A Voluntary Carbon/Eco-Services Market - Strawman

Thomas A. Campbell Amanda Halter April 27, 2016

“…evidently we’re leaking some oil and we are going to be here for a while.”

Captain Hazelwood

EXXON VALDEZ

Loss of 2,650 sea otters 100,000 to 300,000 birds were killed Common Murre colonies were reduced by half

How Do You Value Something that is Not Traded in any Marketplace?

Bayway Site, New Jersey

NOAA economists developed and applied Habit Equivalency Analysis (HEA) to Exxon-Bayway oil spill

Natural Resources and Services

% o

f Ser

vice

s

20

40

60

80

100

Years

Injury [Loss of 800 SAY]

Start Full Recovery

% o

f Ser

vice

s

20

40

60

80

100

Years

Injury [Loss of 800 SAY]

Start Full Recovery

Off-Site Restoration [Gain of 1,500 SAY]

A

B

Natural Resources and Services

Ecological Services

When Ecosystem Services are Impaired in a Particular Ecosystem Patch, it is Possible to Restore and Compensate for a Damaged Ecosystem Elsewhere so that the Aggregate Performance of the Ecological Landscape Remains is Improved.

A > B

Trading vs. Pricing Service Flows • Products and Services should reflect their true cost of production

• Companies should internalize the negative externalities associated with

production

• Ecological Services can’t be reliably monetized o Markets that price goods and services are too complex to mimic

o Models can’t reliably price non market ecological resources

• Rather than attempt to price the wild, we should expect the replacement or

restoration of impacted ecological services

• “No Net Loss of Wetlands” – No Net Lose of Ecosystem Services

• Lays the foundation for A Voluntary Ecosystem Market

• Without a credible certifying body this Market cannot function

Carbon Equivalency Analysis To

ns o

f Car

bon

20

40

60

80

100

Years

Carbon Deficit [Loss of 800 CTY]

Start Carbon Neutral Date

Off-Site Restoration [Gain of 1,500 CTY]

A

B

Carbon Tons

When Carbon Tons are Emitted in a Particular Operation, it

is Possible to Compensate Elsewhere by the Sequestration

a Greater Number of Carbon Tons so that the Aggregate

Performance of the Global Carbon Landscape is Improved.

A > B

Statute

Regulation

Guidance

Project Decision-making

Statute

Regulation

Guidance

Project Decision-making

A Voluntary Carbon/Eco-Services Market - Strawman

Thomas A. Campbell tom.campbell@pillsburylaw.com

Amanda Halter amanda.halter@pillsburylaw.com

April 27, 2016

Thomas A. Campbell • Previous General Counsel of the National Oceanic

and Atmospheric Administration

• Lead Exxon Valdez federal damage assessment; lead settlement negotiation and was signature on $1 billion NRDA settlement

• Pioneered the conceptualization of Eco-Services Flows and Habitat Equivalency Analysis and championed the early practical application of Restoration Science

• Headed Commerce Department Delegation to the 1992 “Earth Summit” in Rio de Janeiro

• Confidential Carbon Sequestration planning for Multi-National Corporation and Foreign Government