Wednesday, July 30, 2008

News Summary for 7/16-7/30


- USDA Forest Service launches CC resource center website –info/tools under 1 roof for land mngrs to understand, plan & mng for CC, esp in W. Set of video presentations avail.


- All things Mitigation – Ecosystem Marketplace’s Mitigation Mail (7/24)
---CA local gov decided to create miti bank for ~newly listed tiger salamander, backs off when considers legal liability + need to come up with $$ to pay for hab cons plan. Impacters left to figure out HCP and miti ratios (? – hard to understand article) &title=Group_aims_to_revive_salamander_strategy
---Proposed port expansion in Portland OR gets new NIMBY argument: forget the development, make a mitigation bank (if can’t get outright protection)
---Pub empoyees for env respons (PEER) slams ME DOT’s proposal for st-wide umbrella miti bank. Criticisms: WL miti doesn’t work, they didn’t give a location for the bank, PEER wants w/in watershed/onsite miti, ME DOT isn’t qualified to restore WL.
---New 266-ac vernal pool fairy shrimp cons bank proposed in southern OR by Wildlands Inc. Neighbors (ag, viniculture) are concerned that turning off the irrigation taps in the summer for the species could impact their w supply.

- All things C – Ecosystem Marketplace’s V-Carbon News (7/29)
---Discussion about lack of/new REDD methodologies
---World Bank finances REDD readiness in 14 countries to estab emiss baselines, adopt REDD strat, design monitoring.
---NYMEX will sell options/futures for RGGI starting late-August.
---WL store 20% of world’s C & if destroy them, you release a “Carbon bomb” say scientists.
---Article tested 10 C calculators and found variation of 30k+ tons (~= to yrly emiss of 3 cars). Only 2 calc’s recc lifestyle changes to reduce C footprint.

(graphic source: Seattle Post Intellincer)

- Certif – study on PA sales of FSC/non-FSC sales shows PA got 10% incr in rev from FSC-certified.

- PES – PBS Frontline highlights Sierra Gorda PES project in Mexico – comm. paid to plant trees, hope to sell > svcs in the future.
- PES – Ecosys M’place article highlights wildlife tourism PES in Tanzania. Tourism interests in past paid just for concessions in wildlife viewing, now paying for (non-tourism) wildlife hab protect. Successful deals allow local comm. trad grazing, but prohibit ag, settlement, tree-felling.

- Instit – FTC to create “green” marketing standards/guidelines in 2009 – to prevent deceptive claims.

- Misc – judge includes loss of ecosys svcs in damages from a wildfire: “It's an important development in the law to have courts saying decisions aren't limited to the value of timber," said Sean Hecht, executive director of the UCLA Environmental Law Center. "A calculation is now allowed to look at the value of wildlife and the ecosystem.”

Friday, July 25, 2008

News Summary for 6/21-7/15

...enough news to [fill in the blank]


- WQT Funding – EPA’s Targeted Watershed Grants app is due (w/ state governor approval) by Sept. 9. $4.2mill for 15-25 projects (range is $100k-$1mill) Contact: Chris Lewicki at lewicki.
Chris”at” or (202) 566-1293. RFP is here
- WQT – EPA’s Toolkit on wqt to include info on trading w/onsite (septic), elig of State Revolving Funds for wqt – expect it out Aug 2008
- WQT – new PT-PT trading in Passaic (NJ) for P.

- Env Mkt – new ~Craig’s List for Farmers Market products in MD:


- Leadership – Rob Doudrick, former lead for US Forest Service ecosys svcs group, leaves post to direct Resource Use Sciences. Al Todd, formerly [Ches Bay] Watershed Program Leader steps up as ecosys svcs lead within State and Private branch of USFS.
- Leadership – Dan Nees, formerly with WRI and the Conservation Finance Center (U MD), to head the Ches Clean Water Fund (aka Nutrient Neutral) within Forest Trends

- C/CC/Forests – June 13th issue of Science (vol 320) full of articles on forests, CC, C, etc.
---Miles & Kapos’ “Reducing GHG emiss from deforest & for degrad: global land-use implications”. Themes of ongoing REDD debate: baseline, countries that have already reduced deforest, protocols for meas/validation of reduct, how to fund REDD (grants vs. mkt-mech). When agree on REDD (prob 12/09), “a major new driver for forest conservation will be born”. Scale of funding HUGE: ballpark $1.2bill-$10bill/yr/globally (compare to ballpark current invest forest protection: $250mill-$700mill; & current world forestry exports: $39bill). Other ecosys svcs could be shafted – REDD “losers” should become new priority for conserv./sust forest mngt.
---Sukumar op ed “Forest Research for the 21st century”. Need > sci for use in CC adapt; > sci to inform sust harvesting in tropics.
---Canadell & Raupach “Managing Forests for CC Miti”. Reviews global estimates of reduced emiss (Pg C) of 4 forestry strat: reforest, incr C density, incr use of forest products, REDD. Also touches on: risk, biophys feedbacks, unintended conseq of lrg land-use change, etc.

- C - RGGI begins auctioning permits Sept 25

- All things C – Ecosystem Marketplace’s V-Carbon Mail (6/27)
---Sir Nicholas Stern’s co IdeaCarbon will rate C credits like bond ratings (AAA -> D)
---Gold Standard-certified C projects can get C insur at reduced rate via company CarbonRe
--- Australia & Indonesia signed Forest C agreement for REDD activities

- REDD – Ecosys M’place releases REDD primer

- C biz – study analyzed 16 major consult firms and says ICF is tops for C work. BTW – ICF is looking to hire a Senior Assoc in their Env Markets group in DC.
- C biz - …but maybe Richard Branson will crash the C consultancy party? w/ new eco-consult Virgin Green Owls
- C biz – Conserv International expanding their Forest C Markets work: hiring Advisor in DC area
(hat tip to ecorazzi for the Gore/Branson love)

- Instit – Ecosys M’place has primer on C registries – breaks it down to emissions tracking registries (“measuring the beans”) and C credit accounting registries (“tracking the trades”). Great overview.
- Instit – Vol C Standard Assoc (VCS) gives blessing to 4 (accounting) registries: APX, Caisee des Depots, Bank of NY and TZ1

- CC – new book “The Atlas of CC: Mapping the World’s Greatest Challenge” – reviewer in Cons Bio says it’s a great “intro and general ref for people involved in policy at any level”. Wish Amazon had sample pages. (Parmesan, 2008, Cons Bio, Vol 22, No. 3).

- All things Mitigation – Ecosystem Marketplace’s Mitigation Mail (7/3)
---Env Mkt – Ecosystem Marketplace releases “the Matrix: Mapping Ecosystem Service Markets” is living database/spreadsheet/info resource summarizes globally env svc mkts (mkt description, size/volume of trades, players, emerging issues, env and dev world impact)
---WQT – Ecosys M’place article highlights momentum of Katoomba mtg for Ches Bay players, emph on figuring out how to help wqt work regionally, Nutrient Neutral Fund idea funded by CIG grant – will follow ex of C neutral
---DU buys easements on prairie potholes, gives easement to FWS, keeps right to sell C & plan to use proceeds to fund restor in plains states. Considering rights to sell wq credits or endangered species miti (esp migratory bird hab)
---TIMO in the St Johns water mngt district (FL) gives up dev rights on ½ its land to create WL bank of 450+ credits. Credits in area are selling for $30k-$160K
---Alberta Canada considering starting oil sands biodiv offset requirements (sounds like 1:1 ratio for preservation or restoration)
---VA broken dam (w/lowered lake levels/prop values) could be new WL miti bank if restore
---BushTender in Australia gets $2.7mill more to add 6kha of restor on priv land (10kha already completed)

- WL Miti – Robertson & Hayden, 2008 (Cons Bio Vol 22, No 3) conduct complete survey of entrepreneurial bank transactions in Chi ACOE District from 94-02. Found temporal loss of WL (allowable in regs, wch release credits for sale in phases based 1st on site-protection & then ecolog perform measures). WL miti an average of 16 mi away from WL loss (allowable in regs). Meets no net loss goal. Discussed regulatory uncertainty – new local laws tht create > localized areas in wch WL miti must occur.
- Str Miti – “Natural Channel Design”, Rosgen’s method of str restor, has tete-a-tete in JAWRA betw authors asking for peer-review (/peer-rev citations) of meth and the creator of the meth (Rosgen 2008, JAWRA, Vol 44, No. 3; Simon et al 2008, JAWRA, Vol 44, No. 3)

- Incen – EDF working w/ state/fed funds to pay farmers in W lake Erie to impr wq & wildlife hab.

- Cons Finance – HUGE TNC/TPL deal to buy priv for industry land (Plum Creek) in MO adjacent to Nat Forests (lands go to Forest Service). $510 mill for 500 sq miles - $ is ½ from donations, ½ from tax credits. Allows some sust forestry/cert logging.

- Stacking – Plantinga et al. 2008 (forthcoming) Efficiency of Incentives to Jointly Increase Carbon Sequestration and Species Conservation on a Landscape. NSF-funded study says you can’t get both C & biodiv. You can maximize species when you restore rare hab; you max C when you restore forests.
- Stacking – Bekessy & Wintle argue in Cons Bio (vol 22, No 3) that current Kyoto C scheme should be changed to make C + biodiv > competitive to C-only. Implied/stated arguments: a C investor will want C + biodiv b/c of positive PR and investment risk-spreading, there is/will be a mkt for biodiv, regulated C mkt should be for > than C.

- Biofuels – Groom et al. 2008 (Cons Bio Vol 22, No 3) argue biofuels should be certified biodiv-friendly – should be sust & small footprint, maintain native/essential food crop habitats, be at least net C neutral.

- Tools – USGS to provide Landsat for free (1972-present)
- Tools – Kalacska et al. 2008 (Journal of Env Mngt, vol 88). Q: are land cover maps accurate enough to use as baseline forest cover (for CDM)? A: no – low accuracies (in Costa Rica, Mex) – nat level maps overest for cover by counting evergr veg, but underest deciduous forest in > local maps.
- Tools – Heinz Center completes 2008 update of measure/monitor project State of the Nation’s Ecosystems 2008, wch tracks/reports on 68 indicators. They hope feds will take over project. Stokstad, Science vol 320, p. 1575.
- Tools – re: cons prioritiz assessments: of published assess papers, 2/3rds never get imple (usu b/c researcher doesn’t plan on imple)- ouch. Article suggests: rewarding academics for “doing”, linking research to q’s of practitioners, etc. Knight et al. 2008, Conservation Biology vol 22, No. 3.

- PES – research on effectiveness of payments (that went to dev projects in communities) to stop illegal logging in a nat park in Indo had no effect on reduced deforest (paired study) - ouch. Linkie et al. 2008, Science, Vol 22, No 3.
- PES – Forest Trends/Katoomba/UNEP release primer on getting started in PES: ID’ing opp’s and buyers, considering instit/tech capacity & access, making & imple a PES agreement
- PES – USFS PNW research station pub synthesizes research work on ecosys svcs, summaries for how FS can integrate into mngt

- Misc – goats provide weed mngt service, bats (bat boxes) provide pest-reduction services in San Jose, CA. Pricey (~$700/acre goats, $145/box), *but* nonmkt val’s: fire fuel reduction, “wildlife viewing” val, edu.

- Nonmarket Val – Martin-Lopez et al 2008 (Cons Bio Vol 22, No 3) do meta-analysis of WTP for biodiversity val studies (single species only) and find factors that contribute to WTP: anthropomorphic (cuteness), anthropocentric (how useful they are – hunt, fish, wildlife view). Goldmine of 60 WTP values in table on p.628-629.
- Nonmarket Val – National Res Council study on forests and water conclude tht most important output of forests is water.
- Nonmarket Val – Gund Instit+USFS PNW research doing val (bene transfer) for multi (23) ecosys svcs in watershed near Seattle (p.5)

Tuesday, July 15, 2008

News Summary for 6/4-6/20

...just catching up, folks. Another installment coming soon.

Meetings / Seminars
- 5/14-16 – CCAR’s 6th Annual Meeting – all you could ever want to know about CCAR. Summaries and presentations here
---CCAR explains Climate Action Reserve. Screenshots and step-by-step how-to incl in ppt
---Nice ppt from PG&E about utility users’ vol C offset program (“by 12/2009, PG&E will contract for at least 1.5 million tons”). This is the program that had a recent RFP out (7/2) for CCAR-standard projects.
- 6/9-6/10 - 12th Global Katoomba Meeting – 6/9 and 6/10 summaries below
- 6/11-6/12 - Private Katoomba Meeting on the Chesapeake Bay – day summaries below
- 6/2008, Brazil - 12th Internat Congress on Env Law of IUCN – focused on trends in imple of PES in Americas (best practices, legal/instit frameworks). Contact: Rodrigo Martinez usdecons9(“at”) (Organiz of Amer States’ Dept of Sust Dev).

- Market-based CIG Grants (Ches Bay grants, national grants)
---Ches Nutrient Neutral Fund (Ches Bay Foundation)
---the Bay Bank (Pinchot Institute)
---Gopher Tortoise Habitat Credit Bank in GA and AL (Amer Forest Foundation)
---Mkt-based rangeland restor & crit w’life hab in Sagebrush (Sagebrush Foundation et al)
---PES in FL ranchlands, from pilot to program operation (WWF)
---C Credit mkt infra (Couer d’Alene Tribe)
---Mkt-based incen to reduce sedi from ag lands, etc. (Kansas St U)
---Develop/use a modified NTT tool for WQT (Tarleton St U, MD)
---Mkt infra for WQT/etc in Upper Miss (Minnesota River Basin, Joint Powers Board)
---Facilitating NIFP to C offset mkts (George McKinley)

- WQT Funding – EPA’s Targeted Watershed Grants app is due (w/ state governor approval) by Sept. 9. RFP is here

- Corp Sustain – World Bus Council on Sust Dev’s class of 2008 Future Leaders Team are focusing on ecosystem services & how bus depend on; how to ID opp’s and miti risks; to use WRI’s Ecosystem Services Review (ESR) methodology. Contact: Katherine Madden, WBCSD madden("at")

- C and Institutions – May 2008 USDA Forest Service memo guides FS leaders re: reforestation/C projects. Says FS is not currently involved in any selling/trading of C offsets (C *credit* projects – distinction here is using for CCX or future regulations). FS only has 3 current C *offset* projects with National Forest Foundation, consider these as demo projects for using forest mngt in a CC miti strategy (new projects can only be approved on case-by-case basis). FS can partner with folks who advertise *general* C claims or benefits from donations for reforestation but these can’t be advertised like “offset your GHG” or ”go C neutral”.

- C – PG&E offsets Dem party nat convention w/offsets from Garcia River Forest (CF project)
- All things C - Ecosystem V-Carbon News (6/11)
---Lieberman-Warner cap & trade bill didn’t get enough votes
---1st project registered/verified under CA Forest Protocols, Pacific Forest Trust’s Van Eck forest in Humboldt Co. CA, offering VERs
---2 CA bills proposed to regulate OTC C

- CC – USDA Forest Service factsheet “Climate Change and Water: Perspectives from the Forest Service”

- Instit – Doug Lashley (CEO Greenvest) op-ed: support > efficient multi-cred mkt in Ches Bay
- Env Mkts –DoD-contracted(?) 2007 doc by Idaho Nat’l Lab – says DoD will likely be largest buyer/seller of wq credits; screenshots of hypothetical multi-cred mkt
- Env Mkt info – new blog related to env markets by EcoAsset Markets

- Tools – a little 411 on the company APX: did CCAR’s “web-based platform and account management tool for the registration, serialization, tracking, and retirement of GHG offsets for the Climate Action Reserve”. Did work in renew NRG mkts, Gold Standard VER registry. Based in Santa Clara, CA with brand-new office in DC (to get cozy with CC legislation). 2 key leaders from Marsh, Inc. (global risk mngt & insur). Goldman Sachs is a minority equity investor.

- Certif – SFI has web-based survey to collect/compile suggestions/rationale for changes to SFI standard

Friday, July 11, 2008

Summary of 2008 Private Katoomba Meeting on the Chesapeake Bay, June 11-12

Update (7/23): Environmental Marketplace posted presentations from this meeting here.

2008 Private Katoomba Meeting on the Chesapeake: How to Design and Implement Market Mechanisms to Improve Water Quality Throughout the Chesapeake Bay Watershed

(courtesy of Al Todd, USDA Forest Service, Northeastern Area State and Private Forestry)

Building from the market-oriented thremes from the public Katoomba sessions in DC, the goal of this meeting was to catalyze new thinking around a suite of market-based tools that could build additional funding streams to achieve and maintain pollution reduction goals across the Chesapeake Bay watershed.

Meeting Objectives:
1. To learn about and discuss lessons learned from both compliant and voluntary market approached to environmental quality;
2. To discuss obstacles and opportunities for applying these approaches to a robust voluntary market for water quality in the Bay watershed;
3. To draft a plan of action and next steps for implementing select market-based tools, including a Chesapeake Clean Water Fund to address water quality in the Bay watershed. The Fund will leverage private dollars to invest in high-impact projects, those in areas that have the highest pollution loads throughout the watershed.

Day One: Overview and Stage Setting

Michael Jenkins, Forest Trends gave the welcome and set the context for the Discussions.

William C. Baker, Chesapeake Bay Foundation. Gave a state of water quality in the Bay. A brief and fast reality check on the history of WQ improvement efforts including dollars invested, legal authority and the need for better coordination and integration of existing regulatory mechanisms, political will, the need for a coordinated communication/outreach strategy across the Bay watershed, WQ standards and the need for new and sustainable funding sources and the role of private investment. Why market-based approaches in the Bay and why now? Said we know what to do but need the funding to do it.

Ricardo Bayon, EKO Asset Management Partners . gave an overview of Payment for Ecosystem Services (PES) Markets and Market-like Instruments: Utilizing the market to affect positive outcomes. Defining and categorizing market-based activities in a water context and the components that make them work (supply and demand).

Dan Nees, World Resources Institute provided a sobering look at the State of Water-Quality Cap & Trade Programs in the Bay Watershed, WRI has completed a summary of Trading Programs highlighting the activities in the Bay region (MD, VA, PA). Dan is currently pessimistic that the demand drivers (regulatory) are not in place to drive the market. The 2010 TMDL may advance this. Key issue: How to mainstream the value and cost associated with establishing market mechanisms such as a voluntary water market in the Bay? How to link market-based approaches to existing regulatory programs?

Panel Discussion : Market Architecture and Design
Standards, certification, registries, exchanges, aggregators: Components of environmental/water markets in the Chesapeake Bay.
• Wetlands Banking Model, Steve Morgan, Wildlands, Inc.
• Credit Aggregators- Peter Hughes, Red Barn Trading
• Insurance Mechanisms, George Kelly-EBX
• The Green Exchange, Evolution Markets (to be confirmed)
• How Federal, State and Local Government can facilitate the design and implementation of these market components, Mindy Selman, WRI

Panel Discussion Building a Market for the Chesapeake Bay Watershed -- Generating Private Investment: New Ideas for Using Market-based Approaches to Improve Water Quality.
• Chesapeake Clean Water Fund (Ricardo Bayon)
• Supplier Certification Program (Tom Simpson)
• Eco Branding – the case of Organic Milk (Suzy Friedman)
• The Bay Bank initiative (Eric Sprague)
• Credit Insurance Programs (George Kelly)

This Panel set the stage for the second day’s discussions.

Day Two: Moving Forward in the Bay

Focus for Day 2 was on developing a road map and building consensus on specific pilots for the Bay. Focusing on the 5 initiatives outlined on the previous day, groups were to acknowledge how they would contribute to improved water quality in the Bay watershed and how they could relate to one another.

Small Group Activity: Participants were broken up into small groups for this task. Each was assigned one of the 5 initiatives and asked to discuss it and then propose a conceptual business plan for a functioning market-based scheme focused on improving water quality across the Bay. Each group should prepare a detailed 5 minute sales pitch, as if pitching the idea to venture capital (VC) investors. Each group selected a spokesperson to make the pitch to the entire group in the afternoon.

Menu of Initiatives:
The Chesapeake Clean Water Fund; Market-driven Supplier Certification Program; The Bay Bank Initiative; Credit Insurance Programs; Eco Branding

Small Group Report Out and Large Group Discussion of Proposals (Group presentation: 5 minutes followed by 10 questions/answers) An interesting aspect of this exercise was that the membership of the breakout groups was purposely designed such that none of the proponents or partners in a specific initiative were in that Breakout Group. All the groups had to go on was the presentation from Day 1 and a conceptual project brief.

Key outcomes:
1) Eco branding: A good concept but quite time and $ intensive to launch and maintain. Examples were provided that would work for eco-friendly lawn care and milk production.
2) Supplier Certification Program: This is a project that has been funded and will be progressing and deals with food supply chain certification of water quality practices. Has potential to reduce nutrient use and change behavior of ag producers through demand from processors and food producers. Agreements in place to begin with several major local food producers. Will proceed on a separate track.
3) Chesapeake Clean Water Fund: Seen as a good idea to catalyze a voluntary nutrient investment fund. Credits would be established and through increased credit valuation, funds could be reinvested in restoration projects and N reduction BMPs. Would focus on the demand side of the market and work to get several major corporate contributions (with a target of $5 million in 2 years) as seed for fund. Would eventually be able to sell high quality certified nutrient credits.
4) The Bay Bank: Seen as a great counterpoint to the Fund discussed above because it would focus primarily on the supply side of the market, educating landowners and facilitating their access to multiple markets including the “Fund”.
5) Credit Insurance: Seen as a valuable addition to both the bay bank and the Clean Water Fund. Several people in the meeting volunteered to work on this concept including reps from both the Bay bank and the Fund. It would serve as a bridging function to help reduce risk for other aggregators. WRI will take the lead.

Forest Trends will continue to track activities in the Bay Watershed on its web site and through the creation of an online Water Market Forum. Reps from the Bay Bank and the Clean Water Fund will convene to ensure that there is a high level of integration as these two go forward. These latter four projects are seen as the nucleus of a Chesapeake Bay water quality markets work plan.

Thursday, July 10, 2008

environmental markets is back...

...after a 3-week hiatus in Panama.

Some interesting market-related tidbits from Panama...
Market interest in PES for watershed services is, in part, driven by monetary savings in dredging costs in the Panama Canal. (from Miraflora Locks visitors center displays)

A representative from a Ngobe indigenous nonprofit group expressed interest in PES for REDD from the C market, but wondered how his group could participate in light of communal property rights.

The usual news summary run-down is forthcoming.

Environmental Services Markets Language in Farm Bill 2008

There are other sections of the Farm Bill that relate to environmental markets, but this specific section gives USDA the authority to create standards for environmental service markets.

Link to Public Law version 6124 of the Farm Bill (use CTRL-F to look for "Sec. 2709")
Link to USDA's home page for the 2008 Farm Bill


Subtitle E of title XII of the Food Security Act of 1985 is amended
by inserting after section 1244 (16 U.S.C. 3844) the following new


``(a) Technical Guidelines Required.--The Secretary shall establish
technical guidelines that outline science-based methods to measure the
environmental services benefits from conservation and land management
activities in order to facilitate the participation of farmers,
ranchers, and forest landowners in emerging environmental services
markets. The Secretary shall give priority to the establishment of
guidelines related to farmer, rancher, and forest landowner
participation in carbon markets.
``(b) Establishment.--The Secretary shall establish guidelines
under subsection (a) for use in developing the following:
``(1) A procedure to measure environmental services
``(2) A protocol to report environmental services benefits.
``(3) A registry to collect, record and maintain the
benefits measured.
``(c) Verification Requirements.--
``(1) Verification of reports.--The Secretary shall
establish guidelines for a process to verify that a farmer,
rancher, or forest landowner who reports an environmental
services benefit pursuant to the protocol required by paragraph
(2) of subsection (b) for inclusion in the registry required by
paragraph (3) of such subsection has implemented the
conservation or land management activity covered by the report.
``(2) Role of third parties.--In establishing the
verification guidelines required by paragraph (1), the
Secretary shall consider the role of third-parties in
conducting independent verification of benefits produced for
environmental services markets and other functions, as
determined by the Secretary.
``(d) Use of Existing Information.--In carrying out subsection (b),
the Secretary shall build on activities or information in existence on
the date of the enactment of the Food, Conservation, and Energy Act of
2008 regarding environmental services markets.
``(e) Consultation.--In carrying out this section, the Secretary
shall consult with the following:
``(1) Federal and State government agencies.
``(2) Nongovernmental interests including--
``(A) farm, ranch, and forestry producers;
``(B) financial institutions involved in
environmental services trading;
``(C) institutions of higher education with
relevant expertise or experience;
``(D) nongovernmental organizations with relevant
expertise or experience; and
``(E) private sector representatives with relevant
expertise or experience.
``(3) Other interested persons, as determined by the

Wednesday, June 11, 2008

Daily Summary: 2008 Global Katoomba Meeting, June 10, 2008.

Summaries, comments, and reactions from day 2 of the 2008 Global Katoomba Meeting: Developing an Infrastructure Fund for the Planet. For day 1 summaries, see post below.

Opening Keynote
Governor Blairo Maggi (Governor, Brazilian state of Mato Grosso) – 60%+ of state is preserved, but state still gets criticized for economic activity. Have program to encourage switching cattle production (req lots land) to food production – switch 10% each year. Rural Property Licensing System - interesting eye-in-the-sky online GIS-based monitoring of preservation areas with program that recognizes & checks for land use change yearly and can send automatic fines (…like a red-light ticket system?). Can require mitigation for deforestation from cattle producers. 1st state in Brazil doing this – intend to replicate in other states. Transparency: anyone can use the system. Mentioned tracking env liabilities city by city and finding env compensation using this system.

Future of Carbon Markets Panel
Carter Bales (The Wicks Group, McKinsey & Co) – forecasting a $2-3 bill C compliance mkt (excluding the US).

William Boyd (Covington & Burling LLP) – talking about recently defeated CC/C cap policy. Big issues: jobs (economic dislocation), cost control (big disconnect betw 2 sides of the debate). If can’t get Senate to pass domestic legislation, won’t pass international treaty.

Jack Gibbs (Prince’s Rainforest Project) – C mkt won’t bring a lot of $ to forests… yet. EU is negotiating phase III of trading system – forestry is excluded. Possible that phase III’s permit auction revenue may go to internat forestry activities.

Beatrice Ahimbisibwe (Ugandan farmer) – C mkts are imp to women in dev countries. Her groups’ tree planting project (vol C mkt) brings income stream and other benefits (future harvests seen as pension fund, land has gained value, helps soil erosion on steep slopes, fruit and medicinal bark, etc.). Hope that incr supply of trees will reduce illegal logging in nearby protected area.

Charlotte Streck (Climate Focus, World Bank) – EU – not a fan of forestry involvement in C mkts.

Q & A’s
Idea of a climate trust model was discussed – similar model to AK citizens receiving dividends from oil royalties.
Q: Influence of RGGI on national/internat C mkt? A: not sure what leakage might be, but it’s a “courageous and positive experiment”
Q: Imple auction to direct revenues to poor comm?
A: Jobs issue needs to be addressed.
Q: Bundling - when you commoditize one service you run the risk of ignoring other values that an ecosystem offers. How can we scale up to include multiple values?

Biodiversity Markets Breakout Session
Yusuf Ole Petenya Shani (Shompole Community Trust, Kenya) – his community (Masai) decided to set aside part of their land as preserve, charge visitors an entry fee, and started a high-end eco-lodge [comment: I looked at their website – swanky!]. Other lodge experience in Kenya can have “20 minivans around one cheetah”, but the community is able to maintain quality wildlife habitat & experience by limiting # of visitors (& charging more). Philosophy on PES – need to be benefits for the present as well as the future, or project will not take off. Challenges: gov understanding of PES; integrating women into PES projects.

Alvaro Umana (former Minister Nat Resources & Energy, Costa Rica; now IMF) – remarked on previous quote – valuing forests for their C content is like valuing computer chips for their silicon content. 2nd generation model of PES in Costa Rica is coming w/ differential payments for higher biodiversity (also challenging to implement).

Steve Morgan (Wildlands, Inc.) – drivers for their business: Clean Water Act, Endangered Species Act. Biggest challenge: limitation of market area (to a watershed, a subpopulation of species, etc.). Their demand driver is growth and encroachment on wetlands/habitat. When regulators’ budgets are stretched thin, plans for restor/mitigation aren’t reviewed quickly.

Sachin Kapila (Shell) – switching perspective towards biodiversity as opportunity. Without clear regulation, cannot analyze opportunity.

Kerry ten Kate (Forest Trends) – explained resource markets as traditional markets (ag, forestry products, etc.) and “funky markets” (bio-prospecting, regulatory and voluntary biodiversity mkts). Total trade in funky markets – $1.5 Bill/yr (mostly in US). Business & Biodiversity Offsets Program - businesses to voluntarily achieve no net loss in biodiv (by avoiding, minimizing, mitigating). Incentive for partic: building trust, getting next license more easily, see regulation coming soon. Looking to future of biodiversity mkts… marry offsets to land use planning (the avoid part of the equation), biodiv mkt dating service to match projects to investors/those who need offsets.

Q & A’s
Q: in dev countries with resource extraction & no/v. little offsets – how get companies to offset? A: one difficulty is how to quantify the offset & locate it – Need Clear Metrics for biodiversity. A#2: “No one will write a check that you don’t have to write”. A#3: need level playing field. A#4: we need to stop this race to the bottom in developing countries.

Q re: how (Masai) community decides to set aside land; are there titles; etc. A: distrust titles (“land grab-iosis”), but community agreed to boundary – if start encroaching, go back to that agreed-upon boundary.

Q: how tease out credits of bundled services? A: we have a diversity of opp of credits to sell.

Carbon Markets Breakout Session
…coming soon.

Water Markets Breakout Session
Bettina von Hagen, VP, Ecotrust: WQT markets are unique bc they exist w/out heavy regulation - local incentives for improving WQ.

Ben Grumbles, Assistant Admin for Water, EPA: "Think globally, drink locally." Greatest concern nutrients and dead zones ($4.2 billion in grants for Miss. River basin - go get 'em!) In case you weren't sure how to describe wetlands, they are "nature's kidneys."

Marta Echavirria, Founder, Ecodecision, Ecuador: "Market" hard to convey in Latin culture but WQ is being funded by user fees, aka. "Watershed Protection User Fees", which has raised over $5mil. Working on bundling project with Forest Trends.

Mark Keiser, Sr. Scientist and Principal, Keiser & Associates: TMDL driver for WQT markets. The Miss. River basin is best chance at developing intersate market; no states in the basin have developed WQT standards. Advocate for simple rules - notes less participation in areas where rules are complex, increases transaction cost. If credit isn't credible, nobody will buy.

Richard Coombe, Regional Chief, NRCS: Catskill Plan worked because small farmers were engaged; small percent of population but own 85% of land. Eco-labeling from Catskills another way to increase profits from improved land practices.

Joe Rozza, Water Risk Mgr, Coca-Cola: "Water neutrality" - return same quantity of water as used in plants. Coca-Cola is looking at WQ in products and watersheds of customers. Interesting note - use 'risk' as means to justify environmental programs to companies, instead of financial incentives.

Will Baker, President, Chesapeake Bay Foundation: Advocates regulation and market approaches must come together. "When know what needs to be done, down to the P and N limits of subbasins; we just need the funding to do it."

How do address different methods and interpretations?
Ben: Flexibility with accountability; provide incentives to encourage mkt; need greater
ability to measure non pt. sources; and move states to numeric P and N goals.

There seems to be two subsets/kinds of markets, financial decision (aka. Catskill) and CSR (Coca-Cola) - how do you connect the two?
Marta: No, we need to integrate all players for markets to be successful.
Richard: They will meld together b/c water is so critical.
Hypothetical - Lake Meade is dry - Where do you start?
Ben: By 2011, most west states will experience extreme shortages. Need to advocate now: sustainable ag, Smart growth and efficiency. Wetland mitigation is an important tool.

Building Bridges Session
Public lands might serve as a future insurance mechanism for ecosystem services markets.

Senator John Kerry Keynote
Senator John Kerry (D-MA) – Inconvenient Truth part III: Return of the Politicians. A rousing speech in a room full of nodding heads (as in nodding in agreement).

An Infrastructure Fund for the Planet Panel
Moderator Alvaro Umana former Minister Nat Resources & Energy, Costa Rica; now IMF) – mentioned a new article in Science [?] proposing an atmospheric trust fund from a % of revenues from auctions of permits under a global cap & trade.

Colin le Duc (Generation Investment Management) – investment in forestry attractive (inflation hedge, tax benefits, etc.). Potential in wetland and ecosystem mitigation but has scalability issues. Mapping/monitoring services will be increasing in importance. Biomass conversion also a hot area.

Larry Linden (Linden Trust for Conservation)
…coming soon.

Larry Schweiger (National Wildlife Federation)
…coming soon.

David Brand (New Forests)
…coming soon.

John Mason (Nature Conservation Research Center, Ghana) – there’s a need to communicate with local stakeholders and recognize the unique challenges they face.

Closing Keynote
Steve McCormick (Gordon and Betty Moore Foundation, former CEO of TNC) – discussed broad eras of conservation history: preservation/protection/parks, conservation recognizing the landscape (outside park boundaries), conservation in harmony with people. Suggested new trend in conservation sparked by decision on Millenium Ecosystem Services Assessment to consider the dependence of humans on ecosystem services. Now perhaps the era is on conserving nature for services with human well-being in mind. We are at the “frontier of the imagination”.

Closing Remarks
Michael Jenkins (Forest Trends) and Cristian Samper (Smithsonian Institute) – some themes revisited during the conference: monitoring, baselines & data. Take-home: stories about env markets contributing to livelihoods in developing countries should motivate us.