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North Bay Business Journal

Monday, November 5, 2012, 6:30 am

Carbon trade program goes before planners in Napa

Developers concerned about higher costs of local mitigation

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    NAPA COUNTY — As planners in Napa County continue development of a strategy to address state-mandated reductions to greenhouse gas emissions, industry groups have expressed concern that a proposed local market for carbon credits will increase costs for developers and suppress new vineyard and agricultural projects in the region.

    Napa County graph of projected greenhouse gas emissions in 2020

    Napa County seeks to reduce its overall carbon emissions to 15 percent below 2005 levels by 2020 (Image credit: County of Napa)

    That proposed market, where developers purchase credits that offset emissions from construction by funding local tree planting and other carbon mitigation efforts, is a cornerstone of Napa’s Climate Action Plan and will be the subject of a report to the Napa County Planning Commission on Nov. 7. Unlike other carbon trading markets, which allow the purchase of credits from a broader geography, the Napa proposal seeks to create a co-benefit for residents by requiring that land preservation and other efforts occur in Napa County.

    Those credits could cost an average of $275, the price to locally mitigate an equivalent metric ton of carbon dioxide, according to a memo by county staff to the planning commission.

    Proponents say that developing a county-wide carbon credit “bank” to fund local mitigation carries several benefits. Carbon-offset assets, like new tree plantings and renewable energy projects, will enhance the local environment for residents and visitors, they say. Greater oversight will also be possible and could provide tangible examples of mitigation efforts.

    Yet groups like the Napa County Farm Bureau and the Napa Valley Vintners, who have lent their voice to the planning process since it began two years ago, have expressed concern that the increased cost of local mitigation will restrict new vineyards and other development. The groups also question the evolving science of measuring carbon stored in plant matter, including the  impact and benefit of vineyards.

    “It’s our understanding that carbon credits cost $20 per metric ton on the open market,” said Sandy Elles, executive director of the Napa County Farm Bureau. “While there may be some very real benefits to keeping mitigation local, global warming is a global issue.”

    Expected to go before the Napa County Board of Supervisors for final consideration in December, the plan will require new developments in the county’s unincorporated areas to purchase carbon credits for emissions exceeding a certain threshold — 38 percent less than levels expected by 2020 if no action were taken. In addition to purchasing credits, developers can set aside habitat, use energy-efficient construction and employ other on-site approaches to lower the measured impact.

    The program was spurred in part by California’s Assembly Bill 32, a 2006 measure requiring an overall reduction of statewide emissions by 2020 to below levels seen in 2005. Local jurisdictions are allowed to determine their own approach to the standard while receiving direction from regional policymakers, in this case the Bay Area Air Quality Management District.

    The Climate Action Plan is not the only effort under way to reduce carbon emissions in Napa County. State measures include California’s implementation of a low-carbon fuel standard, which helps to reach the target set with A.B. 32, and the county is looking at ways to help property owners finance energy improvements.

    However, coupled with the inclusion of greenhouse gas emissions as part of the environmental review process, A.B. 32 has made new development a focus of addressing those impacts, said Hillary Gitelman, county planning director.

    The Climate Action Plan provides a method for developers to estimate the carbon emissions from various projects. With input from agricultural groups, the county revised the calculation methods that were first proposed in early 2011, and the Napa County Board of Supervisors asked staff to begin analyzing projects through the new standards as part of a nonbinding trial that began in early 2012. The board also granted additional time to develop the local carbon trade program in September.

    Some projects will have an easier time meeting the new standards, particularly new buildings with environmentally conscious construction, Ms. Gitelman said. Other projects, like those with a high volume of vehicle trips but little construction, will have a greater impact and could require mediation credits.

    Noting that new vineyards and other agricultural projects could be among those considered to have a higher impact according to the new standards, industry groups have asked planners to closely consider the available science of carbon sequestration in plant matter. The groups have asked that new planting, or the preservation of unused land, play a bigger role in calculating net emissions.

    Those measures have made it easier for vineyards to meet the new standards during the trial, Ms. Gitelman said.

    “We’ve found almost without exception that, even when someone walks in the door planning to use an entire parcel, there’s always land that could be vineyard but ends up being preserved in its natural state,” she said.

    Many vineyards and wineries have already taken steps toward sustainable practices as part of the voluntary “Napa Green Certified” program. Dozens have enrolled in the program, which involves third-party verification of sustainable practices and awards designations for those who satisfy what the Napa Valley Vintners say is the most rigorous standard in the industry.

    The Vintners and others have asked that those efforts be recognized in the calculations, and county staff has responded with interest towards crediting efforts made since 2005. Noting a high level of industry participation in local environmental efforts, Rex Stults, industry relations director for the vintners group, said that a voluntary local mitigation program could stand to generate interest for those who were willing to pay a premium.

    “It’s laudable to have an offset market that will pay dividends to our local community. But the initial cost figures of what that would be like, compared to statewide, are significantly higher,” he said.

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