Environmental Review Toolkit
Accelerating Project Delivery

Eco-Logical Webinar
Step 6 of the IEF: Developing a Crediting Strategy

Tuesday, August 27, 2013
2:00 - 3:00 PM Eastern

Presenter: Jimmy Kagan, Institute for Natural Resources
Presenter: Bobby Cochran, Willamette Partnership
Moderator: Mike Ruth, FHWA Office of Planning

PDF Version [2.95 MB]

One-Page Webinar Summary: HTML and PDF [736kB]


Table of Contents

Step 6: Developing a Crediting Strategy

Institute for Natural Resources, Ecosystem Services and Transportation

Willamette Partnership, Building & Adapting a Crediting Strategy


Step 6: Developing a Crediting Strategy

Slide 1: Eco-Logical Webinar Series — Developing a Crediting Strategy: Step 6 of the Integrated Ecological Framework

Presenters
Jimmy Kagan, Institute for Natural Resources (Oregon State University/Portland State University)
Bobby Cochran, The Willamette Partnership

Introduction
Mike Ruth, FHWA Office of Planning

Image: A collage of colored photographs of a bridge, a deer, a fish, and a curved rural road from the cover of the report Eco-Logical: An Ecosystem Approach to Developing Infrastructure Projects

Images: logos of Volpe: The National Transportation Systems Center and the Federal Highway Administration, U.S. Department of Transportation

Slide 2: Integrated Eco-Logical Framework (IEF)

  • Process to guide transportation and resource specialists in the integration of transportation and ecological decisionmaking.
  • Helps identify potential impacts to environmental resources very early in the planning process.

Slide 3: Steps of the IEF (and the Eco-Logical approach)

  1. Build and strengthen collaborative partnerships
  2. Integrate natural environment plans
  3. Create a Regional Ecosystem Framework (REF)
  4. Assess effects on conservation objectives
  5. Establish and prioritize ecological actions
  6. Develop crediting strategy
  7. Develop programmatic consultation, biological opinion, or permit
  8. Implement agreements, adaptive management, and deliver projects
  9. Update REF

Slide 4: Step 6: Develop a Crediting Strategy Questions to be addressed

  • How does ecosystem crediting fit into the nine-step Integrated Ecological Framework (IEF) process? Why do it?
  • What ecological categories (e.g. wetlands, water quality, endangered species) have more established crediting methodologies? Where is further research needed?
  • What are some examples of how transportation agencies have partnered with resource, regulatory, or transportation partners to implement a crediting strategy that spans multiple jurisdictions?
  • What tools, protocols, and data are available to help agencies begin to develop a crediting strategy? How can transportation agencies best access these tools?
  • How can agencies adapt existing crediting protocols to new ecological services or geographic areas?

Slide 5: Eco-Logical Webinar Series — Developing a Crediting Strategy: Step 6 of the Integrated Ecological Framework

Contact information
Mike Ruth, FHWA Office of Planning (Mike.Ruth@dot.gov)
Jimmy Kagan, Institute for Natural Resources (jimmy.kagan@oregonstate.edu)
Bobby Cochran, The Willamette Partnership (cochran@willamettepartnership.org)
Logan Nash, Volpe Center/USDOT (Logan.Nash@dot.gov)

Image: A collage of colored photographs of a bridge, a deer, a fish, and a curved rural road from the cover of the report Eco-Logical: An Ecosystem Approach to Developing Infrastructure Projects

Images: logos of Volpe: The National Transportation Systems Center and the Federal Highway Administration, U.S. Department of Transportation

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Institute for Natural Resources, Ecosystem Services and Transportation

Slide 6: Step 6: Developing a Crediting Strategy; Ecosystem Services and Transportation

Jimmy Kagan
Institute for Natural Resources
Oregon State University & Portland State University

Images: Logos of Portland State University, the Institute for Natural Resources, and Oregon State University

Slide 7: Ecosystem Services and Crediting Background

The ability to measure and value environmental benefits (clean water, air, food, fiber, climate regulation) may help assure these services are maintained over time.

Considering ecosystem service values ----- costs and benefits ----- is an efficient way to consider both impacts and improvements to the environment.

As such, it can represent a new way for transportation agencies and regulatory agencies to address unavoidable losses and associated mitigation.

Image: Diagrammatic map highlighting how four different natural settings can provide different ecosystem services: the forest reservoir - water purification, flood storage, carbon storage, and fiber production; the farm - food production, nutrient management, groundwater recharge, and pollination; the urban river - water supply, fish and wildlife support, visual and cultural value, and education; and the rural river - flood regulation, water purification, fish and wildlife support, and recreation.

Slide 8: Step 6: Develop Crediting Strategy

  • Purpose:
    • Integrate mitigation sequence at site level: avoidance, minimization, compensation.
    • Development of a crediting system to accelerate implementation and improve the results of mitigation.
    • Support implementation tools like conservation/mitigation banks, programmatic permitting, and advanced mitigation.
  • Outcomes:
    • Agreement on rules for field measurement of ecological functions.
    • Agreement on approved mitigation/conservation banking and expanded pre-approved multi-resource banks.
    • Outcome-based performance standards using credit system.

Image: Photograph of a wooden bridge over a stream in a lush field in a wooded area

Slide 9: Regulatory Constraints and Institutional Barriers

  • Regulatory Constraints
    • Traditional regulatory barriers
    • Suspicion of functional assessments or trading ratios
  • Local Governments and Defining Service Areas
    • Optimal service areas may move mitigation outside of a jurisdiction that is losing resources.
    • This may be exacerbated by statewide, large watershed or regional crediting strategies that identify mitigation banks and restoration priorities that occur outside local jurisdictions.
  • Funding and Organizational Barriers
    • An agency or organizational lead to maintain, update, warehouse, track transactions and funding for this effort
    • Institutional inertia (within DOTs, MPOs & Regulatory agencies)

Slide 10: Existing State Crediting & Trading Programs

  • California – California Environmental Quality Act (CEQA), Regional Advance Mitigation Planning (RAMP) and Statewide Advance Mitigation Initiative (SAMI)
    • Existing Endangered Species Act (ESA) and Wetland Banks potentially linked through newly developing initiatives
  • Minnesota Wetland Restoration Strategy
    • Wetlands Restoration Strategy addressing advanced mitigation
  • North Carolina Ecosystem Enhancement Program
    • Wetlands and Stream Mitigation & Crediting Program involving NC DENR and DOT
  • Ohio River Basin Trading Project
    • Phosphorus and Nitrogen credit market involving electrical generation companies
  • Willamette Partnership and Clean Water Services
    • Multiple trading, focused on ESA and Clean Water Act (CWA) regulatory drivers

Slide 11: Ecosystem Accounting and Measurement example: Phosphorous

Filtration Function Score
The score for the Filtration Function is used as an indicator for Phosphorus Retention.

No Score 0 <10% 10-30% 30-50% 50-70% 70-90% >90%
0% 0% 0% 20% 40% 60% 90% 100%

Infiltration Function Score
The score for the Infiltration Function is used as an indicator for Phosphorus Retention.

No Score 0 <10% 10-30% 30-50% 50-70% 70-90% >90%
0% 0% 0% 20% 40% 60% 90% 100%

Buffer Width Score
Width X Slope Modifier

Width
<5 5-10 10-20 20-50 50-100 >100
0% 20% 40% 60% 80% 100%
Slope Modifier
<5% 5-10% 10-15% 15-20% >20%
100% 90% 70% 50% 50%

Eq. 1

Phosphorus  
Retention
Function
=   Buffer Width (% slope modifier) + Filtration Function Score + Infiltration Function Score
3

Eq. 2

Functional  
Acre
Score
=   Acres x Habitat Type x
Abiotic
Function1 + Function2+… Functionn
-----------------------------------------------------
n
 +  
Biotic
Function1 + Function2+… Functionn
-----------------------------------------------------
n
     ------------------------------------------------------------------------------------------------------------------
2

Image: A partial reproduction of an illustration of a natural landscape meeting a stream. The features are labeled according to ecological classification: stream, emergent wetland, scrub-shrub wetland, deciduous tree, and unimproved pasture.

Slide 12: Considerations for Conducting Step 6

  • Regional mitigation strategies and improved mitigation planning can significantly reduce the time and effort involved in this step.
  • Implementing a function and service based inventory methodology (such as Rapid Wetland Assessment Protocols) in a state's regulatory framework can provide a critical head start.
  • Creating statewide or area-wide service value maps can provide a useful head start, especially for improved mitigation planning.
  • Identify Ecosystem Crediting Platforms or Protocols developed within the region, and evaluate their ability to be used in the REF ecosystems and landscapes.
  • Select or develop units and rules for crediting.
  • Negotiate regulatory assurance for credit.
  • Develop guidelines (or copy them) for program implementation.

Slide 13: N.C. Ecosystem Enhancement Program

Image: Screenshot of the home page of NCDENR's N.C. Ecosystem Enhancement Program (EEP) website

Slide 14: Montana Wetland Assessment Method: Montana Department of Transportation

https://www.mdt.mt.gov/other/environmental/external/wetlands/2008_wetland_assessment/2008_mwam_manual.pdf

Image: Photograph of the side of a mountain, which is covered with trees, grass, and wildflowers
Image: Photograph of a flat wetland, which is lush with tall green grass
Image: Photograph of a clear pond, edged by tall green grass, with pine trees in the background

Slide 15: Upper Deschutes Basin Wetland Priorities

Image: Map of the Upper Deshutes Basin, color-coded to show the locations of wetland, potential wetland, and rivers and lakes
Image: Aerial photograph of a section of the Upper Deschutes Basin, overlaid with colored areas to show the locations of Ecosystem Services (Highest value, High value, Medium value, and Low value)

Slide 16: Summary

  • Crediting programs should be developed cooperatively with the all interested parties.
  • Engage stakeholders early and often.
  • An accepted Integrated Ecological Framework (IEF) with a conservation strategy for the state, watershed, ecoregion or area in which the crediting system is to operate is a great head start.
  • It is easier to start with a single service that can be valued, generally endangered species, wetlands or streams with existing markets; or with a specific set of projects in a location. Build from there.
  • Multi-service crediting systems are more useful but more difficult to establish. Creating these is easier once crediting partnerships, methods and tools have been adopted.

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Willamette Partnership, Building & Adapting a Crediting Strategy

The slides in this presentation contain the Willamette Partnership logo.

Slide 17: Building & Adapting a Crediting Strategy

Image: Photograph of canoers on a calm pond in Corvallis, Oregon
Image: Photograph of a school of smolt
Image: Photograph of a bridge over a river. The river is colored tan from stirred-up sediment.
Image: Photograph of a heron standing in a pond

Slide 18: What are we working for?

Increasing the Pace, Scope, Effectiveness of Conservation

Image: Photograph of a whitewater river in a forest. Viewpoint is looking downstream.

Slide 19: Crediting Protocol: Standards, Metrics, and Process

Image: Cover of the document entitled Joint Statement of Agreement for an Ecosystem Credit Accounting System (issued and signed by organizational leadership) September 2009
Image: The document cover and the slide background contain numerous logos, including the logos for the State of Oregon, Oregon Department of Forestry, Oregon Department of Transportation, Oregon Fish & Wildlife, State of Oregon Department of Environmental Quality, Willamette Partnership, U.S. Fish & Wildlife Service, U.S. Environmental Protection Agency, U.S. Army Corps of Engineers, Natural Resources Conservation Service, The Nature Conservancy, Ecotrust, The Freshwater Trust, CleanWater Services, and Defenders of Wildlife.

Slide 20: Crediting Protocol: Standards, Metrics, and Process

Credit types
Wetland
Salmonid habitat
Upland prairie habitat
Water temperature
Water nutrients
Oak habitat
Coming soon
Floodplain habitat
Sagebrush habitat
Benefits of flow

Image: Cover of the document entitled Ecosystem Credit Accounting: Pilot General Crediting Protocol: Willamette Basin Version 1.0, September 1, 2009

Slide 21: Credit Issuance Process: Validation through registration

Steps for buyers and sellers:

Select & Validate Site → Calculate Benefits/Credits → Verify & Certify Credits → Register & Issue Credits → Ongoing Verification, Tracking, & Transfer Purchase Credits ← Calculate & Verify Credits ← Determine Ability to Trade ← Develop Investment Strategy ←
Project Developer/Seller  
  Buyer/Investor
  Verifier   Verifier   Verifier  
Technical Service Provider (as needed)
Regulatory Agency (for compliance-grade credits, as appropriate)
Willamette Partnership (Market Administrator)

Image: Graphic that is described by the table above

Slide 22: Validation & Eligibility

Suitable
Local natives
Diversity
Density
References
Sustainable
Steward
Costs
Plans
Legal Protection
Additional
Required
Business as usual
No flipping
Avoid
Minimize
Permitted
Select & Validate Site → Calculate Benefits/Credits → Verify & Certify Credits → Register & Issue Credits → Ongoing Verification, Tracking, & Transfer

Image: Photograph of man in a field with four thought bubbles emanating from his head. The thought bubbles are the four lists above.
Image: Section of the graphic from Slide 21, with one section highlighted, described by the table above

Slide 23: Verification

Select & Validate Site → Calculate Benefits/Credits → Verify & Certify Credits → Register & Issue Credits → Ongoing Verification, Tracking, & Transfer

Image: Photograph of a field engineer in a wetland, inputting data into a handheld device
Image: Image capture of a Willamette Partnership crediting document
Image: Photograph of a stream with six tree trunks strewn on the bank and in the stream
Image: A hand holding a small river fish
Image: Screenshot of the Markit Environmental Registry
Image: Section of the graphic from Slide 21, with one section highlighted, described by the table above

Slide 24: (No title)

Credit Type TOTAL
Wetland (acres) 8.84
Salmonid (ln ft) 622
Prairie (acres) N/A
Water Temp. (kcal/day) 2,598,664
Area 1
Credit Type Quantity
Wetland 4.0
Area 2
Credit Type Quantity
Wetland 3.0
Area 3
Credit Type Quantity
Wetland (Buffer) .40
Area 4
Credit Type Quantity
Wetlands 1.44 (-0.72)
Salmonids 622 (Sell 311)
Temperature 2,598,664 (-1,299,332)

Image: Aerial photograph of a section of the Willamette Basin with four sections colored in and labeled Areas 1-4. The five tables above are superimposed over the photograph.

Slide 25: Determining Impacts: A decision tree approach from Thurston County, WA

Is the development site a likely prairie?: Identified as having prairie soils, occupied by listed species, within 2.5 miles of occupied habitat, identified as prairie habitat/critical habitat, or mapped as historic prairie. Other factors may also trigger review.
NO → Standard permit review YES → but Exempt YES → Critical Areas Ordinance prairie permitting
 
What is the quality, size, species presence, and connectivity of the site?:
Degraded, small, and isolated:

Can use expedited review/straight to mitigation/fee in lieu/etc.

Grassland; Medium sized; occupied; or connected:
Need to demonstrate avoidance & minimization.

Run crediting models to determine mitigation requirements.

High quality or native grassland <20 acres, occupied, or grassland <10 acres adjacent to grassland <100 acres:

Default is to avoid. Minimization and mitigation may only be applicable in very rare instances.

Slide 26: Ecosystem Crediting Platform

Image: Screenshot form the Ecosystem Crediting Platform, showing a page generated by selecting the main site navigation's Project Design tab, and then the Accounting Units tab. The page includes an aerial map of the basin and a a dialog box allowing users to create an accounting unit.

Slide 27: Markit Environmental Registry

Image: Screenshot of Registerd Projects on the Markit Environmental Registry page

Slide 28: Markit Environmental Registry: Project Information

Image: Screenshot of the Project Information page for the Half Mile Lane project

Slide 29: Lessons Learned: From those early pilots

  • Programs Evolve in Phases: feasibility, convening, design, and operation
  • Demand is Limiting Factor
  • Transaction Volume is “Thin”
  • State Agencies are Key
  • Local Programs Need a Lot of the Same Things: There are a lot of consistent needs, but local stakeholders need to “own” their design decisions

Image: Photograph of a large grassy field with a wooden fence in the foreground and a tall mountain in the background

Slide 30: Crediting Best Practices Outline

  1. Regulatory instruments to support trading
  2. Eligibility
  3. Baseline & additionality
  4. Credit quantification
  5. Ratios
  6. Credit characteristics
  7. Credit verif. and certif.
  8. Credit registration
  9. Project site monitoring and record keeping
  10. Compliance & enforcement
  11. Program effectiveness and adaptive management

Slide 31: Ecosystem Markets: Catalyzing Investment in Conservation

Willamette Partnership
cochran@willamettepartnership.org
(503) 946-8350

Image: Aerial photograph of the Willamette Basin

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