A timely new working paper by Climate Change Policy Partnership and Nicholas Institute policy analysts Jonas Monast, Jon Anda and Tim Profeta examines options for regulating carbon emissions as financial instruments. The paper reviews options lawmakers may want to consider in climate legislation in the wake of the current global financial crisis, as well as newly unveiled or anticipated legislative proposals that include language related to carbon market oversight. The creation of a U.S. carbon market, Monast, Anda and Profeta write, offers an opportunity to design a program that builds upon best practices for market regulation as well as "lessons learned from recent market failures." They note that four federal agencies with a say in market or emissions policy are "viable candidates" for regulating the new carbon markets: the Commodity Futures Trading Commission, the Securities and Exchange Commission, the Federal Energy Regulatory Commission, and EPA. 

The Nicholas Institute is one of three organizations co-hosting Forest Carbon Finance Summit 2009, March 6-8, in Washington D.C. The summit is sponsored by World Wildlife Fund with support from the Institute and Harvard University's Program on International Finance Systems. The private event will bring together more than 60 senior executives, policy experts, investors and legal and financial leaders for a frank, "off-the-record" discussion of options for making forest carbon markets work. They will examine issues such as: How can forest carbon become compliance carbon used to meet emission reduction obligations? What infrastructure requirements, carbon registries, exchange platforms, legal and institutional frameworks are critical to make markets work and make the carbon results credible and real? And, how can a market system achieve integrity: permanent real carbon reduction and effective protection of social and environmental values, with due regard for national sovereignty? Participation in the event is by invitation only.

In conjunction with the summit, the Institute has published two new draft policy briefs: "Including Reduced Emissions from International Forest Carbon in Climate Policy: Understanding the Economics," and "Forests and Carbon: The Crucial Role of Forest Carbon in Combating Climate Change." For more information, contact Lydia Olander, senior associate director for ecosystem services, at lydia.olander@duke.edu, or Brian Murray, director for economic analysis, at bcmurray@duke.edu.

The Nicholas Institute has launched a new series of reports examining critical issues in ecosystem services. The first two reports in the series focus on valuation. In "Valuing Ecosystem Services from Wetlands Restoration in the Mississippi Alluvial Valley," a team of economists and policy analysts from the Institute, the Nicholas School of the Environment and the U.S. Geological Survey assesses the value of action to restore Mississippi Valley hardwood bottomland forests under the Wetland Reserve Program. They estimate the value of three ecosystem services related with the restoration - greenhouse gas mitigation, nutrient mitigation and waterfowl recreation, and conclude that the total social welfare value would be about $1,500 per hectare per year. The other new report, "Ecosystem Services, Markets and Red Wolf Habitat: Results from a Farm Operator Survey," focuses on ecosystem service markets as a possible means to achieve biodiversity conservation goals on private lands. It addresses potential financial flows from ecosystem services benefits associated with conserved red wolf habitat in North Carolina, and explores ways to use market-based incentives to encourage greater participation in conservation initiatives by private landowners. 

The United States has decades of carbon dioxide storage potential, but it's not necessarily in the places where the Energy Department is planning to pump greenhouse gas underground as part of demonstration projects, according to analysis of geological models by the Climate Change Policy Partnership (CCPP). During a panel discussion last month at the U.S. Energy Association in Washington, geologist Lincoln Pratson, associate professor at the Nicholas School, said, "If it's going to take decades to bring [carbon capture and storage] online, we may want to think twice about where we set up the infrastructure to store it." His suggestion was to pump the greenhouse gas thousands of feet below the Texas Gulf Coast region into a sandstone saltwater aquifer known as the Frio formation. "Frio alone can hold decades of total U.S. emissions," he said. Pratson is working with CCPP staff members to analyze geologic models to estimate the storage capacity and cost of major geologic reservoirs, or "carbonsheds," in the United States to develop carbon storage supply curve. 

Todd Wooten has joined the Nicholas Institute staff as director of the new Southeast Climate Resources Center, where he will work closely with Bill Holman, director of state policy, and other Institute staffers on regional climate policy issues. An expert on climate policy and carbon market design principles, Wooten comes to the Institute from Van Ness Feldman, an energy policy law firm based in Washington, D.C., where he served as senior director for governmental issues. Prior to that, for more than five years he was legislative counsel in the office of U.S. Senator Blanche Lincoln (D-Ark.), where he analyzed policy on issues involving climate, energy, the environment, tax, transportation, judicial nominations, homeland security, intelligence, and armed services. Wooten also served as an energy staffer for Sen. Lincoln on three Senate committees with biofuel jurisdiction: Agriculture, Energy & Natural Resources, and Finance.

Tim Profeta, director of the Nicholas Institute, was recently quoted in a USA Today article about the estimated $646 billion in revenues from a cap-and-trade program, which was included in President Barack Obama's budget. Profeta told USA Today that the estimate is "a clear indication of the priorities of the White House." But he added that "there's still a political challenge to getting climate change legislation passed." Reuters International also sought out Profeta's expertise, along with that of Brian Murray, director for economic analysis, for its story about Obama's inclusion of the $646 billion revenue projection in his budget. Profeta also was quoted in a second Reuters story, published in Forbes and other important business media outlets, about the necessity of enlisting China in a global effort to curb greenhouse gases. In other news, Rafe Sagarin, associate director for ocean and coastal policy, received widespread coverage of his presentation, "Natural Security: A Darwinian Approach to a Dangerous World," at the annual meeting of the American Association for the Advancement of Science. BBC Radio, ScienceMode, and New Scientist magazine were among a dozen of so international news outlets who reported on Sagarin's talk.