California regulators voted to allow offsets from rice farms and Alaskan forests to be used in the state’s carbon market on Thursday but developers fear any increase in future credit supply could be cancelled out by tighter rules imposed for all forest schemes.
The CARB approved its ninth offset protocol to allow US rice farmers using methane-cutting practices to earn carbon credits, the first major offset expansion in five years that experts say could pave the way for a wave of other farming offsets.
Green group EDF says the protocol has the potential to generate 1 million of the units but some developers are wary that costs from strict monitoring requirements will undermine its potential.
Some market participants expressed concerns at the meeting about the eligibility of early-action projects that might not meet the protocol’s requirement to apply the standards of the so-called DeNitrification-DeCompostion (DNDC) biogeochemical model to every field.
Paul Buttner of the California Rice Commission said one of the pilot-scale project owners that he recruited to participate in the development of the protocol had not kept records to meet the DNDC standards.
“We simply don’t have all the data necessary to calculate the baselines…But we need to have an early adopter to help sell the program to other growers,” said Buttner.
ARB chairwoman Mary Nichols agreed and assured him that the ARB would work with early-action developers to “bridge the gap.”
“We’re not the IRS and we know that not everyone saves all records,” said Nichols. “We do care about making this protocol usable.”
FORESTRY CURBS
At the same meeting, the board also approved an update to the existing forest offsets protocol which expands project eligibility to certain areas of Alaska – but not before directing ARB staff to work with industry stakeholders to address a barrage of complaints related to other provisions of the amendment.
While stakeholders testifying at the meeting generally welcomed the prospect of Alaska-based projects, most opposed the inclusion of three new provisions related to forest management practices that ARB considered to be based on the latest accepted science.
“The success of the forecast protocol leads me to question the need for changes,” said Connie Best of the Pacific Forest Trust.
A representative from the American Climate Registry said the changes would dramatically alter the supply of offsets based on the protocol.
“50% of the projects in the pipeline will no longer be economically feasible,” he said.
Just under half of the 21 million offsets California has issued for compliance to date have come from forestry projects.
A representative from offset fund The Climate Trust urged ARB to create a technical committee to maintain rules for the offset protocols, a suggestion backed by other meeting participants who argued that offset developers were largely left out of the process for altering the forest protocol.
“We’re concerned that environmental markets are perceived to be vulnerable to policy changes,” he said.
Nichols defended the ARB staff recommendations, but acknowledged the need for a more inclusive procedure for updating protocols.
“We ought to approve the package in front of us, but direct the staff to work with the stakeholders to work on the process,” she said.
By Robert Mullin – news@carbon-pulse.com
