On Monday, regulators from California’s Air Resources Board discussed a proposed protocol that, if approved in September, would accept offsets from methane-reducing rice projects into the state’s cap-and-trade program. Voluntary standards such as the American Carbon Registry have paved the way for the protocol, and the registry just listed the first rice project – expected to reduce 1,400 cars worth of greenhouse gas emissions.
March 18 | California is ever so slowly inching toward acceptance of the first agricultural-based offsets into its cap-and-trade program.
The California Air Resources Board (ARB) convened in Sacramento on Monday to discuss its first proposed crop-based emissions-reducing protocol. Through the rice cultivation offset protocol, rice growers in California and the Mid-South would be able to monetize greenhouse gas (GHG) emission reductions through small but important tweaks to their cultivation practices. If approved by an ARB vote in September, the offsets would be eligible for the state’s cap-and-trade program starting on January 1, 2015.
The protocol was developed based on standards tested in the voluntary carbon markets: The American Carbon Registry’s (ACR) rice protocol was released in May 2011, with the Climate Action Reserve following with its protocol in December 2011.
To coincide with the ARB workshop, the ACR on Monday announced the expansion of its previously California-specific protocol to the Mid-South states. It also unveiled the first rice project listed on its registry, which aggregates rice growers over a 5,000-acre area in California’s Sutter, Colusa, and Glenn Counties to reduce the equivalent of 6,700 tonnes of carbon dioxide emissions (tCO2e).
“The listing of this rice project is the first step in building a robust pipeline of agricultural offsets for voluntary and future compliance programs by promoting and rewarding farmers for the production of environmental assets,” said Leslie Durshinger, Founder of Terra Global Capital, which helped ACR develop the rice protocol.
Compliance entities under California’s cap-and-trade program can use offsets for up to 8% of their emissions, totaling more than 200 million tonnes through 2020 across all capped sectors – if compliance entities were to purchase their full quota of offsets. To date, the ARB has issued less than one million compliance offsets from projects that reduce ozone-depleting substances (ODS) and less than five million additional ‘early action’ offsets across 81 ODS, forestry, and livestock projects.
Another potential new protocol for Coal Mine Methane (CMM) is slightly ahead of rice on the ARB’s docket. The agency expects a final vote on CMM next month.
Methane down the drain
More than 90% of rice consumed by Americans is grown domestically, over a planted area of 2.7 million acres in 2013.
Rice cultivation is the third largest source of methane emissions in the United States’ agricultural sector. When rice fields are flooded, the water stifles oxygen uptake in the organic matter below, spurring anaerobic decomposition that releases methane gas, a climate pollutant that has 21 times the strength of carbon dioxide.
The ARB’s proposed protocol aims to reduce methane reduction from rice growing by incentivizing farmers to convert to dry seeding or to drain the standing water from fields earlier than they otherwise would. In the Mid-South states of the U.S., projects that flood the fields intermittently, alternating between wet and dry, and those that stagger winter flooding are also being considered for GHG crediting.
None of these GHG-reducing rice cultivation practices are considered ‘business as usual.’ Paul Buttner of the California Rice Commission estimated that only 1-2% of farmers are currently doing dry seeding, mostly because of the inherent risk of moving away from established practices.
“The early drain practice is experimental, it’s viewed by most growers as too much of a risk,” said Buttner. “The most important thing to them is maintaining the quality of the rice. We do have studies showing that maybe they can drain those fields a little earlier…but without a program, very few growers would expose themselves to that risk.”
Big potential, but details to iron out
The protocol would be limited to rice farmers in California’s Sacramento Valley; the Mississippi River Delta extending through Arkansas, Mississippi, and Missouri; and the Gulf Coast of Louisiana and Texas – the major rice-growing regions of the United States. The ARB estimates the methodology could produce between 500,000 and 3,000,000 tCO2e GHG reductions through 2020, the current end-date for California’s cap-and-trade program.
The crediting period for rice projects will be approximately one year, mirroring the growing cycle. To quantify GHG reductions, the ARB is considering using a DeNitrification DeComposition (DNDC) model, a computer simulation of biochemistry based on crop- and region-specific data, and adjusted according to cultivation activities. The model will be used to calculate both the baseline and the project methane emissions.
“The protocol only rewards methane reductions – not nitrous oxide or carbon dioxide – though any increases in these greenhouse gases will be deducted,” said Yachun Chow, an Air Resources Engineer at ARB.
The ARB will also apply two overarching criteria: conserving average yield and preserving the current ecological benefits of rice fields. For this reason, fields that drain into a natural wetland that has no other source of standing water are not eligible for crediting.
The ARB is seeking stakeholder input on several issues, including determining whether changes in drainage practices are likely to affect fertilizer use, figuring out how to monitor soil drying for projects that alternate wet and dry cycles, and developing a methodology for determining the earliest drain date. Verification of a protocol that is based on specific dates of project activities such as flooding and drainage will be challenging.
“This being our first crop-based protocol…we’re hoping that someone really smart out in the audience will come up with a way of figuring out that [fields were] flooded at this date,” said Greg Mayuer, ARB’s Manager of Offset Program Implementation.
At the workshop, however, the audience raised questions as well as provided answers. Barbara Haya, a Research Fellow at Stanford Environment Law Clinic, wondered whether California and Mid-South growers are changing their cultivars to faster-growing rice varieties in response to water shortages. If this were the case now or in the future, drainage and flooding practices might change regardless of the incentive of a GHG offset protocol, changing the ‘additionality’ of projects.
Worth the cost?
The ARB is looking for ways to keep costs down for project developers – a concern that was apparent from stakeholders in the room during Monday’s workshop. In particular, the regulatory body is looking for ways to simplify reporting and use of the DNDC model. Small projects (under 25,000 tCO2e) are allowed to verify biannually rather than yearly, and projects may group together to negotiate prices with verifiers. Project aggregation, however, is not permitted yet. Even when grouped, each project must be verified individually to give a clear line of enforcement.
“We’re not saying no forever, we’re just saying we need to do a bit more work on this,” an ARB official said. Remote sensing might come into play to help with aggregation.
“As the verification of the rice protocol has not really been tested in voluntary [markets], we’re looking for input,” Chow said.
A 2012 study by ACR used a new technology uptake model to estimate that 20% of rice-growing acres in California and 14% of those in the Mid-South would adopt the methane-reducing practices by 2020. However, these figures were based on the assumption that the rice protocol would be adopted earlier, before the protocol’s adoption was delayed multiple times.
The public comment period on the discussion draft is open until April 1. Comment here.