2. Dr Tatanka

3. Tatanka Resources

4. Tatanka Resources

5. Tatanlka Resources

6. Carbon regulation is creating a complex web of opportunities and risks for managers.
Tatanka Resources

7. BUFFALO SPARING
TATANKA RESOURCES

8. Tatanka Resources

9. Winrock International

10. Relative Size of Carbon Markets (2008)
OFFSET MARKETS ALLOWANCE MARKETS
Kyoto Markets:
CDM & JI
418.3 mil.
tCO2e
U.S. Regional &
State Markets
EU Emissions
Trading Scheme
2,981 mil.
tCO2e
27.4 mil.
tCO2e
Chicago Climate Exchange
U.S. Voluntary & Pre-compliance Markets
New South
Wales
69.2 mil. tCO2
54 mil.
tCO2e
30.6 mil.
tCO2e
Source: Source: Ecosystem Marketplace, New Carbon Finance, World Bank Group.
Winrock International

11. Waxman-Markey H.R.2454 Reduction Targets
(17% by 2020, 42% by 2030, 83% by 2050)

12. Options for Compliance
Emissions Cap: 300 tCO2e
metric tons CO2 equivalent
Allowance transfer (A buys from B)
Offset transfer (A buys from B)
Tatanka Resources

13. AMEREN CO2 OUTPUT AND RISK
Tons CO2
MWh Energy
Intensity
% Fossil
% Hydro
% Nuclear
2000:
55,600,000
60,000,000
1,855
80.59
1.77
16.66
Present:
66,000,000
74,400,000
1,773
87.37
2.24
10.16
Future:
66,600,000
75,100,000
87.49
2.22
10.07
TATANKA RESOURCES

14. So lets do a little math By 2015
AMEREN U.E.
POTENTIAL CARBON LIABILITY
65,000,000 TONS PER YEAR x % = 13,000,000 TONS
TO BE REDUCED OR OFFSET AT
$ 10 PER TON = $130,000,000
$ 20 PER TON = $ 260,000,000
$ 40 PER TON = $ 520,000,000
Tatanka Respurces

15. ESTIMATED TONS OF OFFSETS NEEDED BY THE U.S. POWER SECTOR BY 2020
2 BILLION TONS PER YEAR
TATANKA RESOURCES

16. Winrock International
Talking Points
Winrock International

17. Winrock International

18. VOLUNTARY MARKETS HAVE PAVED THE WAY FOR COMING COMPLIANCE ( REGULATORY) MARKETS
ASKING AND ANSWERING BASIC QUESTIONS
DEVELOPING INFRASTRUTURE AND TEMPLATES
MAKING THE FIRST ROUNDS OF MISTAKES,
STANDING BACK UP AND CONTINUING ON
Tatanka Resources

19. Tatanka Resources

20. CARBON MARKET INFRASTRUCTURE
STANDARDS SETTERS
REGISTRIES AND EXCHANGES
ALL THE PEOPLE WHO GET THE WORK DONE
(CONSULTANTS, AGGREGATORS, VERIFIERS, LAWYERS, FORESTERS, SOIL SCIENTISTS, CHEMISTS ETC. ETC.)
Winrock International

21. ROLE OF STANDARDS SETTERS IN CARBON MARKETS
DEFINITION
MEASUREMENT
CERTIFICATION
RE-CERTIFICATION
TATANKA RESOURCES

22. PRINCIPAL U.S. VOLUNTARY MARKET STANDARDS
CHICAGO CLIMATE EXCHANGE
CALIFORNIA CLIMATE ACTION REGISTRY
AMERICAN CARBON REGISTRY
REGIONAL GREENHOUSE GAS INIATIVE ( RGGI)
U.S. E.P.A. CLIMATE LEADERS
VOLUNTARY CARBON STANDARD
GOLD STANDARD
AND OTHERS
TATANKA RESOURCES

23. Ex. - Project Types that Create Offsets
Activity Category
GHG Project Type
Energy efficiency
Transport
Buildings
Vehicle fleet efficiency
Building insulation
Forestry
Tree planting
Conservation
Watershed reforestation
Forest protection
Methane capture & destruction
Landfills
Livestock
Landfill gas capture and destruction
Livestock manure management
Renewable energy (LDCs)
Grid connected
Off grid
Small hydro
PV home lighting systems
Industrial process
Carbon capture & storage
Fuel switching
Enhanced oil recovery
Coal-to-gas fired electricity generation
Winrock International
Winrock International

24. U.S. Carbon Offset Transactions (2008)
Tatanka Resources

25. Tatanka Resources

26. How the Trading Process Works
Project Owner/Sellers
A project developer (e.g., company, government, individual) undertakes a project action to reduce/remove GHG emissions. For example,
Methane capture
Reforestation
Solar water heating
Independent verifier confirms proper GHG measurement, accounting and reporting
A verified project action creates verified carbon offsets
Project developer registers verified offsets on a registry
Carbon Offset Buyers
Through registries:
Governments, companies, and individuals in the U.S. transaction with project developers to in order to buy carbon offsets
Some buy carbon offsets to help satisfy state and regional mandatory obligations
Others buy carbon offsets to apply toward voluntary reduction commitments, or to save them in order to meet anticipated federal mandatory obligations
Carbon
Offsets $$
This diagram illustrates how carbon trading works in concept.
Tatanka Resources

27. What is a Transaction Carbon Registry?
A transaction registry is a marketplace – a place where buyers and sellers meet to trade offsets
A credible transaction registry uses standards and transparent rules to ensure legal ownership, environmental integrity, and market transparency for every offset traded
Tatanka Resources

28. WHAT DOES A REGISTRY DO?
REVIEWS AND ACCEPTS PROJECT DOCUMENTATION AS KEEPER OF
THE KEYS
CREATES A UNIQUE FINANCIAL ASSET
ISSUES IT TO THE OWNERS
TRACKS OWNERSHIP AND TRANSFERS
CANCELS THE CREDITS WHEN THEY ARE USED AS OFFSETS
TATANKA RESOURCES

29. Minimum Normative Reference Standards for a Credible Registry
GHG Protocol for Project Accounting (2005)
ISO Series 14064: 2006, Parts 1-3, project GHG quantificatin
ISO 14065: 2007, verifier accreditation requirements
United States Environmental Protection Agency (U.S. EPA), Climate Leader Program, GHG Inventory Protocol (May 2005)
Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (2007)
Winrock International

30. U.S. Offset Market Characteristics
The U.S. carbon offset market (excluding CCX) grew from US$262 million in 2007 to US$397 million in 2008; estimated growth to US$ 1 billion in 2009.
Both volumes and prices still going up, in spite of market uncertainties, on average price of $7.34 in the U.S. Range from US$2 to US$15.
Corporations continue to set reduction targets, but pre-compliance demand is beginning to dominate with the anticipation of cap-and-trade as part of the American Clean Energy and Security Action (ACESA).
Voluntary buyers interested in low risk, “high charisma” carbon (e.g., forest, energy efficiency).
New administration is serious about climate change. This helps with the US market
Charismatic carbon  carbon offsets of special interest to investors, such as forest preservation and community development, school lighting, etc. in contrast with e.g., gas flaring offsets. These offsets command a premium in the market.
Tatanka Resources

31. Winrock International
Who Buys, Who Sells & How
Buyers include companies that buy carbon offsets for their own operations and/or on behalf of their customers (e.g., airlines), events (e.g., 2005 Gleneagles G8 Summit), and individuals who want to be “carbon neutral”. Includes hedge funds who buy as speculators. Buys from a transaction registry.
Sellers include project developers who invest and undertake a qualifying project action that reduces or removes GHG emissions. Sells on a transaction registry.
Market intermediaries include offset wholesalers who buy offsets from project developers and sell them to retailers, and brokers who connect project developers and wholesalers to compliance buyers, CSR buyers, aggregators, and other large buyers. Convene buyers and sellers on a transaction registry.
Winrock International

32. Tatanka Resources

33. Tatanka Resources