M-AGG Phase 2 Report: Agriculture Sector Greenhouse Gas Quantification Protocol Benchmarking

M-AGG Phase 2 Report:Agriculture Sector Greenhouse Gas Quantification Protocol Benchmarking

Davis, California

Keith Driver, V.P. OperationsBlue Source Canada ULC

June 2010

Outline

• About Blue Source

• M-AGG Phase 2 Objectives

• Activities and Deliverables

• Protocol Basics

• Applicable Programs and Markets

• Protocol Listing

• Criteria for Benchmarking

• Protocol Evaluation

2 | Blue Source | A Leading Climate Change Portfolio

About Blue Source


‹#› | Blue Source | A Leading Climate Change Portfolio C

About Blue Source

Two primary businesses

• Carbon Credit Portfolio100-200M tonne portfolioOver 20 project types in 48 states and CanadaFederal and state carbon advocacy leadershipDeveloped the first protocols in numerous carbon

categories

• Carbon Infrastructure Investment $500 million of dollars project equity (additional $500

million callable)Management team has developed, owned and/or operated

all of the anthropogenic CO2 pipelines in North AmericaBlended engineering, finance and transactional skills

Blue Source has built the largest portfolio of North American emission reduction credits and projects.

About Blue Source

In addition we have a staff of North America’s foremost experts on carbon reduction and sequestration project


M-AGG Phase 2 Objectives

Activities and Deliverables


M-AGG Phase 2 Objectives

• Build on recognition of agriculture sector role in carbon markets

• Acknowledge that protocols are key market access infrastructure

• Drive early action and market development

• Benchmarking exercise to take stock of current protocols• Draw attention to the breadth and depth of current works• Share learnings from historic protocol development efforts• Highlight key issues for agriculture sector protocol development• Provide some guidance for what is market-ready

This is not designed to be critical review.Pioneers get the arrows. Settlers get the land.


Activities and Deliverables

• Develop criteria for benchmarking• C-AGG Principles and others (Offset Quality Initiative)• Regulatory and programmatic guidance

• Review each of the protocols from M-AGG phase 1• Limited to work in the public domain• Compilation into benchmarking matrix

• Communicate results and follow discussion• M-AGG Workshops• Upcoming communication events

• Revisions to draft report prior to final publication


Protocol Basics


Making Carbon a Commodity


Project Documentation

Project Documentation

Validation and Registration

Validation and Registration

Monitoring and Verification

Monitoring and Verification Offset IssuanceOffset Issuance

• Project / Baseline Description

• Monitoring Plan and Methodology

• GHG emission calculation

• Project / Baseline Description

• Monitoring Plan and Methodology

• GHG emission calculation

• Review• Approve• Registration

• Review• Approve• Registration

• Implement• Monitor• Verify

• Implement• Monitor• Verify

• Issuance of tradable units

• Issuance of tradable units

Driven by Reporting Guidance

Transparency

Market Oversight

3rd Party Verification

Monitoring Requirements

Tradable Commodity

Qua

ntifi

catio

n P

roto

cols

Protocol Essential Elements

• Protocol Standards and Approaches• Move toward ISO 14064 pt II

• Streamlined life cycle assessment (project/baseline)• Evaluation of all potential baseline scenarios• Identification of controlled, related and affected GHG emissions • Deciding which GHG sources and sinks are material

• Scientific Rigour• Grounding in peer-reviewed literature• Building on national / international best practice guidance

• Particular challenge for areas of emerging science


Quantification Protocols:

identifying preferred methodologies to

quantify GHG reductions/removals

Protocol Development Requires…..


• Scoping and Applicability• Acknowledge variety of scales of Ag sector projects

• Standardization of quantification approaches

• Define baseline condition• Project specific• Performance standard

• Functional equivalence of project and baseline conditions

• Quantification Element Requirements• Address inherent variability across landscapes• Manage the measurement vs. modeling balance

• Ensure rigour of emission reduction assessment• False positives/false negatives and accuracy/precision



• Regulatory and Programmatic Guidance• Scope of the review/system• Regulatory coverage• Additionality criteria• Permanence rules• Leakage assessments

• Guidance for Validation and Verification• Streamline and de-risk these processes

• Protocol Development and Review Processes• Program specific with little overlap• Stakeholder engagement key (technical and constituency)


Applicable Programs and Markets


Key North American Climate Change Initiatives


NB

NB

NB

NB

Western Climate Initiative

Regional GHG Initiative

Midwestern GHG Reduction Accord

AB Specified Gas Emitters Regulation

SK Bill 126

Canada’s Regulatory Framework

Senate Bill (American Power Act)

Available Protocol Review and Approval Programs


• Some programs are industry-led

• Some programs are regulatory-based

• Cross-pollination and acceptance is possible

• Differences in approval processes

• Differences in scope

Diversity in scope, coverage, timeline, cost and outcome.

Protocol Listing


Reviewed Protocols

• Climate Action Reserve

• Greenhouse Gas Services

• Regional Greenhouse Gas Initiative


Forest Project Protocol

Livestock Project Protocol

Livestock Manure

AfforestationManure

Management

Reviewed Protocols

• Chicago Climate Exchange

• Voluntary Carbon Standard

• Clean Development Mechanism


Forestry Carbon

Agricultural Methane

Afforestation/Reforestation

Manure Management

Offset Fertilizer with

Legumes

Tillage and Grassland

Rangeland Soil Carbon

Sustainable Agriculture Land Mgmt

Reviewed Protocols

• Alberta Offset System


Days on Feed for Beef

Dairy Operations

Edible Oils for Beef

Tillage Management

Nitrogen Emission

Reduction*

Energy Efficiency

Pork Feed and Manure

ManagementBeef Lifecycle Biogas

Criteria for Benchmarking(Building from Phase 1)


Protocol Review Criteria








Results of Benchmarking


Results of Benchmarking - CAR


• Science Based

• Quantifiable

• Additionality• Performance-based approach

• Permanence• Mandated approach

• GHG Accounting• De-minimus exclusion of GHG in livestock

• Scalability• Limited disclosure on SSR interrelationships

• Engagement and Review• Transparency of process • Broad vs. technical stakeholder coverage• CARB oversight or otherwise

Forest Project Protocol

Livestock Project Protocol

Results of Benchmarking - GHGs


• Science Based

• Quantifiable • Exclusion of N2O

• Additionality

• Permanence

• GHG Accounting• De-minimus exclusion of GHG

• Scalability

• Engagement and Review• Private protocol • Only final version of protocol is available

Livestock Manure

Results of Benchmarking - RGGI


• Science Based• Limited transparency as short-form

• Quantifiable • Limit guidance provided

• Additionality• Limited transparency on performance standard

• Permanence• Partial for afforestation – conservation easement

• GHG Accounting• Limited detail and transparency given short-form

• Scalability• Limited disclosure of SSRs and inter-linkages

• Engagement and Review• Only final version published• Standard is codified as part of program

Afforestation

Manure Management

Results of Benchmarking - CCX


• Science Based• Uncertain – lack of transparency

• Quantifiable • Limited coverage of GHGs

• Additionality• Tillage / Rangeland can be continuation of practice

• Permanence• Limited term to liability – where applicable

• GHG Accounting• Limited guidance and transparency at times


• Engagement and Review• Voluntary program• Only final version available• Limited transparency to review process

Forestry Carbon

Agricultural Methane

Tillage and Grassland

Rangeland Soil Carbon

Results of Benchmarking - VCS


• Science Based

• Quantifiable

• Additionality

• Permanence• Programmatic guidance

• GHG Accounting• Reliance on models to address in SALM


• Engagement and Review• Only final version published / under review• Double validation process - limited pool of experts• CDM / CAR approval possible

Afforestation/Reforestation

Sustainable Agriculture Land Mgmt

Results of Benchmarking - CDM


• Science Based

• Quantifiable

• Additionality

• Permanence

• GHG Accounting


• Engagement and Review• Only final version published

Manure Management

Offset Fertilizer with

Legumes

Results of Benchmarking - AOS


• Science Based

• Quantifiable • EE Protocol provides limited guidance

• Additionality

• Permanence

• GHG Accounting• Leakage not always documented

• Scalability• Emission factors and baselines need

adjustment for regional factors

• Engagement and Review• NERP still undergoing review (with others)

Days on Feed for

Beef

Dairy Operations

Edible Oils for Beef

Tillage Management

Nitrogen Emission

Reduction*

Energy Efficiency

Pork Feed and Manure Management

Beef Lifecycle

Biogas

Conclusions and Next Steps

• Protocol benchmarking process• ‘Lessons-learned’ from all programs / systems• Gaps across the range of agriculture operations and activities• Significant opportunities for coalescing efforts • Need to integrate science

• Seeking input on criteria, review results, documentation• Revise documentation to incorporate stakeholder views• Further stakeholder engagement

• Highlight opportunities for further protocol development• Bring together groups working on similar project types• Encourage follow-on work in the public domain


Moving to Three Streams of Activity


Path

to C

arbo

n M

arke

t

Info

rmin

g Pol

icy D

evel

opm

ent

T-AGG

M-AGG

P-AGG?

C-AGG

Contact Information

Keith Driver, M.Sc., P.Eng., MBAVP, Operations

Blue Source Canada ULC

[email protected]

403.262.3026


Documents

M-AGG Phase 2 Report: Agriculture Sector Greenhouse Gas Quantification Protocol Benchmarking