Overview of the Climate Action Reserve Derik Broekhoff Vice President, Policy M-AGG Workshop Washington, DC June 17, 2010

2 Objectives of the Reserve (i.e. Why are we doing this?) Show that carbon offsets can be a useful tool in addressing climate change Model an offset program that has environmental integrity but is not burdensome to use Create value for the North American carbon market –For project developers: High value projects –For buyers: Confidence in offsets they are buying Provide technical resources on offset standards and policy

3 What We Do Develop High Quality Standards –Convene stakeholders and lead development of standardized protocols for carbon offset projects Manage Independent Third Party Verification –Training and oversight of independent verification bodies Operate a Transparent Registry System –Maintain registry of approved projects –Issue and track serialized credits generated by projects

Listed & Registered Projects

5 Existing Protocols Forestry –Improved forest management –Avoided conversion –Reforestation Urban forestry Landfill gas capture (US & Mexico) Livestock methane capture (US & Mexico) Organic waste digestion Coal mine methane Nitric acid production Ozone depleting substances (US & Article 5 sources)

6 Protocol Development Goals Develop a standardized approach for quantifying, monitoring and verifying GHG reductions –Research industry trends in adoption of GHG reducing practices –Set criteria and reference points based on industry trends –Provide specific tools for quantifying emissions –Detailed and specific monitoring requirements –Train verifiers with a consistent set of protocol-specific standards Maintain consistency with or improve upon existing methodologies Balance accuracy, conservativeness, and practicality

7 Protocol Development Process  Internal research and scoping  Kick-off/scoping meeting  Multi-stakeholder workgroup formation  The Reserve drafts a protocol  Draft protocol considered by workgroup –Provides technical expertise and practitioner experience –Period meetings and individual consultation when needed  Revised draft released for public comment  Public workshop  Final version adoption by Reserve board in public session

8 Livestock Methane Capture Protocol What is a livestock methane capture project? –GHG reductions from the installation of a biogas control system (“digester”) that captures and destroys methane gas from anaerobic manure treatment/storage facilities on livestock operations. First adopted June 2007, last update Nov listed and 12 registered projects 118,908 CRTs issued Exploring options to facilitate use by small operators, ease burden of verification requirements

9 Agriculture Protocol Development Plans Three agriculture scoping meetings in late summer, to: –Communicate our plans to a broad audience –Share our analysis of opportunities/priorities –Preview key challenges –Solicit input on our ideas and data resources Launch development of two agriculture protocols in 2010 Start working on one more in 2011 Possibly adapt existing Reforestation Protocol for specific use by agriculture, pending interest

10 Possible New Agriculture Protocols Soil Carbon Management –Carbon sequestration in soil resulting from a change to continuous no-till practices, may also include changes in residue and cover crop management Nutrient Management –Nitrous oxide reductions from changes in the rate, type, timing, and/or placement of fertilizer application Rice Cultivation –Methane reductions from changes in water management, e.g., winter flooding, mid-season draining, and/or drill-seeding

11 Contact Information Derik Broekhoff W. 6th Street, Ste. 428 Los Angeles, CA (213)