Chicago Climate Exchange (CCX) Rangeland Carbon Sequestration Program

(Notes from Jim Thorpe, Preliminary Eastern New Mexico Producers Orientation Meeting)

New Mexico ranchers in 14 inch or above rainfall areas may be able to realize an estimated $0.80/acre per year for participation in four-year “carbon offset projects.” But, as is often said, “The Devil is in the details.” The following is a summary from the notes of the CCX ranch site visit at the Thorpe Ranch located in eastern Guadalupe County on March 22, 2007. This initial meeting was to “test the waters” in terms of potential interest from New Mexico ranchers, as well as to provide CCX with queries from potential participants. The CCX is “the world’s first and North America’s only active voluntary, legally binding integrated trading system to reduce emissions of all six greenhouse gases (GHGs), with Offset Projects worldwide. CCX employs independent verification and has been trading GHG emission reduction since 2003. CCX Members that cannot reduce their own emissions can purchase credits from those who make extra emission cuts or from verified Offset Projects.”While carbon storage per acre of rangeland is relatively low (when compared to, say, rainforest), the vast acreages encompassing America’s rangelands add up to significant carbon storage potential. In eastern New Mexico, it is estimated that 400 acres are required to store one metric ton of carbon per year; thus 40,000 acres of New Mexico rangeland would be required to make one 100 ton contract. These 40,000 acres need not necessarily be contiguous or attached; they may actually, in some cases, be in different counties or states (as a geographic hedge against localized droughts). The current trading prices for rangeland CFIs have been around $1.00/acre; after fees, commissions and costs, the net return to the land owner will be approx. $0.80/acre.

 To put together, or “aggregate,” individual properties into a 100 metric ton contract unit, specialized brokers, or “Offset Aggregators,” will be required. It has been suggested that aggregators will receive 20% of the contract in overhead and commissions. As a performance guarantee, 20% of contract credits/payments will be held in reserve by CCX until the completion of the contract. CCX-authorized verifiers may conduct in-field inspections to ensure rangeland management practices agree with CCX protocols.

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