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Evaluating and Trading Ecological ServicesA Lone Star Coastal Exchange
Adam DavisPartner
April 29, 2013
Towards a ‘Lone Star Coastal Exchange’Environmental Markets1. Fundamental elements of an Exchange• Aligning economic incentive & environmental performance• 4 universal framework elements
2. Examples of other regional efforts
3. Demand and Supply
4. Key next steps• Measuring increments of desired outcomes• Landowner access and eligibility
From ‘Stop It’…Laws & regulations for the environment
Environmental Harm Regulation Market Structure
air pollution Clean Air Act
Regulation
species endangerment
overfishing
wetland loss
sprawl, imp. surface loss
nitrogen runoff
Ntl. Resource Damages
climate change
Endangered Species Act
NOAA
AB32, RGGI, voluntary
CERCLA
Clean Water Act
local land use regulation
Clean Water Act
…to aligning incentives.The government innovation of incentives
air pollution SO2 trading
species endangerment
overfishing
wetland loss
sprawl, imp. surface loss
nitrogen runoff
Ntl. Resource Damages
climate change
conservation banking
total allowable catch & ITQ
CO2 trading
DSAY’s
TMDL’s
TDR’s
wetland mitigation banking
Environmental Harm Market Structure
Restoration Economy jobs and assetsE-Sector market activity is robust & growing
Market Structure Market Size
$ 3.0 billion
$ 800 m
$ 2.2 billion
$ 4.5 billion
$
(value of landed catch)
48 programs
>300 programs
560 m
SO2 trading
conservation banking
total allowable catch, ITQ
wetland mit. banking
CO2 trading
TDR’s
Ntl. Resource Damages
Four common elements…A pattern emerges from early innovationsTARGET UNIT
GEOGRAPHY TRANSFER
• “flood storage capacity”• “no net loss”• “public access”• “breeding habitat”
mitigation bank
• functional acres• tons CO2e• lbs of fish landed• lbs of N reduction
• service area• historical range of species• fishery• watershed
• mitigation bank• conservation bank• catch shares• water quality trading
Using science and verification to know what we’re buying with the money we’re spending.arkets” vs. “Payments for E-Services”
private investment
public spending
Shared metrics and reporting
coastal protection
public priorities
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Examples of Regional Exchanges
Environmental Accounting and Trading• Beyond “compliance”• Efficient and effective procurement
Key features:• Match goals of buyers with benefits
provided by sellers• Scientifically verified units of measure• Monitoring and management included
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Examples of Regional Exchanges II
Baseline, design, verification, credit trackingWillamette Ecosystem Crediting Platform • Standardize the operations and management of
credit creation• Focus on salmonid, prairie and riparian habitatsBay Bank • Match goals of buyers with benefits provided by
sellers• Focus on forest and habitat conservation, water
quality, Brook Trout credits
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Examples of Regional Exchanges III
Lake Tahoe Clarity Crediting • Accounting for
sediment reduction actions
Colorado Habitat Exchange • Focus on Greater Sage
GrouseMokelumne Watershed• Forest, meadow and
streamside restoration
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Demand and Supply on the Texas Coast
Regional goals:• Flood protection/flood storage capacity• Essential bird and fish habitat• Water quality• Outdoor recreation/coastal accessCategories of buyers:• Corporate sustainability interests• Voluntary or regulatory offset purchases• Traditional conservation finance• Flood storage beneficiaries
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Critical elements of the LSCE
Establish credible baseline (GIS)Standard SettingSupply side interactions (Landowner Eligibility)Project Development toolsVerification and Certification ProtocolsTransparent Transaction Platform• Connects Buyers and Sellers• Credit Tracking
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Baseline and Standard SettingBaseline conditions and priority setting:• Aggregate existing INVEST, SSPEED Center and NPCA
data base information with publically available data sets.
• Both “green and grey infrastructure” identified along with natural features
Develop criteria for demand driven credits• Combination of ecological success criteria with legal
and/or financial assurances• Ecological ‘uplift’ above a baseline• Clear rules for participation
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Eligibility and Project Development
Physical location and property characteristics• Match with desired outcomesProject templates simplify participation• Predict credit yield• Step by step process and technical
assistance for participants
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Verification and Transaction PlatformConsistent criteria for tracking outcomes• Tools and methods for participants• Audit and monitoring designOnline market infrastructure• Serialized credits avoid double counting
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Next steps
The next level of clarity for both demand and supply. To that end:
Metrics and standard settingKevin Halsey, Ecometrix SolutionsEstablishing market infrastructureJames Remuzzi, Sustainable Solutions
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Contact:
2002 Clipper Park Rd. ~ Suite 201Baltimore, MD 21211(443) 921-9441
www.ecosystempartners.com