NRCS Conservation Innovation Grants (CIG)

Water Quality Trading Systems

Fiscal Year 2012

Natural Resource Conservation Service (NRCS)& Office of Environmental Markets (OEM)

January 24, 2012

Welcome & Remarks

Ann Mills, Deputy Under SecretaryUSDA Natural Resources & Environment

The Water Quality Trading Systems Conservation Innovation Grants (CIG) are seeking to stimulate the development and adoption of water quality trading markets.

“Our goal is to demonstrate that markets are a cost-effective way to improve water quality in places like the Chesapeake Bay watershed, and agricultural producers are critical to the function of these markets.”

-Agriculture Secretary Tom Vilsack-

OVERVIEW

Funding for Water Quality Credit Trading

Chesapeake Bay Component - up to $5 million

Chesapeake Bay Watershed: Includes the District of Columbia and parts of six States: New York, Pennsylvania, Delaware, Maryland, Virginia, and West Virginia.

National Component – up to $5 million

National 44 States, Caribbean Area (Puerto Rico and the Virgin Islands), and the Pacific Islands Area (Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands).

FUNDING AVAILABILITY

CIG Water Quality Trading Systems Overview of Priority Criteria

Wayne Honeycutt, Deputy Chief Science & Technology, NRCS

• Multi-State collaboration is encouraged

• Established track record of water quality regulation and credit trading market development with key States and Departments involved

• Chesapeake Bay Component - 2010 Chesapeake Bay Executive Order (EO 13508)

• RFP:

• Market Rules and Market Infrastructure

• Tools and Metrics

• Verification & Registry

• Outreach

FUNDING PRIORITIES

What is Water Quality Credit Trading?

Carl Lucero, Deputy DirectorOffice of Environmental Markets

THE DETAILS

BUYERS OFENVIRONMENTAL

CREDITS 

  

SELLERS OFENVIRONMENTAL

CREDITS 

  

WATER QUALITY CREDITS MARKET

Development 

OVERVIEW OF WATER QUALITY CREDIT TRADING MARKETCREATION OF A NOVEL MARKET

 

Overview of Water Quality Credit Trading Market

Developing the Demand for Water Quality Credits

BUYERS OF ENVIRONMENTAL CREDITS: UNDERSTANDING AND STIMULATING DEMAND

 

BUYERS

   

Treatment Plants

Municipalities

Developers

NGOs

Avoided Costs

KEY DRIVERS & MOTIVATIONS

Pre-Compliance

Philanthropic

SUPPLY: WATER QUALITY CREDIT GENERATION 

LAND MANAGERS 

  

WATER QUALITY CREDITS

Baseline & Threshold Practices

Credit Estimation Tools

Credit Generation

Timeframe

Eligibility

Verification

Registration

Monitoring

PROTOCOLS

Developing the Supply of Verified Water Quality Credits

Developing the Water Quality CreditRegistry & Trading Platform

Buyers ofEnvironmental

Credits 

  

SELLERS OFENVIRONMENTAL

CREDITS 

  

WATER QUALITY CREDIT REGISTRY & TRADING PLATFORM 

Transparency

Clear Rules

Monitoring

REGISTRY& TRADING PLATFORM

Eligibility

Qualities of a Successful Market

Successful Water Quality Credit Trading Market

• Verified Credits• Permitted Buyers• Low transaction costs• Clear trading rules• Sufficient buyers & sellers of credits• Transparent transactions• Strong enforcement & experience

Coordination of Trading Systems between States

• Exchange Rates• Reciprocity• Parity

Conservation Innovation Grants Application Process

Gregorio CruzNational CIG Program Manager

• Review Announcement for Program Funding (www.grants.gov and http://www.nrcs.usda.gov/technical/cig/index.html)

• Complete and sign form SF-424.• Determine applicant eligibility: Federally recognized Indian Tribe,

State, or local unit of government, non-governmental organization, or individual.

• Determine project location eligibility: 50 States, the Caribbean Area (Puerto Rico and the Virgin Islands), and the Pacific Islands Area (Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands).

• Describe the involvement of landowners who meet the EQIP eligibility requirements in the project.

CIG Application Process

• Establish project length. (between 1-3 years, starting on Sept 1, 2012)

• Complete project description (up to 15 pages) as required in the APF proposal section.

• Complete project budget information (SF-424A) and budget narrative as required in the APF proposal section.

• Establish federal funds request (up to $2 million). There is a 50% matching funds requirement.

• Submit application by March 2, 2012.

CIG Application Process

Water Quality Market Network

Successful applicants will be required to participate in a “Water Quality Market Network” convened by USDA.

The Network will serve as a venue to share experience and coordinate activities to meet USDA water quality credit trading goals.

CIG Application Deadline & Delivery,Award Announcement & Start Dates, and Program Contacts

For Applications to be considered:

Due Date: Friday, March 2, 2012, by 4:00 p.m. EST

Location : USDA- NRCS National Headquarters 1400 Independence Ave, SWRoom 6227 South Building Washington, D.C. 20250

Selection Announcement Date: July 20, 2012

CIG Project Award & Start Date: September 1, 2012

CIG Program Contact: Gregorio CruzNational CIG Program ManagerPhone: (202) 720-8071E-mail: gregorio.cruz@wdc.usda.gov

CIG Administrative Contact: Dan LukashGrants & Gareements SpecialistPhone: (202) 690-1253E-mail: daniel.lukash@wdc.usda.gov

OEM Program Contact: Carl LuceroDeputy Director, OEMPhone: (202) 401 - 0531 E-mail: carl.lucero@osec.usda.gov

Questions

Conservation Innovation Grants Slide 19

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To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay). USDA is an equal opportunity provider and employer.