1. 1 California Cap-and-Trade Global Warming Solutions Act of 2006 –Target to Reduce GHGs to 1990 Levels by 2020 Cap-and-Trade System –Designed to Achieve ~20% of Targeted Reductions –Allows Carbon Offsets Up to 8% of Compliance Obligation –Contemplates “Sector-Based Offset Crediting” for Activities in Developing Countries

2. 2 Sector-Based Offset Credits REDD Is Only Sector Explicitly Identified Subject to Usage Limits –Up to 2% (1/4 of total offsets) in 2013-2017 –Up to 4% (1/2 of total offsets) in 2018-2020 –Maximum Potential Demand: ~71 million tonnes CO 2

3. 3 California REDD Development Governor’s Climate and Forest Task Force (GCF) California Mexico Brazil Illinois Indonesia Nigeria REDD Offsets Working Group (ROW) California Chiapas Acre CAR “Nested” project protocol for Mexico