From Kansas State University's:

Consortium for Agricultural Soils Mitigation of Greenhouse Gases(CASMGS)


Charles W. Rice, K-State Department of Agronomy, National CASMGS Director

(785) 532-7217

Scott Staggenborg, K-State Department of Agronomy (785) 532-7214

Steve Watson, CASMGS Communications (785) 532-7105


August 15, 2006

No. 50



* Update On Carbon Credit Project In Kansas



* DOE Announces $2 Billion In Loans For “Novel Technologies”

* Supreme Court To Rule on Regulating Carbon Dioxide



* Global Carbon Market Volumes Reach New High










There are 17 new contracts from Kansas for Pool 3 of the Carbon Credit Pilot Project offered by the Chicago Climate Exchange, and contracted with the Iowa Farm Bureau. This includes 16,159 acres of no-till and 185 acres of new grass plantings. Sign-up ended June 30 for this Pool. No credits have yet been sold from Pool 3.


In the previous sign-up, termed Pool 2, a total of 73 contracts were signed in 24 Kansas counties, according to David Miller with the Iowa Farm Bureau. A total of 75,625 acres from Kansas were entered into Pool 2. This included 74,345 acres of no-till and 1,280 acres of new grass plantings. Total payments received by Kansas participants so far from Pool 2 credits amounts to $169,938.


The average net payment per ton of CO2 is $1.87, which is equivalent to $6.86 per ton of carbon sequestered. No-till is contracted at the rate of 0.5 tons of CO2 per acre, so payments for no-till have averaged $0.935 per acre. New grass plantings are contracted at the rate of 0.75 tons of CO2 per acre.


Eligibility requirements for the program are established by the CCX. In the eastern half of Kansas, land in continuous no-till (or strip-till or ridge-till) and new grass plantings is eligible. In western Kansas (except for a few counties in the most southern areas), only land in new grass plantings is eligible at this time, although this may change as the eligibility requirements are reviewed by the CCX.


The carbon credit program basically consists of four main players:


* The producers/landowners, who have the carbon credits;

* The Iowa Farm Bureau, which aggregates the credits from individual producers into a large pool of credits and sells the credits on a commodity exchange;

* The Chicago Climate Exchange, which offers the commodity exchange on which buyers and sellers can agree on a price; and

* The buyers, who offer a bid price for carbon credits, in terms of dollars per ton of carbon. So far, buyers have consisted of some of the companies and municipalities that are members of the CCX. Examples of CCX members include The Ford Motor Company, DuPont, International Paper, the University of Oklahoma, and the City of Chicago.


When the aggregator (Iowa Farm Bureau) who has the credits under contract believes the bid price in high enough, the credits are sold. The buyers pay the aggregator, and the money is then dispersed to the producers who enrolled in the project by signing a contract. The aggregator keeps 10 percent of the proceeds for administrative costs.


-- Steve Watson






DOE announces $2 billion in loans

for “novel technologies”


The Energy Department (DOE) unveiled $2 billion in loan guarantees today for energy projects aimed at reducing or avoiding greenhouse gas emissions and air pollution. The loan guarantees are a product of the Energy Policy Act of 2005.


“We hope to spur investment in new renewable energy projects like solar and wind, as well as clean coal technologies and efforts that can convert cellulosic biomass into ethanol,” said Energy Secretary Samuel Bodman.


DOE spokesman Craig Stevens said the loans are meant to bring “novel concepts, novel technologies to market.” For instance, he said DOE would seek to fund “cellulosic” ethanol projects, as opposed to traditional corn-based ethanol projects.


Bodman said the goal of the loan guarantees is having the government share financial risks for “early stage” projects so innovative technologies will eventually achieve greater market penetration. Bodman said DOE wanted to fund a diversity of projects and said 10 projects is a ballpark estimate for the number under the initial $2 billion round.


-- Greenwire, August 7, 2006






Supreme Court To Rule on

Regulating Carbon Dioxide


The Supreme Court agreed on June 26 to hear arguments on whether the US Government should regulate carbon dioxide (CO2) as a pollutant. The Supreme Court will hear the case Massachusetts v. Environmental Protection Agency, filed by 12 states, 13 environmental groups, two cities and American Samoa against the US Government. The case centers around whether the EPA violated the Clean Air Act in 2003 when it opted not to regulate motor vehicle emissions of greenhouse gases.


The plaintiffs' argument is that the President has the legal authority to regulate CO2 under the Clean Air Act, since it is linked to climate change and poses a threat to the environment. The Clinton administration endorsed that legal reasoning, but did not issue rules regulating CO2. The Bush administration rejected the reasoning, and now must convince the Supreme Court that it has no legal obligation to regulate greenhouse gases, including CO2. The EPA successfully defended its position to the US Court of Appeals for the DC Circuit in 2005, and has issued a statement saying it was “confident in its decision” not to regulate carbon dioxide. The ruling on the case is likely to come next year.


-- Seattle Times, June 27, 2006






Global Carbon Market volumes

reach new high


The global carbon market saw record high volumes traded in the first half of 2006 according to Point Carbon, Oslo-based carbon analysts.


In total, the equivalent of 684 million tonnes (Mt) of carbon dioxide (CO2e) was transacted globally during the first six months of this year, more than five times the volume traded during the same period last year, and 85 percent of the total volume traded in 2005 as a whole.


Worth an estimated $15 billion, the financial value of carbon trades in the first half of 2006 exceeded the entire value traded in 2005.


The EU Emissions Trading Scheme (EU ETS) remains the dominant carbon market segment, with 440Mt traded during the first half of 2006; close to 65 percent of the total traded volume worldwide.


Point Carbon's figures show that other markets are also heating up. The Chicago Climate Exchange and the New South Wales emissions trading scheme in Australia both show four times higher volumes and values than in 2005.


-- Environmental Finance, August 10, 2006







MEETINGS OF INTEREST (All dates are 2006 unless otherwise noted.)



Sept. 18-19

2006 Global CO2 Cap-and-Trade Forum

Washington, DC

For details, contact Jim Turner (646) 546-5230



December 5-6

North America and the Carbon Markets

Washington, DC


For details, see






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