BY: Jennifer Larino, Staff Writer
Jimmy Delery, a fourth-generation owner of more than 10,000 acres of coastal wetlands in south Louisiana, has had a front row seat to the changing coastline since he started hunting with his father 50 years ago.
Sarah Mack, founder and CEO of Tierra Resources, is creating a carbon credit program that could fund wetland restoration at areas such as Bayou Bienville in the Lower 9th Ward. (photo by Frank Aymami)
“Back then we had so many tall cypress trees, I was waiting for Tarzan to come out,” Delery, 57, said.
Those same trees withered to skeletons over the years and were leveled to uprooted stumps after Hurricane Katrina battered the coast. Marsh islands are carved by industrial canals and sinking into open water. His father’s favorite hunting island rests under 3 feet of water.
Without the billions of dollars it will take to keep up with coastal restoration, Delery is in the same boat as the state when it comes to rebuilding some 1,900 square miles of Louisiana coast lost since 1930.
The state in January revealed a $50 billion coastal master plan that will direct $17.9 billion toward marsh creation over the next 50 years. The plan estimates Louisiana could still lose up to 1,756 square miles of coast during that time without additional funding.
That’s why Delery and other coastal advocates have their eye on an alternative: carbon credits.
Polluters buy carbon credits to compensate for the tons of carbon dioxide they emit. Money from credits sold goes toward carbon-reducing projects such as planting an acre of land with trees or burning off methane from landfills.
Last month, the American Carbon Registry of Arlington, Va., which runs a market for carbon credits, published a proposed new methodology that calculates the amount of carbon absorbed by restored wetlands in the Mississippi Delta. If the registry approves the methodology, it will pave the way to provide much-needed money for coastal restoration.
Whether polluters will invest in the idea of wetlands restoration remains to be seen. There’s still a lot of science to translate before projects can get underway. Plus, the credits will face a market that is largely voluntary in the U.S. and has seen participation wane through the recession.
Sarah Mack, president of Tierra Resources in New Orleans, has spent the past five years developing the science behind the wetlands carbon methodology published by the American Carbon Registry. She thinks the market for wetland credits — the first of their kind — could be big business.
She estimates that each acre of restored wetland can generate anywhere between 5 to 15 tons of carbon credits for decades. Planting trees generates about 5 to 7 tons per acre on average.
Mack noted the number of tons of credits generated by each acre will vary based on the type of wetland — freshwater, saltwater, cypress or mangrove ![]()
— but she expects the efficiency of wetlands in absorbing carbon dioxide to boost the price of its credits.
Mack expects the Tierra Resources methodology to be approved in May. The company is searching now for a proof-of-concept project that will prove just how much carbon dioxide coastal restoration can absorb, with verification from an independent third party.
At least one company already has shown interest in the concept. New Orleans-based utility Entergy Corp. funded Mack’s research through with a $150,000 shareholder-backed environmental research grant.
Anjali Sheffrin, an electric utilities expert at the Tulane Energy Institute, said it may not be as easy to replicate that interest elsewhere.
Sheffrin noted that the U.S. carbon markets is still largely voluntary and the appetite to enter carbon markets at will is low now that Congress appears to have backed off the cap-and-trade bill that dominated energy discussions two years ago. State regulators appear to be shifting efforts to setting up renewable energy standards, she said.
“Unless there is a national legislation that puts muscle behind (cap-and-trade), to say that this is the goal of the nation to achieve lower emissions, then you’re not going to see it being successful on these voluntary efforts,” Sheffrin said.Mary Grady, director of business development for the American Carbon Registry, said the organization saw carbon credit purchases slow down after the 2008 financial crisis.
The registry sold, contracted or retired about 2.9 million tons of carbon credit last year, down from 4.3 million tons in 2008. But Grady said the decrease could be an advantage for wetland carbon credits.
“In a regulated market, a ton of carbon that reduced from the landfill is the same that’s reduced from coastal resources. The voluntary market doesn’t look at it that way,” Grady said.
Grady said companies are looking for projects that will support efforts in their own backyard or give them a marketing boost, so-called “charismatic carbon.” She noted that the Louisiana coast received national coverage during Katrina and the Gulf of Mexico oil spill. Coastal restoration gives companies a way to contribute to rebuilding, she said.
Carbon market experts say the importance of having a marketing hook could start to fade as early as 2013.
That’s when California expects to have the first state-administered cap-and-trade program up and running as a part of its aggressive climate change law.
Mack noted that California will be the second largest regulated market in the world behind the established European Union Emissions Trading Scheme launched in 2005, and it will be short on marketable carbon credits. She said her company’s wetlands methodology is on the list to be reviewed for inclusion in the California program.
If the California Air Resources Board, the agency overseeing the program, approves the methodology, polluters in California will be able to purchase wetlands credits for Louisiana projects.
Mack admits there is still a shade of uncertainty to wetland carbon credits. But if successful, they could be the best way to unite the dozens of coastal stakeholders, one of the biggest barriers to large-scale restoration.
“Hopefully this is a way to kind of bring those groups together, just if they see some revenue involved. That’s the ideal situation.”
To sign up for CityBusiness Daily Updates, click here.
Leave a Reply