Rangelands Carbon Markets

PREPAREDBY: FORRESTCOBB

AMANDAGOLDSMITH

ALEJANDRARODRIGUEZ

CHADELLIS

WILLIAMFOX

DOUGTOLLESON

JEFFGOODWIN

EDWARDOSEI

ROELLOPEZ

REVIEWEDBY:

ANNEEGELSTON

KEVINSILVERMAN

SHELBYMCCAY

ABIGAILHOLMES

BRITTANYWEGNER

RANGELAND CARBONMARKETS

A PRIMER ON THE HISTORY, FUNCTION AND PROCESSES OF CARBON MARKETS RELEVANT TO TEXAS RANGELANDS

DECEMBER 2022

LISTOFFIGURES

Figure1.Soilcarboncyclewithcarboninputsandoutputsandthedecompositionoforganic mattertocreatestablecarbon.

Figure2.Meanabovegroundandbelowgroundorganiccarbonstocksinecosystemsacrossthe globe.DataprovidedfromIPCC2000.

Figure3.Diagramofcarboncompoundsbindingtothesurfaceareaoftheclay+siltfractionof soilandthesandfractionofsoilillustratingthatmorecarbonbindingsitesareavailable inaclayandsiltsoilthaninasandysoil.

Figure4.Soilorganiccarbon(gC/m2)inTexastoadepthof30cm.DatasourcedfromgSSURGO database(USDA-NRCS2021).

Figure5.Timelineandhistoryofcarbonmarketsfrom1990to2021.

Figure6.Microsoftemissionsreductionplanforachievingnegativeemissionsby2030, reproducedherefromSmith2020.

Figure7.GlobalvoluntarycarbonmarkettransactionvolumesinMtCO₂eandpricespertonCO₂e from2016–2021byprojectcategory:a)ForestryandLandUse,andb)Agriculture. AdaptedfromdataontheEMDataIntelligence&AnalyticsDashboard (https://dataecosystemmarketplacecom)andfromForestTrends’Ecosystem Marketplace2022

Figure8 Averagenumberofcreditsissuedperprojectforthe7nature-basedprojecttypesinthe USfromfourmajorprojectregistriesfrom2002to2021(CAR,ACR,VCS,andGOLD) Data sourcedfromBerkeley’sVoluntaryRegistryOffsetsDatabase(Soetal 2022)

Figure9 Numberofnature-basedcreditsissuedfromfourmajorprojectregistries(CAR,ACR,VCS, andGOLD) Dataislimitedtoprojectsthatareonlyinonestate Datasourcedfrom Berkeley’sVoluntaryRegistryOffsetsDatabase(Soetal 2022)

Figure10 Overviewoftheinsetandoffsetprojectutility,function,andrelativelevelofeffort

Figure11 Broadoverviewofthenature-basedvoluntarycarboncreditapproachoffsetting emissions

Figure12 Overviewofthetraditionalvoluntarycarbonoffsetcreditgenerationprocess Adapted fromPlastina2022

Figure13 OverviewoftheEcosystemServicesMarketConsortiumoffset/insetcreditgeneration process AdaptedfromPlastina2022

Figure14 OverviewoftheIndigoCarbonoffsetcreditgenerationprocess AdaptedfromPlastina 2022

Figure15 OverviewoftheBayerCarbonoffsetcreditgenerationprocess AdaptedfromPlastina 2022

Figure16 OverviewoftheBCarboncreditgenerationprocess

Figure17 OverviewoftheCityForestCreditsoffsetcreditgenerationprocess

Figure18 Globallytransactedvoluntarycarboncreditvolumeandaveragepriceby standard/registryin2020 AdaptedfromtheEMDataIntelligence&AnalyticsDashboard onEcosystemMarketplace,AForestTrendsInitiative (https://dataecosystemmarketplacecom)

LISTOFTABLES

Table1 BrandedoffsetcreditsforsixvoluntarycarbonregistriesintheUS

LISTOFACRONYMS

ACRAmericanCarbonRegistry

AFOLUAgriculture,Forestry,andotherLandUse

ALMAgriculturalLandManagement

BAUBusinessasUsual

BEFBiodiversity&EcosystemFutures

CARClimateActionReserve

CARBCaliforniaAirResourcesBoard

CCBClimate,Community,&BiodiversityStandards

CCBAClimate,Community,andBiodiversityAlliance

CCXChicagoClimateExchange

CDMCleanDevelopmentMechanism

CERCertifiedEmissionsReduction

CFCCertifiedForestryCredits

CH4Methane

CMEChicagoMercantileExchange

CO2CarbonDioxide

CO2eCarbonDioxideequivalent

CORSIACarbonOffsettingandReductionSchemeforInternationalAviation

CRTClimateReserveTonnes

ERPAEmissionReductionPurchaseAgreement

ERTsEmissionReductionTons

ERTEnvironmentalResourcesTrust

ESMCEcosystemServicesMarketConsortium

ETSEmissionsTradingScheme

EUETSEuropeanUnionEmissionsTradingScheme

GHGGreenhouseGas

GMGeneralMotors

ICAOInternationalCivilAviationOrganization

ICAPInternationalCarbonActionPartnership

IHSInformationHandlingServices

MEAMillenniumEcosystemservicesAssessment

MtMegatonne

mtMetrictonne

N-GEONature-BasedGlobalEmissionsOffset

NGONon-GovernmentalOrganization

NK-CAPNoelKempffMercadoClimateActionProject

NPPNetprimaryproductivity

NRTsNoriCarbonRemovalTonnes

OPROffsetProjectRegistry

PESPaymentforEcosystemServices

PVCPlanVivoCertificates

REDD+Reduceemissionsfromdeforestationandforestdegradation

RGGIRegionalGreenhouseGasInitiative

SDGsSustainableDevelopmentGoals

SECSecuritiesandExchangeCommission

SOCSoilOrganicCarbon

SOMSoilOrganicMatter

TAMUNRITexasA&MNaturalResourcesInstitute

TNCTheNatureConservancy

TSVCMTaskforceonScalingtheVoluntaryMarket

UNFCCCUnitedNationsFrameworkConventiononClimateChange

UNFCCCCOPUNFCCCConferenceofParties

VCMVoluntaryCarbonMarket

VCSVerifiedCarbonStandard

VCUVerifiedCarbonUnit

VERsVerifiedEmissionReductions

VVBValidation/Verificationbodies

WCIWesternClimateInitiative

WWFWorldWildlifeFund

Beginningofnewsubsection withinachapter

Endofchapter

Denotespartofthecarbon offsetprocess

FOREWARD

Thepurposeofthisreportistoprovide anoverviewofcarbonmarketsfor naturalresourcesprofessionals, landowners,agriculturalproducers, andothersinvolvedinmakingland managementdecisionsbyproviding informationonthebackground, history,processesandfunctionof carbonmarkets.Theauthorsofthis reportareprimarilyTexasnatural resourcesmanagementand conservationprofessionals.Inrecent years,wefindourselvesaskedby landowners,publiclandmanagement agencyrepresentatives,local communities,andprivatecorporate entitiesaboutcarbonmarkets,how theyfunction,whattheimplicationsfor rangelandsare,howtounderstand currentcontroversiesaroundthe carbonoffsetsandwhetherthey shouldbecomecarbonmarket participants.Ourhopeinwritingthis reportwastoprovidesomeofthe backgroundinformationneededto navigatethiscomplextopic.

Inthereportwefocusonthosecarbon marketsthataremostapplicableto rangelandsystemsinTexasinan attempttoofferclarityforcurrent voluntarycarbonmarketsystem organizationandprocesses.Givenour focusandareaofexpertiseandthe complexandever-shiftingcarbon marketlandscape,itispossiblethat therearenuancesofpolicyand interpretationthatarenotcompletely covered,soweencouragereadersto utilizesomeoftheresourceswecitefor additionalinformation.Furthermore, whilewedescribethevoluntarycarbon

marketprocessandfunction,wedid notdelvefarintothecurrentissuesor controversiesaroundthesemarkets Nothingstatedinthisdocument shouldbetakenasanendorsementof anygroup,marketsystem,or approach.Sincealmostallentities operatinginthesemarketsareprivate for-profitentities,itisnotpossibleto discusscarbonmarketswithoutlisting for-profitexamples.Organizations mentionedorusedasexamplesinthis reportwereselectedbecausewe believedtheywererepresentativeof themarketplaceandimportantto marketfunctioning,orbecauseof familiarityand/orprevious involvementfromoneormoreofthe authors.Inthisreport,wedonotmake anyclaimastotheirrelativequality nordoweendorseanyparticular marketapproach.

Thereisnosinglestrategyormarket schemethathasemergedto dominatetheoffsetcreditmarketand nocriteriaorframeworkbywhich thesemarketsareevaluated.Giventhe varietyofapproachesandgroups involvedinthisspace,landownersand landmanagersshouldcarefully considerthepotentialobligationsand requirementsoftheseprojects,aswell ascurrentcontroversyaroundcarbon marketsbeforeenteringintocredit developmentcontracts There continuetobesignificantareasof debateastowhetherthevoluntary carbonmarketsystemcanachieveits intendedorstatedbenefitsforclimate mitigation.

Therecentsurgeindemandand purchaseofcarbonoffsetcreditshas correlatedwithanincreasein independentreviewandscrutinyofthe carbonoffsetmarketswithinthe professionalscientificandpolicy communities,aswellasthepublicat large.Therehasbeenasteadyincrease inpeer-reviewedstudies,reportsand newsarticlesfeaturingexamplesof marketflaws,includingindividual projectswhichhavemadeinflated claims,hadunreliableestimation methods,thatfailedforvariousreasons, orinsomecasesfeaturedpotentially fraudulentactivities.Addtothisthatthe utilityofoffsetsforclimateactionisalso beingquestioned,includingwhenitis appropriatetouseoffsets,andwhether thecurrentuseofoffsetsareactually harmingeffortsforclimateactionby allowingforinflatedsustainabilityclaims (i.e.,greenwashing)thatdisincentivizes moremeaningfulaction.Thisreportdoes notcloselyexaminetheseorothersimilar importantconcernsandneitherdowe closelyrevieweffortsfrommarket participantstoaddressthem,not becausetheyareunimportant,but becauseourgoalwastogainabasic understandingofhowcarbonmarkets areorganizedandhowtheyfunction.

Inclosing,theextenttowhichvoluntary carbonmarketscanordoaddressthese concernswilllikelydeterminewhether demandforcarboncreditscontinues andwhatthesemarkets’rolewithin futurenationalandglobalclimate actionwillbe

Eitherway,thesemarketsareaffecting changesonTexaslandsandsoland managementandconservation professionalsneedtogainmore understandingofthesesystems Better informedprofessionalswillalsobetter prepareusforothernascent ecosystemservicemarketsforwater, biodiversity,orotherservices.Wewould liketoencouragemoreattentionand evaluationoftheseprograms,anditis ourhopethatthisreportwillhelpto fosteraknowledgeablesetofnatural resourcesprofessionalsanddecision makerstocontinuethatvital conversationwithinTexasandthe countryatlarge.

1.0 INTRODUCTION

1.1Ecosystemservicesmarkets

Ecosystemsaredynamicandcomplex systemscomprisedofbioticcomponents includingplants,animalsand microorganismswhichinteractwith, transform,anddependuponabiotic componentssuchaslocalclimateor geologytosustainafunctioningsystem.

Ecosystemservicesarethebenefits peopleobtainfromtheseecosystems andaregenerallydescribedasfalling intofourcategories:

Provisioningservicesaredirectly receivedbenefitssuchasfood,water, timber,orfiber.

Regulatingservicesarethosethat moderatenaturalphenomenaand includeclimateregulation,flood control,orwaterqualityprotection.

Culturalservicesproviderecreational oraestheticbenefits.

Supportingservicesarethosethat supportorfacilitatemanyofthe

otherservicebenefits.Forexample, soilformation,photosynthesis,and nutrientrecycling(MEA2005).

Inthelastdecade,therehasbeenan increasingnumberofPaymentfor EcosystemServices(PES)schemeswhich havebeendevelopedtoallow governmental,Non-Governmental Organizations(NGOs),andprivate organizationstopayforthesepublic goods(i.e.,ecosystemservices, Kinzigetal.2011).Thesemarket-like mechanismsareanapproachto environmentalmanagementwhichuse cashorotherformsofpaymentsto conserveandenhancetheseecosystem servicebenefitsbycompensating landownersfortheirstewardshipand managementpractices(Milderetal.2010, Kinzigetal 2011)

TherearecurrentPESschemeswhich havecreatedmarketsforwaterquality andquantity,endangeredspecies habitat,wetlandmitigation,andclimate changemitigation Thelargestcollection ofPESmarkets,andthefocusofthis report,isforregulatoryecosystem servicesrelatedtoclimatechange; specifically,theremovalofatmospheric carbondioxidethroughnaturalcarbon sequestration(i.e.,carbonmarkets)and thereductionofcarbonemissionsfrom landuseconversionorland managementpractices.Whilethese carbonmarketsalldifferintheir application,mostattempttoincentivize thelandownerorlandmanagerto enhanceorconservetheecosystem servicesprovidedbytheirlands.

Thishasgeneratedenormousinterest fromlandownerswhoarelookingto capitalizeonthisdemand.However,the designandapplicationofthesemarkets varieswidely,andadoptionofthese marketstrategieswilldependonmany factorsincludingcontinueddemand, confidenceinmarketbenefits,market function,andtheabilityordesireof landownerstomeetthelegal requirementsandmanagement expectationswithinthesemarkets.

Separatefromtheprivatemarketbasedsystems,federalagenciesare increasinglybeingaskedtoconsider ecosystemservicesintheirprograms, projects,andland-useplanning

OnAugust18th,2022,theOfficeofScienceand TechnologyPolicy,OfficeofManagementand Budget,andDepartmentofCommercejointly releasedanationalstrategytodevelopaUS systemofnaturalcapitalaccounting (Rahmanetal.2022).Thissystemwillestimate thecontributionofecosystemservicestoUS economicactivityinordertohelpdirectfuture federaldecision-making InNovember2022, theCouncilofEnvironmentalQualityreleased “OpportunitiestoAccelerateNature-Based Solutions,”aguidetoincorporatinglanduse, conservation,andstewardshippracticesasa partofclimatemitigationandotherfederal priorityactionareas.Itseemslikelythatpublic agencies,especiallythosewhichregulate naturalresourcemanagement,willcontinue toincreasetheiruseofecosystemservices conceptsfordecision-makinginthefuture.

Whilewedon'texamineothersystemsor methodsforfinancingtheenhancementof ecosystemservicesinthisreport,itis importanttonotethatcarbonoffsetmarkets arejustonefinancing/incentiveapproachina largerglobalefforttoutilizenaturalsystemsin climateaction.Thisreportprovidesabroad overviewoftheecologicalprocesseswhich supplythoseclimatechangemitigation benefits(ie,carbonsequestrationand storage),ahistoryofcarbonmarketsand systems,currentdesignanddemandfor carboncredits,examplemarketswhich operateorcanoperateinrangelands,how theyfunction,andanoverviewofthe requirementstogeneratecreditsunder someofthemajorvoluntarycarbonmarkets

2.0SOILCARBONDYNAMICS

2.1Thesoilcarboncycle

Incarbonmarkets,thelargestcarbon pooltrackedwithingrasslandsand shrublandsystemsisthecarbonin soils Soilcarbonsequestrationisthe processbywhichcarbondioxide(CO₂) iscaptured,converted,assimilated, andstoredinorganicorinorganic forms.Soilcarbonsequestrationis generallypresentedasarate,sinceit representstheamountofcarbonthat hasbeenincorporatedovertime, generallyascarbonmassperyear. Carbonstoragereferstothetotal carbonstocks,theamountofcarbon alreadypresentinthesoilandplant biomass.Soilcarbonsequestrationis drivenprimarilybyorganiccarbon inputsfromplantspecies,butlocal fauna,soilmicrobialandinvertebrate communities,aswellaschemical reactionsbetweensoilmineralsand theatmospherearealsosourcesof soilcarbon.

Carbondioxideisanormal,ifsmall (approximately0.04%)componentof theearth’satmosphere(Buis2022). Human-drivenemissionshave increasedCO₂levelsinthe atmospherebyasmuchas45%since theIndustrialAge,primarilyfromthe burningoffossilfuels(Buis2022) Fossil fuelsareancientplantandanimal hydrocarbonsthatformunder immensepressureandtemperatures underground.Whenfossilfuelsare burned,thosecomplexhydrocarbon moleculesreleaseenergyandCO₂.

PlantsconvertCO₂intheatmosphere intocomplexcarbonmolecules(e.g., glucose)throughphotosynthesis

tobeusedasenergyortocreateplant tissues.Alivingplant’smassismadeup mostlyofwater,butmostofthedry massofaplantiscarbonsourcedfrom atmosphericCO₂andplantsmakeup about80%oftotalglobalbiomass (Bar-Onetal 2018) Whendescribing plantbiomassinanecosystemwewill oftenrefertoabovegroundbiomass (primarilyplantmassinshoots,leaves, trunk,etc.)andbelowgroundbiomass (themassofsoilbiota,plantroots, rhizomes,tubers,etc.;Figure1).

Carbonentersthesoildirectlyfromroot material,plantlitter,andothernatural depositions.Plantorganicmattercan alsoenterindirectlythroughanimal consumptionasmanure,aswellas throughthedecayanddecomposition ofdeceasedanimals Theseplantand animalresidues,alongwiththeliving plantroots,soilfauna,andthemicrobial communitymakeupsoilorganicmatter (SOM)andsoilorganicresidue.

Soilorganiccarbon(SOC)makesup around58%ofthetotalSOM,withoxygen andhydrogenmostlyconstitutingthe restofSOM(Heatonetal.2016).SOMis alltheorganic compoundspresentin thesoilincludingplantlitter,soil organismsincludingmicroorganisms, microbialproducts,andallotherorganic matter(Foth1991) Soilorganiccarbonis themassofcarbonpresentwithinSOM. ThedecompositionofSOMresultsin manydifferentcarbonpoolsandalso providesplantswithimportantnutrients suchasnitrogen,phosphorus, potassium,sulfur,andother micronutrients

DecompositionofSOMoccursin variousstages;thus,SOCcanbe presentinvariousformsthatdifferin theirrelativestabilityorresistanceto decomposition

SomeCO₂isalsoemittedfromsoils, fromplantroots,soilfaunaandsoil microbialrespiration.Soilswill generallysequestermorecarbonthan emittedbutchangesinlanduse,land management,climate,orotherfactors canaffectcarboninputsandcan createadeficitandSOCreductions overtime.Converselyland-use changescanencouragemorecarbon inputsandfacilitategainthrough

additionalsequestrationofcarbonin soilsovertime.Plantproductionand decompositionaremajor determinantsthataffectcarbonfluxes insoil Plant-derivedcompoundscan persistinthesoilformanyyearsand canrepresent25-50%ofSOCeven after50yearswithnonewplantinputs (Barréetal.2018).Soilorganiccarbon generallydecreaseswithsoildepth sincetheupperlayersofsoilcontain thebulkoflivingrootsandrootlitter (Sokoletal.2019).

Thetypeofecosystemandits dominantspeciescandeterminethe type,distribution,andnumberof organicresiduesthatareavailableto becomeSOM

Figure1.Soilcarboncyclewithcarboninputsandoutputsandthedecompositionof organicmattertocreatestablecarbon.

Ecosystemslikegrasslands, shrublands,andforestsharbor significantdifferencesinSOCamounts anddistributionsthroughoutthesoil (Figure2,Jacksonetal 1996,Chenet al.2018).WhilemanySOCstudieshave beenlimitedtotheuppersoillayersin the0-30cmrange,rootzonesin certainecosystemscanextenddown muchfarther,asmuchas1or2min somesoils,leadingtosubstantialSOC atlowerdepths(Jacksonetal 1996)

Plantspeciescompositioncanalso affectSOC.Forexample,C4grasses cancontributetohigherratesofsoil carbonsequestrationthanC3grasses becausetheyhavemoreaboveand below-groundbiomass,slower decompositionrates,andhigher nitrogen-useefficiency(Yangetal. 2019).Vegetationtypesalsohave differentresponsestodisturbancesor managementactions,suchasgrazing orprescribedburning,whichcan positivelyornegativelyaffectcarbon inputs(Abdallaetal.2018,Houetal. 2021).Ingeneral,vegetation communitydiversityandrichness havebeenshowntohaveapositive relationshipwithsoilcarbon(Anacker etal.2021).Managementstrategies, suchasafforestationorreforestation, canalsoincreasecarbon sequestrationthroughhigherinputsof surfacelitterandrootsaswellasthe formationofstablemacroaggregates (Liaoetal 2006)

Asidefromplantorganicmatterinputs, manyfactorscanaffectsoilcarbon sequestration,soilcarbondistribution, andcarbonstorage.Forexample,soil texturecanimpacttheabilityofasoil toincorporateandretainorganic carbon.Eveninanareawithsimilar plantcommunitiesandproductivity, soiltexturecaninfluencetheamount andretentionofSOMinasoil Finer clayparticleshaveahighersurface areaandabilitytobindmorecarbon compoundsthancoarsersand particles(Figure3).Soilparticlesinthe clayandsiltfractioncanchemically stabilizecarboncompoundsby bindingtothem,whichcanbeamajor formofcarbonstorageinsomesoils, whilesiltandclaywillalsoprotectSOM bytheocclusionoforganicmatterin stabilizedsoilaggregates(Hassink 1997,Sixetal.2002).Therefore,soils withhigheramountsofclayusually storemoreSOC(Hassink1997,Sixetal 2002).Becauseofthestabilizing capacityofclay,coarsersandyor loamysoilsaremoresusceptibleto landdegradationandthesubsequent decompositionofSOMthanclaysoils andaremoredependentonconstant carboninputs(Dlaminietal 2016) All thesedynamicshaveimplicationsfor thestoragecapacityoforganic carbonincertainsoils.Manyothersoil characteristicscaninfluencethe amountofSOMandrateof sequestration,buttextureisan exampleofabroadcharacteristicthat caninfluencesequestrationeven withinapropertyorpropertiesthat havesimilarmanagementandplant productivity.

AboveandBelowgroundCarbonStoragebyEcosystem

TonnesofCarbonperhectare

TotalCarbonstocks

Aboveground

Belowground

ecosystemsacrosstheglobe.DataprovidedfromIPCC2000.

Outsideofsoilcharacteristics, precipitationhasamajorinfluenceon soilcarbonsequestration Precipitation drivesplantgrowthwhichincreases carboninputs Moreprecipitationalso meansmoremicrobialactivityand fasterratesofdecomposition,converting organicresiduesintoSOM(Chenetal. 2016).Microbescontributetotheorganic carboninputsintosoilandcanaccount foraround50%oftheSOCin agroecosystems(Angstetal 2021)

Converselyprecipitationcanalso causecarbonlossthroughleaching, especiallyunderextremeprecipitation events.Increasedprecipitationcan alsoincreasemicrobialrespiration whichisoneoftheprimarydrivers responsibleforsoilcarbonloss (Figure1,Liuetal.2018).

Soilorganiccarbontendstobelower inareaswithhighertemperatures. Highertemperaturescanresultin moreplantgrowth(a.k.a.anincrease inplantnetprimaryproductivity[NPP]) whichaddsmoreinputstoSOC.

However,soilmicrobialandinvertebrate respirationwillalsoincrease,resultingin greaterCO₂emissionswhichcanmake soilsanetcarbonemitter(Figure1, Kirschbaum1995).

Manyofthefactorsthataffectsoil carbonsuchasclimateandchemical/ physicalconditionofsoils,areoutof ourcontrol.However,certaintypesof landmanagementpracticescan influencecarbonsequestrationby changingcarboninputs,microbial activity,orbymitigatingcarbonloss Incroppingsystems,thereareseveral managementactivitiesthatcanbeused toincreasesoilcarbonsequestration andretention.Convertingfroma conventionaltillagesystemtoano-tillor reducedtillagesystemcanhelpreduce soilcompaction,erosion,and disturbanceofaggregates(Wuadenet al.2020).Leavingcropresiduesonfields insteadofremovingthemcancreate highercarboninputsintothesoil (Bolinderetal 2020)

Similarly,changingorexpandingcrop rotationsandintroducingcovercropsto provideanadditionalsourceofcrop residuesandcarboninputscan enhanceSOC(Huangetal.2020, McClellandetal.2021).

Grazingmanagementcanalsobe modifiedtoaffectsoilcarbon.Practices suchasoptimizingstockingrate, implementingrotationalgrazing,or improvingforageproductioncan increasecarboninputsanddecrease lossofsoilcarbon(Derneretal 2006, Abdallaetal.2018).Overgrazingcan decreasecarboninputsbydecreasing abovegroundbiomassandshortening rootelongation(Schuster1964). However,anappropriategrazing intensitycanincreasesoilcarbon sequestrationbypromotinggreater turnoverofplantmaterialandbyadding manure.Rotationalgrazingforexample canpromotehealthyvegetativecover andimproveforageproductivity (Abdallaetal 2018)

Clay

Carbon compounds

Clay+Silt (<0.002mm-0.05mm) Sand (0.05mm-2mm)

Figure3 Diagramofcarboncompoundsbindingtothesurfaceareaoftheclay+siltfraction ofsoilandthesandfractionofsoilillustratingthatmorecarbonbindingsitesareavailablein aclayandsiltsoilthaninasandysoil

Sincerangelandsencompassawide varietyofecotypeswhicharegrazedby domesticlivestockorwildanimalsand includegrasslands,shrublandsand woodland,managementapproachesto increasecarbonsequestrationcanvary. Implementingadaptivelivestock management,preservingexisting rangelands,restoringdegraded rangelandsorconvertingcroplandsto perennialgrasslandsbyeliminatingtillage, reducingsoilerosion,andincreasing surfacelitterandrootbiomassareallways toprotectorenhanceSOCandphytomass (Gebhartetal 1994,Sandersonetal 2020) Whilethereisanimpressivebodyof researchonthesoilcarbonimplicationsof landmanagementintheUS,additional researchisstillneededtodeterminesoil carbonimplicationsofdifferent managementstrategiesespeciallygrazing managementinrangelandsystems

Texasisalargestatewithalargediversity ofecosystems,soils,andlanduses. Sincerainfall,ecologicalcommunities, pH,historicallanduse,andsoilproperties affectSOC,itvariesconsiderablyacross thestate Toillustratetheregionaland geographicvariationofsoilcarbon storageseeFigure4whichprovidesa roughestimateofcurrentsoilcarbon stocksacrossTexasingC/m²inthefirst 12inches(30cm)ofsoil

2.2SoilorganiccarboninTexas

Figure4.Soilorganiccarbon(gC/m²)inTexastoadepthof30cm.Datasourcedfrom gSSURGOdatabase(USDA-NRCS2021)

3.0BRIEFHISTORYOFCARBONCREDITS

3.1 Emergenceofint'lcarbonmarkets

In1988,theMaltesegovernment initiatedaninternationalnegotiating committeebysubmittingaresolution totheUNGeneralAssemblyrequesting countriesconvenetodiscussglobal climatechange(UNGA1998).Meetings beganin1990withagoalofproducing adocumentbythe1992UnitedNations ConferenceonEnvironmentand Development.Countriescompletedtheir workbythesummerof1992andbegan theprocessofratifyingtheUnited NationsFrameworkConventionon ClimateChange(UNFCCC),an internationaltreatythatpledged memberstatestoreducegreenhouse gasesto1990levels.Thisdocument furtherpledgedtocontinuetomeetto discusssolutionstoglobalwarming.Five yearslater,theKyotoProtocolemerged, aninternationaltreatyunderwhich countriesagreedtoreduceemissions.

TheKyotoProtocolelaboratedthree Kyotomechanismstolowerthecost associatedwithreducingcarbon.Oneof thosemechanisms,theClean DevelopmentMechanism(CDM),by virtueofitspromptstart,becamethe firstcarboncreditingschemeinhistory (UNFCCC1998).TheCDMallowed countriestoimplementemissions reductionandcarbonsequestration projectsindevelopingcountriestohelp reachtheiremissionstargets During CDMnegotiations,forestmanagement wasdebatedbutnotincludeddueto methodologicaldifficultiesin establishingtheamountofcarbon removedattributabletoaproject (PlantingaandRichards2008).

AsofMarch2016,version1.0ofthe Standard:ApplicabilityofSectoral Scopescameintoeffectwhichoutlines methodologiesunderthe15sectoral scopesoftheKyotoProtocol(UNFCCC 2016).Scope14outlinesmethodologies forafforestationandreforestation, whilescope15outlinesmethodologies foragriculture.Projectproponents registeractivitiesthatearncertified emissionsreduction(CER)credits. Thesecreditscanbeboughtorbanked tobeusedinacomplexcarbon accountingsystemtodetermine countriescompliancewiththeKyoto Protocolinthefirstfive-year commitmentperiodfrom2008-2012

Intensenegotiationsabouttheamount ofcarbonsequestrationallowedunder theCDMduringthesecondmandatory commitmentperiodcontributedtothe failuretocreateasecond commitmentperiodinNovember 2000.Thiscoincidedwiththeelection ofPresidentGeorgeW.Bushwho withdrewtheUnitedStatesfromany furthernegotiations.However, negotiationsattheyearlyUNFCCC regardingmeasurestotakeafterthe endofthesecondcommitmentperiod (i.e.,2020)oftheKyotoProtocol eventuallyledtothe2015Paris Agreement.TheParisAgreement,a legallybinding,internationaltreaty, wasnegotiatedby196partiesatthe 2015UNFCCCnearParis,France.The treatysetlong-termgoalstokeep changeinmeanglobaltemperatures wellbelow2°Cpreferablybelow1.5°C, reduceemissionlevels50%by2030, andachievenet-zeroemissionsbythe mid-21stcentury(UNFCCC2015)

UnliketheKyotoProtocol,theParis Agreementrequirescountriesto regularlysubmitupdatesoncurrent emissionlevelsandtodevelopplans toreduceemissions(UNFCCC2015). UnderArticle6oftheAgreement,a frameworkwasdevelopedforglobal carbonmarketsandinternational tradingofemissionsreductionsto achievelowerglobalemissiontargets. TheUnitedStatesjoinedtheParis Agreementin2015undertheObama Administration,brieflywithdrewfrom thetreatyin2020duringtheTrump Administration,andthenrejoinedin 2021undertheBidenAdministration (Bodansky2021).

Whilenofurtherlegallybinding commitmentperiodhasbeen successfullynegotiated,proponentsof climateactionswithintheinternational communityhavechampionedthe needtoincludenatural-basedcarbon offsetprojectsinanyfuturemandatory programs.TheBidenAdministration’s 2021NationalDeterminedContribution (NDC),whichistheUSplanformeeting greenhousegas(GHG)reduction targetsundertheParisAgreementin 2015,acknowledgestheroleofnatural carbonsequestrationandstorageto meetclimategoalsthrough reforestation,forestmanagement,and applicationofagriculturalbest managementpractices.TheNDC however,doesnotincludeanumerical targetforthecontributionofthese naturalclimatesolutions(United States2021).TheUNFCCCCouncilof Parties(COP)annualmeetingsare wherenewagreementsunderthe

UNFCCCarediscussedand negotiated.AtCOPmeetings, agreementsweremadethatallow carboncreditsgeneratedunderthe CDMtobesoldbetweencompaniesin differentcountries Thisallowsfor developmentofcarboncreditsthat canbetransferredinternationallyand usedinothercountriestomeetNDCs undertheParisAgreement.Future guidanceoninternationaltradingof creditswilllikelybeexpandedunder Article6oftheParisAgreementat futureCOPmeetingsandmayhave implicationsforvoluntarycarbon marketsystems.Outsideof internationallybindingcommitments, USvoluntarycarbonmarketshave developedaspublicandprivatesector net-zeroemissionscommitments haveincreased.

3.2CarbonmarketsintheU.S. WithintheUS,mandatorycap-andtradeprograms,aswellasvoluntary carbonmarkets,havedevelopedto reduceandcompensateforstatewideandprivatecompanyGHG emissions(Figure5) Mandatory carbonprogramsincludeCalifornia’s Cap-and-TradeProgram(Cushinget al.2016),MassachusettsLimitson EmissionsfromElectricityGenerators [InternationalCarbonAction Partnership(ICAP)2021],theRegional GreenhouseGasInitiative(RGGI, MurrayandManiloff2015),andthe WesternClimateInitiative(WCI, Section4.2,Cullenwardetal.2019).

California’sCap-and-TradeProgram, thelargestmandatoryprograminthe USwaslaunchedin2013after California’s2006GlobalWarming SolutionsActcalledforasharp reductionofGHGemissionswithinthe state(Cushingetal.2016).The programincludesnatureandnonnature-basedoffsetapproacheswith goalstoreduceGHGemissionsto1990 levelsby2020,40%below1990levels by2030,and80%below1990levelsby 2050(ICAP2021).Thestateaimstobe carbonneutralby2045(ICAP2021).

Voluntarycarbonmarketsbeganto increaserapidlyafter2005with demandformethodstominimizeCO₂ emissionsoutsideofcountrieswithin theKyotoProtocolandasdemandfor carbonoffsetprogramswithin developedcountriesincreased (Broekhoffetal.2019).Theworld’sfirst private/independentvoluntarycarbon creditregistry,theAmericanCarbon Registry(ACR),waslaunchedin1996 bytheEnvironmentalResourcesTrust (ERT,ACR2022).Carbonregistries(also sometimestermedstandards), approveprotocolsforoffsetcredit generationandtrackcreditownership toprovidetransparencyforoffsetsand theprojectsfromwhichtheywere generated(Section5.6,Broekhoffetal. 2019).Othersuccessfulinternational anddomesticvoluntarycarbonoffset programshavesincebeendeveloped includingtheVerifiedCarbonStandard whichwaslaunchedin2007andwhich iscurrentlythelargestvoluntary carboncreditregistrybyvolumeof transactedcarboncredits,discussed furtherinSection56(Ecosystem Marketplace2022).

Whilesomeprogramshavegrown overtheyears,therehavebeenfailed attemptstoestablishcarboncrediting schemesandmarketsaswell.For example,andmostnotoriously,the ChicagoClimateExchange(CCX).The CCXwaslaunchedin2003,andwasa voluntary,legallybindingcap-andtradeprogramwithbothnatureand non-nature-basedprojectscontaining morethan400memberssuchas DuPont,Ford,andMotorola(Tianbao 2013).CCXactivitiestookplaceinall50 stateswithintheUS,8Canadian provinces,and16countrieswithabout 700millionmetrictonnes(mt)ofCO₂ credits(Tianbao2013) Followingthe program’ssecondcommitment period,theCCXclosedin2010aftera significantdecreaseinthepriceof carboncredits(Sabbaghiand Sabbaghi2017) Thereasonsforthe closureofCCXhavebeenintensely debated Thelackoflegislationto establishamandatorycarbonmarket intheUSleftlargeinvestors disinterestedincontinuingtofunda voluntarycap-and-tradeprogram. Additionally,whiletheCCXhadbeen initiallycelebratedbyclimateactivists, themarketbecomefloodedwith creditsgeneratedfromoffsetprojects resultinginoversupply,causingprices toplummet(SabbaghiandSabbaghi 2017).Givenplummetingprices, combinedwithconcernsaboutthe qualityofcreditsbeinggenerated,the consumercommunitybeganto questionthelegitimacyoftheprogram andthustorapidlyloseconfidence.

ThecollapseofCCXirreparably damagedtrustinvoluntarycarbon marketsamongmanykey stakeholdersincludinglandowners, agriculturalproducersandotherkey landmanagerswhowereheavily engagedbytheCCXprogram.Manyof thesestakeholders,aswellaspotential purchasersofcreditsremaindistrustful ofvoluntarycarbonmarketsgiventhis pastexperience.TheCCX’sfailure highlightstheuncertaintyandpotential volatilitywithinvoluntarycarbon marketsandemphasizesthatefforts fromcarbonoffsetmarketparticipants tosupportconfidenceinthevalidityof thecreditsarevitaliftheywantstable functioningmarketstocontinue.

3.3Greenhousegasinventories

Withsomeexceptions,largeprivate, state,andfederalentitieswithintheUS arerequiredbytheEnvironmental ProtectionAgency(EPA)toreportGHG emissions.TheaccountingofallGHG emissionsfromanentityisitsGHG inventory.MostGHGinventoriesare generatedusingtheGHGprotocol developedbytheWorldResources Institute,whichisthestandard internationalguidanceusedworldwide (EcosystemMarketConsortium[ESMC] 2021).EntitiesinventorytheirGHG emissionsinthreecategoriescalled “scopes”asfollows:

Scope1isallGHGemissionsthat comedirectlyfromownedor controlledoperations.Examples includecompanyvehicles, equipment,orownedfacilities.

Scope2isemissionsfrompower generation.Emissionsfrom powergenerationareindirect sincepowerisusuallypurchased fromapublicutility.

Scope3isindirectemissionsfrom aprivateentity’supstreamsupply chain(orvaluechain)aswellas fromdownstreamusesofits products.Forabakery,for example,allemissions associatedwiththeproduction, milling,andtransportofwheat wouldbepartoftheirvaluechain scope3emissionsinventory Corporateentitiesoftenemploy differentstrategiesforreducing emissionsbasedonscope.For example,aswitchtoarenewable energyutilityorpurchaseof renewableenergycreditscouldbe usedtoreducescope2emissions.To reducescope1emissions,adiesel vehiclefleetcouldbereplacedbyan electricvehiclefleetorthenumberof employeeairlineflightsinagiven yearcouldbereduced.Forany emissionsacorporateentitydoes notdirectlyeliminateorreduce, offsetcreditpurchasesarebeing utilizedtoachieve“net”emissions reductions.Offsetcreditsrepresenta unitofavoidedemissions,orof atmosphericcarbonsequestered, thatisthenclaimed(retired)bythe purchaserandthecreditamount subtractedfromGHGemission inventories.ForScope3emissions, reductionscanalsobeachievedby compensationusingoffsetcredit purchasesorincreasinglythrougha processcalledinsetting(SeeSection 4.5).Carboninsettingisagrowing practicewhichisdrivingthecreation ofmanynewoffsetprogramsand projectsandvariesconsiderably in approachsinceitisdoneentirely withinacompany’sownvalue-chain.

4.0CARBONCREDITS

4.1Carbonoffsetcredits

Sincethisreportfocusesonvoluntary carbonoffsetmarketswewillusethe termscarboncredit,verifiedemissions reductions,carbonoffset,andcarbon offsetcreditsomewhat interchangeably.However,carbon creditscanalsobetiedtocompliance drivenmarketsorcap-and-trade programs Withinthoseprograms,a carboncreditcanrepresenttheright toemitaunitofcarbon(alsotermed anallowance).Acompanythatdoes notemitallitsallowablecarboncan sellthatright(carboncredit)to anotherentity.

Acarbonoffsetcredit,ontheother hand,isafungiblecommoditythat representsaunitofatmosphericGHG removed(sequestered)orGHG emissionsavoided,typically1tonne carbondioxideequivalent(CO₂e).In voluntarymarkets,projectsarefunded toreduceatmosphericCO₂through removalsandavoidedemissionsand thosereductionsarequantified, purchased,andeventuallyclaimedto compensate(e.g.,offset)forthe purchasers’ownGHGemissions (Section50) Mostmajorvoluntary marketgroupshaveproprietaryterms fortheirverifiedoffsets(Section5.6, Table1)butforsimplicitywewillrefer toallofthemascredits.

andUnitedNationsGlobalCompact Initiative.SBTiisanon-profitthat assistsprivatecompaniesincreating GHGreductionplansdesignedtomeet internationaltargetsforlimitingglobal warmingto1.5°C.WhileSBTiisnot utilizeduniversally,attheendof2021, 2,253companiesacross70countries andrepresentingmorethanathirdof globalmarketcapitalizationhad emissionsreductionstargetsapproved throughthesystem(SBTi2021).Intheir generalguidancetheyrecommend using“high-quality”carbonoffset creditstoassistintransitioningtoa stateofnet-zeroemissionsandthento helpeliminateresidualemissionsonce net-zeroisachieved.Theydonot recommendutilizingcarbonoffset creditsinlieuofdirectemission reductionsandfurthermoresuggest limiteddependence(5-10%)on carbonremovaloffsetslong-term (SBTi2021,2022)

Thereisnosinglestandardormethod bywhichcompaniesutilizecarbon offsetcredits.Manyentitieshave emergedtotryandprovideguidance includingtheScienceBasedTargets Initiative(SBTi)whichisapartnership thatincludestheWorldWildlifeFund

WhilemostprogramssimilartoSBTi, recommendusing“high-quality” credits,thereisalsonoonestandard orcriteriaforjudgingthequalityofan offsetcredit.IntheOxfordPrinciplesfor NetZeroAlignedCarbonOffsetting, Allenetal.(2020)definesahighqualitycreditasonewhichincludes rigorousaccounting,requires additionality,ensureslongevityof carbonstorage,andaccountsfor reversalsalongwithotherquality controlcriteria(discussedfurtherin Section5.5).Wewillusetheabove generaldefinitionwhendiscussinga “high-quality”creditbutthatshould notbetakenasanendorsementofthe creditsorthequalityoftheprojects

thatgeneratethem.Therehavebeen attemptstoevaluatehowwellcredits fulfillormeetcriteriaofa“high-quality” credit.OneexampleistheCarbonPlan initiative,anon-profitthathasbegun torankthequalityofvariouscredits basedontherigorofcalculations, durabilityofcarbonbenefits, safeguardsandadditionality requirements Intheirrankingsystem (1-5)theyfoundveryfewcreditswhich rankedabovea2intheirquality assessmentrating(Zelikovaetal.2021).

4.2Voluntaryversuscompliance markets

Carbonmarketsarecomprisedofboth voluntaryprogramswhichtradeoffset creditsintheprivatesector,and complianceprogramswhicharedriven bynationalorsub-national governmentlaws,regulations,and programs.Demandforcarbonoffsets withinvoluntarymarketscomes primarilyfromcorporations,individuals, and/orprivateinstitutions,whilecredit demandwithinthecompliancemarket iscreatedbyaregulatorymandate (Broekhoffetal.2019).

Acompliancemarketisregulatedby national,regional,orinternationallaws, andmandatestheregulationof emissionstocomplywithGHG emissionreductionrequirements (Lovell2010).Whilecompliance marketshavenotbeenestablished withinTexas,regionalcap-and-trade emissiontradingschemeshavebeen developedwithintheUnitedStates (Section3.2,ICAP2021).

Thebroadestcarbonpricingsystem withintheUnitedStatesisCalifornia’s Cap-and-TradeProgramwhichwas implementedbytheCaliforniaAir ResourcesBoard(ie,CARB,Cullenward etal.2019).Theprogrambegan operationin2012andisexpectedto reach200.5MegatonnesCO₂e(MtCO₂e) capby2030(ICAP2021).

Voluntarymarketshaveproliferated withinthelast20yearstomeetthe emergingdemandforoffsets(Broekhoff etal.2021).Thevoluntarymarketbegan togrowafter2005astheCDMbecame moreestablishedandallowed companiesand/orindividualsto purchasecarbonoffsetsonavoluntary basis(Broekhoffetal 2021) Voluntary offsetcreditsfilladifferentroleand functionthancompliancecap-andtradeallowanceoroffsetcreditsandso cannotbeusedinterchangeably.Since mostoffsetcreditsarepurchasedand usedvoluntarily,theytendtobe cheaperthancreditsinacompliance market,whicharescarcerelativeto demandbydesign(Broekhoffetal. 2021).Thevoluntarymarketincludesa widerangeofprograms,forprofitand non-profitentities,standards,and protocolsbutisdominatedbyfour standards/registries:Verra,American CarbonRegistry,GoldStandard,and ClimateActionReservediscussed furtherinSection5.2and5.6.

4.3Demandforcarbonoffsets

Interestincarbonoffsetshassurged andisbeingdrivenintheUSprimarily bycorporatenet-zeroemissions targets.Companiesthathadnot alreadybegunsettinggoalsfor reducingGHGemissionsfromtheir operationsandproductsarefacing increasingpressurefromcustomers, investors,governments,andthepublic toreducetheirimpactonclimate change.TheUSSecuritiesandExchange Commission(SEC)recentlyproposed newrequirementsinMarch2022that wouldsignificantlyexpandmandated climate-relateddisclosuresfrompublic companies(SEC2022).Climate change-relatedlawsuitsfiledby individualsandNGOshavemorethan doubledsince2015andarebeingjoined bylawsuitsfiledbycitiesandstates acrosstheUSagainstlargecorporate entities,especiallythefossilfuelindustry (Gil2022,Kaminski2022).Investing groupsandassetmanagersarealso beginningtodemandincreased climatecommitmentsfromcompanies. Forexample,thesignatoriestotheNet ZeroAssetManagersInitiative,which represent292assetmanagerswith approximately68trillionUSDinassets, havecommittedtoadjustingtheir investmentstrategiestosupport limitingwarmingto1.5°Cincluding seekingoutcompanieswithnet-zero commitments(TheNetZeroAsset ManagersInitiative2022)

Inreactiontothisandotherpressures, anincreasingnumberofcompanies havedeclarednet-zerocommitments, including21%oftheworld’slargest companiesasof2021(Blacket.al2021).

Net-zerocommitmentsaretypically publiclyannounced,non-binding goalstopreventanynetincreasein GHGemissionsfromoperationsas inventoriedinscope1,2,and3 emissions(Section3.3,Shetty2021).

Mostnet-zeroannouncementswill alsosetatargetyearforachieving thosereductionsanywherefrom2025 to2050 Thestrategiesforachieving thesenet-zerocommitmentsvarybut generallyinvolveacombinationof directemissionsreductions,insetting (Section4.5),andoffsettingstrategies. Manycorporatenet-zeroplanshave leanedheavilyonoffsetcredit purchases

Forexample,inJanuary2021,General Motors(GM)announcedplansto achievecarbonneutralityby2040by rampingupelectricalvehiclemotor production,switchingtorenewable energyproviders,andthroughthe purchaseofcarbonoffsetsthat includenature-basedprojects (GeneralMotors2021).JeffBezos announcedin2019thatAmazonwould reachnet-zeroin2040byswitchingto 100%renewableenergyandby investing$100millioninnature-based carbonoffsetprojects(Thorbecke 2019).Evenorganizationslikethe BostonRedSoxhavedeclaredcarbon neutralgoalswithFenwayPark announcinginMarch2022thatthey willbefinancingthepurchaseof carbonoffsets(Moroney2022)

Thesenet-zerogoalsoftenassume,or aredependenton,financingnaturebasedcarbonoffsetprojects.Microsoft hasdeclaredanet-zeroemissionsgoal for2030buthasfurthercommittedto removalofallcarbonemissionsfrom thelifetimeofthecompanyby2050 throughdirectemissionsreductions, insetting,andfrompurchaseofoffset credits,labeledinFigure6ascarbon removal(Smith2020)

Globalcarbonpricingrevenuein2021 wasaround$84billion,andforthefirst timethevoluntarycarbonoffsetmarket valueexceeded$1billion(TheWorld Bank2022).Carboncreditmarkets grewby48%in2021,withthetotal numberofcreditsissuedsince2007 equaling4.7billiontCO₂e(TheWorld Bank2022).

Likemanycompanies,mostoffset purchasesmadebyMicrosoftinFY21 werefromnature-basedprojectswhich arethosethatseektoremoveCO₂from theatmospherebyconserving,restoring, orbettermanagingecosystemsand agriculturallands.Offsetprojectsfunded byMicrosoftforFY21includedforestry improvement,croplandmanagement, andholisticcattlegrazingwith contracteddurabilityrangingfrom13 yearsto100years(Microsoft2021).

Withinvoluntarymarkets,nature-based offsetsarethosethattypicallyinvolve agriculture,forestry,andlanduse projectsoftenabbreviatedasAFOLU. Nature-basedcarboncreditswerethe largestportionofthevoluntarycarbon marketbyvolumein2021(Ecosystem Marketplace2022).

Figure6.Microsoftemissionsreductionplanforachievingnegativeemissionsby 2030,reproducedherefromSmith2020

4.4Nature-basedcarbonoffsets

Thesetypesofprojectsaimtoprotect, transform,andrestoreecosystemsto protectstoredcarbonorsequester additionalcarbonfromtheatmosphere. Examplesofnature-basedoffsetprojects includegrasslandmanagement, sustainableforestmanagement,and avoidedconversionofundevelopedlands. Whilethesenature-basedprojectsoften representasubstantialportion ofprojectswithinvoluntarymarkets,many offsetprojectsarenotnature-based.

Industrialcarboncaptureandstorage (CCS)projects,sequestercarbonthrough industrialprocessessuchasCO₂-driven enhancedoilandgasrecoveryorbyCO₂ injectionintodeepsalineformations Otherexamplesofnon-nature-based offsetprojectsincludeavoidedemissions fromswitchestorenewableenergy sourcesorfromchangesintransportation options(eg,replacingvehiclefleetswith electricvehicles).

Companies,stakeholders,governments, andNGOshaveworkedonthescalability ofAFOLUprojectsaswellstandardizing methodsforimplementingthem (TaskforceonScalingtheVoluntaryMarket [TSVCM]2021).Thisprocessisdifficultasit requirespeerreviewfromexpertsin variousdisciplines(e.g.,forestry,rural development,agriculture,economics,and localstakeholders).Inaddition,measuring carbonstorageandsequestrationwithin naturalsystemsischallengingandcan leadtooverorunder-estimationsand/or leakage(Section63,Section66,Badgley etal.2021).

Standardizedframeworks,nature-based protocols,andtechnologytogenerate andquantifysequestrationhavebeen developedbyvariousentitiestoattempt tomitigatethevariousrisksassociated withtheseprojectsandhaveresultedin manydifferentapproachesand protocolsformeasuringnature-based offsets(TSVCM2021).

Projectsinforestryandland managementhavedominatedAFOLU projectsbyvolumeofcreditsissued (227Megatonnes[Mt]CO₂ein2021), ascomparedwithagriculturalprojects (1MtCO₂ein2021,Figure7).Therehas howeverbeenincreasedinterestin developinggrassland/rangeland projectsgiventhatgrasslandscontain potentiallymoreresilientcarbonstocks thanforestswhicharesusceptibleto lossofcarbonfromdroughtand wildfires(Dassetal.2018).Grasslands alsomakeupasizableportionofland coverageintheWesternUSand generallyhavemoreadaptable managementoptionsforsequestering carbonalongsidecurrenthumanusein comparisontoforests(Dassetal 2018) Therearestillrelativelyfewcarbon creditsbeingissuedfromprojects conductedinTexasversusotherstates (Figure9).However,giventhesurgein demand fortheseprojectsin2021, carbonoffsetprojectsmayincreaseand havethepotentialtoimpactlanduse practices.Appliedresearchandpilot programsareurgentlyneededtoensure thattheseprojectsfunctionasintended andtoseekopportunitiesforgenerating additionalco-benefitsduringproject implementationthatwillservetoprotect andrestoregrasslandecosystems

GlobalvoluntarycarbonmarkettransactionvolumesinMtCO₂eand pricespertonCO₂efrom2016-2021byprojectcategory:a)Forestryand LandUse,andb)Agriculture.AdaptedfromdataontheEMDataIntelligence &AnalyticsDashboard(https://data.ecosystemmarketplace.com)andfrom ForestTrends’EcosystemMarketplace2022

Figure7

Averagenumberofcreditsissuedperprojectforthe7nature-basedproject typesintheUSfromfourmajorprojectregistriesfrom2002to2021(CAR,ACR,VCS,and GOLD).DatasourcedfromBerkeley’sVoluntaryRegistryOffsetsDatabase(Soetal.2022).

Figure9.Numberofnature-basedcreditsissuedfromfourmajorprojectregistries (CAR,ACR,VCS,andGOLD).Dataislimitedtoprojectsthatareonlyinonestate.Data sourcedfromBerkeley’sVoluntaryRegistryOffsetsDatabase(Soetal.2022).

Figure8

4.5 Insetting

Insettingistheprocessbywhichan organization(primarilyprivate companies)investinemissions reductionsandcarbonsequestration (carbonremoval)withintheirown valuechain.Insettingisusedtoreduce orcompensateforscope3emissions andisincreasinglyutilizedsincethe reductionsandremovalsaremore directandcangenerateadditional economicco-benefitswithina company 'svalue-chain Someinset projectscaninvolvethegenerationof anexternallyverifiedcreditorcanbe conductedentirelywithinan organizationorcompanyandresultin aninternalemissionreductionor carbonremovalclaim(Section5.3.1, 541) Forexample,acompanycould fundagriculturalproducerswithintheir ownvaluechaintoadoptcover croppingorsustainablegrazingandso makeanemissionsreductionclaim basedontheirownassessment, withoutusinganoutsideorganization’s certifiedorverifiedprotocols(Section 5.5).Independentlycertifiedand verifiedcreditsystemsarestill sometimesutilizedininsettingeven thoughthecreditsarenotsold.There isstillincentiveforsomecompaniesto investinadditionalverificationwithin insettingsinceitcanprovideamore robustsystemforGHGaccounting.

Estimatingscope3GHGemissionsis challenging,whichmakesproper accountingofremovalswithinavaluechainallthemoredifficult.Therealso canbelessincentivefor methodologicalrigor,sinceactionsare internaltoacompanyandnota tradablecommodity.Requirements

suchasadditionality,leakage, samplingmethodology,and permanence,discussedmorein Section5.0and6.0,arecentraltomost carbonoffsetcreditmarketsbutmay ormaynotbeincludedwithinan insettingprocess.Companiesare utilizingavarietyofdifferent approachesinaddressingscope3 emissionsoffsettingorinsetting (Figure10).

Theriseofcarboninsettinghas createdademandforindependent verificationprotocolsandproject developerswhichwillverify,track,and quantifycarbonsequestrationbut whichmayhavefewerrequirements thanfoundina“high-quality”emission offset(Section5.2).Sinceinsettingisa relativelynewphenomenon,thereare fewerstandardsinplace,although emergingstrategiesdooftenmimic thoseofthemoreestablished voluntaryoffsetmarkets.This documentfocusesprimarilyon“highquality”emissionoffsetcredits,but manyofthesemethodsareutilizedto varyingdegreeswithininsetting strategiesaswell.

Landownerwithin CorporationAvaluechainsequesters carbonorreducesGHG emissions

CorporationAwantsto reducetheirScope1,2or 3emissions

Fundsnature-based emissionsreduction project

Increasingmethodological rigorandfundrequirements

Landownerexternalto CorporationA sequesterscarbonor reducesGHG emissions

5.0THENATURE-BASEDCARBONOFFSETPROCESS

5.1 Introduction

Nature-basedoffsetprojectsreduce atmosphericcarbonbyfunding changesinagriculture,forestry,orland usethatresultinavoidedcarbon emissions,anadditionalamountof carbonsequestration,ormorecarbon storageprotectionthanwouldhave occurredwithoutprojectfunding As introducedinSections2.1and4.4, carbonsequestrationinAFOLUprojects isprimarilyduetophotosynthesis, whichconvertsCO₂intoorganic carbon.Ingrasslands,soilcarbonis oftentheprimarycarbonpool,whichis trackedormonitoredtodetermine totalcarbonremoval;however, sometimesaboveandbelowground plantbiomassisalsoconsidered.

Theamountofnetatmospheric carbonremovedisthenquantified, credited,purchased,andtheoffset creditclaimedbyapurchaserto reducetheirownemissionsinventory (Figure11).

Tomeetdemand,numerouscarbon marketshaveemergedtosupply nature-basedoffsetcredits.These marketsareadynamicandeverevolvingsetofvoluntaryprograms. Whiletheyoftensharesome commonalities,mostmarketsdifferin applicationandapproach.Intheir reviewofUSvoluntarycarboncredit markets,Plastina(2022)characterized carboncreditmarketsas“an unarticulatedpatchofco-existing programswithdifferentrules,

Privateentitypays tooffsetemissions whichfundsacarbon reductionproject

Carbonremoved fromthe atmosphere and/orcarbon emissions avoidedare quantifiedand thenoffset creditsissuedto purchaser

Atmosphericcarbon iscapturedthrough photosynthesisand storedorganiccarbon isprotected

Landowner implementsan additionalland management orconservation practice

Figure11 Broadoverviewofthenature-basedvoluntarycarbon creditapproachtooffsettingemissions

incentives,andpenalties,ratherthan acohesiveandtransparentmarket” Giventheamorphousand fragmentednatureofthemarkets,the challengeinsummarizingand presentingthecreditingprocesshere isthatmostmarketsoperateslightly differentlywithdifferentdefinitions, protocols,standards,andstructures However,wehaveattemptedto provideanoverviewofthecarbon offsetprocesstoassistin understandingmarketfunctioning andimplicationsforlanduse

5.2 Offsetcreditprocess

Whilethefollowingisnota comprehensiveoverviewofthe nature-basedoffsetcreditprocess,it shouldgivethereaderaninformed overviewofthemajorroles,elements, andtypesoforganizationstypically involvedingeneratingoffsetcredits.

TheprocessshowninFigure12ismost appropriateforproducinga“highquality”offsetcredit(Section4.1),most oftenusedtocompensateforscope1 emissions.AsdiscussedinSection4.1 andSection5.9,a“high-quality”offset creditislooselydescribedasthosethat havebeenimplementedaccordingto recognizedstandardsandmeet additionality,permanence,and independentthird-partyverification requirements(Section5.9,Plastina 2022).However,dependingonthe purchaserorprotocol,similarprocesses canbeandareusedforscope3offsets oraspartofaninsettingprocess.

Figure12.Overviewofthetraditionalvoluntarycarbonoffsetcreditgenerationprocess. AdaptedfromPlastina2022.

Whilethisprocessdoesnothavea singlestartingpoint,wewillstartwith protocoldevelopmentunderaregistry:

1.Aregistryreviewsandcertifies protocolsthatcanbeusedtogenerate credits(Section5.6).Theseprotocols outlinelandmanagementactivities, permanence,additionality,monitoring, andotherrequirementsthatmustbe metbeforetheregistrywillissuecredits (SeeSection6.0).Theseprotocolsare availableforanyonetousetodevelop anature-basedoffsetprojectifthey canmeettherequirements

2.Aprojectdeveloperisanyoneorany organizationthatdevelopsand implementsprojectsusinganapproved protocol(SeeSection57) Oftenthe projectdeveloperisaseparateentity, butregistriesandlandownerscanalso actasaprojectdeveloper.Inthis example(Figure12),aprojectdeveloper implementsaregistryprotocolby enteringacontractwith,andpayinga landownerto,implementcertain actionsontheirland.Theproject developerwillensurethatallprotocol requirementsaremetincludingthe monitoringandnetcarbon sequestrationquantificationmethods. Theseresponsibilitiescanalso sometimesbesharedbetweenthe projectdeveloperandthelandowner.

3.Thelandownertypicallyentersa contractwiththeprojectdeveloperin whichtheyagreetoimplementall actionsandrequirementstomeet protocolconditions Undermost protocolsthesemanagementactions mustbeadditionalornewpractices

(SeeSection62) Exampleactions includechanginggrazingpatterns, restoringdegradedlands,orswitching tono-tillagriculture.Landownersmust oftenabidebymanyother requirementsaswell(Section60) For example,theprotocolmighthavea permanencyrequirementthat mandatestheprojectareasigna conservationeasementoragreeto remainunderprescribedmanagement for20yearsormore.

4.Onceactionshavebeen implementedandallrequirementsare met,theprojectdevelopertakesthe informationanddatafromtheproject andusestheprotocoltoestimatethe amountofnetcarbonsequesteredin therelevantcarbonpools(aboveor belowgroundbiomass,soilorganic carbon,etc) Mostprotocolswillalso consideranyemissionsincurredduring theprojectintheirnetemissions calculationsaswellastheamountof emissionsavoided.Theestimatednet carbonsequestered,alongwithall otherprojectinformationanddataare thensenttoathird-partyverifier

5.Thethird-partyverifierreceivesand reviewstheprojectanddecides whetherithasmetprotocol requirementsandthatallinformationis correct(Section6.7).Thismayinclude sitevisitsduringimplementationor othersimilarverificationactions.

6.Iftheamountofnetcarbon sequesteredoremissionsavoidedis verified,thenthethird-partyverifier sendstheinformationtotheregistryto issuecredits.

7.Theregistryreceivestheverified informationfromthethird-partyverifier. Theregistrywillthenissuecreditstothe projectdeveloper.Eachcreditisa uniqueserialnumberthatrepresentsa unitofatmosphericcarbonequivalents reduced(generally1tonneCO₂e).The owneroftheserialnumber(theproject developer)isrecordedintheregistry database(Section5.6).

8.Theprojectdevelopercanthensell thecreditstoapurchaser The purchasercanbetheend-userwhowill claimtheoffset,oritcanbebrokers andaggregatorswhowillfurther bundleoffsetsforlatersale.Duetothe longtimelinesrequiredforthese projects,sometimesprojectsare financedandpurchasedthroughan emissionreductionpurchase agreement(ERPA)whichallows investorstopre-payforoffsetsfrom projectdevelopersandlandowners (Section5.10).Itshouldbenotedthat projectdeveloperscanalsofunctionas brokersoraggregatorsandsometimes thethreetermsareused interchangeably.

9.Oncethecreditispurchasedbythe end-useritcanthenbeusedtoclaima GHGemissionreductionandsubtract thecompany’sGHGinventorybythe offsetamount(1tonneCO₂e).

10.Theprocessofclaimingthecredit benefitiscalled“retiring”sincethe registrywillretiretheuniqueserial numberofeachcreditafteritisused. Retiringtheuniqueserialnumberis intendedtoensurenodouble-counting ofcarbonsequestered(Section5.6).

Inthevoluntaryoffsetmodel, paymentsflowfromthepurchaserto theprojectdeveloper.Theproject developerthenpaysalltheassociated organizationsinvolvedintheprocess includingthelandowner,thethirdpartyverifier,andtheregistry.The timingofpaymentsdependsonthe individualcontractsandbusiness modeloftheprojectdeveloper.

Paymentsmaybemadeinadvance, oronlyatthetimeofsaleofthe credits Whilepaymentsmaybemade inadvance,itisworthnoting paymentsmayberetracted/reversed ifstoredcarbonisrereleased(i.e., reversal,Section6.6).Penaltiesfor reversalsvaryfromforfeitingcreditsto beingrequiredtorefundpaymentsin full Tomitigatethisrisk,many protocolswillrequireareserveofnontradeablecarboncredits(i.e.,buffer pool)thataregeneratedunderthe protocoltobesetasideinthecaseof unforeseenlossesinsoilcarbonstocks (e.g.,leakage,Section6.6).Payment modelsoftendifferhowever,insome, thelandownermayberequiredto shoulderthemonitoringand verificationcostsforexample.

Inthissection,threeexamplesof carbonmarketsaregiven,allthreeof whichutilizeprotocolsfromatleast oneofthefourlargestUSvoluntary carbonregistries(Section56)

5.3 Exampleprocessesunderthe majorregistries

TheEcosystemServicesMarket Consortium(ESMC)beganbuildingits carbonprogramin2017(Figure13, ESMC2022).ESMCisanon-profitand currentlyutilizesoneregistry,Gold Standard.ESMCoperatesasandworks withprojectdevelopers,develops protocolsforreviewandcertification byGoldStandard,provideslandowner assistance,andconductsresearch

ESMChasseveralprotocolsunder reviewbyGoldStandardforscope3 credits ESMCworkswithonlyone verifier,SustainCert,whoprovides third-partyverificationandsharesthe datawithGoldStandardbefore creditsareissued.ESMCutilizesERPAs inthefundingofcarbonprojectsfor buyersdirectlyandthroughvarious brokerageorganizations

5.3.1 ESMC

Figure13.OverviewoftheEcosystemServicesMarketConsortiumoffset/insetcredit generationprocess.AdaptedfromPlastina2022.

5.3.2CarbonbyIndigo

IndigoCarbonwasdevelopedby IndigoAgandlaunchedin2019(Figure 14,Indigo2022) IndigoCarbonuses tworegistries(VerraandCAR)to certifyprotocolsandretire,issue,and trackcredits.IndigoCarbononlyuses oneprotocolfromeachregistryto conductoffsetprojects,theSoil EnrichmentProtocoldevelopedbyCAR andtheMethodologyforImproved AgriculturalLandManagementwhich wascoauthoredbyIndigo.Indigoacts asprojectdeveloperandworks directlywithfarmersandpartner

organizations(e.g.,Corteva)to implementprojects(Indigo2022).

IndigoCarbonhasalsoacquiredSoil Metrics,asoilsciencecompanyto conductitsmeasurement,reporting, andverification.Finally,similartoESMC, IndigoCarbonworkswithoneverifier, AsterGlobalEnvironmentalSolutions. Onceverified,VerraorCARwillissue creditstoIndigo Indigoclaimsthatat least75%oftheprofitsfromtheoffset creditsalearethendirectlypaidtothe farmer(Indigo2022).

Figure14.OverviewoftheIndigoCarbonoffsetcreditgenerationprocess.Adaptedfrom Plastina2022.

5.3.3 BayerCarbon

TheBayerCarbonProgram,released byBayerin2021,offersfarmers incentivesforimplementingcarbonsmartfarmingpractices(Figure17, BayerCarbon2022) Currently,Bayer CarbonworksprimarilywithGold Standardtocertifyprotocolsandretire, issue,andtrackcredits.BayerCarbon actsasthesoleprojectdeveloperin theirprogramandpayslandownersto implementagriculturalpracticesfora per-acrepaymentbasis.

ProjectdataissharedwithBayer Carbonthroughthecompany’s ClimateFieldviewplatform(Plastina 2022).BayerCarbonthenutilizes multipleverifierstomeetthird-party reviewrequirements.Finally,once verified,dataisgiventotheregistry andtheregistryissuesthecreditsto BayerCarbon.BayerCarbonthensells toabrokerortoanend-user

Figure15.OverviewoftheBayerCarbonoffsetcreditgenerationprocess.Adaptedfrom Plastina2022.

Therearemanycarbonoffset programsthatoperateoutsideofthe majorUSregistries/standards(Section 5.6).Thetwoselectedhereoperatein Texasandhaveasimilarstructureand organization.Bothorganizationscite issuesorimpracticalityofmajor registryprotocolsasthereasonfor theircreationandastheargumentfor

standardandcreatesprotocolswith thestatedgoalofmakingtheprocess moreaccessibletoworkinglands (BCarbon2022).Oneprimaryand importantdeviationfrommost internationalstandardsisthat BCarbonhasredefinedadditionality andpermanence,discussedfurtherin Section6.2andlistedinAppendixII (BCarbon2022) AsofJuly2022,there weretwoprojectdeveloperswhich utilizedtheBCarbonStandard protocols,GrassrootsCarbonand FutureFoods.GrassrootsCarbonalso utilizedprotocolsundertheVerra standardandthroughtheVerra Registrysystem

theirapproach

5.4 Exampleprocessesoutsideofthe majorregistries

5.4.1 BCarbon

TheBCarbonstandardwascreatedby theBakerInstituteSoilCarbonWorking groupatRiceUniversity(Figure16, BCarbon2022) BCarbonisitsown

Figure16 OverviewoftheBCarboncreditgenerationprocess

5.4.2 CityForestCredits

TheCityForestCredits(CFC)registry wasfoundedin2015andhascreated protocolsforcarbonoffsetprojects fromurbantreeplantingorforest preservationprojects(Figure17,CFC 2022).Theirstatedgoalindeveloping anewstandardwastocreate protocolswhichwouldworkwellin urbanforestryprogramswhereother registryprotocolswereconsidered impractical(CFC2022).In2007Austin, TexasmayorSteveAdlerpledgedthat theCityofAustinwouldbecarbon neutralby2040(CityofAustin2022). Aspartoftheirclimatemitigation strategy,theAustinWatershed

ProtectionDepartmentandParksand RecreationDepartmentpiloteda programtopurchasecarbonoffsets fromtreeplantingprojectsconducted withinTravisCounty(TreeFolks2022) TreeFolks,aTexas-basednon-profit thatconductstreeplantingand reforestationprojectshasutilizedthe CFCregistryprotocolstogenerate carboncreditsfromthatreforestation program.TheCityofAustinhas committedtopurchasingallcarbon offsetcreditsgeneratedfromthis projectandasofyear1oftheproject haspurchased871outofatotal8709 estimatedprojectcredits(CFC2022).

Figure17.OverviewoftheCityForestCreditsoffsetcreditgenerationprocess.

5.5Standardsandprotocols

Withinvoluntaryandcompliance markets,standardsprovideguidance andaconsistentapproachto quantifying,monitoring,andreporting carbonremovalandemission reductions(Broekhoffetal.2019).

Specifically,acarbonstandardsets rules,requirements,andprotocolsfor projectsandprogramsandspecify howoffsetcreditscanbegenerated, certified,andissued(Strecketal.2021). Typically,standardsaredevelopedby internationalNGOsorgovernments thathavethecapacitytoprovide qualitycontrolandareintendedto safeguardthequalityofverifiedcredits withinthevoluntarycarbonmarket (Strecketal.2021).Inorderforprojects togenerateverifiedandcertified carbonreductionsunderastandard, theymustcomplywiththestandards’ requirements.OrganizationslikeGold Standard,createtheserequirements andthenactasormanageregistries totrackthegeneration,transfer,and transactionofoffsetcredits(Strecket al.2021).Theseorganizationsdevelop orapproveprotocols(sometimesalso referredtoasmethodologies)for nature-basedandnon-nature-based projectsthatfulfillormeetthese standardstoproduce“high-quality” credits(Section41;Broekhoffetal 2019).Projectprotocolsoutlinethe agreements,andspecificprocedures projectdevelopersandlandowners mustcommittowhenconductingtheir carboncreditdevelopmentproject. Protocolsprovidethecriteriaand guidanceoneligibility,activities, additionality,monitoringtechnique, permanencerequirements,crediting periods,reversalandleakage contingencies,andverificationprocess (Section6.0,Broekhoffetal.2019).

Projectdevelopersandlandowners mustfollowtheprotocolsapprovedby aregistryunderitsrelevantstandard (Broekhoffetal.2019).First,protocolswill outlineeligibility,forexampletheeligible landsbyregion,landusetype, applicablecropping,orecosystemtype (e.g.,grassland,forest),andwhat managementactivitiesareallowable (Broekhoffetal.2019).

Moststandardsrequirethatthe activitiesimplementedbythe landownerundertheprojectbe “additional.”Althoughtherearemany waysthatadditionalityisdefined,most definitionsarethatthepracticewas adopteddirectlybecauseofproject financing(notsomeothercause),are notalreadylegallyrequiredorfunded, andarenotacommonpracticealready appliedintheregion.Thisunderliesthe basicpremiseofmostcreditoffset paymentmodels,theassertionthat fundingprojectshasledtoanincrease incarbonremovaloravoidedemissions beyondpre-existingbaselinevalues. Additionalitystandardsandthe definitionofadditionalitydifferbroadly withinvoluntarymarketsandthe effectivenessoftheadditionality standardsandtestsareaconstant sourceofcontroversyandresearch Therearehoweversomeemerging alternativeapproaches,BCarbon,for example,doesnotrequirethatpractices employedbeadditionalbutwillissue creditsbasedonanycarbon sequesteredbetweenprojectsampling periods(AppendixII) Techniquesfor monitoringcarbonstocks(field samplingormodelingmethodologies) andthefrequencyofthatmonitoring areusuallyalsooutlinedbutcanalso varyconsiderably(Grimaultetal.2018).

Aprotocolprovidesallguidanceand requirementsfordevelopinganaturebasedemissionsreductionand carbonremovalprojectthatwillmeet thestandardsoftheregistries. Protocolsusuallydescribeforexample, thecriteriafordeterminingwhat constitutesanadditionalpractice versusbusinessasusual(Gold Standard2020).Someprotocolswill evenoutlineaspecificpercentagethat carbonstocksmustincreasefromthe baselinevalueduringtheproject period(Verra2022a).

Mostprotocolswithinthemajor registriesrequirethatprojectsensure carbonwillremainsequesteredfora setperiodoftime.Thisisaddressedin theprotocolcreditingperiod(i.e.,what timeperiodCO₂ereductionsare eligibleforcreditissuance)and permanencerequirements(ie,how longcarbonmustremain sequestered/stored;Michaelowaetal 2019).Areversaloccurswhencarbonis re-releasedintotheatmosphere (Broekhoffetal.2019).Forexample,in 2021,wildfiresinCaliforniaandOregon eliminatedtreebiomassthatwaspart ofmultipleverifiedcarbonoffset projects(Choi-Schagrin2021)

Protocolswilloutlinethemethodsfor identifyingriskofreversalsandhow theriskscanbemitigated.

Manyprotocolswillrequireareserveof non-tradeablecarboncredits(i.e., Bufferpool)tobesetasideinthecase ofunforseenlossesinsoilcarbon stocks(e.g.,reversal,ClimateAction Reserve2010).

Inthecaseofthe2021wildfires,the bufferpoolwaslikelyinsufficientto coverthereversals.Undersome protocolstherecanbepenaltiesfor unaccountedreversalsvaryingfrom forfeitingcreditstorefunding paymentsinfull(ClimateAction Reserve2010).Whendiscussing reversals,protocolswillalsoaddress leakage.Leakageoccurswhencarbon emissionsareshiftedorincreaseddue toactivityshifts(e.g.,livestock displacement,reductionincropyield, FowlieandReguant2021).Forexample, ifacarbonoffsetcreditproject requiredareductionoflivestock stockingrateonaproperty,butthe stockingrateoftheadjacentproperty wereincreasedasaresult,thatwould beconsideredleakage.Leakage provisionsaremeanttoreducetherisk thataprojectmerelyshiftscarbon emissionsversusreducingthem

Foradditionaldetailsonprotocolsand reviewof15protocolsrelevantto rangelandsseeSection6.0and AppendicesI-VI.Protocolsreviewedin thisreport(AppendixI–VII)were developedundermanydifferent standardsincludingtheVerified CarbonStandard,ClimateAction Reserve,GoldStandard,American CarbonStandard.Thesefour standards/registriesissuethemajority ofvoluntarycreditsintheworldand generallyfolloworconsider internationalguidancefromtheIPCC, containedwithinUNFCCCCDM guidance,orotherinternationally recognizedsources.

Protocolsunderthreeadditional standards,Nori,RegenNetwork,and BCarbonwerealsoreviewedand summarized Thesethreestandards arerelativelynewanddonotalways followguidelineslikethefourmajor standards/registries.

5.6 Registries

Carbonregistriesapproveprotocols thatmeettheirstandardsforoffset creditgeneration,andtrackcredit ownershiptoprovidetransparencyfor offsetsandtheprojectsfromwhich theyweregenerated(Broekhoffetal. 2019) Organizationsthatmaintain registriesusuallyalsocreateand managestandardsandsoweusethe termsomewhatinterchangeablyfor someoftheseorganizationslikeVerra ortheClimateActionReserve. Registriesareresponsibleforissuing andvalidating/certifyingcreditsfor eachunitofavoidedemissionsor carbonremoved(Bernsteinetal 2010) Beforearegistryissuescredits,theywill haveaverificationprocessto determinethattheprojecthasmetthe registrystandardusuallythrougha third-partyverifier(Section67, Broekhoffetal.2019).Registriestrack thenumberofcreditsgeneratedfrom eachproject,thesaleofcredits,and retirementofcredits(Bernsteinetal. 2010).Totrackcreditsandreducethe riskofdoublecounting,registries assigneachverifiedcreditaserial number(Descheneau2012,Broekhoff etal.2019).Whenthecreditissold,the registrywillrecordtransferof ownershipfromthesellertothebuyer.

Oncethefinalpurchaserclaimsthe credit(ie,subtractsthecreditamount fromtheiremissioninventory),the registrywillretiretheserialnumberso thecreditcannotberesold(Broekhoffet al.2019).Mostregistriesandcarbon programsissuetheirownbrandedor labeledoffsetcreditswhich,although theyaregenerallyequalto1tonneCO₂e, aregeneratedusingdifferentprotocols andmethodsandsoarenotdirectly transferableorequivalent(Table1).

Whiletherearemanyprogramsand registriesinvoluntarymarkets,four registriesissuethemajorityofcarbon offsetcreditsglobally:Verra,Gold Standard,theAmericanCarbon Registry,andtheClimateAction Reserve(Figure18).

Table1 Brandedoffsetcreditsforsix voluntarycarbonregistriesintheUS.

TheAmericanCarbonRegistry,thefirst privatevoluntaryoffsetprograminthe world,wasfoundedin1996andoperates inboththeglobalvoluntaryand compliancemarkets(ACR2022).ACR overseestheregistrationandverification ofcarbonoffsetprojectsfollowingits approvedcarbonaccountingprotocols. Withincompliancemarkets,ACRwas approvedin2012asanOffsetProject Registry(OPR)fortheCaliforniaCapand-TradeprogramandinMarchof2020 bytheCounciloftheInternationalCivil AviationOrganization(ICAO)tosupply emissionreductionunitsforcompliance undertheCarbonOffsettingand ReductionSchemeforInternational Aviation(CORSIA,ACR2022).Many registries,includingACR,reportemission reductionsorremovalasCO₂e.CO₂eis calculatedtodeterminetheamountof metrictonnesofnetGHGemissionsthat havethesameglobalwarmingpotential asonemetrictonneofCO₂.ACR’s electronicregistrysystemsupportsa widerangeofnatureandnon-naturebasedprotocolsincludingtheAvoided ConversionofGrasslandsand ShrublandstoCropProductionprotocols.

VCS-VerifiedCarbonStandard

GOLD-GoldStandard

ACR-AmericanCarbonRegistry

CAR-ClimateActionReserve

TheClimateActionReserveregistry wasfoundedin2001astheCalifornia ClimateActionRegistry(CAR2022). CARoperateswithintheNorth Americanvoluntaryandcompliance carbonmarkets.SimilartotheACR, CARservesasanapprovedOPRfor California’sCap-and-Tradeprogram registry(CARB2022) CARsupports bothnatureandnon-nature-based carbonoffsetprojects(e.g.,CARU.S. LivestockProtocol).

TheGoldStandardwasfoundedin 2003bytheWorldWildlifeFund(WWF) andotherNGOstohelpachievethe UnitedNationsSustainable DevelopmentGoals(SDGs,Gold Standard2022).TheGoldStandard wascreatedwithaself-stated intentiontoserveasabenchmarkfor carbonmarketsandsetinternational standardsforcarbonoffsetcredits withintheworldwidecarbonmarket. Asof2022,theGoldStandardhad over1,900projectsinover90countries (GoldStandard2022).

Figure18 Globallytransactedvoluntarycarboncreditvolumeandaveragepriceby standard/registryin2020 AdaptedfromtheEMDataIntelligence&AnalyticsDashboardon EcosystemMarketplace,AForestTrendsInitiative(https://dataecosystemmarketplacecom)

Mostregistriestrackcreditsvia environmentalmarketdepository softwareprovidedbyseparate providers TheACR,CAR,andGold StandardregistriesallutilizeAPXInc. astheirprimaryserviceprovider (Broekhoffetal.2019).APXInc.was foundedin1996andisaregistry softwareproviderforenvironmental marketsinGHGsaroundtheworld (APX2022) APXworkswithACR,CAR, andGoldStandardtotrackand enabletradingofemissionscredits.

Verradevelops/managestwo standardsandprograms(Verified CarbonStandard[VCS]andClimate, Community,&BiodiversityStandards [CCB],Broekhoffetal.2019).Verrawas foundedin2007byenvironmentaland businessleadersandservesasan approvedOPRforCalifornia’sCap-andTradeProgram(Verra2022a)

Asof2022,Verrahadissued881million verifiedcarboncreditunitsandhas 1,786projectsinmorethan80countries (Verra2022a).VCSisbyfartheworld’s largestvoluntaryGHGprogram, representing62%ofallCO₂ecredit issuancesbyvolumein2021(World Bank2022).VCSwaslaunchedin2006 andtracksallitscarboncredits (Verra 2022a).TheVCSprogramwasoneof thefirstglobalstandardstomake requirementsfordevelopingcredits fromAFOLUprojects(eg,forestand wetlandconversionandrestoration, agriculturallandmanagement,VCS 2016).VerraalsomanagestheCCB Standard(Broekhoffetal.2019).The CCBStandarddevelopedbythe Climate,Community,andBiodiversity Alliance(CCBA)in2005actsasa projectdesignstandardanddoesnot verifycarbonoffsetcreditsorprovide aregistry(Broekhoffetal.2019).

TheCCBStandardisintendedtobe appliedearlytoanyland managementprojects(e.g.,forest conservationandrestoration, agroforestry,sustainableagriculture) includingthosewithintheVCS programtocertifyclimate,community, andbiodiversitybenefits(Verra2022a) andtoensurelocalcommunityand biodiversitybenefits(Broekhoffetal. 2019) ToearnCCBStandards approval,projectsmustmeet17 requiredcriteria(e.g.,NetPositive ClimateImpacts)outlinedunderthe Standard.ProjectscanalsoearnGold LevelStatusbymeetingthree additionaloptionalcriteria(e.g., ClimateChangeAdaptationBenefits). Asof2022,37CCBprojectshavebeen validatedand79CCBprojectshave beenverifiedinover60countrieswith about70milliontonnesofCO₂eannual emissionsreductions(Verra2022a)

TheSocialCarbonStandardis managedbyBiodiversity&Ecosystem Futures(BEF)butwasdevelopedby theEcologicaInstitutein1998withthe firstprojectvalidatedin2008 (Broekhoffetal 2019,SocialCarbon Standard2022).SimilartoCCB Standards,theSocialCarbonStandard istypicallyusedinconjunctionwith anotherprogram(e.g.,VCS)anddoes notquantifyorverifycarbonoffset credits.In2022,SocialCarbonbecame afullstandardforNature-Based Solutions.Biodiversity&Ecosystem Futures,anenvironmentalregistry service,managestheprojectsaswell asissues,tracks,transfersownership, andretiressocialcarboncredits Asof 2022,63projectshavebeendeveloped across5countriesunderthe SocialCarbonStandard(SocialCarbon Standard2022).

PlanVivoRegistryisalsoadministered byIHS(InformationHandlingServices) Markit(Broekhoffetal.2019,IHSMarkit 2022).ThefirstPlanVivoStandardwas createdin2001/2002andalloffset creditsareissued,transacted,and retiredontheIHSMarkitRegistry.Asof April2021,therewere27projects registeredandover5milliontonnesof CO₂wereestimatedtoberemoved fromtheatmosphere(Bohannon2021, PlanVivo2022).

SimilartoAPXInc.,IHSMarkitmanages globalcarboncreditswithinits financialmarket-basedregistryfor boththeSocialCarbonRegistryand PlanVivoRegistry(Broekhoffetal. 2019).IHSMarkit’senvironmental registryprovidersectorwasfoundedin 2009andtracksallprojectsandissues, transfers,andretirescredits Allcredits aresearchableandviewableby registeredbuyerstoensurecontinued participation,investment,and efficiencywithinthecarbonmarket.As ofJune2022,IHSMarkitsupported126 countriesandhastracked6,197 projects(IHSMarkit2022)

5.7 Projectdevelopers

Projectdevelopers(sometimestermed projectproponents)playacentralrole innature-basedcarbonoffsetprojects byworkingwithregistries/standards, verificationbodies,andlandownersto developprojectsallaroundtheworld (HamrickandGallant2018).Typically,a projectdeveloperisanindependent entity;however,alandowner,company, carbonprogram,orregistrycanalsoact asaprojectdeveloper.Specifically,to developcarboncredits,project developersinitiateprojectsthat implementaprotocolcertifiedbya registry/standard,collaboratewith partners,developcontractswith landowners,andbearthefinancial responsibilityofprojectimplementation (Kolmussetal.2008).Projectdevelopers workinternationally,nationally,and regionallytoidentifyanddevelop carbonoffsetopportunities(Kolmusset al.2008).However,mostproject developers(97%)willinitiateprojectsin onlyonecountry,andonlyafew operateglobally(Filmanovic2021).The projectdevelopermarketis predominatelylocatedinIndia,United States,China,andTurkeywiththetop20 developersaccountingforoverathird (39%)ofallcarbonoffsetprojects (Filmanovic2021).Thetop5developers accountfor19%ofallissuancesglobally (Filmanovic2021).Tofurtherinternalize andacceleratethecreditingprocess, largedevelopershavebegunforming partnershipswithintermediariesand capitalproviders,aswellasforming carbonprogramswithadditional capacitywithinthecarbonmarket space(Filmanovic2021).

Toimplementacarboncreditproject, projectdevelopersenterintoacontract withalandownertosequestercarbon andgeneratecreditsaccordingtoa standardprotocol(Bayonetal.2006, Broekhoffetal.2019).Forexample, GrassrootsCarbonmayinitiateor manageprojectswithlandownersthat followBCarbonorVerraprotocols, dependingonwhichprogramfitsthe projectrequirementsorlandowner needs(Mooiweer2022).Similarly,Anew Climate,thelargestprojectdeveloper inNorthAmerica,developsprojects followingprotocolsreleasedbymultiple registries(Bluesource2022).Project developmentincludesimplementing activitiesaccordingtoregistry protocols(e.g.,preventinggrassland conversionordevelopment),ensuring monitoringofcarbonstocksfollowthe protocolmethodologies,andensuring allotherlanduse,third-party verification,leakage,permanence,or reversalagreementsarefollowedand implemented(Broekhoffetal.2019).For example,onceaprojectisreadyfor externalreview,AnewClimatewill conductanon-sitevisitwithathirdpartyverifiertoassessthatproject activitiesarebeingimplementedand toverifyresultsofmonitoringdata If verified,theregistrywillthenissue creditstoAnewClimatewhichcanthen besold(Kollmussetal.2008).Project developerswillthenusefundsfromthe saleofgeneratedcarboncreditstopay theverifier,registry,andlandownerwith thedistributionofpaymentsvarying withprojectdeveloper.

5.8Carbonprograms

Carbonprogramscanrangefrom internationalorgovernmentregulatory bodies,toNGOandprivate organizations

Sometimesthemajorregistriesarealso describedascarbonprograms. Focusingonprivatecarbonprogram organizations,suchasIndigoCarbon, theprimarydifferencefromaproject developeristhattheyusuallyfillmore rolesinprotocoldevelopment,credit generation,landownerassistance,basic andappliedresearch,creditpurchase, orthecreditsaleprocess.Manyofthese samecarbonprogramsmayalso functionasaggregators,bundlingoffset projectsorissuedcredits,discussed furtherinSection5.10.Acarbonprogram ismorebroadlyengagedinthecarbon offsettingandinsettingprocessthana projectdeveloperandwilloftenemploy projectdevelopersaspartofitsoverall program.

5.9 Third-partyverifiers

Third-partyverificationisarequirement ofthelooselydefined“high-quality” offsetcredit.Toprovidethis,third-party verificationauditorsknownas validation/verificationbodies(VVB) conductthird-partyassessmentsof projectstoconfirmallprojectdataand methods(BrammerandBennett2022). Typically,registrieswillhavealistof approvedauditorsthatproject developersmayusetoverifytheir carboncredits.Forexample,Verra currentlyhasmorethan20VVBsacross fivecontinentsthatareapprovedunder theVCSprogramtovalidateprojects (Verra2022a) Tobecomeanapproved VVBwithinthetheprogram,thethirdpartyverifierisrequiredtosignan agreementwithVerraandmustbe accreditedbyaVCS-recognized accreditationbody(Verra2022a).Gold Standardalsoprovidesalistof accreditedVVBsandauditorswithin eachorganizationforproject developerstochoosefromfortheir currentproject(GoldStandard2022).

Beforenetcarbonsequesteredor emissionsavoidedcanbecertified, theymustfirstbereviewedtoassess whethertheymeettheregistry standardrequirements(Brammerand Bennett2022).Creditqualitycriteria requirementsareoutlinedwithinthe approvedstandardsandprotocolsand arefollowedbythird-partyverifiers whenverifyingcreditsgeneratedwithin aproject(BrammerandBennett2022).

Forexample,ACRrequiresallthirdpartyverifiersfollowtheACRValidation andVerificationStandardwhen reviewingprojects.

Verificationofactivitiesdiffersbetween eachprojectandprotocol;however, typically,methodsrequireongoing monitoringandreportingofactivities andofcarbonsequestrationor emissionsreductions(Brammerand Bennett2022).Forexample, NativeEnergy,aprojectdeveloper, verifiesaproject’sperformanceafter thefirstyearinpartnershipwiththeir VVB,AsterGlobal.Afinalverification roundisconductedagainseveral yearslaterasafinalconfirmation (NativeEnergy2022).ACRandVerra haveastatedrequirementthat projectsundergoasitevisitverification atintervalsnolongerthanfiveyears (ACR2022,Verra2022b).

5.10 Brokersandaggregators

Oftenthecostandtimeassociated withregistering,monitoring,verifying, andsellingcreditscanhinderproject development(BrammerandBennett 2022).Aggregatorsandbrokers operateinthecarbonmarketbyaiding inselling,aswellasgeneratingan abundantsupplyofcreditswhile minimizingprojectcosts(Garnache andMerel2012).Typically,aggregation canbeundertakenbyindividuals and/ororganizationstoreduce transactionandbusinesscostsaswell asinmanagingperformancerisk (BrammerandBennett2022).Overall, therearetwotypesofaggregation: projectandcontractaggregation (EmissionsReductionFund2017)

Projectaggregationoccurswhen multipleprojectsusingthesame carbonprotocolaregroupedintoa singleregisteredproject.Thesecond, contractaggregation,occurswhen multipleprojects,sometimesusing differentmethods(ie underdifferent protocolsandregistries),aregrouped intoasinglecreditpurchasebid (EmissionsReductionFund2017).

Oftenaggregatorsholdresponsibility fordeliveryandunderperformance underthecarbonabatementcontracts (EmissionsReductionFund2017).An aggregatormayenteracarbon abatementcontractwithmultiple projectdevelopersormayundertake allaspectsofaprojectandaggregate multipleprojectsacrossvarioussites intooneproject(BrammerandBennett 2022).Theaggregatoralsomay registereachprojectseparatelywith theintentionofbundlingprojectsintoa singlecontractlater(Diamant2011).

Brokersactasmiddlemanforthe transactionofcarboncreditsafter theyhavebeenissuedinexchange foracommission(Capoorand Ambrosi2007).Brokers,unlikeproject developers,donottakeany responsibilityorownershipofa project(Broekhoffetal.2019).While brokersmainlyoperatewithinthe compliancecarbonmarket,therehas beenarecentincreaseofbrokers withinthevoluntarycarbonmarketas well(WaltersandMartin2012).Brokers tendtobemoreinvolvedinthe compliancemarketduetothehigher volumesandhigherprice transactionsascomparedtothe voluntarymarket Brokers,likeallother entitiesinvolvedincarboncredit developmentarepaidfromthe proceedsofcreditsales.Therefore, brokerinvolvementcannecessitate highersalepricestocovertheir additionalcostsorcanpotentially reducetheamountoffundsavailable fromotherentitiesaftersale.Someof thelargestUSbrokersincludeAnew ClimateandCMEGroup.

AnewClimatewhichformedaftera mergerwithBlueCarbonand ElementalMarkets,actsasbotha projectdeveloperandabrokerand representsbothbuyersandsellers withinenvironmentalandenergy commoditymarkets.

CMEGroupaidsinthebuyingand sellingofoffsetcreditsandfunding otheremissionreductionandcarbon removalprojects(CMEGroup2022, EvolutionMarket2022).Someproject developersuseEmissionReduction PurchaseAgreements(ERPAs)tobuy andsellcarboncredits.AnERPAisa legallybindingagreementbetweena buyerandsellerthatidentifies responsibilities,rights,andobligations tomanageprojectrisks(Peskett2010). Generally,anERPAoutlinesquantity andpriceaswellasthedeliveryand paymentscheduleofoffsets(e.g., consequencesofnon-delivery,general obligationsofthesellerandbuyer, projectrisks,Peskett2010) Bothofthese groupsactasintermediarieswithinthe carbonmarkets.

6.0REVIEWOFRANGELANDCARBONCREDITPROTOCOLS

6.1 Introduction

Protocolsareoftendetailed,dense, andhavenuancesofapplication whichrequiresomedegreeof familiarity Familiaritywiththese protocolsisthehallmarkandspecialty ofprojectdevelopersandcarbon programsinfacilitatingand coordinatingthegenerationofcarbon offsetcredits Thisreportdoesnot attemptanin-depthevaluationofall rangelandprotocols,however,the followingsectionprovidessomekey sectionstoreviewindetermining ineligibleorimpracticalprotocolsfor specificworkinglands.Protocol requirementshavebeensummarized herein6broadcategoriesfor15 protocolswehavereviewedand considerapplicableforrangelands andgrasslands(Section6.2-6.7, AppendicesI–VI).Wealsobriefly describesomegenerallegal implicationsalandownermight encounterwithanynature-based projectswithorwithoutan intermediaryprojectdeveloper (Section6.8).

6.2 Eligibilityinlanduseandpractice

Protocolsoutlineprojectrequirements (eg,landuse,practice,and permanence)landownersandproject developersmustusetodetermineif theproposedsiteiseligible. Specifically,protocolswilloutlineland useeligibilitysuchas:(1)geographic scope(e.g.,International,United States);(2)applicablelandtypes(e.g., rangelandorforestland);and(3) minimumenrollmentsize(i.e.,acreage neededtosupportproject).

Inadditiontolandtypeorgeneralland userequirements,allpotentialproject sitesmustmeetlandpracticeor activityrequirementsaswellandbe abletopassanadditionalitytest(in mostcases)intendedtoensuremore carbonissequesteredoremissions avoidedthanBusinessAsUsual(BAU) scenarios.Protocolswilloutline:(1) specificeligiblemanagement activities(e.g.,reducedfertilizer application);(2)ineligibleorprohibited practices(e.g.,drainingwetlands);(3) whetheradditionalornewactivities arerequired(mostrequire additionality);and(4)additionality criteria(howtodeterminewhethera practiceisconsideredadditional). Finally,protocolswilloutline permanencerequirementsthata projectsitemustmeet.These requirementsoutlinetheobligations undertheprotocolintendedto addressriskofshorttermreversals For example,aprotocolmayrequirethe projectsiteenterintoaconservation easement,orthatprojectsite managementorconditionshould remainunchangedfor25yearsafter projectimplementation.Abroad summaryofsomeofthese requirementsfor15protocolscanbe foundinAppendixIIEligibilityinLand Use,Practice,andManagement.

6.3 Samplingandmodeling

Toencourageconsistencyinmeasurementandestimationofbiomass, activity,andsoilcarbonbetween registeredprojectsunderthesame protocol,manyprotocolsoutline specificmonitoringmethodologies.

Mostprotocolswillalsooutline baselinedatarequirementsandwill stateifbaselinedatawillbecollected onetime(static)orifprioryearsof historicdataareneededtocalculate baselinelevels(dynamic).This baselineismeanttoprovidean estimateoftheGHGemissionsor amountofcarbonremovalthatwould haveoccurredindependentofproject financing.

Protocolswillstatewhetherfield samplingisrequired,howfrequent samplingeventsmustoccur,the methodologieslandownersorproject developersmustfollow,andif/which modelsshouldbeusedwhen calculatingemissionsorcarbon sequestration Someprotocolsare veryprescriptivewhilesomehave looseguidanceorleavemonitoring methodsuptothediscretionofthe projectdeveloper.TheVerra MethodologyforImprovedAgricultural LandManagement(VM0021)protocol forexamplehasthreedifferent measurementscenarioswhichcanbe utilized Aftereachmonitoringperiod, manyprotocolswillhavereporting requirementsinordertoconfirmall dataistrackedandreductionsremain ontarget.Abroadsummaryofsome oftheserequirementsfor15voluntary carbonprotocolscanbefoundin AppendixIIISampling,Monitoring,and Reporting.

sequesteredfromeachproject, emissionsavoided,and/oremissions incurred.Aprotocolwillidentifythe carbonpoolsthatwillbeconsideredor excludedincalculatingcarbon removal.Withinrangelandsystems, soilorganiccarbonisoftentheonlyor primarycarbonpoolmonitoredfor carbonsequestrationandstorage,but somewillalsoconsiderchangesinlive ordeadplantbiomass(aboveand/or below-ground).Inorganiccarbonmay alsobemonitoredundersome protocols,forexample,inVerra’sSoil CarbonQuantificationMethodology (VM0021)protocol.

6.4 Sequestrationandemissions reductionquantification

Protocolsoutlinehowtoquantifynet emissionsreductionsincludingcarbon

Additionally,manyprotocolswillonly issueoffsetcreditsbasedonnet carbonreductionswhichwillincludeall carbonsequesteredandallGHG emissionsfromoperationsinthe projectarea.Ifprojectemissionsare considered,aprotocolwilldiscusshow eachemissiontype[e.g.,methane (CH₄)fromcattleornitrousoxide(N₂O) fromfertilizeruse]mustbequantified Finally,allemissionreductionand carbonremovaldataareusually standardizedandreportedasCO₂eto makedifferentGHGscomparable withinthesameprojectboundary.This includesleakageconsiderationsfor anyemissionsthatareshiftedoutside oftheprojectboundarydiscussed moreinSection66 Therefore, protocolsoftenprovideguidanceon accountingmethodsforemission sourcesandconversiontoCO₂e.A broadsummaryofsomeofthese requirementsfor15voluntarycarbon protocolscanbefoundinAppendixIV EmissionsReductionQuantification

6.5 Paymentstrategy

Whendevelopingprojectprotocols, someregistrieswilloutlinethefinancial anddataretentionrequirements landownersand/orprojectdevelopers mustfollow Forexample,project protocolsmaydetailhowlong(i.e., creditingperiod)andatwhatintervals theregistrywillverifytotalreductions (e.g.,10years,renewableupto30 years) Protocolswillalsodetail whetherprojectaggregationis allowed.Throughaggregationof projects,landownersmaybeableto minimizecostsbypartneringwith otherlandownersand/orproject developerstoproducemoreoffset credits Protocolswillalsooftenstate ifthestackingofpaymentsand incentivesispermittedwithinthe projectarea.Forexample,whether acarbonoffsetprojectcanbe implementedonaprojectsitewhich alsoreceivesfundingforactivities undertheUSDA-NRCSConservation StewardshipProgram.

Finally,protocolsoutlinedataarchiving requirements(e.g.,landownersmust keepdatafor10yearsafter informationisgeneratedor7years afteritisverified)anddatasharing requirements(e.g.,doesthelandowner retaindataorisdataownedbythe developerorregistry).Abroad summaryofsomeofthese requirementsfor15voluntarycarbon protocolscanbefoundinAppendixV

PaymentStrategies

6.6 Reversalsandleakage

Mostprotocolshaverequirements intendedtoensurethatcarbonwill remainsequesteredforasetamount oftime.Protocolswilloutlinehowto monitorandmitigatereversalsand leakageincludingwhenlandowners/ projectdevelopersmustcontactthe registryinformingthemofareversal, methodsforidentifyingriskof reversals,andhowtomitigatethe chanceofareversal(e.g.,buffer pools).Reversaloccurswhen sequesteredcarbonisre-releasedinto theatmosphereorpost-intervention emissionsarehigherthanbaseline.

Leakageoccurswhenreductionof GHGemissionswithinaprojectdirectly orindirectlycausesanincreaseinGHG emissionselsewhere.Protocolsalso oftenoutlinehowtodefineandtrack leakageincludingwhatactivitiesmust beaccountedforasleakageduring theproject(eg,manureapplication), andhowunintendedincreasesin emissionsduetoactivityshifts(e.g., livestockdisplacement)mustbe calculated.Abroadsummaryofsome oftheserequirementsfor15voluntary carbonprotocolscanbefoundin AppendixVIReversalsandLeakage

6.7 Verificationmethod

Togenerateaverifiedoffsetcreditfrom aproject,protocolswillsetmonitoring, reporting,andverificationprocesses Theserequirementsmayincludehow oftenanoffsetcreditmustbeverified, methodsforverifyingacredit,and/or whomayverify,sometimeseven specifyingaspecificthird-partyverifier. Abroadsummaryofsomeofthese requirementsfor15voluntarycarbon protocolscanbefoundinAppendixVII VerificationMethods.

6.8 Legalimplications

Whileprotocolsoutlinethepractices requiredtomeettheregistrystandards, theagreementsandcontractsputin placebetweenpartiestomeetthose protocolrequirementsmayimpose somelegalrequirementsthatcannotbe fullycapturedheresincetheywillapply onaproject-by-projectbasis.Inher reviewofcontractsassociatedwith thesesortsofprojects,Lashmet(2022) outlinedsomekeyconcernsthat landownersshouldbeawareofbefore enteringintoacontractforaproject. Whilebynomeanscomprehensive, someselectedexamplesfrom Lashmet'sworkaregivenbelowto illustratetheseconcerns:

Controlofland–giventhe permanenceandactivity requirementsundersomeprotocols (AppendixII)someleasedlands maybeprecludedfromenteringinto aprojectagreement.Thisis especiallytrueiftheleaseisshorter thantheprotocolpermanence requirementorcreditingperiods (AppendixIIandV).

Ineithercasetheleaseholderand lesseewouldbothberequiredto adheretoallprotocolrequirements

Implicationsforenergydevelopment–tobeeligibleforaprojectunder certainprotocols,alandownermay needtoexcludepartsofaproperty fromanyfutureenergydevelopment. Ifasurfaceownercannotorwillnot ensurethatenergydevelopmentis excludedfromtheprojectareainthe future,theymaynotmeetthe permanenceandactivityrequirements ofmanyprotocols(AppendixII). Thiswouldberelevantforoiland gasas wellasrenewableenergy developmentinsomecases

Activityimplications–sincenet emissionsarequantifiedundersome protocols,contractsmayinclude provisionsagainstintroducingnew emissionsourceswithinproject boundaries,suchasnewvehicles,to ensurethatnetemissionreduction targetsaremet.

Landtitleimplication–thelandowner maybeaskedtoenterintoarestrictive covenant,lien,orconservation easementtomeetcertainprotocol permanenceandactivityrequirements. Penalties–sincetherearenumerous activities,accounting,andlanduse requirementsunderthevarious protocols,contractsmaycontain penaltiesandterminationclausesif theseconditionsarenotmet

Theseexamplesillustratethatacarbon offsetprojectagreementwillusuallycreate additionalrequirementsthatcanalter landowneroperationsbeyondthespecific projectboundariesandformanyyears.

7.0GLOSSARYOFTERMS

Additionality:Therearedifferenttestsandstandardsusedtojudgeadditionality.However,in carbonoffsetprojects,additionalityreferstotherequirementthatthefinancialincentivefrom thecarbonoffsetprojectbedeemedtheprimarycauseoftheinterventionthatledto increasedcarbonremovalorvoidedemissions Forexample,iftheactionsundertakenina carbonoffsetprojectarerequiredforANYotherlegalreason,thenmostguidelineswould indicateadditionalitycouldnotbeclaimed

Aggregation:Referstothegroupingorbundlingofprojectsand/oroffsetcredits.Tominimize thecostofprojectdevelopment,multipleprojectsusingthesameprotocolcanbegrouped intoasingleregisteredproject.Alternatively,tomeetdemand,multipleoffsetcredits, sometimesgeneratedusingdifferentprotocols,canbebundledintoasinglebid.

Allocation:Referstopermittedemissionsunderanemissionstradingscheme Eachpermit setstheallowableemissionsforthepermitholderandthustheir“allocation”ofemissions whichcanbeusedortradedandsold

AvoidedEmissions:Inthisreport,avoidedemissionsrefertoestimatesofemissionsthatwould haveoccurredintheabsenceofintervention.Someprotocolssuchastheavoidedland-use protocolswillgenerateoffsetsbasedontheamountofemissionsavoidedfrompreventing landuseconversion.Usedinterchangeablyinsomecaseswithemissionsreductions.

Baseline:Referstothemeasurementofanycurrentpre-interventionvaluesortoany quantifiedestimatesoffuturevaluesunderabaselinescenario Forexample,baselinesoil organiccarbonvaluespre-projectimplementationorprojectedsoilorganiccarbonin10years underabusiness-as-usualscenario,seebelow

BaselineScenario:Abaselinescenarioistheassumedconditionsunderwhichabaseline estimatecanbemade.Abaselinescenario,sometimesusedinterchangeablywith“business asusual,”assumesthatpastmanagementanddevelopmenttrendswillcontinueinthe absenceofintervention.Thesesetofconditionswilldeterminethevariablesusedinestimating baselinevalues.

BusinessasUsual(BAU):Usedinterchangeablyorintandemwithbaselinescenario,see above

Cap-and-Trade:Asystemdesignedbyagovernmentalinstitutionorauthoritytolimit emissionsbysettingacaponthetotalamountGHGthatcanbeemittedwithinanareaor sectorwhilealsocreatingandallowingamarketforthoselimitednumberofallowable emissions.Permits,alsoknownasallowances,aregiventocompanieswhichcanbetradedif thefullallowanceisnotutilized.Theintentionistocreateamarketincentiveforemittersto reduceemissionswhilealsoslowlyloweringthetotalallowableemissionsovertime.

CarbonCredit:Acarboncreditisafungiblecommoditythatrepresentsaunitofatmospheric GHGreductiontypicallyof1tonneCO₂e CarbonoffsetcreditsrepresentaGHGreduction throughavoidedemissions,orcarbonremoval(sequestration)whichcanbetradedandused asanemissionreductionclaimagainstthepurchasers’ownGHGemissions Acarboncredit representingallowableemissionsisfoundincap-and-tradesystemsandallowsthe owner/purchasertoemitthecreditamountaspartoftheiroperations

carboncreditsynonymouslywithcarbonoffsetsorothertypesofverifiedemissionsreduction assets.

7.0GLOSSARYOFTERMSCONTINUED

CarbonMarket:Bothvoluntaryorcompliancemarketsfunctiontoallowentitiestobuy,sell, andtradecreditstoregulateGHGemissionsortooffsettheirownemissions

CO₂equivalent(CO₂e):AwayofstandardizingthereportingofallGHGemissions(eg CO₂, CH₄,etc ) AllGHGsareconvertedtoaunitofCO₂erepresentingtheglobalwarmingpotential ofonemetrictonneofCO₂ Forexample,1tonneofCH4wouldbeconvertedtoapproximately 25tonnesCO₂esincemethanehas25timestheglobalwarmingpotentialofcarbondioxide.

Carbonoffset:Carbonoffsets,whicharesometimesusedinterchangeablywithcarboncredits, specificallyrefertoaunitofatmosphericcarbonremovedoremissionsavoidedwhichcanbe purchasedandsoldinvoluntarycompliancemarkets.Carbonoffsetstypicallyrepresent1 tonneofCO₂eandcanbeutilizedtocompensateforthepurchasersGHGemissions.

Carbonoffsetting:Carbonoffsettingistheprocessbywhichcompaniesfundavoided emissionsandcarbonremovalprojectswhichoccurexternaltotheirorganization,andutilized thosereductionsandremovalstocompensatefortheirownGHGemissions(ie subtractoffset amountfromemissionsinventory)

Carbonpool:Sometimesusedinterchangeablywithcarbonsink,itrepresentsareservoirinan ecosystemwhichhasthecapacitytotake,store,andreleasecarbon.Ingrasslandecosystems theprimarycarbonpools,areinorderofrelativemass;soils,belowgroundplantbiomass,and abovegroundplantbiomass.

Carbonreduction:Inthecontextofthenature-basedcarbonoffsetmarkets,carbonreduction referstothenetreductionofCO₂fromtheatmospherethroughphotosynthesisdrivenremoval, fromavoidedemissions(protectingstoredcarbonfromrelease),orreductionofdirect emissionssources(reductionoffertilizeruseforexample)

Carbonremoval:Inthecontextofnature-basedcarbonmarkets,itreferstoremovingcarbon dioxidefromtheatmospherethroughphotosynthesis.

Carbonsequestration:Carbonsequestrationistheprocessofcapturingandstoring atmosphericcarbondioxide,usedinterchangeablywithremovalinsomeinstances.

Carbonstock:Canalsobeusedinterchangeablywithcarbonstorage,representstheamount ofcarboncurrentlywithinacarbonpoolorwithinmultiplecarbonpoolsinanarea

ComplianceMarket:Compliancemarketssellcreditswhicharetiedtoaregulatoryprogram createdbynational,regional,and/orinternationalprograms.Compliancemarketsincapand-tradesystemsforexample,facilitatethesaleofacarboncreditswhichrepresentsthe righttoemitGHGs,usuallyequivalent1tonneCO₂e.

CreditingPeriod:ThecreditingperiodusuallystartswhenprojectactivitiesbeginorwhenGHG emissionsreductionsorremovalsareachieved Thecreditingperiodisthelengthoftheproject lifetimewhenquantifiedemissionsreductionsandremovalswillgenerateoffsetcredits Protocolsmayspecifyaminimum,maximum,arange,orspecificnumberofyears

7.0GLOSSARYOFTERMSCONTINUED

CreditStacking:Thiscanrefertoreceivingpaymentsfordifferentecosystemservicebenefits fromthesameproject(ie carboncreditsandwatercredits),oritcanrefertogenerating carbonoffsetcreditsfrommultipleprotocols/registrieswithinthesameproject Creditstacking isnotallowableundersomeprotocols

CreditQualityCriteriaInitiative:DevelopedbytheEnvironmentalDefenseFund,WorldWildlife Fund,andOeko-Institut,theCarbonCreditQualityInitiativewasmadetoguidebuyerson carboncreditsinagrowingmarket.Itusessevencriteriatoscoreandevaluateprograms.

EmissionsCap:AlimitontheamountofGHGemissionsthatcanbeemittedbyanentityor withinapoliticalboundary(i.e.state).Thesearetypicallyfoundinregulatorycap-and-trade programs.

EmissionsReductions:ReferstoareductionintheamountofGHGreleasedintothe atmosphere Withinnature-basedcarbonmarkets,avoidedland-useconversioncouldbe consideredanemissionreduction,sinceland-useconversionoftenresultsinthereleaseof organiccarbonintotheatmosphere Asasecondexample,reducinguseofnitrogenfertilizer couldbeanemissionreductionsinceoveruseoffertilizercanleadtoreleaseofGHGs.Thisis sometimesusedinterchangeablyinthisreportwithavoidedemissions.

EmissionsTrading:Thetradingofemissionsallowanceswithinacompliancemarket.

Insetting:TheprocessbywhichcompaniesinvestinGHGemissionsreductionsorcarbon removalwithintheirownvaluechaininordertocompensatefororreducetheirGHGemission inventory Forcompanieswhichhavelandorothernaturalassetsintheirvalue-chain,naturebasedreductionprojectscanbefundedwithintheirvaluechainandusedtoreducescope3 emissions Insetcreditsarenottradedorsoldtootherorganizationsbutaregeneratedand utilizedinternallytoreduceemissioninventories.Insetcreditscanbegeneratedusinga processsimilartotheoffsetcreditmarket.

Leakage:LeakageoccurswhenreductionofGHGemissionswithinaprojectdirectlyor indirectlycausesanincreaseinGHGemissionselsewhere.Leakagecanbeseparatedinto activityleakageandmarketleakage.Protocolswillusuallytakeleakageintoaccountwhen estimatingemissions Whenleakageoccurs,thereisadecreaseinnetGHGreductionssince emissionsaremerelydisplaced,notsequestered

MetricTonneofCO₂:Ametrictonneofcarbondioxide,whichisequalto2,20462lbs Thisis differentfromaUS ton,whichisequalto2,000lbs

Mitigation:Inthecontextofclimatechangeprevention,anyeffortstoreduceorpreventGHG emissions,ortoremoveCO₂fromtheatmosphereinordertoavoidfutureimpactsfrom climatechange.

Paymentstacking:Projectsthatarefundedboththroughoffsetpurchaseswhilealsoutilizing otherpaymentsforexample,fromtheUSDAFarmBillprograms Thiswouldbereceivingtwoor morepaymentsforthesameconservationaction Someprotocolsmayprohibitorlimitthis practiceifitisconsideredtohavenegatedtheadditionalitystandard

7.0GLOSSARYOFTERMSCONTINUED

Permanence:Thetimelinerequirementsforsequesteredcarbonormanagementintendedto ensuremeaningfulclimatechangemitigation Permanencerequirementsareintendedto ensuresequesteredcarbonremainsstoredlong-termormitigateriskofshort-termreversals Mostprotocolswilloutlineatimeframewhencarbonstocksmustbeprotectedagainst reversalswhicharereferredtoaspermanence Penaltiesareusuallyoutlinedifpermanence requirementsarenotmet

Projectdeveloper:Projectdeveloperscanbeasingleperson,team,ororganizationthat initiates,bearsthefinancialburdenof,andwhoislegallyresponsibleforrunninganoffset project.Thisincludesidentifyingandworkingwithlandowners,implementingaprotocol certifiedbyaregistry,collaboratingwithpartners,etc.

Projectproponent:Sometimesusedinterchangeablywithprojectdeveloper,seeabove

Protocol:Protocolsoutlinelandmanagementactivities,reporting,permanence,additionality, monitoring,andotherrequirementsthatmustbemettogeneratecredits Theterm methodologyissometimesusedinterchangeablyorusedtorefertospecificallyto methodologiescontainedwithinaprotocol,dependingontheregistry.

Registry:Aregistryreviewsandcertifiesprotocolsthatcanbeusedtogenerateoffsetcredits andareresponsibleforissuing,certifying,trackingownership,sale,andretirementofoffset credits.

Retire:Aregistrywillretiretheserialnumberassignedtoeachoffsetcreditonceitisusedto claimaGHGemissionreductionbythepurchaser Thisisintendedtomitigateriskofdouble counting

Reversals:Reversalsoccurwhensequesteredcarbonisre-releasedintotheatmosphereor post-interventionemissionsarehigherthanbaseline.Abufferpoolofcreditsisusuallyset asideasareserveofnon-tradeablecarboncreditsthatwillbeusedtocompensatefor reversals.Incasesofreversalsthatarelargerthanthebufferpool,penaltiescaninclude forfeitedcreditsorrequirementtorefundpaymentsinfull.

Scope1emissions:GHGemissionsthatcomedirectlyfromownedorcontrolledcorporate operations Examplesincludefromcompanyvehicles,equipment,orfromownedfacilities

Scope2emissions:Emissionsfrompowergenerationusedbyanoperation Emissionsfrom powergenerationareusuallyindirectsincepoweristypicallypurchasedfromapublicutility

Scope3emissions:AllindirectemissionsnotincludedinScope2,causedindirectlybya corporationthroughitsupstreamsupplychainanddownstreamemissions.Forexample,fora bakery,allemissionsassociatedwiththeproduction,milling,andtransportofwheatwouldbe partoftheirscope3emissionsinventory.

Soilcarbonsequestration:SoilcarbonsequestrationistherateatwhichCO₂iscaptured, assimilated,andstoredinthesoilinorganicorinorganicforms

Soilorganiccarbon:Soilorganiccarbonrefersonlytothecarboncomponentoforganic compoundsinthesoil.

7.0GLOSSARYOFTERMSCONTINUED

Soilorganicmatter:Soilorganicmatteristheorganiccomponentofthesoilandconsistsof bothlivinganddeadorganiccomponents Sourcesofsoilorganicmatterincludeplantsand animals Itiscomposedofmanyelements;mainlycarbon,hydrogen,oxygen

Validation:Afteraprojectdesigndocumentiscreated,anentityorindividual,usuallyan approvedthird-partyvalidationandverificationbody,willreviewthataprojectdesignmeets therequirementssetbythestandard.

Verification:Toverifyacarboncredit,anentityorindividual,usuallyanapprovedthird-party validationandverificationbody,monitorprojectdataandverifythatcarbonsequestered, avoidedemissions,oremissionsreductionsweregeneratedandestimatedaccordingtoall projectprotocols,andensurestheappropriatenumberofcreditswillbeissuedbyproject.

VoluntaryCarbonMarket:Amarketthatenablescollectivevoluntarytransactionsofcarbon credits Voluntarycarbonmarketshavenocentralizedmarketplaceandishighlyfragmented, composedofmanydifferententitiesanddiscreteprograms

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APPENDIXI.GENERALPROTOCOLDESCRIPTIONS

Aprotocolforprojectsthat enhancesoilcarbon sequestrationorreduce emissionsonagricultural landsthroughadoptionof agriculturalland managementactivities.

KeyProtocolInformation(See pagenumbers)

Additionality-AppendixIIpg.67; Permanence-AppendixIIpg 67; Leakage-AppendixVIpg 101; Reversals-AppendixVIpg 101;

LandUseEligibility-AppendixIIpg.67; PracticeEligibility-AppendixIIpg.67; Monitoring-AppendixIIIpg 82;

CreditQuantification-AppendixIVpg 90;

PaymentStrategy-AppendixVpg 95; Verification-AppendixVIIpg.106

Aprotocolforprojectsthat enhancesoilcarbon sequestrationorreduce emissionsonagricultural landsthroughadoptionof agriculturalland managementactivities especiallyregenerative agriculture

Aprotocolforprojectsthat reduceemissionson agriculturallandsthrough adoptionofagricultural landmanagement activitiesincludingbutnot limitedtomanure management,useof covercrops,compositing cropresiduals,and introductionoftreesonto thelandscape.

Additionality-AppendixIIpg 68;

Permanence-AppendixIIpg 68;

Leakage-AppendixVIpg.101; Reversals-AppendixVIpg 101; LandUseEligibility-AppendixIIpg 68;

PracticeEligibility-AppendixIIpg 68; Monitoring-AppendixIIIpg.82;

CreditQuantification-AppendixIVpg 90; PaymentStrategy-AppendixVpg 95; Verification-AppendixVIIpg 106

Additionality-AppendixIIpg.69; Permanence-AppendixIIpg 69; Leakage-AppendixVIpg 101; Reversals-AppendixVIpg 101;

LandUseEligibility-AppendixIIpg.69;

PracticeEligibility-AppendixIIpg.69; Monitoring-AppendixIIIpg 83;

CreditQuantification-AppendixIVpg 90;

PaymentStrategy-AppendixVpg.95; Verification-AppendixVIIpg.106

SoilCarbon Quantification Methodology,v 1.0VERRA (2012)

Yes

Aprotocoldesignedto quantitychangesin carbonaccrualfrom conservation,ecosystem restoration,agricultural projects,aswellasother projectswhere managementdirectlyor indirectlyaffectschanges insoilcarbon.

Additionality-AppendixIIpg 70;

Permanence-AppendixIIpg 70;

Leakage-AppendixVIpg 101;

Reversals-AppendixVIpg.101;

LandUseEligibility-AppendixIIpg 70;

PracticeEligibility-AppendixIIpg 70; Monitoring-AppendixIIIpg 83;

CreditQuantification-AppendixIVpg.91;

PaymentStrategy-AppendixVpg.96; Verification-AppendixVIIpg 106

APPENDIXI.GENERALPROTOCOLDESCRIPTIONSCONTINUED

KeyProtocolInformation(See pagenumbers)

Aprotocoldesignedto quantitychangesinGHG emissionsandsoilorganic carbonstocksthroughthe adoptionofimproved agriculturalpracticesto achieveavoidanceof emissionsaswellas increasesinsoilcarbon stock.

Additionality-AppendixIIpg.71; Permanence-AppendixIIpg.71; Leakage-AppendixVIpg 102; Reversals-AppendixVIpg 102; LandUseEligibility-AppendixIIpg 71; PracticeEligibility-AppendixIIpg.71; Monitoring-AppendixIIIpg 84;

CreditQuantification-AppendixIVpg 91;

PaymentStrategy-AppendixVpg 96; Verification-AppendixVIIpg.106

NoriCroplands

Aprotocoldesignedto quantityincreasesinsoil organiccarbonstocks resultingfromthe adoptionofimproved regenerativesoil treatmentandcropping practices

Additionality-AppendixIIpg 72; Permanence-AppendixIIpg 72; Leakage-AppendixVIpg 102; Reversals-AppendixVIpg.102;

LandUseEligibility-AppendixIIpg 72;

PracticeEligibility-AppendixIIpg 72; Monitoring-AppendixIIIpg 84;

CreditQuantification-AppendixIVpg.91;

PaymentStrategy-AppendixVpg 96; Verification-AppendixVIIpg 106

Methodology forGHGand Co-Benefitsin Grazing Systems,v0.91 REGEN NETWORK (2021)

Aprotocolintendedto provideaholistic assessmentofmultiple ecologicalstateindicators forgrasslandsprescribed grazingregimesincluding climatemitigationthrough increasesinsoilorganic carbonstocksaswellas co-benefitsincludingsoil health,animalwelfareand ecosystemhealth.

Additionality-AppendixIIpg.73;

Permanence-AppendixIIpg 73;

Leakage-AppendixVIpg 102;

Reversals-AppendixVIpg 102;

LandUseEligibility-AppendixIIpg.73;

PracticeEligibility-AppendixIIpg.73;

Monitoring-AppendixIIIpg 85;

CreditQuantification-AppendixIVpg 92;

PaymentStrategy-AppendixVpg.97;

Verification-AppendixVIIpg.106

Aprotocoldesignedto measureandquantify changesinbelow-ground storedcarbonovertime onworkinglands properties.

Additionality-AppendixIIpg 74; Permanence-AppendixIIpg 74;

Leakage-AppendixVIpg 103;

Reversals-AppendixVIpg.103;

LandUseEligibility-AppendixIIpg 74;

PracticeEligibility-AppendixIIpg 74;

Monitoring-AppendixIIIpg 85;

CreditQuantification-AppendixIVpg.92;

PaymentStrategy-AppendixVpg 97;

Verification-AppendixVIIpg 107

APPENDIXI.GENERALPROTOCOLDESCRIPTIONSCONTINUED

MajorUS Standard/ Registry GeneralDescription

KeyProtocolInformation(See pagenumbers)

Afforestation and Restorationof Degraded Lands,v1.2 AMERICAN CARBON REGISTRY (2017)

Avoided Conversionof Grasslands and Shrublandsto Crop Production,v 2.0AMERICAN CARBON REGISTRY (2019)

Yes

Aprotocolisdesignedto measureandquantify emissionsreductionsand removalsfromrestoration ofdegradedlandsand afforestationprojects

Additionality-AppendixIIpg 75; Permanence-AppendixIIpg.75; Leakage-AppendixVIpg 103; Reversals-AppendixVIpg 103;

LandUseEligibility-AppendixIIpg 75; PracticeEligibility-AppendixIIpg.75; Monitoring-AppendixIIIpg 86;

CreditQuantification-AppendixIVpg 92;

PaymentStrategy-AppendixVpg 97; Verification-AppendixVIIpg.107

Yes

Aprotocoltoestimatethe amountofemissions avoidedbypreventingthe conversionofgrasslands andshrublandstoannual cropproduction

Additionality-AppendixIIpg 76; Permanence-AppendixIIpg.76; Leakage-AppendixVIpg 103; Reversals-AppendixVIpg 103;

LandUseEligibility-AppendixIIpg 76;

PracticeEligibility-AppendixIIpg.76; Monitoring-AppendixIIIpg.86;

CreditQuantification-AppendixIVpg 93;

PaymentStrategy-AppendixVpg 98; Verification-AppendixVIIpg.107

Methodology forsustainable grassland management, v1.1VERRA (2021)

Yes

Aprotocoltoestimate emissionsreductionsand removalsfromadopting sustainablegrassland managementpractices suchasrotationalgrazing orrestorationofseverely degradedland.

Additionality-AppendixIIpg 77;

Permanence-AppendixIIpg 77;

Leakage-AppendixVIpg 103; Reversals-AppendixVIpg.103;

LandUseEligibility-AppendixIIpg 77;

PracticeEligibility-AppendixIIpg 77;

Monitoring-AppendixIIIpg 87;

CreditQuantification-AppendixIVpg.93;

PaymentStrategy-AppendixVpg.98;

Verification-AppendixVIIpg 107

Methodology forthe adoptionof sustainable grasslands through adjustmentof fireand grazing,v1.0 VERRA(2015)

Yes

Aprotocoltoquantify emissionsreductionsand changesinsoilcarbon stockfromadoptionof grasslandmanagement techniquessuchas manipulatingstocking rates,rotationalgrazingor alteringfireregimes includingfirefrequency, intensity,ortiming.

Additionality-AppendixIIpg.78;

Permanence-AppendixIIpg.78;

Leakage-AppendixVIpg 104;

Reversals-AppendixVIpg 104;

LandUseEligibility-AppendixIIpg 78;

PracticeEligibility-AppendixIIpg.78; Monitoring-AppendixIIIpg 87;

CreditQuantification-AppendixIVpg 93;

PaymentStrategy-AppendixVpg 99;

Verification-AppendixVIIpg.108

APPENDIXI.GENERALPROTOCOLDESCRIPTIONSCONTINUED

KeyProtocolInformation(See pagenumbers)

Methodology foravoided ecosystem conversion,v 3.0VERRA (2014)

Yes

Aprotocoltoestimateand quantifyemissions reductionsandremovals fromactivitiesthat preventtheconversionof foresttonon-forestandof nativegrasslandand shrublandtoanon-native state.

Additionality-AppendixIIpg 79; Permanence-AppendixIIpg.79;

Leakage-AppendixVIpg 104;

Reversals-AppendixVIpg 104;

LandUseEligibility-AppendixIIpg 79;

PracticeEligibility-AppendixIIpg.79;

Monitoring-AppendixIIIpg 88;

CreditQuantification-AppendixIVpg 94;

PaymentStrategy-AppendixVpg 99; Verification-AppendixVIIpg.108

Grassland Project Protocol,v2.1 CLIMATE ACTION RESERVE(2020)

Yes

Aprotocoltoquantifyand estimateemissions reductionsassociated withprojectsthatprevent lossofsoilcarbondueto conversionofgrasslandto croplandaswellasother associatedGHG emissions.

Additionality-AppendixIIpg 80; Permanence-AppendixIIpg 80; Leakage-AppendixVIpg 104;

Reversals-AppendixVIpg.104;

LandUseEligibility-AppendixIIpg.80;

PracticeEligibility-AppendixIIpg 80; Monitoring-AppendixIIIpg 88;

CreditQuantification-AppendixIVpg.94;

PaymentStrategy-AppendixVpg.100; Verification-AppendixVIIpg 108

Agriculture Methodology forincreasing soilcarbon through improved tillage practices,v0.9

GOLD STANDARD (2015)

Yes

Aprotocoltoquantify reductionsinGHG emissionsandremovals fromcarbonsequestration bychangingsoiltillage practices

Additionality-AppendixIIpg 81; Permanence-AppendixIIpg.81; Leakage-AppendixVIpg.105; Reversals-AppendixVIpg 105; LandUseEligibility-AppendixIIpg 81; PracticeEligibility-AppendixIIpg 81; Monitoring-AppendixIIIpg.89;

CreditQuantification-AppendixIVpg 94;

PaymentStrategy-AppendixVpg 100; Verification-AppendixVIIpg 108

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCE

Non-federallandsintheUSincludingterritories,andtribal lands Applicable

Mustbegrasslandorcropland Projectsmustremainin agriculturalproductionthroughoutthecreditingperiod

Permanence

Ineligibleor

Eligible Management Activities

Determinedbyaperformanceadditionalitystandardtest criteriaincludingadoptingorstoppingpracticesthat impactSOCstoragewherethatpracticeisnotalready performedon>50%ofcropland/pastureareawithinthe County,andwherethepracticeisnotalreadyrequiredby law

Somepracticesmaynotbeeligibleifitisshownthatthey arealreadyacommonpracticeinthearea(see additionalitycriteria) Areaswhichhavebeenclearedof nativeecosystemsorotherrestoredorprotectedareas maynotbeeligible Projectactivitieswhichdecrease carbonstocksinwoodyperennialsorwhichintroduce broadscaleorganicamendmentsmaynotbeeligibledue tothepotentialtoshiftsystemstowardlowergrassland biodiversity

Projectactivitiescanincludeoneormorechangesto: fertilizerapplication,soilamendments,water management,tillage/residuemgmt.,cropplanting,fossil fuelusage,andgrazingpractices.

NewActivities Required

Yes Soilenrichmentprotocolrequiresaprojectactivityto beimplementedthatenhancessoilcarbonsequestration onagriculturallandsthroughtheadoptionofsustainable agriculturallandmanagementactivities

Creditsareissuedasaproportionofa100-year permanenceperiod Thefullamountwouldbepaidwith 100yearpermeance

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Ineligibleor Prohibited Practices

Eligible Management Activities

Projectactivitiesmustbeimplementedonlandthatis, andremains,eithercroplandorgrasslandthroughout theprojectcreditingperiod

NewActivities Required

(1)EstablishthatthechangeinpracticewouldNOThave occurredbecauseofcultural/socialbarrierwithoutthe projectand(2)demonstratethattheproposedproject activitiesarenotalreadyacommonpractice(<20% localadoption).

Theprojectareamustnothavebeenclearedofnative ecosystemswithinthe10-yearperiodpriortotheproject startdate.Restrictionsexistifprojectactivityinvolvesthe applicationofbiochar.Ifbiocharisused,itmustbe producedusingfeedstockthatwouldotherwisehave beenlefttodecayinaerobicoranaerobicconditionsor beenburnedinanuncontrolledmanner.Additionally, theprojectactivitycannotoccuronawetland.

Projectactivitiesinclude:reducedfertilizerapplication, improvedwatermanagement,reducedtillageand improvedresiduemanagement,improvedcropplanting andharvesting,andimprovedgrazingpractices.Other regenerativeagpracticescanbeincludedwhereGHG benefitscanbereliablydemonstrated.

Yes Achangeconstitutesadoptionofanewpractice, cessationofapre-existingpractice,oradjustmenttoa pre-existingpracticethatisexpectedtoreduceGHG emissionsand/orincreaseGHGremovals.Any adjustmentmustexceed5%ofthepre-existingvalue.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

GeographicScope

LandUse Eligibility

Applicable CroppingSystems andLandUse

International Methodologybasedontheproject, "WesternKenyaSmallholderAgricultureCarbonFinance Project"

Applicabletoprojectsthatintroducesustainable agriculturelandmanagementpractices(SALM)in croplandsorgrasslands.Applicabletoareaswherethe soilorganiccarbonwouldremainconstantordecrease intheabsenceoftheproject.

Permanence Eligibility

Additionality criteria

Ineligibleor Prohibited Practices

Eligible Management Activities

TheprojectmustusethemostrecentversionoftheCDM combinedtooltoidentifythebaselinescenarioand demonstrateadditionality

Theprojectmaynotoccuronwetlands.

SALMprojectactivitiesmayinclude,butarenotlimited tomanuremanagement,useofcovercrops,returning compostedcropresidualstothefield,andthe introductionoftressintothelandscape.

NewActivities Required Yes Newprojectactivitiesrequiretheintroductionof sustainableagriculturelandmanagementpractices

Landowner Permanence Commitment 30years.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Additionality criteria

Projectsmustbecroplandorgrassland.Applicableto conservation,ecosystemrestorationandagricultural projects,aswellasotherprojectswherethemanagement ofsoilsdirectly,ormanagementofhydrology,fertilityand vegetationsystems,canaffectchangesinsoilsandsoil carbon.

Ineligibleor Prohibited Practices

Eligible Management Activities

Projectproponentmustdemonstratethattheproposed projectactivityisadditionalusingthelatestversionofthe CDMCombinedtool

Projectactivitiesmustnotincludechangesinsurfaceand shallow(<1m)soilwaterregimesthroughfloodirrigation, drainage,orothersignificantanthropogenicchangesin thegroundwatertable.Additionally,theprojectactivity mustnotcauseasignificantchangeintermite populations,ascomparedwiththebaselinescenario.

Availabletoarangeofprojectactivitiesdesignedto improvesoilsincluding:changestoagriculturalpractices, grasslandandrangelandrestoration,reductionsin erosion,grasslandprotectionprojects,treatments designedtoimprovediversityandproductivityof grasslandandsavannaplantcommunities

NewActivities Required

Yes Projectsmustimplementnewactivitiesfocusedon improvingcroplandmanagement,grassland management,orforcroplandandgrasslandland-use conversions

Allprojectsmustdemonstratetheywouldnothave beenimplementedwithoutthebenefitsofcarbon certificationusingCDMAdditionalityTool,orshowing localadoptionrateof<5%inthearea;andtheusing theGoldStandardactivitieslist Ineligibleor

Wetlandsorforestsineligible.Biomassburningforsite preparationisineligible.Projectactivitiesshallnot includechangesinsurfaceandshallowsoilwater regimes.Theprojectactivitymustnotleadtolanduse conversion.Activitieswhichcausereductionincrop yieldareineligible.

Eligible Management Activities

Encompassesarangeofactivities/scalesthatmaybe morespecificallyrelatedtomanagementpractices dependingonSOCActivityModuleswhichare developedonanongoingbasis

Yes Improvedagriculturalpracticesmustbeadopted aspartofprojectactivities Permanence

Permanencerequiredwithincreditingperiod. Percentageofcreditsgotoabuffertomitigate againstlosses.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

UScroplandsincludingthoseproducingawidevariety ofannualveg,grain,fruit,andperennialorchards.

NoriwillonlyissuecreditsrepresentingincrementalCO₂ drawdownandretentionarisingfromanactivityor practicechangethatisreasonablyexpectedtoresultin anetnewCO₂removalandCO₂retention

Becausetheconversionofforestsorgrasslandsto croplandresultsinsignificantnetCO₂releasestothe atmosphere,croplandsthatwereconvertedfrom forestsorgrasslandsafterDecember31,1999arenot eligible. Eligible Management Activities

Ineligibleor Prohibited Practices

Eligibleprojectactivitiesinclude:changing/expanding croprotationsandcropintensity,introducingcover cropsand/orshiftingfromannualtoperennials, reducingtillageintensityand/oradoptingnewresidue mgmt techniques,newirrigationtechniques, substitutingsyntheticfertilizerswithOMadditions

NewActivities Required

Yes Norirequiresnewpracticestobeadoptedin croplandsorsubstitutingperennialgrassesorwoody biomassinwetlands,riparianorbufferzonesthatwere previouslycropped

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Additionality criteria

Criterianotstatedwithintheprotocol However,Regen NetworkRegistrystatesapracticemustbeadditional andadoptedfromapre-approvedlistofregenerative grazingbestmanagementpractices

Ineligibleor Prohibited Practices

Eligible Management Activities

WhenexaminingthecorrelationbetweenpercentSOC andremotesensingdata,simpleregressionmodels canonlybefittosatelliteimagery,ancillarydataor derivedindicesmaynotbeused.Anypracticeswhich donotmeetanimalwelfarestandardsmentionedin theprotocolwouldalsobeprohibited.

Activitiesmustbeadditionalandanewpracticecan beadoptedfromapre-approvedlistoutlining regenerativegrazingbestmanagementpractices

NewActivities Required Yes Aprojectmustbeimplementedthatwillaidin minimizingthereleaseofcarbonbyaltering prescribedgrazingmethods Permanence

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND

MANAGEMENTPERMANENCECONTINUED

Additionality criteria

Standardappliestocroplandorgrazinglandthatisprovenby testingtosequestercarbonandremainsinproductionforten yearsaftereachcreditawardyear,witha"true-up"afterfive years Minimum Enrollment SIze? Thereisnominimumormaximumacreagespecified Practice

Ineligibleor Prohibited Practices

BCarbonredefinesadditionalityasapropertyrightsconcept.Ifa landownercanprovethattheyareaddingatmosphericcarbon tothesoilorastreebiomass,theyhavearighttosellthatstored carbon.Ontheotherside,emittersownthecarbondioxidethey releaseandhavetherighttopaylandownerstoremoveand storetheircarbondioxideemissionsinthesoil.BCarbondefines additionalityasanycarbonstoragethatisensuredthroughthe saleofcredits.

Thisprotocolisdirectedtobelow-groundcarbonmeasurements onlyandsodoesnotencompasstheevaluationofabovegroundcarbonaccrualassociatedwiththelandmanagement practices MeasurementofsoilcarbonbasedonLossofIgnition (LOI)methodsisnotacceptedunderthisprotocol

Eligible Management Activities

Protocolmaybeappliedtoanylandmanagementpracticethat enhancesandmaintainsbelow-groundcarboninawaythat preservesorimprovessoilhealth

NewActivities Required

No.Ifalandownercanprovethattheyareaddingatmospheric carbontothesoilortrees,theyhavearighttosellthatstored carbon.BCarbonprojectsareadditionalbecausestoragewould notbeensuredwithoutthesaleofcredits.

Landowner Permanence Commitment

TheinitialpermanencecommitmentrequiredbyBCarbonisten years,whichisrenewableeachsubsequentyearwhennew creditsareissued.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Geographic Scope International However,iftheForestVegetationSimulatoris used,projectsmustbelocatedintheUnitedStates

LandUse Eligibility

Applicable Cropping Systemsand LandUse

Minimum Enrollment SIze?

Additionality criteria

Applicabletoafforestationandreforestationprojectactivities thatareimplementedondegradedlandsthatareexpected toremaindegradedorcontinuetodegradeintheabsence oftheproject.

Notstated;however,aregenerationmonitoringareamustbe atleast1/4hectareinsizebesimilartotheprojectarea,and beestablishedoutsideoftheprojectarea

Projectproponentsshalldemonstrateadditionalitythrough theACRthree-prongtest

Ineligibleor Prohibited Practices

Practice Eligibility

Eligible Management Activities

Ifatleastapartoftheprojectactivityisimplementedon organicsoulsorwetlands,intentionalmanipulationofthe watertableisnotallowed.Nomorethan10%oftheareamay bedisturbedasaresultofsoilpreparationforplanting. Speciesplantedarerestrictedtohistoricnativespeciesinthe projectarea.Littershouldremainonsiteandmaynotbe removedintheprojectactivity.

Ploughing/ripping/scarificationmustbelimitedtothefirst fiveyearsandnotrepeatedwithinaperiodof20years.

Independentevaluationofaproposedafforestationor reforestationprojectactivitybyadesignatedoperational entityagainsttherequirementsoftheCleanDevelopment Mechanism(CDM)needed

NewActivities Required Yes Anewafforestation/reforestationprojectactivitymust beimplementedondegradedlands

Permanence Eligibility

Landowner Permanence Commitment

Apermanenceperiodisnotstated;however,toensure permanenceofaproject,ACRrequiresprojectswithariskof reversaltoassessandmitigaterisk

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Protocol

AvoidedConversionofGrasslandsandShrublandsto CropProduction,v2.0AMERICANCARBONREGISTRY (2019)

Geographic Scope UnitedStates.

LandUse Eligibility

Applicable Cropping Systemsand LandUse

Grasslandorshrublandonly;Mustbequalifiedasshrubland orgrasslandfortenyearspriortostartdate

Minimum Enrollment SIze? Notstated.

Additionality criteria

Requiredtodemonstratethattheprojectactivityissurplusto regulationsandreducesemissionsbelow"businessasusual" forratesofconversionofgrasslandtocroplandintheUS, basedonpracticetestandperformancestandards

Ineligibleor Prohibited Practices

Practice Eligibility

Nomorethan25%ofthelandcanbeLandCapabilityClassVII andVIII Grasslandorshrublandonorganicsoilsorpeatlands, orwetlandacreswithingrassland/shrublandtractsare ineligible Wherelivestockarepresent,manureisnot managed,stored,ordispersedinliquidform Additionally, livestockmustnotbemanagedinaconfinedarea(ie, feedlot)

Eligible Management Activities Avoidconversionofgrasslandandshrublandtocropland.

NewActivities Required

Permanence Eligibility

Landowner Permanence Commitment

Yes,anewprojectactivitymustbeimplementedtoprevent theconversionofgrasslandsandshrublandstoannualcrop production.

Projectsmustcommittomaintain,monitor,andverifyproject activityforaminimumprojecttermof40years However,the minimumprojecttermisnotequatedwiththeassuranceof permanence

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Protocol

Methodologyforsustainablegrassland management,v1.1VERRA(2021)

Geographic Scope

LandUse Eligibility

Applicable Cropping Systemsand LandUse

International Locatedinaregionwhereprecipitationisless thanevapotranspirationformostoftheyearandleaching isunlikelytooccur

Grasslandatstartofprojectthatisdegradedandbaseline scenariothatshowsthelandwillcontinuetobedegraded

Minimum Enrollment SIze? Thereisnominimumormaximumacreagespecified.

Additionality criteria

Mustdemonstratetheadditionalityoftheprojectusingthe mostrecentversionoftheVCSToolfordemonstrationof additionality Themostplausiblebaselinescenariomustbe assessedtogetherwiththeprojectscenario

Ineligibleor Prohibited Practices

Practice Eligibility

Eligible Management Activities

Projectareamustnothavebeenclearedofnative ecosystemswithin10-yearsprior Projectactivitiesmustnot includelandusechange Projectactivitiesmustnotleadto anincreaseintheuseoffossilfuelsandfuelwoodfrom non-renewablesourcesforcookingandheating Wetlands orpeatlandsareineligible

Activitiesthatintroducesustainablegrassland managementpracticessuchas:rotationofgrazing animalsbetweengrasslandareas,limitingthenumberof grazinganimalsondegradedgrassland,restoringseverely degradedgrasslandsbyreplantingwithgrassesand ensuringappropriatemanagement.

NewActivities Required Yes newsustainablegrasslandmanagementpractices mustbeadopted

Permanence Eligibility

Landowner Permanence Commitment 20years.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Protocol

Methodologyfortheadoptionofsustainable grasslandsthroughadjustmentoffireandgrazing,v 1.0VERRA(2015)

Geographic Scope International.

LandUse Eligibility

Applicable Cropping Systemsand LandUse

Minimum Enrollment SIze?

Mustbegrasslandinthebaselineandprojectscenarios. Expectedtobeongrasslandsthathistoricallyhave experiencedSOCloss.

Forprojectsthatproposetomodifygrazing,themaximum individualprojectsizeis3millionhaor5%ofacountry'sland areacurrentlyorpotentiallyusedtograzelivestock

Additionality criteria

MustusethelatestversionoftheVCStoolfordemonstration ofadditionality

Ineligibleor Prohibited Practices

Practice Eligibility

Eligible Management Activities

Projectmustresultinnonetincreaseinthedensityofortime spentbyanimalsinconfinedcorralsthatwouldcausedung topileupandcovermorethan50%oftheground Methods cannotbeusedwithprojectactivitiesthatinvolve mechanicalvegetationremovalorsoiltillage Methodscan alsonotbeusedinaprojectareathatreceivesanetimport ofinorganicororganically-derivedfertilizer

Theprojectactivitieseligibletoapplythismethodology includemanipulationofnumberandtypeofdomestic livestockgrazinganimalsand/orgrouping,timingand seasonofgrazinginwaysthatsequestersoilcarbonand/or reducemethaneemissions.Alteringfirefrequencyand/or intensity,inwaysthatincreasecarboninputstosoil,isalsoan includedactivity.

NewActivities Required

Yes.Newprojectactivitiesfocusedontheadjustmentoffire practicesandgrazingtoproduceasustainablegrassland.

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Protocol

Methodologyforavoidedecosystemconversion, v3.0VERRA(2014)

Geographic Scope International.Undercertainconditions,projectsmustbe locatedinatropicalecosystem.

LandUse Eligibility

Applicable Cropping Systemsand LandUse Forestsandgrasslands.

Minimum Enrollment SIze? Itisrecommendedplotsbeatleastonehectare

Additionality criteria

MustusethelatestversionoftheVCStoolfor demonstrationofadditionality

Ineligibleor Prohibited Practices

Practice

Eligibility

Eligible Management Activities

Projectaccountingareasmustnotcontainpeatsoil If livestockisbeinggrazedwithintheprojectareainthe projectscenario,theremustbenomanuremanagement takingplace Projectactivitiesmustnotresultinsignificant GHGemissions

NewActivities Required

Projectactivitiesmustapplytoaccountingforavoided emissionsfromplanneddeforestationanddegradation, unplanneddeforestationanddegradation,planned conversion,andunplannedconversion.

Yes Aprojectactivitymustbeimplementedthatprevents theconversionofforesttonon-forestandofnative grasslandandshrublandtoanon-nativestate

Permanence Eligibility

Landowner Permanence Commitment

Noperiodstated;however,apooledbufferaccountthat holdsnon-tradeablebuffercreditswillbeusedtocover thenon-permanencerisk

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Geographic Scope

LandUse Eligibility

ConterminousUSandtribalareas.

Applicable Cropping Systemsand LandUse Grasslands.

Minimum Enrollment SIze? Notstated.

Additionality criteria

Projectsmustsatisfythefollowingcriteriatobeconsidered additional:theperformancestandardtest,thelegal requirementtest;andlimitsonpaymentandcredit stacking ProjectsmustdemonstratesurplusGHG reductionsadditionaltowhatwouldhaveoccurredinthe absenceofanoffsetcarbonmarket

Practice Eligibility

Ineligibleor Prohibited Practices

Eligible Management Activities

Projectsmaynotemploysyntheticfertilizeradditions Livestockmanuremustnotbemanagedinliquidform Additionally,otherrecreationaloreconomicactivitiesmay occurwithintheprojectarea;however,theactivitycannot threatentheintegrityofthesoilcarbonstocks.Treecanopy maynotexceed10%ofthelandareaonaper-acrebasis.

PreventionofemissionsofGHGstotheatmosphere throughconservinggrasslandbelowgroundcarbonstocks andavoidingcropcultivationactivitiesonaneligible projectarea.

NewActivities Required

Permanence Eligibility

Landowner Permanence Commitment

Yes ProjectactivitymustbeimplementedtopreventGHG emissionsthroughconservinggrasslandbelowground carbonstocksandavoidingcropcultivationactivities

Maintainstoredcarbonforatleast100yearsfollowingthe issuanceofCRTs.Employaqualifiedconservation easementandprojectimplementationagreement.

GrasslandProjectProtocol,v2.1CLIMATEACTION RESERVE(2020)

APPENDIXII.ELIGIBILITYINLANDUSE,PRACTICEAND MANAGEMENTPERMANENCECONTINUED

Protocol

AgricultureMethodologyforincreasingsoilcarbon throughimprovedtillagepractices,v0.9GOLD STANDARD(2015)

Geographic Scope International.

LandUse Eligibility

Applicable Cropping Systemsand LandUse

Managedcroppingsystems(e.g.,singlecroporcrop rotation)havebeeninplaceforatleastfiveyearspriorto projectimplementation.Onlymineralsoiltypesareeligible. Minimum EnrollmentSIze? Notstated.

Additionality criteria

AllGoldStandardprojectsarerequiredtodemonstratethat theywouldnothavebeenimplementedwithoutthebenefits ofcarboncertification

Practice Eligibility

Ineligibleor Prohibited Practices

Eligible Management Activities

Theprojectareashallnotbeonwetlands.Proposedprojects onsiteswithorganicsoilsareineligible.Nobiomassburning forsitepreparationisallowedintheprojectscenario.Project activitiesshallnotincludechangesinsurfaceandshallow (<1m)soilwaterregimes,orothersignificantanthropogenic changesinthegroundwatertable.Noreductionincropyield canbeattributedtotheprojectactivity.Thismethodologyis notapplicabletonotillagetechniquesincludingstriptillage anddirectdrillpractices.

Conservationtillagemethodsareappliedincludingreduced tillagewhereresidue,islefttoprotectsoil.Atleast30percent ofthesoilsurfacemustremaincoveredbyresiduetoreduce soilerosionbywater.Activitiesintheprojectareamustresult insequestrationofcarboninsoil,whichresultinan increasedsoilorganiccarboncontent

NewActivities Required

Permanence Eligibility

Landowner Permanence Commitment

Yes Conservationtillagepracticesmustbeimplementedto avoidsoilandmoisturelossinturnreducingCO₂emissions

Nospecifictimestated.Underpermanenceprotocolstates “projectparticipantsshalldemonstrateothermotivationsto participateintheprojectthangeneratingCO₂-certificates.”

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTS

Protocol

SoilEnrichmentProtocol,v 1.0CLIMATEACTIONRESERVE (2020)

MethodologyforImproved AgriculturalLandManagement v1.0VERRA(2020)

Baseline (dynamic/ static)

Dynamic Thebaselineisbased on3-5yearsofhistoricBAU management.Baseline emissionswillberemodeled eachyearusingclimateand SOCdatafromtheproject cultivationcycle.

Field sampling required? Yes

On-site Sampling

Frequency of Sampling

Soilsamplingmustoccurat projectinitiationandevery5 years.

Required Sampling Protocol?

Aremodels involved?

Yes.Samplingdetailsprovided inSEPprotocol.

Dynamic Thebaselineisa minimumof3yearsandcoveringat leastonefullcroprotation Baselinesarerequiredtobe reassessedevery10years

Yes,SOCandbulkdensitymustbe measured

Measurementsmustoccurevery5 yearsorless.

Yes.Nospecificmodelrequired, 5-yearmeasurementsareused tovalidateandadjustmodeled estimates

No Theprotocolstatessoil samplingshouldfollowestablished bestpractices

Yes,nospecificmodelrequired,but mustbepubliclyavailable,shownto besuccessfulunderpeerreview, abletosupportrepetition,and validatedperdatasetsand proceduresdetailedinVMD0053

Thesamemodelandparameter setsmustbeusedinboththe baselinedataandproject scenarios

Project Reporting Monitoring/ Reporting?

Monitoringisongoingwith resultsreportedannually

Reportingperiodsareindividual cultivationcycles(maybe greaterorlessthanacalendar year),andaverificationmay includeasmanyas5reporting periods

Everyfiveyearsorpriortoeach verificationeventiflessthan5years

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

AdoptionofSustainableLand Management,v1.0VERRA (2011)

SoilCarbonQuantification Methodology,v1.0VERRA (2012)

Baseline (dynamic/ static)

Static.Itisassumedthatthe baselineremovalsdueto changesinSOCarezero

Static Itisassumedthatthe currentcarboncontentofthe soilswillstaythesame throughouttheprojectcrediting periodunderthebaseline scenario

On-site Sampling

Yes.Theprojectproponentshall usetheCDMEBapproved GeneralGuidelinesforSampling andSurveysforSmall-ScaleCDM Projectactivities.

Yes,VMD0021Estimationof StocksintheSoilCarbonPool, v10forsoilsampling

Aremodels involved?

Project Reporting Monitoring/R eporting?

Yes,theRoth-Cmodel Ifother modelsareused,revisionsare required.Additionally,theremust bestudiesthatdemonstratethat theuseoftheRoth-Cmodelis appropriatefortheIPCC climacticregionsof2006IPCC AFOLUGuidelinesorthe agroecologicalzoneinwhichthe projectissituated

AnActivityBaselineand MonitoringSurvey(ABMS)is conductedannually;SOC modelingundertakenevery5 years.

Yes,theDNDCmodelisrequired Requiressoilsamplingcoupled withmodeledestimatesforN₂O andCH₄.

Atleastonceeveryfiveyears

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Protocol

SoilOrganicCarbon FrameworkMethodology,v 1.0GOLDSTANDARD(2020)

NoriCroplandsMethodology, v1.3NORI(2021)

Baseline (dynamic/ static)

Static Baselineisscenariothat representsthecontinuationof historicallandmanagement practicesthatarebeingfollowed atleast5yearsbeforeproject startdate

Field sampling required?

Depends.No,unlessthe landownerchoosestofollow Approach1(requireson-site measurementsdocument baselineandprojectSOCstocks).

On-site Sampling

Dynamic GGITprovides10-year projectionsofSOCstockforboth historicbaselineandadoption scenariosforeachenrolledfield

No,reliesonGreenhouseGas InventoryTool(GGIT) Frequency

Yes,approvedMethodologies includeVCSVMD0021andthe ICRAFprotocol.

Aremodels involved?

UnderApproach2,nospecific modelisrequired Ifusing Approach2,model/calculations mustbesupportedby local/regionalvalidationdata. Validationofmodelviadirect measurementisrequired

Project Reporting Monitoring/ Reporting?

OutlinedwithineachSoilCarbon ActivityModule

ReliesonGGITplatform Datafor modelisrequiredeveryyearbut needstobeverifiedbyathirdpartyevery3years

MustupdatedataannuallyinNori app butprojectsneedverification atleastevery3years,withafinal projectauditafterthe10years

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Protocol

MethodologyforGHGandCoBenefitsinGrazingSystems,v 0.91REGENNETWORK(2021)

Baseline (dynamic/ static)

Static.Baselinecalculatedasthe totalSOCstocksfromtheinitial monitoringdate

Field sampling required?

Yes Fieldsamplingrequired

Static.Baselinesoilcarbon measurementstakenat beginningofproject

Yes Belowgroundcarbonand soilbulkdensitymustbe measured

On-site Sampling

Frequency of Sampling

Theminimumnumberofsoil samplingroundsfora10-year creditingperiodis5andmustbe conductedonthefirstandlast yearsoftheproject 2soilsample roundsshouldoccurconsecutively duringthefirstandlast2years

Required Sampling Protocol?

Yes,on-sitesamplingisusedto calibratetheremotesensing approach

Aremodels involved?

No Simpleregressorsormachine learningmodelsareutilizedto modelSOCstocksfromremote sensing

Soilsamplesatinitiationof projectandevery5years

Samplingdetailsprovidedin BCarbon'sProtocolfor Measurement,Monitoring,And QuantificationofTheAccrualof Below-GroundCarbonOver Time

Yes,nospecificmodelrequired Eachmodelusedwillbe reviewedandevaluatedbythe projectteam

Project Reporting Monitoring/ Reporting?

Aftereachmonitoringround,a reportwithsoilsamplingresults mustbesubmittedtotheregistry

Theprotocolprovidesforyearly reportingandinterimcredit issuancebasedonliteratureor modelingstudies Trueupsare requiredatleasteveryfiveyears basedonfieldverification.

BCarbonSoilCarbonCredit SystemsBCARBON(2021)

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Protocol

AfforestationandRestoration ofDegradedLands,v1.2 AMERICANCARBONREGISTRY (2017)

AvoidedConversionof

On-site Sampling

Baseline (dynamic/ static)

Static.Changesincarbonstockof above-groundandbelow-ground biomassofnon-treevegetation maybeconservativelyassumedto bezeroforallstratainthebaseline scenario.

Field sampling required?

Yes.Projectproponentsare requiredtotakeseveralfield measurementsintheplanned projectarea

Frequency of Sampling

Monitoringmustoccureveryfive yearssincetheyearoftheinitial verification Eachregeneration monitoringareamustbe reassessedatintervalsnotto exceed10years

Required Sampling Protocol?

Yes Eachparametermonitoredhas aspecificprocedurelistedtofollow

Static TheBaselinedetermination requiresademonstrationofthelandusescenarioofcroplandinthe absenceoftheprojectactivityanda descriptionoftheavoidedcropland managementpractices Thebaseline managementscenariomustbe updatedevery5years

Yes.Ifdirectmeasurementsapproach istaken,thenfieldsamplingis required

Minimumevery5years

Yes.DirectmeasurementofSOCmust betakenaccordingtorequirementsin ISO10381-2:2003SoilQualitysampling -Part2:Guidanceonsampling techniques.

Aremodels involved?

Yes,atreegrowthmodelmustbe used TheUS ForestService's nationalforestgrowthmodel (ForestVegetationSimulator[FVS]) canbeusedasatooltoestimate carbonstockchanges

Ifmodelingapproachistaken,yes The DAYCENTorothermodelsmaybe used Otherwise,directmeasurements aretaken

Project Reporting Monitoring/ Reporting?

Parametersaremonitoredevery5 yearsandtheregeneration monitoringareamustbeexamined closetotheprojectstartdateto determinebaselinevaluesandreassessedatintervalsnottoexceed 10years Projectmonitoringreport shouldbecompletedforeach reportingperiod.

Reevaluationofsoilcarbonand subsequentupdatesmustoccurat minimumonceeveryfiveyears. ProjectsmustsubmitaGHG monitoringreportforeachreporting period

GrasslandsandShrublandsto CropProduction,v2.0AMERICAN CARBONREGISTRY(2019)

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Protocol

Methodologyforsustainable grasslandmanagement,v1.1 VERRA(2021)

Methodologyfortheadoptionof sustainablegrasslandsthrough adjustmentoffireandgrazing,v 1.0VERRA(2015)

On-site Sampling

Baseline (dynamic/ static)

Static Themostplausiblebaseline scenarioiscalculatedfor5 consecutiveyearsbeforeproject startdate.Option1:Baselineis computedmaximumcarbon stocksthatoccurredwithinthe previous10years Option2: Proceduresoutlinedintheprotocol areusedtodeterminethevalueof baselinelessthan2yearspriorto theprojectstarttime

Field sampling required?

Depends Yes,ifOption2ischosen DirectmeasurementsofSOCcan betaken(Option2)oramodeling approach(Option1)maybeused.

Frequency of Sampling

Required Sampling Protocol?

Aremodels involved?

IfSOCismeasured,monitoring mustoccurevery5years,whileif SOCismodeleditmustbe modeledeveryyear

No,butsoilsamplingmustfollowa scientificallyestablishedmethod ornationallyapprovedstandard.

Yes,ifOption1ischosen A biogeochemicalmodelthathas beenacceptedinpeerreviewand validatedfortheprojectregion (e.g.,CENTURYsoilorganicmatter model)canestimatetheannual changeinSOCstocks

Static Projectproponentshall demonstratebaselineconditionsfor the10yearspriortotheprojectdate. Baselinecanbedeterminedfrom analysisofpastsatelliteimages The projectproponentmustgather documentationofhistoric managementplansandbaseline vegetationforbaseline

Yes Bothmodeledandmeasured approachesrequiresamplingofsoils andmeasurementofbulkdensity andSOC.

Ifmodeling,re-calibrationneedsto occurevery5-10years Ifmeasuring, measurementsmustoccurevery1to 2years

Yes,dataparametershaveaprotocol citedforhowtosampleeach parameter.

Yes,ifusingamodeledapproach,a peer-reviewedmodelforsoilcarbon dynamicsmustbeused.

Project Reporting Monitoring/ Reporting?

Ifoption2isselected,parameters mustbemonitoredevery5years If Option1isselectedannual changesinSOCstocksmustbe estimatedeachyearoftheproject undereachoftheidentified managementpracticesof stratums.Avalidationreportand monitoringreportarerequiredfor verification

Ifthemeasuredapproachistaken, emissionsaremeasuredevery1-2 years Ifthemodeledapproachis taken,emissionsareestimatedat regularintervalsaftertheinitial estimation(ie,every5-10years dependingontheproductivityofthe site).Avalidationreportand monitoringreportarerequiredfor verification

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Baseline (dynamic/ static)

Dynamic Landisforest,grassland, andshrublandtypesfor10years minimumpriortotheprojectstart date.Thebaselinescenariofor projectsisconversionto agricultureoranthropogenicuse

Field sampling required?

Yes Sampleplotsareusedto estimatecarbonstocksinselected poolsataparticularpointintime.

Dynamic Thebaselineemission equationsrelyonemissionfactorsthat modeltheemissionsofafullyear,intenyeargroups.So,baselineemissionfactors needtobereassessedeverytenyears

No Acompositemodelingapproachis used.

On-site Sampling

Frequency of Sampling

Monitoringmustoccurminimum everyfiveyears

Areportingperiodmaynotexceed12 monthsinlength,exceptfortheinitial reportingperiod,whichmaycoverupto 24months.Reportingperiodsmustbe contiguous;theremustbenogapsin reportingduringthecreditingperiodofa projectoncethefirstreportingperiodhas commenced.

Required Sampling Protocol?

Aremodels involved?

Yes Thedataparameterstobe measuredhaveameasurement methodcitedforeachparameter aswellashowofteneach parametermustbemeasured

Yes,thereisarequiredmodeling approachtoestimateemissions The modelisperformedusingthesamebuild oftheDAYCENTmodelthatisusedforthe estimationoftheinventoryofUS GreenhouseGasEmissionsandSinks

Yes changesinmeasuredcarbon stocksareusedwiththe cumulativeemissionsmodelto quantifynetGHGemissionsor removals

Yes,emissionfactorsaredevelopedwith thecompositemodelingapproach This approachgreatlysimplifiesthe quantificationandmonitoringof grasslandprojects,ascomparedtoan approachbasedonsite-specific samplingandmodeling

Project Reporting Monitoring/ Reporting?

Thelengthofeachmonitoring periodmustbelessthanorequal tofiveyears Avalidationreport andmonitoringreportarerequired forverification.

Areportingperiodmaynotexceed12 monthsinlength,exceptfortheinitial reportingperiod Tomeettheverification deadline,theprojectownermusthave therequiredverificationdocumentation submittedwithin12monthsoftheendof theverificationperiod Nomorethansix reportingperiods(max72months)can beverifiedatonceduringtheprojects creditingperiod

Protocol

Methodologyforavoided ecosystemconversion,v3.0 VERRA(2014)

GrasslandProjectProtocol,v2.1 CLIMATEACTIONRESERVE(2020)

APPENDIXIII.SAMPLING,MONITORING,ANDREPORTING REQUIREMENTSCONTINUED

Protocol

AgricultureMethodologyforincreasingsoilcarbon throughimprovedtillagepractices,v0.9GOLD STANDARD(2015)

Baseline

Fieldsampling required?

Static BaselineSOCstocksarecalculatedasthesumof stocksineachstratumarea BaselineSOCshallbe quantifiedusing1of3approaches.Approach1:SOCis measuredinanumberofsoilprofileswithineachstratum Approach2:SOCisquantifiedfromdatainpeer-reviewed literature Approach3quantifiesSOCusingmodeling

Yes.IfApproach2isused,measurementofsoilcarbonis required

On-siteSampling

Frequencyof Sampling

Theprojectownerisrequiredtosubmitamonitoringreport annually Additionally,atleasteveryfiveyears,theproject ownershallundergoaperformancereviewaccordingto theGoldStandardAgricultureRequirements'

Required Sampling Protocol?

Aremodels involved?

Yes Ifapproach2isusedacceptedprotocolsaretheICRAF protocolandtheVCSSOCModule

Yes,ifapproach3isused Ifapproach3isused,SOCis modeledusingtheapproachdocumentedinIPCC2006

ProjectReporting

Monitoring/ Reporting?

Theprojectownerisrequiredtosubmitamonitoringreport annuallycontainingatleasttheinformationlistedinthe GoldStandard'AgricultureRequirements'aswellas parameterslistedasannualrecording Everyfiveyears,the projectownershallundergoaperformancereview. accordingtotheGoldStandard'AgricultureRequirements'

APPENDIXIV.CARBONREMOVALANDEMISSIONSREDUCTION QUANTIFICATION

Soil Enrichment Protocol,v1.0

CLIMATE ACTION RESERVE (2020)

Methodologyfor ImprovedAgricultural LandManagementv 1.0VERRA(2020)

Adoptionof SustainableLand Management,v 1.0VERRA(2011)

Soilorganic carbononly

Soilorganiccarbon,tree biomass,andshrub biomass

Soilorganiccarbon andwoody perennialbiomass Doesprotocol

Yes.CO₂,N₂O, andCH₄are considered

Yes CO₂,N₂O,andCH4 areconsidered.However, ifapproach2(measure andremeasure)isused, onlyCO₂isquantified

Yes.CO₂,CH₄,and N₂Oareconsidered

Quantification ofnetGHG emissions

CO₂,N₂Oand CH₄are accountedfor viamodelingor emission factors

CO₂ismeasuredviasoil organiccarbon CH₄is measuredviasoil methanogenesis.N₂Ois measuredviauseof nitrogenfertilizers,and useofnitrogenfixing species.OnlyCO₂is measuredviasoil organiccarbon

Approach3:CO₂is measuredviafossilfuels. CH₄ismeasuredvia entericfermentation, manuredeposition,and biomassburning N₂Ois measuredviauseof nitrogenfertilizers,useof nitrogenfixingspecies, manuredeposition,and biomassburning.

Baselineandproject emissionsaredefinedin termsoffluxofCH₄,N₂O, andCO

CO₂ismeasured viaburningoffossil fuels CH₄is measuredvia burningofbiomass andburningof fossilfuels N₂Ois measuredviause offertilizers,useof N-fixingspecies, burningof biomass,and burningoffossil fuels

APPENDIXIV.CARBONREMOVALANDEMISSIONSREDUCTION

QUANTIFICATIONCONTINUED

Primarilysoilorganic carbon However, whensignificant changeisexpected, theabovegroundand belowgroundbiomass ofgrassandwoody speciesarealsoused toquantifycarbon

Bothcurrentemissions ofN₂OandCH₄are estimatedwithinthe projectareafollowing VMD0019Emissionsof Non-CO₂GHGsfrom soilsprotocol Future emissionsare projectedaswellusing VMD0019Methods.

Yes.N₂OandCH₄are considered However, morethan50%of

only

Accountedforby trackingincreased nitrogenfertilizerinput, increasedcombustion offossilfuelsand electricityuse,andother agrochemicalemissions (increaseduseof agrochemicals, especiallypesticidesor non-Nfertilizers)

TheNRTis denominatedin CO₂e.Onetonneof incrementalSOC stockgainis multipliedby44/12 (gCO₂/gC)toreflect theamountinCO₂e. thatisdeemedtobe removedfromthe atmospherewhen1 tonneofSOCstock gainisdetected

APPENDIXIV.CARBONREMOVALANDEMISSIONSREDUCTION QUANTIFICATIONCONTINUED

Methodologyfor GHGandCoBenefitsin GrazingSystems, v0.91REGEN NETWORK(2021)

BCarbonSoil CarbonCredit Systems

BCARBON(2021)

Afforestationand Restorationof DegradedLands,v 1.2AMERICAN CARBONREGISTRY (2017)

Liveaboveground andbelowground biomassoftree species,deadwood, woodproducts,and littercarbonpools.

Conversionto CO₂e?

GHGemissionsfrom livestockand fertilizerinputsmust berecordedeach yeartocalculate creditablecarbon change(according toIPCCguidelines)

Convertingsoil organiccarbon stockstoCO₂e stockscanbedone bymultiplyingthe SOCstocks(in metrictonnes)bya conversionfactorof 367

CH₄isincludedin accountingfrom burningofwoody biomass

APPENDIXIV.CARBONREMOVALANDEMISSIONSREDUCTION

QUANTIFICATIONCONTINUED

Protocol

Avoided

Conversionof Grasslandsand Shrublandsto CropProduction, v2.0AMERICAN CARBON REGISTRY(2019)

Methodologyfor sustainable grassland management,v1.1 VERRA(2021)

Methodologyfor theadoptionof sustainable grasslands through adjustmentof fireandgrazing, v1.0VERRA (2015)

Whatcarbon poolsare includedto calculate carbon removal

Soilorganiccarbon Aboveandbelow groundwoodyand non-woodyspecies biomass,excluding treebiomassis optionaltoinclude.

Yes,N₂OandCO₂ areconsidered CH₄ isoptionalto include

Soilorganiccarbon andaboveand belowgroundwoody biomass

Soilorganic carbonandwoody aboveground biomass

Yes N₂O,CH₄,and CO₂areconsidered

Yes CH₄is considered

N₂OandCO₂from soilmanagement areincluded,while CO₂fromfossilfuel combustionand CH₄fromlivestock emissionsis optional

N₂Oisaccountedfor viatheuseof fertilizers,burningof biomass,manure depositionon grasslandanduseof N-fixingspecies CH₄ isaccountedforvia theburningof biomass,manure

depositionon grassland,and animalrespiration/ entericfermentation

CO₂isaccountedfor viafarming machinery

CH₄isquantified vialivestock grazinganimal censuses,and CO₂eemissions frombiomass burningincluded

Whatcarbon

Methodologyfor avoided ecosystem conversion,v3.0 VERRA(2014)

GrasslandProject Protocol,v2.1

Agriculture Methodologyfor increasingsoil carbonthrough improvedtillage practices,v0.9 GOLDSTANDARD (2015)

Aboveand belowground biomassandsoil organiccarbon.

Doesprotocol includeGHG emissionsin netreductions Yes,CO₂,CH₄,and N₂Oareconsidered Yes N₂OandCH₄are considered

Quantification ofnetGHG emissions

CO₂isaccountedfor viafluxincarbon pools CH₄is accountedforvia livestock(arequired sourcewhen emissionsfrom grazingarenotde minimis) N₂Ois accountedforvia syntheticfertilizer.

N₂Oisaccountedfor viasoilnitrogen dynamicsand fertilization,burning, grazing,and irrigation CH₄is accountedforvia burningandgrazing

Conversionto CO₂e? Emissionsmeasured intCO₂e Emissionsmeasured intCO₂e Emissions measuredin tCO₂e

94

APPENDIXV.PAYMENTSTRATEGIES

Protocol

SoilEnrichment Protocol,v1.0 CLIMATEACTION RESERVE(2020)

10years,renewable2 timesupto30years

CreditingPeriod

Aprojectcould continueindefinitely, providednewfields wereaddedover time

Methodologyfor Improved AgriculturalLand Managementv1.0 VERRA(2020)

Foragricultureland management projects,crediting periodis7years, twicerenewablefor atotalof21years

Adoptionof Sustainable Agricultural Land Management,v 1.0VERRA(2011)

Foragriculture landmanagement projects,crediting periodis7years, twicerenewable foratotalof21 years

Payment Stacking Allowed?

Yes Stackingoffsets withotherpayments (suchasNRCS payments)maybe permissibleinsome circumstances

Payment Strategy

Dataretention/ sharing?

Projectdevelopers mustkeeprequired recordsfor10years afterinfois generatedor7years afteritisverified); Datawillnotbe publiclyavailable

Depends Ifbiocharis used,theremaynot beanyothercarbon incentiveawarded fortheproductionof biocharappliedon theprojectarea.

Alldatacollectedas apartofmonitoring process,including QA/QCdata,must bearchived electronically,and bekeptatleasttwo yearsaftertheend ofthelastproject creditingperiod

Notstated

Projectproponent shallensurethat alldocumentsand recordsarekept foratleasttwo yearsaftertheend oftheproject creditingperiod

Yes,projectsmay containmorethan onediscretearea ofland

APPENDIXV.PAYMENTSTRATEGIESCONTINUED

Protocol

SoilCarbon Quantification Methodology,v1.0 VERRA(2012)

SoilOrganic Carbon Framework Methodology,v1.0

GOLDSTANDARD (2020)

NoriCroplands Methodology,v 1.3NORI(2021)

Payment Strategy

CreditingPeriod

Minimumof20years, renewedatmost4 timeswithatotal projectcrediting periodnottoexceed 100years

DependingonSOC ActivityModule,5-20 years

Projectregistration termisaminimum oftenyearsand canberenewed. EachtimeNRTsare issuedafter verification,credit termisextended (generatinga rolling10-year creditingperiod)

No Agreement saystheycannot registerany carbonremoval claimsontheNori marketplacethat arealsolistedfor saleinanother market

Dataretention/ sharing?

Projectproponent shallensurethatall documentsand recordsarekeptfor atleasttwoyears aftertheendofthe projectcrediting period

Electronicarchiveof allmonitoringdata collectedinlast creditingperiodof upto2years.

Projectownermust retainrecordsfor 10years. Aggregation

Yes,projectsmay encompassfields orthewholefarm andmultiplefields andfarmscan aggregateintoa largerproject

APPENDIXV.PAYMENTSTRATEGIESCONTINUED

CreditingPeriod

10yearswithan optiontorenew; eachrenewal periodis10years andthereisnolimit onrenewals.

Annual creditingperiod withrenewalof 10-yearland userestriction.

Notstateddirectlyinthe protocol;however,ACR standardstatescrediting periodforprojectsis10 yearsunlessotherwise statedintheapproved methodology.

Depends ACRallowsfor offsetprojectregistration simultaneouslyonACR andothervoluntaryor complianceGHG programsorregistries onlyincaseswherethe simultaneousregistration isdisclosedandapproved byboth programs/registriesand offsetsissuedforthe sameuniqueemissions reductionsdonotreside concurrentlyonmorethan oneregistry

Dataretention/ sharing?

Rawdatawillbe keptfortheproject permanence periodplus5years.

Alldata collectedwill beavailablein someformor another(tobe determined)to thepublic

Aggregation Methods(Is aggregationof projectsinto largerunits allowed?

Yes,sitesmust havesimilarsoil typesandbe locatedwithinthe samepre-defined geographicregion followingUSGS nationallandcover database classifications.

Yes,butonlyif tractsare similarand testingis accomplished inamanner thatis representative ofalltracts.

Alldatacollectedaspart ofmonitoringmustbe archivedelectronically andbekeptatleasttwo yearsaftertheendofthe projectcreditingperiod

Yes.Aprojectproponent proposinganaggregate shallsubmitaGHGproject planencompassingall projectsites,fields, parcels,orfacilitieswitha singleprojectstartdate andcreditingperiod

APPENDIXV.PAYMENTSTRATEGIESCONTINUED

Protocol

AvoidedConversionof GrasslandsandShrublands toCropProduction,v2.0

AMERICANCARBON REGISTRY(2019)

Methodologyfor sustainablegrassland management,v1.1VERRA (2021)

CreditingPeriod

PaymentStacking Allowed?

CreditingPeriodmustbeat least5yearsbutnomorethan 40yearsandcannotbe renewed.

Minimumof20years, renewableatmost4times withatotalprojectcrediting periodnottoexceed100 years.

Payment Strategy

Dataretention/ sharing?

Aggregation Methods(Is aggregationof projectsintolarger unitsallowed?

Yes Paymentprograms administeredbygovernment entities(eg,Conservation ReserveProgram)arenot consideredlegalbarriersto participationinacarbonoffset program.Enhancement programsadministeredby governmententities(eg, EnvironmentalQuality IncentivesProgramor ConservationStewardship Program)donotpurporttopay forthepreservationof grasslands,andareconsidered compliantwiththis methodology'srequirements

TheVVBshallretainreports, measurementsandother projectrelateddocuments Wheresoilsamplesare collected,theseshallbe maintainedbytheproject developeruntilatleastthenext scheduledverificationevent (i.e.,5years).

Theprojectareaincludeseither onecontiguousparcel,or multipleparcelsofland.Inthe caseofaggregatedprojects, fieldsmusthavequalifiedas grassland/shrublandforatleast 10yearspriortothedateof enrollmentintotheaggregate

Alldatacollectedaspartof monitoringmustbe archivedelectronicallyand bekeptatleasttwoyears aftertheendoftheproject creditingperiod

Yes,aggregationof grasslandparcelswith multiplelandownersis permitted,withaggregated areastreatedasasingle projectarea.

APPENDIXV.PAYMENTSTRATEGIESCONTINUED

Protocol

Methodologyforthe adoptionofsustainable grasslandsthrough adjustmentoffireand grazing,v1.0VERRA (2015)

Methodologyforavoided ecosystemconversion,v 3.0VERRA(2014)

Payment Strategy

CreditingPeriod

Minimumof20years, renewableatmost4times withatotalprojectcrediting periodnottoexceed100 years Payment

Dataretention/ sharing?

Minimumof20years, renewableatmost4times withatotalprojectcrediting periodnottoexceed100 years

Projectproponentshall ensurethatalldocuments andrecordsarekeptforat leasttwoyearsaftertheend oftheprojectcrediting period

Projectproponentshall ensurethatalldocuments andrecordsarekeptforat leasttwoyearsaftertheend oftheprojectcrediting period

Aggregation Methods(Is aggregationof projectsinto largerunits allowed?

Notstated.

Yes.Eachprojectactivity instanceistreatedasa projectaccountingareaina singleprojectarea All projectactivitiesthatare groupedmustbeinthe sameregionandmusteach meetalltherequirementsof thismethod.

APPENDIXV.PAYMENTSTRATEGIESCONTINUED

Protocol

GrasslandProject Protocol,v2.1CLIMATE ACTIONRESERVE(2020)

AgricultureMethodology forincreasingsoilcarbon throughimprovedtillage practices,v0.9GOLD STANDARD(2015)

Payment Strategy

CreditingPeriod

Emissionsreductionsmay onlybereportedduringthe creditingperiod,uptoa maximumof50years Project lifetimeforanAGCprojectis upto150years.

Theprojectcreditingperiod shallbefixedto10yearsand cannotberenewed

Payment Stacking Allowed?

Dataretention/ sharing?

Yes Theopportunityforcredit andpaymentstackingmay beavailableforspecific creditsthatcandemonstrate additionalityorgovernment programsthatdonothave overlappingpurposes However,therulesofmost governmentfunded programswilllikelylimitthese opportunities.

Projectownersarerequired tokeepallinformation outlinedinthisprotocolfora periodof10yearsafterthe informationisgeneratedor7 yearsafterthelast verification.Theinformationis notpubliclyavailablebutcan berequestedbytheverifieror reserve

Aggregation Methods(Is aggregationof projectsinto largerunits allowed?

Multipleprojectsmaybe managedtogetherasa projectcooperative

Notstated.

APPENDIXVI.REVERSALSANDLEAKAGE

SoilEnrichment Protocol,v1.0 CLIMATEACTION RESERVE(2020)

Apercentageofcreditsgotobuffer poolstomitigaterisksofunavoidable reversals(eg drought,fire,flood)

Accountsforleakagerelatedto displacementoflivestockoutsidethe projectareaandsustaineddeclinein yieldsforcropsgrowintheproject area.

Methodologyfor

Improved AgriculturalLand Managementv1.0 VERRA(2020)

Anumberofbuffercreditsareapplied viatheVCSAFOLUNonPermanenceRisk Tool;Whenstocksshowlosses, "proceduresinthemostcurrentversion oftheVCSRegistrationandIssuance Processforlossorreversaleventsare followed"

Accountsforleakageofmanure applicationfromoutsidetheproject area,productivitydeclinesand displacementoflivestockoutsidethe projectboundary(#oflivestockin projectscenariomustnotbelower thannumberoflivestockinhistoric period)

Adoptionof SustainableLand Management,v1.0 VERRA(2011)

Anumberofbuffercreditsareapplied viatheVCSAFOLUNonPermanenceRisk Tool;Whenstocksshowlosses, "proceduresinthemostcurrentversion oftheVCSRegistrationandIssuance Processforlossorreversaleventsare followed."

Leakage:useoffuelwood/fossilfuels fromnon-renewablesourcesdueto decreaseinuseofmanureand/or residuals.Leakageisdetermined throughtheABMSundertaken annuallyduringtheprojectperiod If ABMSsurveydatashowsthat>10%of projecthouseholdsusenonrenewablebiomassfromoutsidethe project,thenleakageisconsidered significantandshallbecalculated

SoilCarbon Quantification Methodology,v1.0

VERRA(2012)

Anumberofbuffercreditsareapplied viatheVCSAFOLUNonPermanenceRisk Tool;Whenstocksshowlosses, "proceduresinthemostcurrentversion oftheVCSRegistrationandIssuance Processforlossorreversaleventsare followed."

Projectionofleakagedueto displacementofgrazing,fodderand agriculturalproduction.Iflivestock grazingdecreasesunderaproject, projectproponentsmustestimate emissionsfromdisplacedlivestock Marketleakageisalsoaccountedfor ifproductiondeclinesandleadsto outsidedemandelsewhere

APPENDIXVI.REVERSALSANDLEAKAGECONTINUED

Afixedpercentageofvalidatedand verifiedcreditsmustbetransferredto GoldStandardComplianceBufferif SOCactivityresultsinsequestration (asopposedtoemissionreduction)

SpecificActivityModuleswill addressleakagebutgenerally relateto:shiftingcropproductionto otherlandstocompensateforyield reductions,emissionsfrom increasedCrunoff.

ModelinputstoGGITincludeclimate dataandsodynamicbaselineand projectprojectionscanaccountfor any"bad"years.Inthecurrentpilot stage,Noriispayingfarmerswithcash upfrontandanequivalentamountof restrictedtokens(acryptocurrency thatisrestrictedfor10years) Ifa supplierintentionallyreleasescarbon ormakesafraudulentcarbonclaim, NoriquantifiesthisvalueintoNRTsand recovertheequivalentvalueoftheNRT fromtherestrictedNORItokens.

If/whentheprojectisdefinedasa subsetoftheentirefarmoperation, theNRTclaimverificationprocess willestablishwhetherornotthe incrementalSOCstockgains realizedwithintheproject boundariesdirectlyresultinSOC stocklossesoutsidetheboundaries elsewhereonthefarm(s)forwhich theselectedfieldsareasubset Protocolsstates,"Researchand experiencetodatesuggestthat whenweaccountforallsourcesof on-farmGHGs,itismostunlikely thattheadoptionofthepractices listedabovewillcausenonet increaseintotalfarmGHGs"

Witheachissuanceofcredit,adefault contributionof20%toeachcredit issuancewillgototheBufferPoolto accountforriskofreversal.This contributioncanbeissuedbackto ProjectProponentattheendofthe finalmonitoringandverification, providedcarbonstocklevelsareabove thoseofthepreviousverificationround

EachCreditClasswilldefine appropriateprocedurestoaddress leakage;ifanactivityshows significantleakageovertime, RegenRegistrywillremovethose activitiesfromapprovedpractices

SoilOrganicCarbon Framework Methodology,v1.0 GOLDSTANDARD (2020)

NoriCroplands Methodology,v1.3 NORI(2021)

APPENDIXVI.REVERSALSANDLEAKAGECONTINUED

BCarbonSoilCarbon CreditSystems BCARBON(2021)

10%ofcreditsgotothebufferpoolforland conversionorsubsurfacesoildisturbance

Leakageisproposedtobe addressedbyalifecycle assessmentprinciplethatisunder development,meaningthatany increaseinthelifecycleemissions mustbededucted;nodeduction forexistingemissions Decreased emissionsarenotcreditedeither.

Afforestationand Restorationof DegradedLands,v 1.2AMERICAN CARBONREGISTRY (2017)

AvoidedConversion ofGrasslandsand ShrublandstoCrop Production,v2.0

AMERICANCARBON REGISTRY(2019)

Tomitigateriskofreversal,projectproponents contributeanadequatenumberofERTstoa bufferpooltoaccountforreversal Thebuffer contributionisapercentageoftheproject's reportedoffsets.Iftheprojectproponentelects tomakethebuffercontributioninnon-project ERTsorusinganalternativeriskmitigation mechanismapprovedbyACR,thepercentage ofprojectERTsgoingtothebufferpoolwillbe settozero

Sequestrationprojectswillbeterminatedifa reversalcausesaproject’sstockstodecrease belowbaselinelevelspriortotheendofthe minimumprojectterm Toassesstheriskof reversalandtermination,theproject proponentsshallconductariskassessment addressinginternal,external,andnaturalrisks usingthemostrecentlyapprovedACRRisk AssessmentTool

Underthismethodology,GHG emissionsduetoagricultural activitydisplacementmayoccur andtherefore,leakageis estimated

Methodologyfor sustainable grassland management,v1.1 VERRA(2021)

AFOLUbuffercreditsmustbedepositedintothe AFOLUpooledbufferaccountwhentheproject requestsissuanceofVCUs Buffercreditsmust bedeductedfromtotalemissionreductionsto determinethenumberofemissionreductions eligibletobeissuedasVCUs.AFOLUbuffer creditsthatmustbedepositedintotheAFOLU pooledbufferaccountmustbecalculatedby multiplyingnon-permanenceriskratingbythe changeincarbonstocksinagivenmonitoring period

Marketleakageistheprimary sourceofpotentialleakage.A conservativedefaultvalueof20% marketleakagemaybeusedfor avoidedconversionofgrasslands orshrublandstocommoditycrops intheUnitedStates

Theonlypotentialsourcesof leakageinclude:(1)Market leakageduetoreductioninthe productionoflivestockproducts withintheprojectboundary;(2) Displacementofgrazingbeyond projectboundary.Leakagemust bequantifiedusingVCSModule VMD0033EstimationEmissions fromMarketLeakage,andVCS moduleVMD0040Leakagefrom DisplacementofGrazingActivities, respectively

APPENDIXVI.REVERSALSANDLEAKAGECONTINUED

Methodologyforthe adoptionof sustainable grasslandsthrough adjustmentoffire andgrazing,v1.0

VERRA(2015)

Methodologyfor avoidedecosystem conversion,v3.0

VERRA(2014)

GrasslandProject Protocol,v2.1 CLIMATEACTION RESERVE(2020)

Whereareductioninfirefrequency occurs,woodyplantcarbonstockswill increaseasaconsequenceand reversalsofpastandongoinglossesof woodyplantbiomassmaybe conservativelyexcluded Thismeans baselineemissionremovalsfrom existingwoodyperennialswouldequal zero.

Leakagewouldprimarilyoccurfrom displacementoflivestocktoother grazingland Iflivestockmovemore than2kilometersfromtheproject boundaryitisconsideredleakage. Marketleakageisgenerallyminimalin ALMprojects Ifareductioninlivestock occurs,itmustbeestimatedas marketleakage.Ifleakagedoes occur,itmustbequantified

Intheeventthatthequantified emissionsreductionsforany monitoringperiodarenegativeasa resultofcarbonstocklosses,theproject proponentmustfollowproceduresfor lossevents Differencesmustbe addressedthroughthepooledbuffer account.

Leakagefrombothactivityshifting andmarketleakageareconsidered Emissionsfromactivityshifting leakagearecalculatedusingthe leakageemissionsmodelandactivity shiftingleakagearea,whilemarket leakageisestimatedusingamarket leakageareaanddefaultvalues.

Theprotocoldistinguishesbetween avoidableandunavoidablereversals Foravoidablereversals,theproject ownermusttransfertotheReservea quantityofCRTsfromitsreserve accountequaltothesizeofthe reversal.Forunavoidablereversals,the ReserveshallretireaquantityofCRTs fromthereservegrasslandbufferpool equaltothesizeofthereversalin metrictonnesofCO₂

Avoidedgrasslandconversion projectswouldresultinleakageifthe projectactivitiesresultinthe conversionofothergrasslandoutside oftheprojectarea Thereservehas takenaconservativeapproachand assumesa20%leakageeffectfrom grasslandprojects.Thus,leakage emissionsduringthereportingperiod arecalculatedbymultiplyingbaseline emissionsduringthereportingperiod bytheleakagediscountfactor(0.2).

APPENDIXVI.REVERSALSANDLEAKAGECONTINUED

CarbonOffsetRisks Reversals Leakage

Agriculture

Methodologyfor increasingsoil carbonthrough improvedtillage practices,v0.9GOLD STANDARD(2015)

Anyareasleavingtheprojectduring theprojectdurationareconservatively consideredfullreversals(ie lossofall carbonsequestered) Theproject ownerisresponsibletomaintainor compensatecarbonlosstothelevelof CO₂-certificatesalreadyissued Additionally,afixedpercentageofthe CO₂-certificatesshallbetransferredin thecompliancebuffer

Leakagemayoccurinrelationtoshift ofcropproductiontootherlandsto compensateforyieldreductionsorto emissionsfromincreasedCrunoff. Whiletheprojectsiteisactively maintainedforcommodityproduction duringtheproject-creditingperiod, yield-relatedleakagerisksare relativelysmall.Carbonlossesresulting fromareductionincropyieldand activityshifttoanon-projectlandare calculatedinaspecificcalculation period.Toavoidundueaccountingfor leakageaftertemporaryyield increases,reductionincropyieldis alwayscalculatedagainstthelowest yieldintheprojectareasinceproject start

APPENDIXVII.VERIFICATIONMETHODS

Protocol

SoilEnrichmentProtocol,v1.0 CLIMATEACTIONRESERVE(2020)

MethodologyforImproved AgriculturalLandManagementv1.0 VERRA(2020)

AdoptionofSustainableLand Management,v1.0VERRA(2011)

SoilCarbonQuantification Methodology,v1.0VERRA(2012)

SoilOrganicCarbonFramework Methodology,v1.0GOLDSTANDARD (2020)

CarbonCreditValidation

Verification/CertificationMethod

ISO-accreditedverificationbodiestrainedbytheReserve forthisprojecttypeareeligibletoverifyprojects

Allvalidation/verificationiscarriedoutby3rdpartyauditors (akavalidation/verificationbodies;VVBs)

Allvalidation/verificationiscarriedoutby3rdpartyauditors (akavalidation/verificationbodies;VVBs)

Allvalidation/verificationiscarriedoutby3rdpartyauditors (akavalidation/verificationbodies;VVBs).

Third-partyverificationbyapprovedVVB

NoriCroplandsMethodology,v1.3 NORI(2021)

ISOaccredited(eg approvedverifiersingoodstandingin anyofthethreeexistingmajoroffsetcreditregistries operatingintheUnitedStates,ClimateActionReserve, AmericanCarbonRegistry,andVerra)areautomatically eligibletoprovideverificationservicestoSuppliersinthe Norimarketplace,uponprovidingproofofaccreditation

MethodologyforGHGandCoBenefitsinGrazingSystems,v0.91 REGENNETWORK(2021)

Third-partyverificationaccreditedunderISO14065and/or approvedbyestablishedregistries(VCS,GoldStandard, CAR,CDM,CarbonFarmingInitiative)

APPENDIXVII.VERIFICATIONMETHODSCONTINUED

AMERICANCARBONREGISTRY

Notstateddirectlyhowtheverificationprocessworkswiththe protocol;however,itisstatedtobeeligibleforverification, certification,andcreditissuancebyBCarbon,afinalproject reportshallbeproduced Additionally,amoralmetesandbounds surveybyalicensedsurveyordoesnotneedtobecompleted,but anaccuratedescriptionandaccompanyingmapmustclearly outlinetheprojectboundarywithsufficientdetailsuchthatthe verificationandcertificationentitycanvalidatetheboundaries

AllVVBsmustbeaccreditedinsectorofmethodologyand approvedbyACRandaccreditedunderISO14065bythe AmericanNationalStandardsInstitute;oraccreditedbythe UNFCCCasAccreditedIndependentEntitiesapprovedunderJoint ImplementationorDesignatedOperationalEntitiesapproved undertheCleanDevelopmentMechanism ValidationoftheGHG projectplanonlyoccursoncepercreditingperiod;however, renewalofthecreditingperiodrequiresanewvalidation Once everyfiveyears,proponentsmustsubmitaverificationstatement basedonafullverificationincludingafiledsitevisit,andan updatedassessmentofriskofreversalandupdatedbuffer determination

Eachprojectshouldbeverifiedthroughtheendoftheircrediting period Theavoidedconversionprojecttypeareuniquesuchthat certainvalidationandverificationproceduresareallowedthat supersedetheACRVerificationandValidationStandard.Sitevisitsarenotrequired,however,theverifiermustbeabletoreach areasonablelevelofassuranceviareviewofdocumentsand supplementalmaterial

Thegrasslandmanagementplanandrecordoftheplan implementedduringthecreditingperiodmustbeavailablefor validationandverification VVBsapprovedbyVerraareassigned toassesseachprojectagainsttheVCSprogramrulesand requirementsthatmustbecarriedoutaccordingtothe methodology VVBschosenareverified,independent3rdparties approvedbyVerra

BCarbonSoilCarbonCredit SystemsBCARBON(2021)

AfforestationandRestorationof DegradedLands,v1.2AMERICAN CARBONREGISTRY(2017)

AvoidedConversionof GrasslandsandShrublandsto CropProduction,v2.0

(2019)

Methodologyforsustainable grasslandmanagement,v1.1 VERRA(2021)

APPENDIXVII.VERIFICATIONMETHODSCONTINUED

Becauseactivitiesmaybedemonstratedannually,emission reductionsmaybeverifiedannuallyifdesired UndertheVCS program,VVBsapprovedbyVerraareassignedtoassesseach projectagainsttheVCSprogramrulesandrequirementsthat mustbecarriedoutaccordingtothemethodology.VVBschosen areverified,independent3rdpartiesapprovedbyVerra

Completed,VCS-approvedtemplatesmustbeprovidedtothe VVB Validationandverificationisarisk-basedprocessandshall becarriedoutinconformancewithISO14064-3:2006andISO 14065:2013.VVBsareexpectedtofollowtheguidanceprovidedin theVCSValidationandVerificationManualwhenvalidatingor verifyingprojectsandconductingmethodologyassessments undertheVCSProgram

VVBswillreviewforcompletenessthesources,sinks,and reservoirsidentifiedforaproject,andreviewtheappropriateness ofthemethodologiesandmanagementsystemsthatthe grasslandprojectownerusestogatherdataandcalculate baselineandprojectemissions VVBswillalsoinvestigateareas thathavethegreatestpotentialformaterialmisstatements Site visitsduringverificationarestronglyrecommendedbutarenot mandatory.

Auditorshallassesstheadequacyofthesamplingandshallrevisit aseriesofsoilpitstoverifytheprojectowner'sassessment

CarbonCreditValidation Verification/CertificationMethod

Methodologyfortheadoptionof sustainablegrasslandsthrough adjustmentoffireandgrazing,v 1.0VERRA(2015)

Methodologyforavoided ecosystemconversion,v3.0 VERRA(2014)

GrasslandProjectProtocol,v2.1 CLIMATEACTIONRESERVE(2020)

AgricultureMethodologyfor increasingsoilcarbonthrough improvedtillagepractices,v0.9 GOLDSTANDARD(2015)

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