News Summary for 7/16-7/30

Projects

- 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.

News

- 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.”

News Summary for 6/21-7/15

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

Projects

- 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”epa.gov 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: www.foodtrader.org

News

- 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)

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”)oas.org (Organiz of Amer States’ Dept of Sust Dev).

Projects
- 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")wbcsd.org

News
- 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

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.

Conclusion
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.

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

SEC. 2709. ENVIRONMENTAL SERVICES MARKETS.

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
section:

``SEC. 1245. ENVIRONMENTAL SERVICES MARKETS.

``(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
benefits.
``(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
Secretary.''.

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."

Q&As:
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.

Daily Summary: 2008 Global Katoomba Meeting, June 9, 2008.

Today and tomorrow environmentalmarkets authors will post summaries, comments, and reactions from the 2008 Global Katoomba Meeting: Developing an Infrastructure Fund for the Planet.

Opening Keynote
John Holdren (Woods Hole, Harvard) - Inconvenient Truth part 2: return of the graphs. Climate change science rundown. Choices for dealing with it: mitigation, adaptation, and my favorite... suffering.

Q & A's
Good metaphor for importance of biodiversity: taking out the rivets on a plane b/c it's free to do so and we don't really know how many we need. Metaphor 2: library.

Re: involvement of indigenous communities... some of the key q's addressed in Bali re: REDD were: can you monitor, how do you compensate, and can you engage indigenous population?

Panel on State of Affairs
Ken Newcombe (Goldman Sachs) - insight to the history of the C market. The 1st C market is an ex of a market catalyzed by an institution, and overtaken by private investment within 1 year. Hope that REDD can start in vol mkt while figuring out baselines. Alluded to an emerging mkt for adaptation - encouraging invest in sust landuse practices like soil C and WL conservation. Ecosystem services are at the nexus between the env, social dev, ag & infra.


Katie McGinty (PA Dept of Env Protection) - Millennium Ecosystem Assessm highlighted WQ as most urgent env problem (over CC). Insight into PA WQT. Environmental imperative for the market - alternative is pouring concrete/grey infrastructure solutions and chemical treatment (aka “call the engineers”). Env skepticism of markets - healthy when a check/balance leading to better design of the mkt, not so good when get "death by discounts" – “slice & dice” of pounds of reduction from edge of field-> stream ratio, stream-> mouth of Ches Bay ratio; reserve ratio; etc. Just say no when trading is proposed when it doesn't belong.

Stuart Anstee (Rio Tinto) – Mining companies own a lot of land that they’re not working on – normally see this as a liability. When impacting biodiversity, consider this a business risk/cost. Switch perspective to opp for mitigation of impacts on their land. Create positive env results from restor/rehabilitation & potentially get income stream. Builds trust with regulators.

Odigha Odigha (NGO Coalition for the Environment) – founder of a Nigerian NGO that works at the local level challenged audience to take the discussion about PES to the community level in developing countries – to where income streams for creation of env benefits is important.

Jonathan Lash (WRI) – stressed importance of “rules of the game”. Stressed viewing markets as a means to getting desired environmental outcomes (questioned the crowd [Who’s here to make markets work?] & no hands went up). The mechanism for creating value in ecosystem services is a regulatory framework. Legitimacy, predictability, transparency important in env markets.

Q & A’s
Re: viability of markets for fisheries—yes, where possible to define & limit access & rights to access can be sold. Politically difficult to limit access.

The Coastal Zone Mngt Act needs to be updated, so why not create a regulatory mechanism to limit access & require offset responsibilities.

Re: market barriers for poor/small landowners b/c of “death by standards & consulting costs”—ex given where markets accessible for areas in extreme poverty – buying C credits [voluntary] from women tree-growers in developing countries. Works in vol market, but compliance markets still buying as commodity, so buying for lowest cost. When commoditize C, you exclude other attributes – issue of quantity vs. quality. Landowners need advanced payments to imple projects. Small parcels are a problem.

Closing Key Note
Kathy Sierra (World Bank) – gave an overview of World Bank involvement in C [& other?] env markets. Anyone have points to add re: this presentation?

Closing Dialogue
Michael Jenkins (Forest Trends) & Cristian Samper (Smithsonian Institution) - Scale, scope, and pace of change are important in development of env markets. Pace—institutions do not move quickly, but must learn to be nimble if want to affect the way markets develop. In developing countries, the institutional capacity to use/enforce standards is weak.

News Summary for 5/17-6/3

Projects
- Nonmarket Valuation – BBC World “Nature Inc.” – “a new series that reveals the true value of nature by putting a price tag on it.” 1st install – bee pollination & CA almond groves June 13th 19:30GMT.
- W Flow – new FS project looks at beavers/fens restor/reintro in Rocky Mtn region to incr w retention capacity as CC adaptation. Contact: Trey Schillie

News
- Farm Bill (USDA website)
---“Passes” (w/snafu) on 5/22 (veto overridden)
---5-yr, $307 bill - $4bill for conservation ($188mill for Ches Bay)
---Lang to help env svcs markets but no funding (“develop uniform standards for quantifying environmental services; establish credit registries; and offer credit audit and certification services”)
---New grants for buying community forests; cost share for emergency for restor; state forest assess & plans; forest “CIG”-type grant program; wood-to-NRG program
---Some, but not much reform of subsidies (see Economist slam)
---Ecosystem Marketplace summary
---Summary of forestry-related items by Northern Forest Alliance Exec Dir George Gay
---Summary of Conservation Title from American Farmland Trust

- All things Mitigation - Ecosystem Marketplace’s Mitigation Mail (5/30)
---FL bill to regulate sea grass loss/damages fine facing veto as last-min amend to allow mitigation banking angers enviros. Crit: miti = net loss
---a NJ conserve trust is putting land up for bid to dev/sell WL miti (but not own the land). Bids start at $15k. Could bring the org $3.8mill.
---TX County has HCP for review that sets up cons miti bank (birds, karst invertebrates) for roads, schools, utilities, pub or priv dev, etc. in Co.
---Charlotte County plans to buy scrub jay (TES) habitat crit: $$, would be preserved by landowner anyway (additionality), pub access concerns
---Another Co gets crit re: additionality of cons miti plan on pub land bought for conservation. Sounds like idea to create bank spurred by dev D/ lack of miti S
---Another gov gets crit re: additionality/net loss – ME DOT + partners planned to restore WL for restoration’s sake, then decided to turn it into a WL miti bank for their uses.
---Miti industry consolidation – Wildlands Inc. buys Acer Environmental (GA/NC)
---Australia’s BioBanking has RFP for landowners to dev/sell biodiv credits, sign biobanking agree

- Cons banking/ Regulatory drivers – US House Nat Res Comm/GAO investigation finds USFWS could have “trumped science with politics” on 8 ESA [de]listing decisions (of ~200 investigated). Looks like FWS jumped the gun in delisting. Pol interference could create unnaturally weak demand-driver for cons banking. House Nat Res Comm site, GAO report (70p), News article summarizing GAO official’s testimony to the House Nat Res Committee

- WQT – Ecosystem Marketplace article on Vol W Mkts reviews basics of D drivers (even if “vol”, gotta have reg driver)/players (regulated PT source, unreg ag sector) in WQT; ag prefers to stay under the radar of regulation/gov (eg – verifiers on farms); WQT price must entice - no D if ag prices high; state policies can work against D (ex – MD “flush tax” paying for PT source poll reduction).

- C – PG&E RFP asks for up to 1mill tons GHG emiss reduction via CA CCAR-verified projects to use customers’ vol offset $s. Deadline 7/2.
- C tax – SF Bay air qual mngt auth 1st in US to charge businesses fees to emit GHG. Will raise $1.1mill from 2500 businesses (ex fees: ~$1/yr for service station -> $50k+/yr for oil refinery). [Q: and do what with it?]
- REDD – New Forests continues S Asia roll (orangutan miti in Malaysia, selling biodiv credits to palm oil manu in Borneo) w/ REDD arrange w/ Indonesia regional gov for up to 1mill hectares forest.
- REDD in the USA – NPR story on N CA forest mngd by Pac For Trust –old trees capture/store > C > quickly than younger trees; variable standards of vol C offsets; CCAR

- Nonmarket valuation –U MD Center for Agroecology study on multi ecosys svcs, incl: maximizing forest mngt for C seq & timber, recre values ($96/day trip, $400/overnight trip), existence value of forests ($200-$375/person/yr). Press release, News story
- Nonmarket val – EU/Germany report: world env damage and species loss from forests costs $2.1-$4.8 trill/yr (NPV). Other world-scale val studies in draft stage: gen biodiv loss, coral reefs, Meditterr coastal WL, env bene of flood/erosion risk mngt, cost of species/hab plans.
- Nonmarket val – Tufts U/NRDC research – cost of not addressing CC (esp from hurri damages, real est loss, incr NRG costs, w costs) in US is $3.8trill/yr by 2100.
- Nonmarket val – CA Forest Assoc’s summer mag is all about link betw forest -> clean water/ consistent flow, W & CC, etc.

- Certif – FSC Fam Forest Cert mtg ID’d ways 2 reduce costs assoc w/ cert, incr landowner bene, impr communic. Mtg report soon.

- Tools – NWI maps now on Google Earth
- Tools – Forestry GIS freeware

-Misc – OSU article on forest mkt drivers - TIMOs and REITs don’t care about maximizing ecosys svcs, sustaining local econ, etc. Land goes to highest val (golf course, timber, whatever). Rise of TIMOs/REITS b/c of tax law (disadvan for timber co’s to own land).

Farm Bill... could've been so much better

The 5-year, $307 billion Farm Bill was passed on May 22nd (vetoed and overridden). Here's what Ecosystem Marketplace says about the bill:

The action has direct and indirect effects on environmental markets – for not only does the new Farm Bill govern large swathes of the ecosystem marketplace, but the relatively small portion of its funding earmarked for conservation [$4 billion] still represents the federal government's largest environmental outlay...

The new Act calls for the agricultural secretary to: "establish technical guidelines that outline science-based methods to measure the environmental services benefits from conservation and land management activities."

The guidelines are to be used to develop procedures for measuring environmental services benefits, a protocol for reporting them, and a registry. Guidelines to help farmers, ranchers, and forest landowners participate in carbon markets are a priority – but the bill provides no funding for the initiative. [emphasis added]

Both Ecosystem Marketplace and The Economist note that the real loss in this Farm Bill is the lack of reform of commodity subsidies. The Economist slams the Bill as one giant income distribution mechanism, funneling tax dollars to rich farmers (average income: $230,000)

Here'a a summary of the conservation title, courtesy of American Farmland Trust

News Summary for 5/3-5/16

Meetings / Seminars
- 5/7-9 - 11th Annual National Mitigation & Ecosystem Banking Conference – day summaries for May 9th, May 8th, and May 7th

Projects
- Mapping – National Geographic/NatureServe’s LandScope, to be launched 2008, brings maps/data/photos/info about conserved/priority cons/planning areas, trends, etc. for US/states together to inform/target efforts on the part of land trusts/st & local gov/private landowners/etc.
- Mapping – Trust for Public Land launches Conservation Almanac--lists data (1998-2005) about conserved areas in each st, acres acquired, $s spent, LandVote ballot measures, profile of state policy/conserv programs. Helpful for st/regional cons stats.

- Markets – AgTrader, a Craig’s List for MD farmers launched

News

- CC – US FWS lists Polar Bear as threatened due to loss of habitat (sea ice), says won’t use listing to force regulatory action

- All things C – Ecosystem Marketplace’s V-Carbon Mail (5/2/08)
---CCAR launches Climate Action Reserve that provides standardized protocols for C projects, info on projects, and tracks credits.
---Bush - proposal of zero emissions growth by 2025
---Canada and Greece out of compliance w/Kyoto can’t trade in EU C market until they get their act together
---Sir Nicholas Stern (of Stern report fame in ’07) says he goofed and to minimize dangerous risks of CC, need to reduce emiss by 50% for world and 90% for US

- C - Ecosys M’place releases 2007 State of the Voluntary C Market. Interesting stats:
---65 mill tonnes of C credit transactions in vol mkt [42mill from OTC mkt, 23 from CCX transactions]
---ave pr of credit went from $4.10->$6.10/tonne from 06 to 07
---OTC mkt tripled to 42 mill tonnes C credit transactions (val of $258mill in 07)
---dominant projects in OTC: NRG efficiency, renew NRG, methane, forestry/land projects

- WQT – summary of MD’s newish (4/18/2008) PT-PT trading policy

- Leadership – TNC appoints Goldman Sachs’ green guru Mark Tercek as new president/CEO

- PES - Special Issue on PES in Developing and Developed Countries – May 2008 Ecological Economics, 65.4. Sven Wunder, Stefanie Engel and Stefano Pagiola (ed).

- Nonmarket val – UFORE analysis of Houston’s regional forests: store $721mill worth of C, gen $456mill of env bene/yr, save $131mill in res NRG costs.
- Nonmarket val – WSJ Natural Cap blog discusses bene-cost analysis for env policy; crux of debate – whether economists value future generations’ benefits enough (via disc rates)

MD's Newish Point to Point Water Quality Trading Policy (dated 4/18/2008)

Maryland Policy for Nutrient Cap Management and Trading in Maryland’s Chesapeake Bay Watershed

• This is phase I of the policy (PT to PT). Phase II is PT-NPS.
• Caps are Tributary Strategies nutrient limits (a concentration of TN or TP x a point source's design capacity/flow) & are written into NPDES permits
• Only allowed to buy credits to maintain cap… or if a new or expanded plant, to get offsets (& have to prove that you can get offsets for next 20 years)
• 3 trading regions: Potomac, Patuxent, Eastern/Western Shore Tributary Basins (including Susquehanna)
• Ways to get reductions: find reductions in your own plant, buy credits from other sewage treatment plants that are below their caps, pay for a little guy to upgrade their treatment, pay for a little guy to reduce their discharge to 0 (retire) or to connect all their discharge to a big plant, pay for septic system folks to connect to a treatment plant (but this only gets TN credits), spray poo (“land application of wastewater w/ pre-treatment & nutrient management controls”)
• A credit is a lb of N or P/yr delivered to the Chesapeake Bay
• Credits are valid for one calendar year & can’t be banked
• Major PT has to do Enhanced N Removal technology before they can trade, but this technology is paid for by MD taxpayers via “flush tax”
• Allows interstate trading
• MDE will initially maintain a database of credits generated & traded
• Appendix A has a nice list of all major PT sources, their design capacity (in MGD), their 06 flow – shows how close WWTPs are to their max capacity (@ which point, caps become a reality)
• MDE estimates use 9.5 lbs/yr TN/person and 0.23 lbs/yr TN/person

Notes from the field: 11th Annual National Mitigation and Ecosystem Banking Conference, May 9, 2008

McGeorge Group Breakfast Session
Panel: Mark Sudol (ACOE), Craig Denisoff (Westervelt), Deblyn Mead (USFWS), Michael Bean (EDF).

Some notes: Banking industry has concern of in-lieu fees that are held by groups with a vested interest in keeping the $, but not a concern with in-lieu held by an agency directed to purchase the miti. Prior to 4 yrs ago, didn’t require no net loss of streams, but now, yes (if meets jurisdictional def). ACOE HQ has 6 employees (!). Proactive conservation banking – yes it’s possible, but no practical demand for it w/o regulatory handle—could be an opp to change law to create incentives to help species before they’re listed.

Technology & Tracking Session
Interesting ACOE Ecologist mapping project to identify key lands for WL mitigation from banker perspective (cheap land), ecological/regulators’ perspective. Regional FL interactive mitigation banking website – staff enter info in sys and is immediately avail online – similar to RIBITS.

Update from ACOE on RIBITS & ORM database (?). Basically, all ACOE districts are for the 1st time all using the same database mngt sys. Will be linking database to RIBITS (currently only avail in Norfolk & Mobile districts). ACOE has MOA w/ EPA, USFWS to link conservation banking to RIBITS.

Integrating Banking into Resource Planning Session
Department of Defense interested in doing mitigation offsite; has legal authority to buy credits in WL bank or to pay in-lieu fees; has Legacy Program – env grants to [buy land or easements?] to support mil readiness. DoD has contract with LMI to ID viable offsite mitigation in base buffer areas in a project in the Ches Bay. The 2 pot projects ID’d are related to nutrients/WQT: WWTP in FT AP Hill buys WQ credits; WWTP on base convinces adjacent landowners to do WQ BMPs, then base buys conservation easement & WQ gets credits (?).

EPA’s Green Infrastructure approach can help bankers with the watershed approach req by new Rules b/c GI ID’s priority cons areas. DOT did big grant to use GI to see pot conflict/ID miti opportunities on their projects.

Highlights from Q & A’s from the Day
Q: If Rappahanos final decision says have to mitigate for ditches, could we dig another ditch that has the same function?
A: In Supreme Court discussion, Scalia says a ditch is jurisdictional, so yes.

Q: Does RIBITS allow you to find onsite mitigation projects?
A: No. Audience member suggested that searching for conservation easement database could help.

Q: Regarding military knowledge of mitigation banking…
A: Military knows about, & is extremely interested in mitigation. Presenter saw a recent research paper that suggested the mil would be the largest buyer of mitigation (anyone have this source?).

Tip to WL Mitigation Bankers: Differentiate Company Name/Logo

As someone new to mitigation banking, I can say that I had a hard time remembering companies because they all sounded alike: "environmental", "mitigation", "solutions", "ecological". And so many use that heron logo...

[The color] Green is Out
From a Getty Images green marketing report
"Expect the future to be any color but green because right now everybody uses green (and darker shades are predominant). The environment comes in all colors, and visual clichés do not compel interest. Expect to see a backlash on all familiar environmental iconography. Innovators will embrace the mucky, the messy, the colorful."

Notes from the field: 11th Annual National Mitigation and Ecosystem Banking Conference, May 8, 2008.

Preliminary address highlights
Michael W Sole, FL DEP Sec of the Env – FL’s st legislature working on/passed WQT, cap & trade. FL wants to take a look new Rule – is going to mitigation banks 1st “bridling ourselves”?

Mark Rey, Undersec for Nat Res & Env, USDA – Farm Bill insiders’ view – some of the things the dept wanted (> conservation funding, reforms on commodity/subsidy payments, incr spending by no more $6bill, don’t pay for it with taxes) aren’t what the Senate & House put forth. Pres promises to veto it as is (no reforms, not as much cons funding as would like, paying for it with taxes/”budget gimmickry”). House & Sen conf committee rushing to change it right now. Interesting ecosystem market development: TIMOs/REITs’ interests now diverging with forest products manufacturing industry b/c landowners want to take advantage of selling ecosys services & the forest prod industry thinks this will incr fiber prices.

Ben Grumbles, EPL Asst Admin for Water – the new Rule is a BIG.DEAL. (likens importance to “no net loss”). Why he likes the new rule: advances the *science* of WL/str miti, > consistent/reliable standards, performance-based, market-based. Still maintain importance of avoidance/minimization/no net loss. EPA & COE working on potential legislation to amend CWA re: jurisdiction, & streamlining permitting process, extending general permit (?) from 5 to 10 years.

George Dunlop, Principal Dep. Asst Sec of Army, Civil Works – a real character. WL miti used to be one size fits all, onsite, which “shackled” mitigation banking, this new rule brings an “opportunity concept” to mitigation. Also heard: semi-quote “compensatory mitigation in the 1990s was shackled by a neo-Marxist, neo-pantheistic system” (wha???). Entrepreneurs need & Rule provides: clarity, transparency, consistency, predictability, timeliness. Warns that “skeptics & saboteurs” will counterattack. Likened agencies/bureaucrats to amoebas – wanting to expand control.

Session: Business of Banking, Primer 102
Due diligence in setting up wetland mitigation banks – talked about what WL mitigation bankers think about when considering setting up a bank, including: Demand for credits (users), service area, who’s influential on the interagency review team, development trends in the area, competition, etc.

Financial assurances – a review of the process that mitigation bankers go through to provide required assurances (what’s required is that mitigation is constructed and has met performance standards). Sec 332.3(n) has specifics. Banker finds a Trustee, Trustee uses bonds, escrow/letter of credit, etc. Diff type of assurance situations, but basically the Trustee or bonder will ensure the work gets done if there’s an issue.

Sales & Marketing Strategies – back to basics: used framework of 7 Habits of Highly Effective People. Good planning and execution goes a long way in miti banking success.

Lunch Speakers
Mostly reiterating major points of new Rule. Corps/EPA have some training set – at joint May 08 national meeting, and an IRT member training in June 08 with training posted online.

Mitigation Laws and Cases of Interest to the Mitigation Banking Industry: what’s a jurisdictional water & legal tests of most recent guidance… and potential new legislation (Clean Water Restoration Act) to bring the def of jurisdictional waters back to pre-2001. Farm Bill item on tax incentives for conservation banking. Industry concerns re: standards of recovery credit trading. Water Resources Development Act of 2007 – establishes preference for mitigation banks; requires water resources projects (e.g. Corps projects) to meet new Rules [correct me if I’m wrong].

Capital Session
Can anyone out there capture the salient points? (Use comments feature)

Water Quality Trading Session
Overview of basics of water quality trading programs (can find full info in Toolkit for Permit Writers at www.epa.gov/waterqualitytrading). NRCS sees role for itself to help create/standardize models to help determine nutrient credits, reviewed NTT tool (Nitrogen Trading Tool, contact: Shaun McKinney). Overview of PA’s trading program.

Highlights from Q & A’s from the Day
Q: concerning pre-selling credits to a 3rd party (financier) for resale…
A: Banker thinks could be bad idea – creating new competition, but could structure the deal so the original banker retains marketing rights.

Q: Regarding financial assurances…
A: If you can’t work out a solution with the regulator & have to actually use your financial assurances, you’re not building trust with the regulator = bad for your business.

Q: Regulator interested in simplicity in dealing with financial assurances.
A: Banker resists this idea as limits financial opportunities; some states have different financial instruments…

Q: What happens when you want to do a conservation easement but the mineral rights are held separately?
A: Write in a contract a waiver of surface entry but allow access [via directional]…

Q: Regarding long-term management assurances…
A: This issue is huge. Banks give funds to [land trusts, etc] for long term management and might find out that’s not really happening. Suggested requirement for financial plan negotiated between the banker and the manager.

Q: Do gov agencies need financial assurances?
A: Yes, but they can self-insure.

Q: Concern about capital carpetbaggers in env markets…
A: Many of these investors have heart in it, but recognize the fear

Comment: Idea for National Miti Banking Industry to set up a clearinghouse of bankers to help match up funders with bankers.

Notes from the field: National Mitigation Banking Conference, May 7, 2008.

New Rules – overview of major themes (see New Corps/EPA wetland mitigation regulations).

National Mitigation Banking Association Session – discussion about ensuring that new Rules are implemented & consistently. NMBA will watchdog. NMBA interest in expanding conservation banking beyond CA. NMBA interest in informing other potential legislation affecting the miti industry (conservation banking, WQT, Nat Resources Damage, C issues, stacking).

Highlights from Q & A’s during the Day
Q: Concern voiced over ACOE’s (lack of) motivation to efficiently administer WL miti banking review b/c of lack of OMB performance measures.
A: ACOE has proposed new perf measures to OMB.

Q: Concern voiced that ACOE/EPA staff stretched thin.
A: Acknowledged, trying to make more info avail online (RIBITS) that will increase public info & ensure continuity of records with staff turnover. Also more Interagency Review Team training so members can review efficiently, having the info they need.

Q: Questions regarding stream miti.
A: ACOE *already* requires miti for impacts to streams, Rule doesn’t make this a new thing. Next big step is to develop guidance on quantifying debits for impacts & credits for restoration.

Q: Several questions/discussions regarding stacking
A: ACOE, EPA clear there should be no double-dipping. Comment from audience: USDA Secretary previously announced that farmers who receive $ from Farm Bill programs (CRP, etc.) can also receive payments for ecosystem services. Basic argument for stacking: if an impact is required to mitigate for several diff types of impacts (WL, habitat) on one piece of land, a mitigation site should be able to mitigate for several diff types of impacts. Basic argument against: if it’s acre per acre-type mitigation, you just can’t sell the same acre twice. Concession: if mitigating based on function, and can show/document “uplift”, maybe could stack. Stacking WL and WQ – probably not. If bank were “double-dipping”, ACOE would stop the bank from selling any more credits.

Coming soon... posts from the National Mitigation Banking Conference

I will be attending the National Mitigation & Ecosystem Banking Conference: Banking on the Environment this week and will post summaries and comments nightly.

Conference info: www.mitigationbankingconference.com

News Summary for 4/21-5/2

Projects
- Regional ecosys market – non-prof NW Nat Res Group receives EPA targeted w’shed funds for market-like projects in Nisqually w’shed, WA. Includes promoting sust cert of ag/forest products, creating wq trading credits from sust ag/forest mngt, conservation easements.

- GHG offsets – EDF focusing on CA working lands; pilot test with rice farming mngt practices & will market credits.

News
- All things Mitigation - Ecosystem Marketplace’s Mitigation Mail
---Ecosys Marketplace 1st of series of articles on new WL miti rules. Past pres. of Nat Miti Banking Assn thinks new WL regs will triple priv WL miti banks from 500 to 1500 in 3-5 yrs. > transparency – required docs have 2B posted online. New timeline (<1 yr) for the Corps to approve miti. Skepticism: that WL f(x) can be maintained w/ miti, can str really B restor?, unintended conseq: miti occurs away from urban areas (hi pr land)
---Ecosys services standards in Farm Bill – House version would have USDA in charge, with input from DOI, DOE, Commerce, DOT, EPA, ACOE; Senate version – build standards framework w/ collabor stakeholder process. Supposed to decide 4/18.
---2007 ELI Report Miti of Impacts to Fish and W’life Hab: Est Costs and ID Opps – 1st ever annual cost compens miti from fed programs is ~$3.8bill ($2.9bill-404 permits, $370mill-HCPs, $417mill-hydropower miti, rest-nat res damage miti). Could target those $s to st w’life action program priorities.
---Charlotte Co interested in buying scrub jay habitat for new miti bank
---WA ag comm protesting taking ag land out of production for WL miti bank, suing; bank says it’s ag land b/c includes native seed/plant nursery
---New Forests launched $100mill Eco Products Fund – invest in forest-based C, biodiv, water ecosys services (SE Asia, Pac Is, Latin Amer). Selling biodiv credits to palm oil manu in Borneo.
---New CA Sandhills conserv bank
---OR Willamette valley WL miti credits expensive: $65k-90k
---private co Canopy Capital buys 1mill ac Guyana rainforest in hopes of future ecosys service compens – 16% of profits would go to the co, 80% (!) to local comm., 4% to research instit

- WL Miti – Science article (Stokstad, vol 320:5873) on Final Rule WL miti - presents sci as alarmed/ troubled/ worried about some aspect of WL/str miti, w/ minor defense from the Nat W’life Fed & ACOE rep's quoted saying things along the lines of this is pretty good/ we're addressing that concern

- C – cap&trade won’t break the bank says EDF. Evidence from 5 major studies = if reduce 60% by 2050, would slow eco growth by 0.03% yr. @ odds with industry study – lose mill’s jobs.
- C – new Google-type search plants 2 trees for every 1,000 searches (offsets 1 ton GHG)

- Biofuels – NYT Op ed about biofuels as darling/baddy, stresses don’t throw baby out w/bathwmg but refocus on those with env bene & no subsidies.
- Woody biomass – article re: as housing market slows, mills slow, wood waste decr -> decr S for biomass NRG plants. Chip prices are up 50% since last year.

- Drinking water – Forest Service Forests, Water, and People Assessment highlights priority private forests in the Northeast and Midwest that are imp for drinking water
- Flood retention svcs – Google earth to include flood threat on mapping
- Misc – new Water Footprint calculator. Basic version – if you live in the US and are not a vegetarian, your footprint will be large; scales up with income.

- Certif – NBC Nightly News highlighted sust logging on FSC-cert forest.

Ecocho: You Search, We Grow Trees

Hey kids,

Check this out: http://www.ecocho.com/. This isn't the first time that I've seen a spin-off or modified manifestation of a popular search engine, but I guess I'm more than a little intrigued by this one - they'll plant 2 trees (in NSW, Australia; credits are certified by KSGW under the NSW GGAS) for every 1,000 searches, effectively offsetting 1 ton of carbon. Just think, you could offset 1/1,000 of a ton of carbon during your next search! If you drive 10 miles to work in the morning, and your car gets 20mpg (and burning one gallon of gasoline releases roughly 20lbs CO2) you'd just need to do 5 searches on echcho to offset your morning's carbon emissions!

Actually, my dorky little calculations are doing a bit of a disservice to this well-intentioned website. One of it's strengths is that within its list of simplified answers to FAQs, they admit that much more needs to be done to tackle climate change than afforestation alone, but that tree planting can certainly make a meaningful difference. It seems they've put Yahoo's technology to good use. However, they seem to stick with touting trees' carbon benefits, and don't mention any other ecosystem services. What do you all think? Is this an effective way to raise peoples' awareness in general, and create a link between climate change, trees, and environmental/human health?

News Summary for 4/5-4/20

- Gov Incentives – Land Econ article (Suter, Poe, & Bills, 2008) concludes that 1-time sign-up bonuses are > cost-effective at incr cons than increases in annual payments.
- Gov Incen – US Forest Service will spend $54 mill on cons ease on working forests via Forest Legacy Program in ’08. 35 projects in 32 states
- Gov Incen – NOAA is requesting comments by June 9 on revisions to Coastal and Estuarine Land Conservation Program (CELCP)
- Cons Finance – REDD in the USA? some individuals in AR bought forest land, asking folks to lease it for $200/yr per 1k sq ft.

- WQT – Ches Bay watermen considering suing state agencies re: water quality & economic impacts; potential driver for TMDL regulation in the Chesapeake, wqt.

- REDD – Marriott signs agreement w/ Brazilian state (Amazonas) to protect trees. Gives $2mill for 1.4mill acres.
- C tools – COMET-VR to pair up with COLE.
- C tools – Wilderness Society report criticizes USFS’ COLE, C Calculation tool, other tools – good effort, but coarse scale. News story, report

- Renew NRG – Waste Management going to open 60 new landfill gas-to-energy facilities. Dell HQ is using 100% of the power from 1st Austin TX facility.
- Renew NRG – CO Universities, Nat Renew NRG Lab, businesses partner on C2B2 (CO Center for Biorefining and Biofuels) to research biofuel/refining tech.
- Cellulosic biomass – Iowa State U, ConocoPhillips, Nat Renew NRG Lab partner on dev tech for converting (mostly ag) non-food cell biomass into transportation fuels.

- Misc – U of Missouri research – the public prioritizes local env issues. Top 3: local drinking water, reducing US water poll, impr urban air poll issues like smog. Global warming is 8th.
- Misc – over 50% of paper used in US is recovered for recycling.

News Summary for 3/24-4/4

Meetings / Seminars
- WSJ ECO:nomics, Creating Environmental Capital conference - was invite only/$$$ & w/lots of big-wigs. Wal-mart: we’re not sure when we’ll get to 0 waste and 100% renew NRG. GE: capitalizing on green tech. Governator: re-think nuclear? Rainforest Action Network: kickin’ it old school, crashes party & slams ADM re: palm oil (w/schoolchildren petitions, no less). Summary of conference
- WQT – just came across a 2/21 PA Sen Repub Policy Committee hearing on Ches Bay nutr reduction goals. Speculations on why nutr trading isn’t going gangbusters. Main points below, audio file here
- C – Western Climate Initiative Offsets Subcommittee – discussed what will qualify as offsets under WCI’s cap&trade (incl role of forestry, ag). Draft proposal out ~May. PPTs

News
- WL miti – EPA/Corps issue official reg’s on wetland miti (had been just guidance). Changes: gives pref to miti from (in order): mitigation banks, in-lieu fee programs, ~on-site mitigation (big change b/c on-site was previously 60% of miti); watershed-scale miti gets pref; in-lieu held to miti bank standards; approval process has timelines. Regs, detailed analysis, news story
- All things Mitigation - Ecosystem Marketplace’s Mitigation Mail
---Species recovery credits – if there’s TES habitat on gov land, agency (ex – Army) can shift respons of protecting habitat to adjacent landowners. Criticisms: less accountabil than cons banking (mngt/monitoring plans, ecological milestones); no endowments to cover unforeseen exp; long-t mngt stays w/ landowner (as opposed to a cons group); less/no transparency (/landowner confidentiality).
---Pomo tribe (CA) creating WL miti bank to miti for development w/in their lands
---GA school board to set up a WL miti bank on their lands
---WA state lets local gov give final approval of WL banks
---rural WA credits go for $75k, Seattle/Belleview credits go for $400-500k
---new 500-acre bank in MS

-WQT – MD announces final [point-to-point source] nutrient trading. Have to upgrade WWTPs before can trade.
- WQ – Nature article on study of (72 US) streams’ ability to absorb N: 10-20% w/in 1 hour. As incr N loads, “precipitous drop” in abil to absorb. Impli: if incr N (say, from incr biofuels prod), more N pollution/dead zones. Mullholland et al., 2008, Nature, vol. 452.

- All things C - Ecosystem Marketplace’s V-Carbon News
---TNC has vol C credits to VCS & CCS standards from project in LA, pricey ($20/credit)
---JPMorgan buys UK C offset co
---Env Defense has RFP for potential offset providers on new FightGlobalWarming.com, which helps co’s buy hi-qual C offsets
- C – new WY legis: 1) estab state reg framework for C seq projects, 2) gives owners surf rights the rights to underground CO2 storage
- C – AgraGate (subsidiary IO Farm Bureau) does 15-yr forestry contracts (afforest, sust mngt), pools credits, sells on CCX, pays landowners (- service fee). Currently has 100 contracts/60k acres afforest in southern US.
- C – CCX C prices rising, from low of $1.70 last year to $5.70 last week (b/c all 3 pres candidates are talking about C cap&trade)
- C seq – forest industry study concludes managed forests seq 2x more C than unmanaged

- Planning – program/tool Corporate Ecosystem Services Review (WRI) - ~EMS-ish, but easier, review risk/opp/strategies from ecosys service perspective. xls/ppt/cases to help
- Planning –Ecosystem Services: A Guide for [public sector/gov] Decision Makers (WRI)- a how-to framework for taking es into account in economic/social policy decisions. Story/case study provides ex of how to imple
- Woody biomass –NV plant (designed to power prisons) halts production. Blames USFS, says can’t get supply; USFS counters: we have S, it’s just transport $$ to get to plant.
- Incen for conserve – article re: 3,600 forestland conservation easements in US, held by 16 states & 355 cons org’s (from survey of land trusts/gov easement holders w/ ~50%response rate). Failure to address shortcomings (lack/poor baseline, record keeping, professional mngt plans) = lose legitimacy.
- Incen for conserve – 1st time in 2 years farmers can sign up for CSP in these watersheds
- Info – Dovetail report, basic explan of forest opp’s in eco-markets, emph on C (16p)

- Internat PES – WWF/CARE Guatemala studies on: hydro, eco val, w’shed selection, legal framework (in Spanish). Contact
vreyes@wwfca.org
- Certification – WWF new focus on certif., how it can val env services (can you get a price premium?, actually impr biodiv?, does is impr rural incomes?). Contact Pablo.gutman@wwfus.org
- PES – new website, ex’s of PES around the world

Nutrient trading in PA - why it's not gangbusters

Summary of a 2/21 PA Senate Republican Policy Committe public hearing on Chesapeake Bay Tributary Strategy

Interesting meeting with testimony from PA DEP, local gov wastewater treatment plant rep's, municipalities/builders/agricultural trade org's, env org, & EPA. Here's some of the speculation for why nutrient trading isn't gangbusters:

• it's new, it'll take time for folks to adopt (DEP)
• vauge It's not applicable to us/ we don't feel it's a viable option at this time (local gov's)
• no fair that sewer rate payers have to pay for nutr reductions, can we get state money for it (local gov's)
• uncertainty of having to buy nutr credits on annual basis (price fluctuations), uncertainty of tangible result of nutr credits (local gov)
• PT sources haven't felt the heat yet - reg's not in full force until 2010, some WWTP's haven't reached max capacity/nutrient cap yet
• there's not enough #s of P credits avail (municipalities org)
• nutr trading isn't financially competitive with WWTP upgrades (builders org, nutr trading co, env org)

Current price of nutr credits: $9/lb for N, $4/lb for P (Red Barn Trading Co.)

Audio of the meeting

Water supply

AL, FL, GA fighting over water supply – haven’t been able to come to a solution, Army Corps of Engineers steps in, says will do command-and-control solution.

New Corps/EPA wetland mitigation regulations

242 pages of fun wetland mitigation regulations. Prior to the "Final Rule", there were no official regulations, just guidance doc's. Emphasizes landscape-scale wetland mitigation in the watershed context. Specifically gives the following order of preference for mitigation type: mitigation banks, in-lieu fee programs, and then on-site mitigation. All types of mitigation have equivalent standards now - including planning requirements, financial assurances, monitoring, and ecologically-based performance standards. Future in-lieu fee programs will have to step up, but all current in-lieu fee programs will be grandfathered to previous guidance.

In the past, 60% of wetland mitigation had been done onsite. That won't be the case in the future. There is also quick mention that wetland mitigation that's done using federal $s (WRP, CREP, etc) cannot be sold --no double-dipping. BUT these federally-funded wetlands *could* double-dip and sell endangered species credits, where applicable.
Regulations
Analysis of regs
EcosystemMarketplace news story, CNN news story