California climate offsets and additionality

I spent two days last week at the Association of California Water Agencies' spring conference.  What is that?  Yes, I am an exciting person always seeking thrills and experiences.  Why do you ask?

The conference had an interesting-to-me panel on the financial aspects of California's cap-and-trade auctions.  Entities subject to the cap are allowed to get up to 8% of their carbon allowances through offsets.  The 8% max isn't for total allowances, it's for each emitter - one rich emitter can't satisfy all the obligation through offsets.

All offsets have to be certified through the California Climate Action Reserve - you have to do more than just say "I paid JimBob to add solar panels to his roof, so I'm done now."  The Reserve's protocols then has to be accepted by the California Air Resources Board, and only a few have so made it so far. The key idea is that offsets are going to be like wetland mitigation banks - people will be financing new actions that reduce emissions, certify them, and then sell the allowances that result from the decreased emissions.  This could assist in establishing a distance between buyer and sellers of offsets.

Additionality has some interesting twists - to the Reserve, satisfying additionality must go beyond legal requirements, must be initated in a timely manner (no backdating old projects to claim they deserve credit as offsets) and must exceed standard business practices.  Last one's the trickiest, of course.

I did a write-up for my water district about the conference:

 3.    AB32 and tidal wetland restoration
One panel focused on cap-and-trade.  Afterwards I talked to panelist Joel Levin of the California Climate Action Reserve, a state-created nonprofit that certifies third party carbon offsets that can be sold to entities that have to comply with greenhouse gas reductions.  I asked him if they have done any work with tidal wetland restoration as a carbon offset.  He said they had and believe the technique could be used as a carbon offset and therefore a financial benefit to those who are certified as creating the offset.  However, they presently do not have an accurate estimate of how much carbon is sequestered in order to certify an offset.  It is an ongoing area of scientific analysis. 

 There are two other barriers to Water District benefits from tidal wetland restoration as a carbon offset.  First, we don’t own the baylands that are being restored – the federal government does.  However, we are helping restore them, so we might be able to reach an agreement to share in any offsets created.  Second, the Reserve does not now accept offsets created on federal land, but it is working on eliminating that restriction. 

We have some big plans to do tidal wetland restoration of 16,000 acres in South San Francisco Bay.  This has potentially huge carbon offsets that could help tremendously with financing this project.  My understanding is that tidal wetlands have as much or more carbon sequestration benefit as freshwater wetlands, with none of the counterbalancing methane emissions.

OTOH, selling offsets eliminates the carbon benefit from restoration, at least to the extent you sell offsets.  Still there are countless other benefits from getting back wetlands, including other climate benefits.  Tidally-influenced areas can catch sediment that otherwise sweeps out to sea, making it at least somewhat more likely that the marsh areas can keep pace with sea level rise.


I'll just add a tangent from the memo about another topic that might interest people, putting solar panels on canals and reservoirs:

 1.    Solar power on canals and reservoirs
I talked to two solar power exhibitors, SunPower and SolarCity.  I asked both of them if anyone had used canals or reservoirs as areas to place solar panels.  Both brought up the potential advantage of reducing evaporation and the “free” space you wouldn’t have to rent or buy.  Both also mentioned an experiment by a winery that set up panels over a small reservoir/pond using a series of pontoons.  Neither company was the contractor in that case and the experiment has not been repeated.  They believe maintenance would be expensive.  SolarCity said something like it has been discussed for the State Water Project. 

 I mentioned to both of them that there might be advantages in many districts in reducing algae growth in reservoirs, and that our District in particular might benefit from reduced mercury methylation.  They hadn’t considered those potential benefits.  I told them this was just speculation on my part, and both said that if the District is interested, they’d be happy to talk to us.  My impression is that both thought this would be difficult. 

Not impossible, but not easy.