presented by dean current, phd center for integrated natural resources and agricultural management...
TRANSCRIPT
CARBON CREDITS FOR FORESTLAND
Presented byDean Current, PhDCenter for Integrated Natural Resources and Agricultural Management (CINRAM)Department of Forest ResourcesUniversity of Minnesota
Sponsored by theMinnesota Wood Education ProjectWith funding from theNortheast Minnesota Regional Sustainable Development PartnershipMinnesota Wood Education Project / 26 E. Exchange Street, Suite 405 / St. Paul, MN 55101 / USATel +1-651-223-5629 / www.MinnesotaWoodEducationProject.com / [email protected]
CONTENT
Background on CO2 and carbon sequestration
Carbon credits/offsets
Carbon markets past and future
Options for carbon credits for forestland
Current issues related to the carbon markets
GLOBAL CARBON CYCLE
http://www.netl.doe.gov/technologies/carbon_seq/overview/what_is_CO2.html
CARBON SEQUESTRATION
Carbon sequestration can be defined as the capture and secure storage of carbon that would otherwise be emitted to or remain in the atmosphere.
Growing plants sequester carbon from the atmosphere and release it when they decompose unless converted
Source: Iowa Farm Bureau, 2006
MECHANISMS FOR SEQUESTRATION & STORAGE
Terrestrial Carbon Sequestration Trees Perennial Grasses Conservation Tillage Methane Capture
(Digesters) Geologic Carbon
Storage Secure capture and
storage
TERRESTRIAL CARBON SEQUESTRATION
Trees Afforestation, Reforestation or Agroforestry Species and age dependent 5.5 mT/acre/year
Perennial Grasses Deep root systems Mix of species 1.6 mT/acre
Conservation Tillage Low-Till / No-Till .3-1 mT/Acre Controversial
Source: Minnesota Terrestrial Carbon Sequestration Initiative
WHAT ARE CARBON CREDITS?
Carbon credits are provided for: Prevention/reduction of carbon emissions
produced by human activities from reaching the atmosphere by capturing and diverting them to secure storage.
Removal of carbon from the atmosphere by various means and securely storing it.
CARBON OFFSETS
Carbon offsets are reductions in the emissions of CO2, or removal of CO2 from the atmosphere, used to compensate/offset emissions occurring elsewhere often by industries.
Forestry activities that sequester carbon can receive carbon credits/offsets for the CO2 sequestered and those offsets are traded on markets
CREDIT/OFFSET
For carbon sequestered and stored for a defined period of time (15-100 years)
Forestry credits – net sequestration
Payments based on no. of tons of CO2 equivalent per year
Carbon sequestered (tree growth, soil storage)
- Carbon emitted (mortality, harvest, etc.)
= Net carbon sequestration above base “business as usual” case (basis for payment)
OPPORTUNITIES IN FORESTRY
Climate Action Reserve (CAR)
Reforestation Improved forest
management Avoided conversion of
forest land Urban forestry
Voluntary Carbon Standard (VCS)
Afforestation, Reforestation and regeneration – ARR
Improved Forest Management - IFM
Low to high Productivity - LtHP
OFFSET INTEGRITY (SOURCE: CLIMATE ACTION RESERVE)
• Real– Can be measured to a high degree of accuracy– Is based on an activity that has occurred, not one that isprojected to occur in the future
• Additional– Occurs outside of any regulatory requirement– Would not have occurred but for the incentive provided by aGHG market
• Verifiable– Can be (and has been) independently verified
• Enforceable– Ownership is undisputed and enforcement mechanisms exist toensure all program rules are followed
• Permanent– Is removed from the atmosphere for a minimum of 100 years
MARKET MECHANISMS
Leakage: Leakage may be caused by shifting harvest to
another location if harvest is reduced on one site.
Permanence: The requirement that GHGs must be
permanently reduced or removed from the atmosphere to be credited as carbon offsets. In CAR must be stored for 100 years.
DEALING WITH LEAKAGE FROM IMPROVED FOREST MANAGEMENT
DEALING WITH PERMANENCE
Buffer established – Credits held back based on established level of risk.
Buffer used to offset any loss of stored carbon.
Ask risk is lowered the buffer is reduced.
As commitment is met, buffer funds are returned to landowner
Greenhouse GasEmission Reductions
Carbon Credit Program• Eligibility Assessment • Protocol Development• Monitoring• Reporting• Verification• Registration
Carbon Credits(certified, tradable, $$)
Protocols (CCX, CAR, VCS, others)
Achieved viaqualifying GHGemission reduction projects
Sell on marketthrough an aggregator
Market Mechanism
AGGREGATORS
The Chicago Climate Exchange (CCX), when operating, required that credits be sold in increments of at least 12,500 mT, approx.2,500 acres
Landowners need to work with an aggregator.
An aggregator combines credits to create a large enough bundle to sell to the market.
Aggregators charge a fee of between 8-10% of gross carbon credit payments to sustain their business
MARKETS
Compliance/Kyoto Market Europe – higher prices
Voluntary/Chicago Climate Exchange Forestland options
Global Market for Forest Based Offsets 0.3 Million Metric tonnes equivalent (MtCO2e) in 2002
to 30.1 MtCO2e in 2010. ($5-$15/tCO2e in 2010)
US Markets Lack of regulation Project based
• No up-front, out-of-pocket costs
• Full forest + carbon inventory and assessment
• 10-year FSC management plan and certification
• 100% of FSC-certified wood product revenues
• 50%+ of forest carbon revenues – important new source of annual cash flow
• Inclusion in landscape-scale conservation project designed by TNC
Landowner Benefits
• Focus and protect public/private investments
• Active and engaged landowners
• Repair degraded forests; maintain desired conditions
• Keep working landscapes working and in private ownership
Public Benefits
BLUE SOURCE – NATURE CONSERVANCY ‘WORKING WOODLANDS’ PROGRAM
CO-BENEFITS OF CARBON SEQUESTERING LAND PRACTICES
Improved forest management
Healthier, more resilient forests
Increased and Improved Habitat
Water quality Agroforestry buffers
SUMMARY
Forestland has potential for generating carbon credits for landowners
Growing global and US regional markets for forestland credits
Few current opportunities for Minnesota landowners Economic conditions Lack of regulated market
A market with potential but still needing development
WEBSITES FOR ADDL. INFORMATION
California Climate Action Reserve (CAR)
http://www.climateactionreserve.org/
Voluntary Carbon Standard (VCS)
http://www.v-c-s.org/
Dean CurrentCenter for Integrated Natural Resources and Agricultural Management (CINRAM)Dept. of Forest ResourcesUniversity of [email protected]
Thank you!