Legal Status of Credit Stacking

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Information about Legal Status of Credit Stacking
Education

Published on February 19, 2014

Author: IEUO

Source: slideshare.net

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Written by Royal Gardner, Professor of Law, Director of Center for Biodiversity and Law, Stetson University

Phone: 877-789-2085 Attendee PIN: 7712 What is Environmental Credit Stacking? © 2014 Electric Power Research Institute, Inc. All rights reserved. 1

Phone: 877-789-2085 Attendee PIN: 7712 The Crux of Stacking Can you get paid twice for the same conservation action? • Drive to maximize Economic Returns • Concern over Ecological Validation • Development of Policy © 2014 Electric Power Research Institute, Inc. All rights reserved. 2

Perspectives and Responsibilities Phone: 877-789-2085 Attendee PIN: 7712 • Agencies: Regulatory agencies need to ensure that the credits appropriately offset impacts. This can be challenging even in one market type. When credits are stacked the question of “additionality” becomes even more prominent. • Landowners: Shouldn’t credit producers expect to be compensated for the range of environmental benefits they support? • Project Managers: Even in the absence of clear direction from agencies and standard protocols, pilot projects are proceeding to test the possibilities of credit stacking. • Ecosystems: Credits represent mitigation. When credits are stacked, so are the risks to the ecosystem if credits fail. © 2014 Electric Power Research Institute, Inc. All rights reserved. 3

Phone: 877-789-2085 Attendee PIN: 7712 Stacking scenarios: Wetlands and endangered species • Van Vleck Ranch Mitigation Bank (CA) – Wetland and vernal pool fairy shrimp credits Source: Westervelt Ecological Services http://www.wesmitigation.com/mitigation-conservation-projects/van-vleck-ranchmitigation-bank.cfm#page=photos © 2014 Electric Power Research Institute, Inc. All rights reserved. 4

Phone: 877-789-2085 Attendee PIN: 7712 Stacking scenarios: Wetlands and water quality • Neu-Con Umbrella Wetland Mitigation and Stream Restoration Bank (NC) – Wetland and nutrient offset credits Source: North Carolina State University http://www4.ncsu.edu/~grhess/PhotoOfTheMonth/archive/ © 2014 Electric Power Research Institute, Inc. All rights reserved. 5

Stacking scenarios: Phone: 877-789-2085 Attendee PIN: 7712 Wetland functions • Spellbottom Mitigation Bank (TX) – Temporary Storage of Surface Water (TSSW) – Maintenance of Plant and Animal Communities (MPAC) – Removal and Sequestration of Elements and Compounds (RSEC) Source: Mitigation Solutions USA http://www.msusa.com/banks/texas/SpellbottomMitigati onBank_Map.html © 2014 Electric Power Research Institute, Inc. All rights reserved. 6

Phone: 877-789-2085 Attendee PIN: 7712 Stacking scenarios: Multiple species (federal) © 2014 Electric Power Research Institute, Inc. All rights reserved. 7

Phone: 877-789-2085 Attendee PIN: 7712 Stacking scenarios: Multiple species (federal and state) • Lyonia Preserve (FL) Source: Volusia County Florida www.volusia.org © 2014 Electric Power Research Institute, Inc. All rights reserved. 8

Phone: 877-789-2085 Attendee PIN: 7712 Stacking scenarios: Endangered species and carbon • Florida Panther Conservation Bank – Panther credits and reservation of right to seek carbon credits in the future Source: The Florida Panther Conservation http://pantherconservation.com/ © 2014 Electric Power Research Institute, Inc. All rights reserved. 9

Stacking scenarios: Water Quality Phone: 877-789-2085 Attendee PIN: 7712 Phosphorous and Nitrogen • Maryland’s (nascent) water quality trading program Chesapeake Bay Source: Fairfax County http://www.fairfaxcounty.gov/dpwes/environmental/cbay/ © 2014 Electric Power Research Institute, Inc. All rights reserved. 10

Accounting Units & Defensible Stacking Scenarios • Species • Wetlands • Carbon • Water Quality Bundles of Ecosystem Values (Acres) Defined Accounting Units (tons, pounds) Based on our analysis, the most appropriate credit stacking scenario is when the accounting units are pollutant-specific, such as pounds of nitrogen in water quality trading, and tons of CO2 equivalents in carbon markets. © 2014 Electric Power Research Institute, Inc. All rights reserved. 11

Discussion … © 2014 Electric Power Research Institute, Inc. All rights reserved. 12 Phone: 877-789-2085 Attendee PIN: 7712

Phone: 877-789-2085 Attendee PIN: 7712 Considerations for a Credit Stacking Protocol “Credit stacking could provide great economic incentives for effective conservation, but only after the fundamental considerations described here are addressed.” Consideration 1: Ecosystem credits that consist of a suite of functions should not be stacked and unbundled. Consideration 2: Stacking and unbundling credits should not result in habitat loss. Consideration 3: Managing the site for one credit type should not denigrate the ecological values represented by other credit types. © 2014 Electric Power Research Institute, Inc. All rights reserved. 13

Phone: 877-789-2085 Attendee PIN: 7712 Considerations for a Credit Stacking Protocol Consideration 4: Regulatory agencies need the resources and capacity to confirm the ecological validity of the transactions. Consideration 5: Any stacking and unbundling of credits should be transparent. Consideration 6: Tests for additionality should be applied. © 2014 Electric Power Research Institute, Inc. All rights reserved. 14

The Bottom Line on Credit Stacking Phone: 877-789-2085 Attendee PIN: 7712 • While environmental markets can be flexible to accommodate social and economic elements such as price, infrastructure, and mechanics, they need to maintain basic scientific integrity and defensibility. • While the perspectives of the buyer, seller, and regulator are important in these markets, the quality of the credits needs to be ensured. • The validity of credit stacking boils down to appropriate mitigation: do the credits appropriately mitigate the impacts that they are intended to offset? © 2014 Electric Power Research Institute, Inc. All rights reserved. 15

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