I wrote the article below titled California is a Model for Climate Policy for Sustainable Business Oregon:
Recent action from the Obama administration requires states to act on climate change. In light of the challenges of the new climate goals outlined in the President’s Clean Power Plan, other states might be wise to consider the subtleties of California’s climate policy, which could provide an excellent framework to follow.
To bypass the current stagnation in our political system, a new strategy to craft policy that mitigates catastrophic climate change is emerging in the United States. International negotiations drone on—attempting to settle on a timeline under which future agreements could come to terms. The conversation in Congress, amazingly, continues to focus on whether or not action is needed at all. Yet over the last three months, the Obama Administration has ditched these broken processes and taken a leadership role where it can. And it’s making an impact.
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I filed these comments with the California Air Resource Board after their preliminary determination to invalidate credits generated by the Clean Harbors facility that destroyed ozone depleting substances. After the California Air Resource Board moved forward with a smaller invalidation, Ecosystem Marketplace’s Despite Market Outcry, California Voids Some Carbon Offsets article quoted me:
“It’s not good news, but I don’t think it’s market-destroying news either,” said Peter Weisberg, Program Manager, The Climate Trust….The ARB should consider alternatives to buyers’ liability such as a buffer account to cover these types of losses, Krausse, Weisberg and other stakeholders suggested. Quebec – the Canadian province partnering with California on carbon trading via the Western Climate Initiative – established a buffer pool that sets aside 4% of offsets to cover reversals or invalidations. In discussions with Oregon and Washington, which are both considering options to comply with upcoming federal carbon regulations, Weisberg has encouraged them to follow Quebec’s model or the approach of voluntary standards in ensuring offset integrity rather than California’s approach. However, he also noted that there are potential solutions to the risk created by California’s buyers’ liability provisions, including insurance policies designed specifically to cover the invalidation risk. “It’s definitely an unfortunate risk,” he said. But “we still think this is a risk that can be managed.”
I wrote the article below for The Climate Trust’s newsletter:
California’s suite of climate policies create two distinct environmental markets: a cap-and-trade market for allowances and offsets, and a Low Carbon Fuel Standard (LCFS) market for LCFS credits. Both generate significant revenues for dairy digesters, but, according to recent informal discussions, the Air Resource Board has decided that biogas projects cannot sell both at the same time. Dairy digesters whose biogas is used as transportation fuel therefore need to determine which market offers the most value. This analysis is trickier than it first appears.
Prices for both offsets and LCFS credits are reported with the same units, dollars per metric ton of carbon dioxide equivalent reduction ($/mtCO2e). The baseline from which each reduction is calculated, however, is different. Offsets are based on the methane emissions that would have occurred if the dairy had not installed a digester. LCFS credits, on the other hand, are based on the reduction from the LCFS’s annual carbon intensity target. The same dairy digester project will therefore generate a very different number of offset and LCFS credits. To determine which market offers the most value, projects need to calculate how many of each credit they could generate.
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I wrote a brief article for Sustainable Business Oregon about the Junction City Biomethane project, and the unique business model it is testing in Oregon.
Oregon Pioneers a New Biogas Model
A webinar I gave for the American Biogas Council on the Low Carbon Fuel Standard and biogas projects. My presentation begins at minute 26:54.
I’m part of a team, along with Ducks Unlimited and The Nature Conservancy, that wrote a carbon offset protocol to credit landowners who place prairie into permanent conservation easements for the value of the carbon sequestered in their soil. The methodology is now approved by the American Carbon Registry and available here. Our work will provided a financial incentive to prevent our prairie from looking like this!
I was very excited to present the work I have been doing assessing the potential value of the Low Carbon Fuel Standard credits, Renewable Identification Numbers and carbon offsets to biogas projects. To put this value into to context, I modeled the returns that could be expected from a 5,000 cow dairy digester whose biogas is cleaned and used as transportation fuel. Here is the summary slide:
This project (with an estimated $11.05 million capital cost) is estimated to have a 7.8% ten year, pre-tax internal rate of return based on the revenue generated by selling transportation fuel, tipping fees, nutrients and bedding. The presentation explores the returns added by selling all three environmental credits under a variety of potential price scenarios.