1. ++++++++++++++ ++++++++++++++ Climate Legislation and Markets: Regional Outlook Focus: Agriculture Jessica Shipley Solutions Fellow Pew Center on Global Climate Change Agriculture and Carbon Markets: Making Carbon Count June 17, 2010

2. ++++++++++++++ ++++++++++++++ Pew Center on Global Climate Change Founded May 1998 Independent, non-profit, non-partisan Produces research on policy, economics, science & impacts, and solutions Works with policymakers at state, federal, and international levels Conducts education and outreach Engages the business community through the Business Environmental Leadership Council

3. ++++++++++++++ ++++++++++++++ Overview: Legislation and Markets Regional Greenhouse Gas Initiative (RGGI) Midwestern Greenhouse Gas Reduction Accord (MGGRA) Western Climate Initiative (WCI)

4. ++++++++++++++ ++++++++++++++ RGGI: Offsets and Agriculture Program design on offsets: 3.3% of compliance obligation No offset credits yet used for compliance 5 project types Must be located in a RGGI participating or MOU state Additionality: standards-based approach with benchmarks Eligibility of credits for federal program Projects likely to qualify with current bill language

5. ++++++++++++++ ++++++++++++++ Midwestern Accord: Offsets and Agriculture Design recommendations on offsets: Limited to 20% of facilities’ compliance obligation Project types, sizes, start dates, etc. still TBD Likely to be limited to Accord states Additionality, monitoring, and certification undefined Eligibility of credits for federal program MGGRA recommends that jurisdictions ensure that offsets issued under the Accord are recognized by a federal program.

6. ++++++++++++++ ++++++++++++++ WCI: Offsets and Agriculture Design recommendations on offsets: –With other allowances, limited to 49% of total reductions –Priority project types for investigation: Agriculture Forestry Waste management –Criteria: real, permanent, additional, verifiable –States may issue offsets for outside projects

7. ++++++++++++++ ++++++++++++++ Three Regions Initiative WCI, RGGI, and MGGRA –Collaborating on linking, offsets, and LCFS Joint offsets white paper: released May 19 –Commitment to ensuring offsets are real, additional, verifiable, permanent, enforceable –Based on uniform standards. –Recommendations for standards is next step LCFS working group –Discussing many issues, e.g. land use change

8. ++++++++++++++ ++++++++++++++ Other Market Opportunities Reducing demand for fossil fuel… Boosts demand for bio-based and farm-based energy Biopower On-farm wind generation Power from captured methane (sold back to the grid) Biofuels Implementation of most effective policies happening at state and regional levels

9. ++++++++++++++ ++++++++++++++ Agriculture and climate legislation Pew analyzing issues for a forthcoming paper Key Takeaways –Regional programs important but other options ongoing Business-driven (e.g. Walmart sustainability) EPA Litigation –Legislative cost containment tools minimize impact –Net economic gain for farmers is possible –Climate change poses many risk management concerns

10. ++++++++++++++ ++++++++++++++ Conclusion Regional policies and markets continue to provide opportunities for agriculture Regional offset markets will likely remain smaller than a federal system Uncertainty still exists for farmers; federal legislation could provide some certainty

11. ++++++++++++++ ++++++++++++++ More information www.pewclimate.org Jessica Shipley shipleyj@pewclimate.org