Accounting Challenges to Landowner Participation in Carbon Sequestration Projects
By guest blogger David Wade

Ecologically-based carbon sequestration represents an opportunity to mitigate our impact on climate change. The United States’ crops, grasslands, soils, and forest sequester 14% of the nation’s carbon emissions.* The Environmental Protection Agency estimates that a payment of a mere $15 per ton of carbon sequestered could entice landowners to boost ecological sequestration enough to offset 21% of the nation’s emissions.** It is clear that ecological sequestration could play a large role in the nation’s efforts to reduce its greenhouse gases.

However, the carbon accounting criteria of additionality, verifiability, leakage, and permanence, which are important to ensure the programs’ carbon benefits, require land use restrictions and complicated monitoring that may dissuade some landowners from undertaking carbon sequestration projects. This blog post suggests ways carbon purchasing programs can work with – and support — landowners to achieve significant levels of program participation.

Additionality and verifiability require that sequestration projects show measurable increases in carbon uptake.

• Additionality requires that landowners conduct studies to determine what their net carbon emissions (emissions minus uptake) were before a project begins and what they will be after a project has started.

• Verifiability requires that landowners pay the cost of monitoring their carbon emissions over time in order to prove they are meeting their carbon obligation.

At first, landowners may not have the technical expertise to undertake these studies, and may need to hire consultants to do the work. The monetary cost of hiring experts and time cost of learning complex monitoring systems may initially cause landowners to doubt the value of participation. Fortunately, the majority of the costs occur at project outset. Carbon purchasing programs can win landowner participation by providing assistance with costs, both monetary and time, as landowners learn how to manage their projects. Once the initial measurement requirements are met and knowledge gaps are bridged, landowners will be more than capable of meeting their reporting requirements.

Leakage and permanence both threaten to dissuade landowner participation by limiting land use options.

• Leakage is carbon emissions that partially or fully offset the carbon uptake of a landowner’s sequestration project. Programs aim to limit leakage as much as possible since leakage undermines a project’s carbon benefits.

• Permanence is the goal of ensuring that carbon reduction lasts for the duration of a project’s contract. Not many landowners will be thrilled to learn that leakage and permanence may limit them to only engaging in land use activities that are carbon neutral.

Landowners know they have to protect themselves against an uncertain future, and their best bet lies in maximizing their ability to generate revenue from their land. If programs are going to overcome landowner aversion to limiting land use options, then programs need to provide landowners with ways of protecting themselves against unforeseen losses such as flood, fire, or other catastrophic events. If the conditions for opting out of the program are well defined, contract termination clauses may provide the flexibility and assurance landowners require in order to consider participation.

If this blog post shows nothing else, it shows that carbon accounting criteria give landowners legitimate reasons for being wary of participating in carbon sequestration projects. Fortunately, carbon purchasing programs can do much to earn landowner participation by providing technical and financial assistance as well as means of opting out in the face of unforeseen losses. These options are useful considering how much the nation’s biological systems can offer in mitigating climate change.

What do you think? Comment below!

–David Wade is a recent recipient of a MPA from the University of Oregon and drew on his thesis research on forest-based carbon sequestration projects to form his insights about how conservation accounting criteria may impact landowner participation levels. He aims to put these ideas to use assisting conservation organizations secure high levels of landowner participation. Contact him at dwade@uoregon.edu if you have any questions or think he might make a good addition to your staff.

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* Environmental Protection Agency (EPA). (2009). Executive Summary: Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. USEPA #430-R-07-002. Washington, D.C., pp 15.

** Environmental Protection Agency (EPA). (2005). Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture. USEPA #430-R-05-006. Washington, D.C., ch 4. pp19.

The Next Generation of Ecosystem Market Tools

by Doug Parsons, Florida Fish and Wildlife Commission

Defenders of Wildlife has been a leader in developing effective and innovative ecosystem service tools, as their recent work attests. Defenders can also take the lead in identifying the next generation of ecosystem service market tools–those which can quantify the value of ecosystem services by adaptation in the face of climate change.

In Florida, the greatest threat from climate change is likely to be sea level rise. Currently, we can look at existing habitats and quantify their economic value in regard to their ability to maintain clean water or clean air, but what value, if any, do they have in a changing climate? A particularly healthy ecosystem might have had X value in regards to how it provided clean water, but can we find additional value for this same land based on its adaptation functions? For example, if maintaining healthy and resilient terrestrial systems helps with northern species migration that is expected to occur with higher temperatures, do these lands now have new economic values based on these new climate response functions? In 2004, mangrove systems famously played a role in mitigating the impact of the tsunami in Southeast Asia. These same systems in Florida could help play a role in mitigating the impacts of sea level rise. Can we put a dollar value on this ‘adaptation value’? I think we can. Florida Fish and Wildlife Commission is considering funding a State Wildlife Grant project to look at how people value ecosystem services in respect to sea level rise. We hope these kinds of projects will help set the stage for developing new economic tools that will provide financial incentives to landowners to help maintain resilient ecosystems in the face of climate change.

I’m optimistic we can develop more sophisticated ways to define ecosystem services, including valuing adaptation functions, which in turn could be powerful tools in preserving natural systems. Although this is new territory for all of us, investing in adaptation today will be cheaper than trying to restore or maintain healthy ecosystems decades from now. We already invest billions of dollars in programs like the Conservation Reserve Program, why not create an Adaptation Reserve Program? In the coming years, carbon markets offer a huge opportunity for adaptation funding. The emphasis on carbon mitigation will hopefully shift, at least partly, toward adaptation funding. Governments and businesses will recognize that a certain amount of warming is going to occur, so now is the time to identify new sources of adaptation funding.

In the spirit of the season which includes best wishes for the year—and years—to come, the Conservation Registry now includes fields addressing climate change.

1. Actions
If greenhouse gas offsets are part of your project, go to the Actions tab, select the category “Enhanced Conservation Status”, sub-category “Conservation / Mitigation Banks” and select “Greenhouse gas offsets.”

2. Goals and Targets
Under the Goals and Targets tab, the checklist which asks your primary motivation for the project now includes Climate Change Adaptation and Ecological Carbon Sequestration as choices. On the same page, the next question asks if your project is consistent with a plan, and Climate Change Strategy is given as one of your choices.

3. Quick Searches on the Home page
A new series of Quick Searches on the Registry’s home page feature those projects that have specified climate change activities.

If you want to update your project information with our new climate change options, please do so!

Let us know what you think constitutes a climate change adaptation/conservation project with your comment below.

Our guest blogger, Doug Parsons from Florida’s Fish and Wildlife Conservation Commission, offers up some provocative questions on the topic of forest carbon credits and state wildlife action plans. Let’s get a dialogue going.

“As state wildlife agencies struggle to find match for their state wildlife grant projects, we should consider the emerging carbon markets as an additional source of match. For example, many states use State Wildlife Grant funds for projects that restore habitats, in the process, this restoration is sequestering carbon. In Florida, we are currently funding Longleaf pine restoration to restore critical Sandhill habitat. Keep in mind, that sequestered carbon has a dollar value: why can’t we count that as match for the grant?

We don’t want to get in the business of helping private or public entities generate a profit directly from a State Wildlife Program grant, but if the project is structured appropriately, those carbon credits generated through these projects can be counted as overall project funding. It would be agreed in any contract that any money generated through the sale of carbon credits, as a direct result of the grant funding, would be used to further the overall goals of that particular project, e.g., site maintenance, additional tree plantings, burning, etc. Basically, this approach reinvests any carbon money generated back into the same project. It would be valuable if the Fish and Wildlife Service allowed this match flexibility, since generating 50/50 match is always a challenge for the states, especially in lean budget times.

So two questions: 1) Does anyone know if the U.S. Fish and Wildlife Service allows this? And 2) if so, are there any states currently using carbon credits, in any form, as match for their State Wildlife Program grants?”

Salt Creek, Death Valley, California

Registry staff will soon roll out some changes to make it easier to use the Conservation Registry to track climate change adaptation activities. The idea behind climate change adaptation is to start planning now for the unavoidable effects of climate change — the ones that we’re already committed to, despite our best efforts to reduce emissions. In fact we’re already starting to see many of these changes on the ground today, so we know it’s important to make sure the conservation work we do now will still make sense in a rapidly changing climate.

In talking about how to best track adaptation activities, we’ve had to face up to some interesting questions about climate change and conservation: What is climate change adaptation, exactly? How do we know it when we see it? How can we figure out what’s adaptive and what’s not in a world where future conditions are so uncertain? Are all conservation actions climate-adaptive? Are there actions we should take specifically to prepare for and adapt to the consequences of climate change?

We don’t have any pat answers to these questions yet… if you do, please share them in the comments! Perhaps Dr. Lara Hansen has it figured out:

“Today, everything we do, every decision we make, every plan we put into place is either planning for climate change (adaptation) or it’s done without regard for the reality of climate change (maladaptation)… Adaptation is the new lens through which we must view the world and make decisions in it, if we want them to be good, robust decisions.”

What do you think? Can climate change adaptation be found in making sure every decision we make is climate-smart? Or is there something more to it? Comment below.
–Sara O’Brien, Defenders of Wildlife