Read: Carbon trading: What it is and how it works
Read: Carbon trading: Notes from the European Union
The Chicago Climate Exchange (CCX) website identifies two categories of carbon offset providers that can generate carbon credits through their processes and / or technologies. One is called an offset provider. The other is called an offset aggregator.
An offset provider is a company that undertakes to reduce greenhouse gasses (GHG) through a qualifying offset project. The other day SH member chapeau said, “I own 70 acres of bush and 130 acres of pasture. How can I benefit [from] carbon credit trading? What is the procedure to follow to participate.” With this information, we can deduce that chapeau might be eligible to receive CFI contracts (Carbon Financial Instrument) for offset projects relating to forestry and / or “rangeland soil carbon management.” That would put chapeau in the category of offset provider.
Here is where the category of offset aggregator comes in. Say chapeau is eligible to bring down carbon emissions through forestry and rangeland best practices (more on that below). There’s no way, with that small amount of acreage, he’d be able to offset enough to equal 10,000 metric tons of CO2 equivalents. But he’s doing something better than nothing, right? He must therefore align himself with an offset aggregator, which is an organization that is set up for the purpose of pooling smaller offset projects like chapeau’s to meet the minimum requirement of 10,000 metric tons of CO2 equivalents.
Here it is, direct from the CCX website:
Offset projects involving less than 10,000 metric of CO2 equivalent per year should be registered and sold through an Offset Aggregator. The terms of the business and legal relationships between aggregators and offset project owners are left to the discretion of those parties.
Let it be known that these qualifications and eligibility milestones are set based on U.S. standards, as set out by CCX, so if chapeau’s land is in Canada (or anywhere else), the process may (or may not) be different.
There are, of course, third party verifiers who participate in the qualification process. If chapeau gets a rangeland soil carbon offset project up and running, he could contact one of two organizations listed on the CCX website, either Agri-Waste Technology, Inc or SES Inc., for verification in the eyes of CCX.
As an example, Agri-Waste Technology could provide chapeau with the following services (from the Agri-Waste website):
AWT can assist your facility in generating, quantifying or verifying carbon credits. Greenhouse Gas emission offsets can be created by collecting and destroying or utilizing biogas created from anaerobic treatment of animal manure, converting land to grassland, committing to no-till management of cropland, and managing rangeland using sustainable methods. Additional credits may be available for anaerobic digester projects where renewable energy is created in the form of electricity or pipeline quality gas.
One figure on the CCX website stood out, as it allows us to get to the nitty gritty of these offset projects. In the case of rangeland soil carbon offsets, CCX issues them at “standard rates,” from between .12 and .52 metric tons per acre per year. If we multiply these rates by chapeau’s 130 acres of “pasture,” we see that chapeaumay be eligible for between 15.6 metric tons of CO2 offsets and 67.6 metric tons of CO2 offsets, depending on “project type and location” (again, this is based on U.S. standards).
From previous research we know that a metric ton of CO2 is trading at around US$6.00 – so if we do the multiplication on that we get a cash “equivalent” of between US$93 and US$405 for the total acreage per year.
Something tells me that, from a financial standpoint, implementing a rangeland soil carbon offset project is going to put chapeau in the red for a number of years – but at least he’ll be doing his part. And of course we haven’t considered the effect of a forestry offset project that might be applicable to the 70 acres of “bush” chapeau owns.
Still, without taking a closer look at the costs of such a project, we can’t write off the financial benefits completely. For example, does it even cost anything to tackle a project like this?
Non-degraded rangeland managed to increase carbon sequestration through grazing land management that employs sustainable stocking rates, rotational grazing and seasonal use in eligible locations.
Or this?
Restoration of previously degraded rangeland through adoption of sustainable stocking rates, rotational grazing and seasonal use grazing practices initiated on or after January 1, 1999.
Best of luck to chapeau.
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