AgraGate Climate Credits - Carbon Credits



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About Greenhouse Gases, Carbon Aggregation and Offset Credits

The Chicago Climate Exchange (CCX) is a voluntary, pilot greenhouse gas (GHG) emissions trading program targeting emissions and offsets in North America (US, Canada and Mexico) as well as limited offset projects in Brazil. The work is being carried out under the direction of Environmental Financial Products, LLC. For more information visitwww.chicagoclimateexchange.com. AgraGate is working to aggregate carbon credits from farmers for sale on the Chicago Climate Exchange.

The CCX, like the concept of trading carbon credits, is relatively new. Continuous electronic trading of GHG emission allowances and offsets began on December 12, 2003. CCX reduction commitments and trading apply for years 2003 through 2010.

Carbon sequestration in soil and biomass will be recognized on the CCX through credits generated by projects that are registered and verified on the Exchange. Additional on-farm GHG emission reduction activities, such as methane capture and reduced nitrogen application, are also eligible for carbon credits.

Greenhouse Effect

The “greenhouse effect” refers to the temperature regulation effect that certain atmospheric gases have on the earth. The temperature-regulating gases, called greenhouse gases, or GHGs, form a blanket around the earth that traps some heat from the sun within the earth’s atmosphere, keeping the planet warm and habitable.

“Global warming,” or climate change, can occur when the blanket of GHGs gets thicker. The six types of GHGs covered under global warming policies and in trading programs are: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); sulfur hexafluoride (SF6); perfluorocarbons (PFCs); and hydrofluorocarbons (HFCs). AgraGate is involved only with carbon dioxide and methane.

Carbon sequestration, credits & storage

Carbon sequestration can be defined as the capture and secure storage of carbon that would otherwise be emitted to or remain in the atmosphere.

Carbon credits encompass two ideas: 1) Prevention/reduction of carbon emissions produced by human activities from reaching the atmosphere by capturing and diverting them to secure storage, and 2) Removal of carbon from the atmosphere by various means and securely storing it.

Carbon is continuously cycled between land, vegetation, sea, and the atmosphere in inorganic and organic form. Most of the carbon stored in organic matter is nonliving, occurring either in soil humus or dissolved organic carbon (DOC) in seawater. The atmosphere, in addition to comprising a major carbon reservoir, plays a critical role as a medium for rapid global exchange of CO2 and other bioactive elements.

Sequestering or “holding” carbon in the soil and plant material such as trees helps reduce carbon dioxide in the atmosphere. Increased levels of carbon dioxide (CO2) can be stored in the soil through no-till planting, restoring wetlands, converting cropland to permanent grass or trees, planting conservation buffers and using cover crops.

Agriculture’s Opportunity

Research shows that a no-till or strip-till planted crop stores an average of up to 0.6 tons per acre more carbon dioxide (in Region A) annually. Establishing a new grass stand on previous cropped land sequesters an average of an additional one ton of carbon dioxide per acre. Credit for rangeland improvement will depend on the location and the degree of improvement to the land.

The carbon stored in the soil creates an offset, or credit, that can be sold on the CCX. Not only is no-till good for the soil and the environment, it can also help facilitate the adoption of carbon emission reductions by companies.