CARBON MANAGEMENT. presentation to. Oregon State Bar: Sustainable Futures Section

Transcription

1 CARBON MANAGEMENT presentation to Oregon State Bar: Sustainable Futures Section Lucy Brehm Senior Manager, Business Development The Climate Trust September 27, 2010

2 The Climate Trust Founded in 1997 as a 501(c)(3) nonprofit based in Oregon The only qualified organization under the Oregon CO 2 Standard Investing since 2001 in projects that avoid, sequester or displace emissions of CO 2 Governance OR Board nominated by EFSC, environmental groups and utilities Support and oversight from EFSC and Oregon Department of Energy

3 Oregon Carbon Dioxide Standard Passed in 1997 First U.S. state law aimed at reducing CO 2 emissions Requires fossil fuel-fired energy facilities to reduce CO 2 emissions by 17%: Investing directly in on-site emission reductions Funding and developing carbon projects Providing funding to nonprofit to develop and manage carbon projects on their behalf (Known as the Monetary Path )

4 How the Monetary Path Works Current rate is $1.40 per metric ton 80% for carbon credits 20% for long-term project management (5-100 years) Plus one-time fee of 5% for investment selection and contracting Payment calculated when site certificate is granted Law allows for Energy Facility Siting Council (EFSC) to increase the price up to 50% every two years $0.28 $1.12 Offset funds Management funds

5 Emissions Emissions Offset Fundamentals Offset Definition The reduction, removal or avoidance of emissions from a specific project that is used to compensate for emissions occurring elsewhere Role in cap and trade Projects in sectors outside emissions cap Purchased by capped sectors to meet compliance obligations

6 Offsets must be: Additional Based on a Realistic Baseline Quantified and Monitored Verified by a Qualified and Impartial 3 rd Party Unambiguously Owned Address Permanence Address Leakage Do No Net Harm

7 Offsets: What they promise = Real, verified reduction in greenhouse gas levels Equivalent to on-site reductions

8 Sample Offset Projects Anaerobic Digesters Improved Forest Management Truck Stop Electrification

9 Renewable Energy Credit A Renewable Energy Certificate (REC)** is the unique and exclusive proof that one megawatthour of electricity has been generated from a qualified renewable resource connected to the grid. (Offset Quality Initiative) ** (Also referred to as green tags, tradable green tags, and Tradable Renewable Certificates)

10 Renewable Energy Sources Wind Solar Biomass Farm Power Biodigester Mt. Vernon

11 Offsets and RECs Renewable Energy Project Offset Criteria 1 ton of CO 2 e Demonstrated Additionality CO 2 benefit explicitly included/quantified Demonstrated Ownership Ongoing Monitoring and Verification Renewable Energy Credit Criteria 1 MWh of renewable generation from a qualified renewable resource GHG benefit may or may not be included Not Mandated by Law Compare: Additionality Ownership Environmental Benefits

12 Voluntary --- Regulatory Markets Continuum Retail buyers (individuals) Corporate Social Responsibili ty Goals Voluntary Customer Programs Precompliance buyers (example: utilities) Regulated Industries (Oregon Power Plants) State and Regional Regulation National- Cap and Trade system

13 Local Voluntary Program Example:

14 Trends: Carbon Market Voluntary market growth From $91 million in 2006 to $708 million in ~50% drop in value Low carbon prices suppress project development Uncertainty about climate regulation is stalling investments Standardization on the rise Development of voluntary standards Increase in carbon service providers Source: Ecosystem Marketplace, State of the Voluntary Market Report, 2009

15 Trends: Climate Policy in Flux State climate policy Oregon California Washington Regional climate policy East RGGI West WCI Midwest MGGRA Federal climate policy American Clean Energy and Security Act (passed House) American Power Act (Senate) EPA regulation Climate-related policy Energy efficiency Renewable portfolio standards Biofuels and fuel economy Land-use change Tax policy

16 Regional Cap and Trade Programs System Regional Greenhouse Gas Initiative (RGGI) Western Climate Initiative (WCI) Midwestern Greenhouse Gas Reduction Accord (MCA) IN DRAFT Sectors Covered Reduction Targets Electricity 10% below 2003 by 2020 Electricity, industry; after 2015 transportation, residential, ag and waste Electricity, industry (possibly transportation fuels) 15% below 2005 by % below 1990 by 2050 Between 15-25% below 2005 by 2020 Start Year Offset Program US-based project types; limited CDM offsets 2012 North-American offset program; CDM also accepted TBD MCA states only at first; CDM considered later

17 State Programs System Sectors Covered Reduction Targets California AB 32 Oregon CO 2 Standard Washington CO 2 Standard Electricity, industry, transportation, residential Electricity Electricity 1990 levels by 2020 Standard of 17% below most efficient Standard or 1.1 lbs. of GHGs per kwh Start Year Offset Program 2012 TBD; will not restrict by geographic location 1997 Offsets purchased at set rate; Climate Trust designated offset provider 2008 Sequestration or electric facility offsets from western grid

18 Useful Resources Offset Quality Initiative Pew Center on Global Climate Change World Resources Institute Classes at Greenhouse Gas Management Institute VanNess Feldman Policy Updates Climate Change - U.S. Climate Policy

19 Thank- you. Lucy Brehm Senior Manager, Business Development The Climate Trust 65 SW Yamhill, Suite 400 Portland, Or