Eron Bloomgarden, President, Environmental Markets Group

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Making Forestry and Land Use Mainstream US Update
Eron Bloomgarden, President, Environmental
Markets Group Equator, LLC 212.404.1770 www.e
quatorllc.com
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EQUATOR, LLC

• Integrated timberland and environmental asset
  management company established in 2007
• US 300M committed capital for timberland
  investments in Brazil
• Co-manager of The Eco Products Fund (with New
  Forests Inc.) for investment in carbon, wetlands
  and biodiversity mitigation
• Transacted in terrestrial carbon, biodiversity
  offsets, and wetland mitigationthe first-of
  the-kind
• Focus on US regulated and un-regulated markets
• 22 professional staff, 5 administrative staff
• Offices in New York NY, Memphis TN, Seattle WA,
  Portland OR, Washington D.C., Sao Paulo (Brazil),
  and Minas Gerais (Brazil)

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Compliance Regional Cap-and Trade Schemes
AK
Regional Greenhouse Gas Initiative
NF
Participants
Observers
MB
SK
BC
AB
PE NS
Midwestern Climate Pact
ON
QC
NB
ME
Participants
WA
VT NH MA CT RI NJ DE MD
Observers
MT
MN
OR
NY
WI
ID
SD
MI
WY
Western Climate Initiative
PA
IA
OH
Participants
IN
IL
NV
UT
CO
Observers
KS
CA
Single state/ province initiatives
NM
AZ
Also participant to WCI Also observer to
RGGI
SO
FL
TM
Source PointCarbon
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US FEDERAL POLICY
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US POLICY UPDATE

• HR 2454 (Waxman Markey) released May 15th
• Emissions cap relaxed from 20 to 17 by 2020
• Broader use of free allocations
• Several important implications for offsets
• Overall limit of 2 Billion tons (per entity limit
  formula)
• Elimination of 54 penalty for domestic offsets
• EPA has 2 years after enactment to promulgate
  meths
• Early action provided for credits achieved from
  Jan 1, 2009 until 3 years after enactment through
  programs
• Established by a state/tribe, or
• Has a public consultation process and meets
  equivalent stringency

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FORESTRY COST CONTAINMENT
Source McKinsey
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IMPLICATIONS FOR FORESTY

• Domestic
• Inclusion of a broad suite of land-based sectors
  
• activities which improve management, avoid
  conversion, and reforest degraded or deforested
  land should all be permissible as offset types.
• New CAR protocols broadening application
  throughout US
• Permanence
• Buffer pools, managed across a registry, or on a
  project basis
• Long term legal commitments to a specified forest
  management regime with replacement or buy-out
  provision
• International
• Requirement that an agreement be in place with a
  project host country in order to obtain
  international credits
• Limited ability to conduct subnational project
  activities outside of context of a national
  deforestation baseline
• Country must establish a trajectory that would
  result in zero net deforestation by no later than
  20 years after national baseline has been
  established
• No afforestation/reofrestation
• Some exceptions for major emitting states or
  provinces phases out by 2017

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WHATS NEXT?

• US EPA endangerment finding regulatory process
• Congressional action
• HR 2454 moving to a floor vote
• Senate
• US state and regional
• Ongoing rulemaking
• New CAR forest protocols expected June 2009
• Question of preemption
• Tension between volume (2Bt) vs. stringency

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Thank you! Eron Bloomgarden eron_at_equatorllc.com 2
12-404-1770 Corporate Headquarters 250 Park
Avenue South, New York, NY 10003
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