The Climate Trust provided $11 million in financing to carbon offset projects that reduced emissions by 2.5 million metric tons of carbon dioxide equivalents. Priority project sectors for carbon offsets include dairy digesters, organic waste digestion, composting, and forestry. A dairy digester project reducing emissions from 2,500 cows can generate $10,000 in carbon offset revenue in the first year and $40,000 annually for years 2 through 10, with a net present value of $250,000 over 10 years. Transaction costs for offset projects include upfront preparation and equipment fees as well as annual verification and registry costs. Larger project scales of over 1,000 cows for dairies and 15,000 tons of eligible

1. Value of Carbon Offsets from Composting and Digester Projects Peter Weisberg Biocycle Global 2011 San Diego, CA April 6, 2011

3. The Climate Trust Provided $11M in financing to carbon projects Reduced 2.5 million mtCO2-e Offset programs First U.S. state-based compliance program – Oregon First voluntary state program - Colorado First by natural gas-only firm – NW Natural 3

4. Priority project sectors Dairy Digester Organic Waste Digestion Composting Forestry

5. Carbon Offset “Profit”= (Offsets)(Price) -(Transaction Costs)

6. Dairy offset revenue- 2,500 cows; digester reduces 8,750 mt CO2e every year $ = (Offsets)(Price) – (Transaction Costs) Price = $6 Year 1 Carbon Sales Profit: $10,000 Year 2-10 Carbon Sales Profit: $40,000 NPV (10 years, 7%) = $250,000

7. Transaction Costs Project Preparation: $20,000 - $50,000 upfront Verification: $8,000 - $12,000 annually Monitoring equipment: $0 - $15,000 upfront Registry fees: $0.23/credit issued

8. Importance of Scale Dairy projects need 1,000+ cows Organic waste digestion or composting projects need 15,000+ tons of eligible feedstock per year. Eligible: Post-consumer food waste “Agro-industrial” waste water

9. California’s Carbon Market Cap-and-trade system begins in 2012 Offsets = 8% of compliance 1st Period (’12-14) – 39 million offsets 2nd Period (‘15-17) – 92 million offsets Air Resource Board approved offsets CAR Livestock (Dairy Digesters) CAR Forestry CAR Ozone Depleting Substances

10. California Carbon Market: Supply Currently~2.2 million eligible offsets

11. Carbon Price Air Resource Board Approved: $7 - $9 Small transactions, ~25,000 offsets Un-Approved: $3-6 Future Legal challenges More protocols

12. Value of Carbon Credits to Dairy Digester 2,500 cow digester ~3.5 mt CO2e per cow per year ~8,750 mt CO2e reduced

13. Value of Carbon Credits to Organic Waste Digester 40,000 tons of MSW food waste ~0.5 mt CO2e per ton of food waste per year ~20,000 mt CO2e reduced per year

14. Thank you! Peter Weisberg Senior Project Analyst The Climate Trust 503-238-1915 x207 pweisberg@climatetrust.org