Summary

Launched
2006
Estimated duration
3 Years
Estimated total value
$2,750,000
Regions
Northern America
Locations
United States
Partners
Swift Foundation; Environmental Defense Fund (EDF)

Growing New Solutions: A Carbon Fund for Farms and Forests

Approach

Environmental Defense Fund (EDF) will establish a Carbon Fund, to be administered by a third party, which will buy carbon offsets generated by five to eight demonstration projects over three years. Each transaction will have a carbon-dioxide equivalent in the range of 100,000 metric tons. To ensure the integrity of the carbon reductions, EDF will define carbon-capture methodologies according to the ‘gold standard’ developed with Duke University, and will seek adoption of this standard in legislation and/or regulatory guidelines.
This pilot fund will emulate a cap-and-trade market for five to eight demonstration projects, by financing credits for the carbon kept out of the atmosphere. We also will develop a corporate partnership with an agribusiness firm to offer new carbon-reduction technologies to the firm’s customers.

Background

Modest changes in farming and forestry practices can yield substantial greenhouse gas reductions. For instance, farmers can reduce their emissions by cutting back on nitrogen fertilizers, capturing methane from manure to use for fuel, or switching to ‘no-till’, which keeps carbon in the soil. They can remove additional carbon from the atmosphere by returning marginal croplands to forest or grasslands, which absorb and store carbon. Farmers and forest owners who see the potential can bring their politically powerful voices to the case for capping U.S. greenhouse gas emissions.
Environmental Defense will establish a Carbon Fund, to be administered by a third party, which will buy carbon offsets generated by five to eight demonstration projects over three years. Each transaction will have a carbon-dioxide equivalent in the range of 100,000 metric tons. To ensure the integrity of the carbon reductions, we will define carbon-capture methodologies according to the ‘gold standard’ developed with Duke University, and we will seek adoption of this standard in legislation and/or regulatory guidelines.
ANTICIPATED TIMELINE: September – December 2006
– Developed a draft description and numerical illustration for an investment portfolio (above scale) of greenhouse gas emissions reduction and offsets.
– Completed, in consultation with the Wall Street law firm, an investment fund prospectus Executive Summary.
– Initiated contacts with several Wall Street placement agencies to form a focus group to review the GHG investment fund plan as described in the Executive Summary document.
– Selected four organizations that have greenhouse gas emission offset aggregations in the agricultural sector that are viable candidates for tendering of pilot purchase offers.
– Completed reviews of copyedited ‘gold standard’ publication, now in-press at Duke University Press.
– Cultivated new aggregator organizations in California and Florida.

Progress Update

April 2011
EDF has achieved the following milestones:
– In June 2007, in collaboration with Duke University Nicholas Institute, EDF published a manual for carbon offsets in agriculture and forestry, Harnessing Farms and Forests in the Low Carbon Economy.
– Developed a computer model to simulate and help measure methane and nitrous oxide emission reductions from changes in water, fertilization, and residue management in California rice fields. The same method is being used to elucidate emission reduction opportunities for wine grape growers in their vineyards.
– Funded research and synthesis conducted by scientists at UC Berkeley and UC Davis to better understand how grassland ecosystems with widely diverse soil types can sequester carbon. This research will be used to further efforts in computer model development and identifying management practices that reduce net GHG emissions.
– Served on the Climate Action Reserve working group that authored accounting protocols for forestry projects and is now working with domestic forestland owners to develop pilot projects based on these new protocols.
– Was a founding member and serves on the steering committee of the Coalition on Agriculture Greenhouse Gases (C-AGG), a coalition of environmental NGOs, farm groups, researchers and carbon market experts seeking to advance emission reduction opportunities and associated markets in the agricultural sector.

Partnership Opportunities

Seeking:
A financial services partner to design and market the Carbon Fund
Partnership with a leading farm equipment manufacturer or other agricultural firm to offer new carbon-reduction technologies to customers.
Additional $7.5 million over three years to underwrite the Carbon Fund and other project costs.

NOTE: This Clinton Global Initiative (CGI) Commitment to Action is made, implemented, and tracked by the partners listed. CGI is a program dedicated forging new partnerships, providing technical support, and elevating compelling models with potential to scale. CGI does not directly fund or implement these projects.