved a $50 billion Master Plan that aims to substantially increase flood protection and the sustainability of the state’s coastal lands. The lawsuit asked that the court find the energy companies liable and indebted to the authority and the levee districts it governs, but did not specify how much the plaintiffs were looking to collect. The lawsuit claims the oil and gas industry should share in this responsibility because it has benefitted from exploiting the state’s abundant natural resources and ravaged Louisiana’s coastal landscape.
About 100 oil and gas production and pipeline companies are named in the petition, including major players such as Anadarko and Kinder Morgan. The lawsuit seeks to hold these companies responsible for the abatement and restoration of the coastal lands, including backfilling and revegetating of canals dredged and used by the defendants, and abatement and restoration activities such as wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration.
“This case is about the future of south Louisiana,” the lawsuit states.
Chris John, President of the Louisiana Mid-Continent Oil and Gas Association, says the organization will be able to comment after reviewing the details of the case and speaking to its member companies named in the lawsuit. But he pledges the industry will vigorously defend itself against the petition.
“The issue of wetland loss is tragic and one that is very important to the oil and gas industry,” John says. “We live, work and play in and near Louisiana’s wetlands and have been very involved in fighting coastal erosion. The reasons for the loss are complex and involve both natural changes and many man-made activities.”
Both John and Louisiana Oil & Gas Association President Don Briggs say the petition appears to be one that is typical of the litigious state of Louisiana in terms of being a contingency lawsuit where the plaintiff attorneys stand to gain millions of dollars.
“This is just one more group seeking to extort money from the oil and gas industry,” Briggs says. “Many factors contribute to the erosion of Louisiana’s coast,” he continues. “The oil and gas industry’s contribution is but a small percentage of the problem. Yearly hurricanes and the Mississippi River changing paths many times over the decades play the majority role in erosion.”
The authority also has a noteworthy opponent in Louisiana Governor Bobby Jindal, who accused the board of overstepping its authority and hiring the lawyers who filed the lawsuit without his permission.
“We’re not going to allow a single levee board that has been hijacked by a group of trial lawyers to determine flood protection, coastal restoration and economic repercussions for the entire state of Louisiana,” he says.
Rolling the Dice
The lawsuit relies on three different statutes to establish that these activities are governed by a regulatory framework that protects against the harmful effects of these activities, but the authority is not the agency that has permitting power under these statutes.
“That underlines, I think, a weakness,” Donald says.
The defendants are likely to argue that the authority does not have standing to pursue the case and that the permitting authorities are responsible for addressing the issues raised by the lawsuit within existing administrative procedures. The companies will probably also argue that the courts should not weigh in on issues that are the domain of the executive branch, as dictated by the political question doctrine, which refers to courts refusing to hear cases if they present political questions.
“These are arguably political questions, not necessarily legal ones,” Nevius says. “I think trial courts are more ready to clear their dockets and say this is a political question.”
Another potential hurdle is that the authority will have to prove causation, lawyers say. The lawsuit mentions that the oil and gas canal network and the altered hydrology associated with the industry’s activities in general, has been ranked among the primary causes of coastal land loss by the US Geological Survey. But government agencies such as the US Army Corps of Engineers have also been cited as contributing to the extensive land loss. The energy companies are likely to argue that the flood control and navigation system built by the Corps is largely responsible for the loss of sediment and freshwater that has damaged the wetlands.
“The plaintiffs are going to have a difficult time,” Nevius says. “These are complicated questions. At the end of the day, oil and gas companies would agree they are part of the solution, but to focus exclusively on them is to focus on only part of the problem.”
But the lawsuit does have attributes that could help pave the way to a successful judgment, including that it accuses the energy companies of engaging in specific activities that led to a specific event – the destruction of coastal lands – rather than a broad claim that their activities have contributed to climate change.
Given what Governor Jindal and the trade association presidents have acknowledged is a permissive judicial system in Louisiana, a state court might be willing to entertain this kind of legal approach, lawyers say. And the fact that a public entity has filed the lawsuit gives it additional credibility, Nevius says. But given the governor’s stance against the lawsuit, “I would expect continuing political pushback,” he says.
Regardless of whether the lawsuit is dismissed outright or is allowed to proceed, it ultimately succeeded in generating extensive coverage about the damage being done to Louisiana’s wetlands, which may have been the authority’s goal all along, Nevius says.
“It may not be fully successfully judicially, but is likely to be successful in focusing on this issue,” he says. “By focusing attention, it is likely that the plaintiffs will get a large part of what they want.”
As California’s cap-and-trade program scales up, so does the risk of seeing offsets go sideways if the underlying projects fail to deliver. Now it’s possible for offset buyers to protect themselves from that risk by purchasing an insurance policy.
30 May 2013 | The Climate Action Reserve (CAR) is partnering with an insurer to mitigate the risk of invalidation for ozone-depleting substances (ODS) and livestock offsets bound for California’s compliance market.
The CAR has formed an exclusive alliance with specialty insurer Parhelion Underwriting Ltd to insure against invalidation of offset credits that are transitioned from credits originally issued by the reserve to California’s cap-and-trade program.
The coverage is designed to remove a key obstacle for California compliance offset transactions: the buyers’ liability provisions featured in the California Air Resources Board’s (CARB) regulations governing the cap-and-trade program. The provisions allow the CARB to invalidate credits that are found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance.
Parhelion CEO Julian Richardson said the parties understand why the CARB included the buyers’ liability provisions, but they have “created a significant issue for market participants.”
The insurance policy would indemnify the owner of the offset credit for the replacement cost of an invalidated offset. The insurance should be set based on the future cost of replacement rather than the current price of offsets as these costs could be higher at the time of invalidation, Richardson said. “It’s up to the insured to select what that limit should be,” he said.
Parhelion is initially focusing on ODS and livestock methane projects issued through CAR as there are complications with the invalidation rules as they pertain to forestry projects, Richardson said. “Once we have further certainty, we will certainly be looking at the forestry projects,” he said.
The insurer would also be willing to expand the coverage to other project types such as coal mine methane and rice cultivation that the CARB is considering, Richardson said. “We don’t see why we wouldn’t make policy available for those types of projects as well,” he said.
The policy can be purchased by the project developer or the buyer of the offset credits and could help increase liquidity in the market, Richardson said. California’s investor-owned utilities are not allowed to assume invalidation risk, but by removing the invalidation risk with an insurance policy, Parhelion hopes to see these potentially large buyers of offset credits participate in the market, he said.
The invalidation risk has led to the emergence of different types of offset contracts, including a product in which sellers retain the risk rather than transferring the exposure to their buyers, known as “Golden” California Carbon Offsets (CCOs), but these offerings are “very inconsistent,” Richardson said.
The premium rates for Parhelion’s policy would be set on a dollar and cents per ton basis that varies based on factors such as project type and the experience and history of the developer, but good projects with reasonable limits likely would be quoted a rate of about $1/t, which is within the spread between allowances and Golden CCOs, Richardson said. “This is a significant reduction in costs we’re able to deliver to offset sellers,” he said.
The CAR will not receive any proceeds from the insurance policies, simply continuing its traditional role of analyzing projects and issuing high-quality credits, Richardson said. “They are the first line of defence of risk assessment for the projects,” he said.
But the CAR expects its customers to see a discount in insurance premiums compared to other registries if Parhelion expands its coverage beyond the reserve, given the CAR’s expertise and risk assessment of these projects, said CAR President Gary Gero.
The regulations allow the CARB to invalidate credits subsequent to issuance if the regulators find the project to be in regulatory non-compliance or if the project is registered elsewhere, he said. But the more likely scenario for invalidation involves a material misstatement in the number of credits that have been issued, defined as an error of more than 5% of the total issuance, Gero said.
The Council on Environmental Quality (CEQ) just wrapped up the commenting period on the proposed new guidelines for evaluating Federal water resources investments. The Proposed Guidance is aiming for more balanced investments with an ecosystem services approach that will benefit both the economy and the environment.
30 May 2013 | Human existence depends on ecosystem services, and while some are quite obvious – think carbon sequestration and water regulation – others, like soil regulation, are not. But they are all equally important and necessary in sustaining life, which is why there is a growing understanding and appreciation for these services. It’s also why the preservation and conservation of valuable ecosystems is appearing in government policies and planning.
For instance, the White House’s Council on Environmental Quality (CEQ), which coordinates the executive branch’s environmental efforts, has recently released an updated version of the 1983 Principles and Guidelines on Water and Land Related Resources Implementation Studies to include an ecosystem services approach to the evaluation process. Previous guidelines focused almost exclusively on economic factors.
The Principles and Requirements for Federal Investments in Water Resources, or Proposed Guidance or P&R, for short, were released in March of this year. The guidelines are meant to instruct federal water and land related investments in projects ensuring that the agencies’ actions contribute to economic development while preserving the environment.
The 1983 Guidance, which is in effect right now, applies only to four agencies-the Army Corps of Engineers (COE), Bureau of Reclamation, Tennessee Valley Authority and Natural Resources Conservation Services. The Proposed Guidance expands to cover the water resources investment decisions coming from several other sectors such as the Environmental Protection Agency (EPA) and the Departments of Agriculture, Commerce and Interior.
The new guidelines create a common framework for analyzing investments from various federal agencies in water-related projects and programs. Activities include grants, funding programs, studies on new infrastructure and proposals and plans affecting areas like national parks and forests.
While the Proposed Guidance do represent a possible shift in policy that recognizes the value of nature as an important component in economic development, it’s important to note that they are guidelines and not the rule for federal water resources investments. It’s unsure how effective they will be in moving toward a more balanced investment approach between the environment and the economy.
Looking at the effects of guidelines from the conservation and species banking industry-a relatively new sector familiar with functioning under guidelines rather than rules-they can provide a consistent message and direction for the entire sector but they lack the authority to supply incentives or reward the best players.
“Guidance has been useful as they send a clear message, and can be used by those willing and eager to have some consistency,” says Jemma Penelope, a private consultant to the conservation and species banking industry. “But they tend to promote rather than require.”
Timing also plays an important role in the effects. For conservation banking, Penelope believes the time is right to implement higher standards because there is a push from all sides involved and they agree it’s what the industry needs. Those involved in the water sector would need to determine if the time is right, as well, for guidelines prompting an ecosystem services approach or regulations requiring it.
An Ecosystem Services Approach
In order to evaluate these investments using an ecosytem services approach, the new guidelines propose a framework that links the social, environmental and economic impact of an activity and then evaluates it accordingly. By design, an ecosystem services approach traces the effects of a potential action through the watershed or ecosystem in order to capture its effects and better capture the value the ecosystem or watershed contribute to our economy and well-being, the documents reads.
Ecosystem services like water filtration, nutrient regulation and mitigation of floods and droughts can be difficult to quantify which is one reason why investment decisions have been mostly based on economic gains. The report argues that measuring water resources investments purely on economic gains no longer reflects national needs and the integrated ecosystem services approach will lead to more socially beneficial investments.
The Guidelines also promote using a watershed approach when investing in water projects. Similar to an ecosystem services approach, a watershed approach incorporates a wide range of stakeholders within and around the watershed when developing solutions. It takes the upstream and downstream conditions and needs into consideration when making decisions. This approach often allows for achieving multiple goals and utilizing water resources so all stakeholders benefit, according to the guidelines.
Possible Impacts
Along with an evaluation framework that is focused on ecosystem services, the Requirements call for Federal investments to utilize the best available data and technology and to collaborate between agencies in greater transparency. Risk and uncertainty, another Requirement, points out climate change as a significant threat. Analysis of climate change should be done using historical records and future models that project an altered climate, the document says. It also instructs using an adaptive management style, which is a scientific process that adjusts activities to reduce risk.
Other Requirements include considering the efficient use of water and competing demands as well as international issues regarding the resource.
The Proposed Guidance notes these Requirements should be integrated with other laws such as the National Environmental Policy Act (NEPA) and offers Interagency Guidelines as assistance in blending the two processes.
The P&R will also likely have to be integrated into initiatives coming out of the Water Resources Development Act (WRDA), which the Senate recently passed. Inside the WRDA is a pilot program called the Water Infrastructure Finance and Innovative Authority (WIFA). WIFA will fund roughly $100 million of water infrastructure annually for five years. The program will authorize loans for projects like pipe replacement and new water supply facilities through the EPA and COE. And because of the Proposed Guidance’s expanded scope, the EPA and COE would be subject to its guidelines.
The impacts and effects of the P&R, however, remain uncertain. The open comment period ended on the 28th of this month.
Kelli Barrett is a freelance writer and editorial assistant at Ecosystem Marketplace. She can be reached at [email protected].
22 May 2013 | The Kootenay Land District – or “the Kootenays”, as people there call it – is the heavily-forested southeastern part of British Columbia. More than 90% of it is government-owned, and on this land, logging is kept to a minimum.
The rest of the land is in private hands, most of it in the form of tree farms. So when Duke Carl von Wí¼rttemberg announced he was putting a 54,792-hectare wilderness area known as Darkwoods up for sale, the Nature Conservancy of Canada (NCC) swooped in to buy it and created the Darkwoods Forest Carbon Project to finance the upkeep in perpetuity. That project is built on the premise that a commercial logger would have practiced “liquidation” logging – which involves harvesting available timber as soon as it’s economically viable to do so. In creating the project, NCC followed step-by-step procedures laid out by the Verified Carbon Standard (VCS) to earn credits for the carbon that stayed in those trees it saved.
In late April, the provincial Office of the Auditor General (OAG) slammed the carbon project, in part because it said commercial loggers in the region are more likely to practice “sustained-yield” logging – which involves harvesting slowly over time. That, the OAG said, meant NCC had exaggerated the number of trees it was saving.
It was a jarring claim, because standards are the foundation on which all carbon offsetting rests. They are designed to offer clearly-defined procedures for creating real and verifiable emission-reductions without having to reinvent the wheel with every new project. To deliver environmental benefits, such standards must stand up to scrutiny by disinterested third parties. If the OAG’s two-man team was right and the VCS and its hundreds of experts and years of review were wrong, then the carbon sector was in need of a major rethink.
So far, however, it’s the OAG’s own claims that aren’t standing up to scrutiny, while the VCS is looking better and better.
The OAG’s Arguments
The OAG dismissed the procedure and the project on two grounds. First, the OAG claimed that NCC hadn’t factored carbon finance into its purchase and was instead cashing in after the fact (an argument that proved to be built on false premises and incomplete information).
Second, the OAG claimed that NCC had exaggerated the number of trees it had saved – or, in carbon lingo, it had exaggerated the baseline. This argument had two components: one relating to the amount of harvestable timber on the property, and the other relating to the way commercial tree farmers typically manage their land.
The question of harvestable timber is highly technical, and even well-regarded timber consultants are divided over the best way to deal with it. We will review that in our next installment.
The question of typical practices, however, is fairly straightforward: the OAG claimed that “most private forest land owners in the area” don’t employ liquidation logging, but it offered no evidence to support this claim. We started calling timber consultants, contractors, landowners, and local authorities in the Kootenays to find out what the common procedures were.
The answers are revealing – not only with regard to the practice of tree farming in the Kootenays, but also with regard to process of reasoning in the OAG.
Which Properties are “Typical”?
Everyone we spoke to initially said that liquidation logging is, in fact, the norm across the Kootenays – just as NCC said it was. We even found two properties adjacent to Darkwoods that had been liquidation-logged, and we learned that the owner of one of those properties had shown an interest in purchasing Darkwoods.
Lead auditor Morris Sydor, however, told us we had been looking at the wrong properties – and, to be fair, we had been directed to one of them by 3GreenTree, which was NCC’s partner in the Darkwoods project. Sydor directed us to four properties that he assured us were more representative of the types of managers likely to purchase Darkwoods: specifically, he told us to look up Beaumont Timber, Almforest Timber, Erie Creek Timber, and Kelly Creek Timber. All of them, he said, follow the Private Managed Forest Land Act (PMFLA) to earn tax credits, and none of them, he assured us, practice liquidation logging.
“They’ve got a long-term outlook in mind,” he said. “I had a phone conversation with a consultant a while ago and he basically confirmed the same thing: If you look at small properties, yes, people are going to liquidate because it is a small property, but if you’re looking at the larger ones people tend to have a longer view in mind.”
At 28,000 hectares, Beaumont is by far the biggest of the four, and it’s just over half the size of Darkwoods. If it was, in fact, practicing sustained-yield harvesting and was, in fact, typical of the types of entities that would buy Darkwoods, then maybe the baseline was, as the OAG claimed, too aggressive.
But when we contacted British Columbia’s Corporate Registry and other authorities, we learned that all of the properties Sydor referenced are owned by German aristocrats like the Prince and Princess of Wied (see “Beaumont Ownership”, right). These aristocrats are cut from the same cloth as von Wí¼rttemberg, who had owned Darkwoods for 40 years before selling it. They are the last remnants of a wave that came over at the height of the Cold War, and they have been divesting since the 1990s. What’s more, every property that these aristocrats have sold has ended up being liquidation-harvested, subdivided, or otherwise treated the way a normal commercial developer would treat such properties.
So, yes, the owners of these four properties take a longer-term view than other private timberland owners in the area, but that’s because they are completely different from other private timberland owners in the area.
“These properties are far from typical,” says Rainer Mí¼nter, who has served as General Manager of Almforest and currently owns Monticola Forest Ltd, a consultancy that does business with three of the four properties. “The families that own them view these investments more as a form of capital preservation than capital appreciation, so their expectations are much more modest than are those of typical investors.”
Granted, that doesn’t preclude one of them buying Darkwoods, but we’ve learned that the owners of Darkwoods offered it to all four properties and were turned down.
“We looked at it,” says Mí¼nter. “But we concluded that there was no way we could make it work financially if we were to log sustainably – not at the price they were asking.”
And here’s the kicker: Beaumont – the largest of the four properties – has been harvesting at a rate consistent with the baseline that NCC picked, and every timber dealer in the region knows it, which means the OAG should have known it. That rate, it turns out, doesn’t violate the PMFLA, and neither does the baseline analysis that 3GreetTree created. In fact, while the Project Description Document does say that a commercial owner would probably opt out of the PMFLA to avoid the cost of replanting, the actual baseline included tree planting, which meant the baseline itself was consistent with the PMFLA. The reference to the PMFLA is, therefore, irrelevant.
What’s truly bizarre about the OAG’s report is that, on re-reading it after knowing the facts, you repeatedly see the auditors mostly (but not completely) understood the facts but wrote about them a way that appears intentionally vague and misleading, giving themselves the wiggle room to claim they weren’t technically wrong, even though they were very far from being right. Take, for example, this paragraph from the report:
The project assumed a “liquidation logger” would not follow the requirements of the Private Managed Forest Land Act (PMFLA), even though the project plan identified that most private forest land owners in the area followed these requirements. This is common practice in the area, as significant tax benefits are gained by registering a forest under the Act. The project documentation provided no explanation for omitting such registration from the baseline calculation. By not registering under the PMFLA, a liquidation owner would not follow the minimum forest management objectives for private land (e.g. for soil conservation, protection of water quality, fish habitat and critical wildlife habitat, and reforestation). The baseline assumed that areas classified as environmentally protected by the previous owner such as sensitive habitat for mountain caribou and other at-risk species, would be logged, and not replanted by a liquidation owner.
Well, yes – it’s mostly true, but it’s completely meaningless. The “areas classified as environmentally protected by the previous owner” are parts of the property that the Duke had set aside for his own use, and not areas that were protected for any scientific environmental reason. Furthermore, the project documentation does actually provide an explanation for omitting the registration (they mentioned that a liquidation logger would probably try to save the cost of replanting), but then 3GreenTree still factored replanting into its baseline calculation, meaning the baseline calculation wouldn’t have been disqualified from the PMFLA.
What About Wildlife and Activists?
Interestingly, in our interviews, Sydor quickly conceded the irrelevance of PMFLA on harvesting levels, but then said local people wouldn’t tolerate the destruction of valuable habitat.
“The problem with the baseline scenario is it wipes out all the habitat for mountain caribou and grizzly bears,” he says. “It has no consideration for environmental values.”
That, of course, is why NCC was so keen to buy the property, but he says it also makes the baseline scenario untenable because no one will do business with a company that chops down trees in environmentally-sensitive areas.
“There was a forest company five years ago that went public with some logging plans that it was going to log in mountain caribou habitat,” said Sydor. “What happened was there was such an uproar that its major purchasers in the US went public and said, ‘We’re not going to buy from this organization if this goes ahead.’ They had to pull back.”
Mike Vitt, who managed the project for 3GreenTree, points out that neighboring Porcupine Creek has chopped down more than 70% of its trees, and there has been no protest from the green community. What’s more, he says, the baseline scenario he chose doesn’t really decimate the caribou habitat.
“Caribou are high-altitude animals,” he says. “The two things that caribou care about are that you’re not logging the really high-elevation stuff and you don’t have open roads, because then wolves and other predators can get them.”
Finally, in cases where a green protest has emerged, logging has tended to increase rather than decrease. Take, for example, the case of Texada Logging on Salt Spring Island, near Vancouver. Like Darkwoods, Texada Logging had been owned by a German aristocrat, Prince Johannes von Thurn und Taxis. When he died in 1990, his heirs started looking for a buyer. In stepped Robert J. MacDonald and Derek M. Trethewey, who announced plans to start logging. Local nature-lovers put together an incredibly well-organized and well-documented community action, but instead of stopping, the owners sped up the logging until the government stepped in to buy the land at an inflated price.
Texada matters because MacDonald and Trethewey also own Porcupine Creek. We don’t know if they bid on the Darkwoods property, but we do know of three parties who showed an interest, and all of the either practiced liquidation logging or developed real estate.
That’s partly because the asking price was based on an assessment of the timber value conducted by Jim Thrower, one of the leading timber consultants in British Columbia. He looked at the timber on the land and concluded that a commercial operator would harvest between 180,000 and 380,000 cubic meters per year, depending on external factors. 3GreenTree then used a mid-range figure to come up with its asking price. Any commercial venture that paid the asking price would, therefore, have had to push the limit of timber extraction to make a profit.
This doesn’t mean there is unanimity among timber consultants on the baseline, which brings us to an issue we’ll explore in our next installment: namely, how timber assessments are made, and where timber consultants say carbon baselines can be improved.
The 18th Katoomba Meeting begins Thursday in Beijing, and will focus on the interaction between forests and water. Todd Gartner of WRI says it couldn’t come at a better time. Here he explains the benefits of investing in natural ecosystems rather than gray infrastructure to treat our water.
This article was originally published on the WRI webiste. Click here to read the original.
Note:The views are those of Todd Gartner and James Mulligan and not necessarily those of Ecosystem Marketplace, Forest Trends, or its affiliates.
15 May 2013 | Natural ecosystems provide essential services for our communities. Forests and wetlands, for example, filter the water we drink, protect neighborhoods from floods and droughts, and shade aquatic habitat for fish populations.
While nature provides this “green infrastructure,” water utilities and other decision-makers often attempt to replicate these services with concrete-and-steel “gray infrastructure”—usually at a much greater cost. Particularly where the equivalent natural ecosystems are degraded, we build filtration plants to clean water, reservoirs to regulate water flow, and mechanical chillers to protect fish from increasing stream temperatures. And even though healthy ecosystems can reduce the operational costs of these structures, investing in restoring or enhancing various types of green infrastructure is rarely pursued—either as a substitute for or complement to gray infrastructure.
Despite America’s history of reliance on gray infrastructure, now is a critical time to tip the scales in favor of a green infrastructure approach to water-resource management. Investing in the conservation and improved management of natural ecosystems to secure and protect water systems can keep costs down and create jobs. Green infrastructure can also provide a suite of co-benefits for the air we breathe, the places we play, the wildlife we share our landscapes with, and the climate we live in.
The Time Is Now
In the United States, most gray infrastructure was built 40-50 years ago with large federal grants and few provisions for maintenance. This aging infrastructure needs significant investment to keep pace with population growth and to repair wear and tear.
Yet funds for investment in water infrastructure are drying up in an era of fiscal austerity. Naturally, water utilities, reservoir managers, and storm water managers are seeking lower-cost solutions to meet water demands of the 21st century.
Since the landmark green infrastructure investment in New York City’s Catskill-Delaware watershed in the late 1990s, there have been several similar breakthroughs across the United States. These cases illustrate how green infrastructure can secure clean water and other services at a lower cost and with greater benefits than traditional gray infrastructure. Just a few examples include:
Denver, COis investing in thinning and other fire risk management measures in its forested watersheds. Wildfires in Denver’s headwaters can cause massive sedimentation, which can clog the utility’s water intakes, reduce reservoir storage capacity, and increase treatment costs. Managing for fire risk also improves watershed function and reduces risk to local homes, wildlife, and fisheries.
Medford, OR is saving an estimated $12 million by investing in riparian forest restoration to shade streams instead of installing mechanical chillers to meet its Clean Water Act obligations related to stream temperature. Riparian forest also provides benefits for habitat, carbon sequestration, and water quality.
Portland, OR is saving an estimated $200 million by prohibiting logging in most of its Bull Run watershed. The city is closing logging roads and removing culverts and other infrastructure in order to maintain downstream water quality and secure ancillary benefits for wildlife. This investment has helped Portland to secure clean water and thereby qualify for a filtration avoidance waiver from the U.S. Environmental Protection Agency (EPA), saving the utility the cost of a new filtration plant.
The Barriers
Despite the growing number of success stories, the practice of green infrastructure investment has yet to reach scale, leaving substantial opportunities for enhanced services and cost savings unrealized.
The struggle to get to scale can be associated with a long list of institutional challenges, including knowledge gaps and old habits of defaulting to gray infrastructure. For example, water utilities are largely staffed with engineers trained to build gray infrastructure. Accounting standards currently do not allow water utilities to use the same finance mechanisms for natural capital that are typically available for gray infrastructure. And key enabling agencies like the U.S. EPA are sometimes slow to sanction innovative solutions like green infrastructure, due to standard operating procedures that often center on gray infrastructure.
Pushing for a Tipping Point
However, there are encouraging signs that the green infrastructure approach is nearing a tipping point in the United States. The American Water Works Association (AWWA) is increasingly engaged with its member utilities in the area of “source water protection”—which often centers on green infrastructure. Major cities like Denver, New York, Philadelphia, and San Francisco are starting to test out green infrastructure for water management, acting as models to inspire and educate other communities. And a growing number of conservation groups are now specializing in the development and implementation of green infrastructure investment programs.
There’s also a push to provide more resources to help water utilities and other decision makers invest in green infrastructure. At the recent ACES and Ecosystem Markets Conference—which brings together the science, practical, institutional, and decision-making sectors of the ecosystem services community—WRI announced a forthcoming document for green infrastructure investment, a joint effort with Earth Economics and the Manomet Center for Conservation Sciences. With the working title “Investing in Green Infrastructure for Source Water Protection,” this guidance document is intended to provide water utilities, local conservation groups, and private businesses with a persuasive case, a road map of next-steps, and/or overarching guidance to integrate green infrastructure into decision-making. The guide is set to be released in 2013, and is just one part of a broader push by WRI and our partners to bring green infrastructure investment to a tipping point.
We’re in a critical moment—natural ecosystems continue to degrade, existing gray infrastructure continues to age, and costs continue to rise. Even if just a portion of upcoming water infrastructure investment is directed toward green infrastructure, the opportunities for cost savings and water-related benefits are immense.
New Guide on Investing in Green Infrastructure
WRI expects to release its new guide, “Investing in Green Infrastructure for Source Water Protection,” later this year. The focus in this publication is forest-based provisioning of clean water, although much of the guide has broader relevance. The guide threads together the insights of leading green infrastructure experts and practitioners into a single, comprehensive resource that will help water resource decision makers do the following:
Identify characteristics of watersheds “ripe” for green infrastructureinvestment;
Understand the scientific foundation underlying the approach;
Make the business case for green infrastructure;
Identify key players and elements of the stakeholder engagement process;
Identify potential finance mechanisms for green infrastructure; and
Draw key takeaways from early green infrastructure success stories.
Todd Gartner is a Senior Associate in WRI’s People and Ecosystem Programs. James Mulligan is Executive Director at Green Ventures.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
