Techniques for minimizing nitrous oxide emissions and increasing certainty in generating, quantifying and verifying standardized environmental attributes relating to nitrous oxide

[0001] The present application claims the benefit of U.S. Provisional Application No. 61/055,902 filed May 23, 2008, and priority to co-pending U.S. patent application Ser. No. 12/045,583 filed Mar. 10, 2008, and its parent U.S. patent application Ser. No. 10/364,128 filed Feb. 10, 2003, which issued Nov. 25, 2008, under U.S. Pat. No. 7,457,758, all three such applications being incorporated herein in their entireties by this reference.

[0002] The present invention generally relates to minimizing undesired nitrous oxide emissions. More particularly, the present invention relates to methods of increasing precision in controlling emission of nitrous oxide and thereby increasing certainty when generating, quantifying and confirming standardized environmental attributes and reserve standardized environmental attribute, when such attributes relate to nitrous oxide emissions. These attributes are quantified for the purpose of monetizing environmental attributes of benefit to society into Environmental Benefit Credits (EBCs), sometimes referred to as “Green tags”.

[0003] The development of a vibrant economy requires a safe and healthy food supply, sustainable land use, clean water, and pure air, among other things. Producers, such as farmers and ranchers offset their production costs with income derived from products such as grain, hay and meat. State and Federal regulations provide essentially no penalties for non-point sources of pollution, with the exception of indirect disincentives such as SodBuster or SwampBuster farm bill provisions. Environmental incentives for participants in conservation programs, e.g., EQIP, CRP, CSP, may not be sufficient to outweigh market driven production incentives. Therefore, the costs for sub-optimal land use are transferred to the public in the form of remediation costs, while the value of benefits realized by society through sustainable environmentally-responsible landuse management and optimal land use does not reach the producer.

[0004] A major barrier to the development of agro-environmental service markets is the dearth of biophysical linkages between management practices, measurable impacts on soil, air, and water quality and environmental regulations. The invention described herein is able to connect basic science research on biogeochemical systems, with ecological models, economic models and relevant legal analysis to translate that research into market-driven management strategies that not only maximize production but also produce environmental commodities that embody attributes of value to society.

[0005] An example of environmental attributes of the present invention is Carbon Emission Reduction Credits. An accelerating rate of change in the amounts of specific trace gases in the earth's atmosphere has the potential to modify the earth's energy balance, which may result in a variety of consequences. These trace gases are often referred to as greenhouse gases and include carbon dioxide. Although there is disagreement concerning the potential threats or benefits of this change, there is widespread agreement in the global community that it is prudent to enact policies to attempt to slow down the rate of change. At the same time, research is underway to predict the consequences of increasing greenhouse gas concentrations and to develop the technology to economically limit those increases. All current protocols have established emission reduction targets that define a specific base year, e.g., 1990, and specify reductions for specific sources as a fractional percentage of emission rates from those of the base year.

[0006] The increasing concentration of greenhouse gases in the atmosphere is a global issue. For example, carbon dioxide emitted from into the atmosphere from any source such as a power plant has a lifetime of approximately 100 years and therefore is distributed globally. As a result, at least for the issue of atmospheric greenhouse gases, the geographic location where the greenhouse gases are removed from the atmosphere is less important than the fact that they are removed. For other types of EBCs, the specific location of the emission reduction may be important. For example, the reduction of the transport of sediment in a watershed that has many man-made water impoundments, such as dams, may be of more value than the reduction of sediment transport into an unregulated and uncontrolled watershed.

[0007] One of the key provisions of many national strategies to limit the rate of growth in the amounts of atmospheric greenhouse gases is the concept of emissions trading. Emissions trading is a process whereby specific target emission rates of certain greenhouse gases are set for specific industries. A member of the industry who achieves measured emissions below the target rates may trade the difference on the open market to another who exceeds, or forecasts that it will exceed, its own emission targets. An entity responsible for measured emissions above its target rates may be subject to fines or other sanctions. The objective is to reduce the overall emission of greenhouse gases in the atmosphere, even if the emissions of one particular source are not decreased, or indeed are increased. In the last decade, the effectiveness of this market-based emissions reduction approach as applied to criteria air pollutants in the US has been demonstrated. Fledgling attempts to develop similar systems for water pollution trades and for other remediation issues are in progress, however they have been hindered by several key factors addressed by the methods and apparatus described herein.

[0008] The unit of measure of tradable carbon emissions that has been generally accepted is commonly known as the Carbon Emission Reduction Credit, or CERC, which is equivalent to one metric ton of carbon dioxide gas (or other greenhouse gas equivalent) that is not emitted into the earth's atmosphere (emission reduction) or one metric ton of carbon dioxide that is removed from the atmosphere (emission offset) due to a human-caused change. That is, a CERC can be generated for human activities that have occurred since a base year, e.g., 1990, that have resulted in a reduction in the specified business-as-usual emissions of greenhouse gases.

[0009] For example, CERCs can be generated through energy efficiency gains of fossil fuel technology, substitution of biofuels for fossil fuels, or removal of greenhouse gases from industrial gas streams. CERCs also can be generated by sequestration of atmospheric carbon dioxide into land or water, e.g., by reforesting land or through implementation of agricultural practices that increase the storage of organic matter in the water or soil. Additionally CERCs can be generated by capturing methane emitted from sewage lagoons and burning it into carbon dioxide since one ton of methane is equivalent to approximately 22 tons of carbon dioxide with respect to its global warming potential. Additional CERCs would be generated if the methane was used as a substitute for fossil fuels. Other EBCs can be generated through the modification of business as usual management practices. For example, a producer can switch from pesticide intensive management to “organic farming” practices and therefore potentially earn water quality based EBCs.

[0010] With regard to other greenhouse gases for which use of EBCs would be applicable, nitrous oxide (N₂O) is a greenhouse gas for which excess generation also has very serious environmental consequences. While the total contribution to radiative warming (total greenhouse gas effect) of nitrous oxide is less that that of carbon dioxide, its persists longer in the atmosphere. Indeed, it has been estimated that on the basis of the net incrememntal greenhouse gas impact per additional molecule emitted into the atmosphere, nitrous oxide has almost 300 times the impact on global warming as carbon dioxide. Thus, even though nitrous oxide has a lower concentration in the atmosphere, it is the third largest greenhouse gas contributor. Furthermore, nitrous oxide has a long lifetime in the atmosphere. Presently, nitrous oxide concentration in the atmosphere is about 300 parts per billion and is increasing at about ½% to 1% per year.

[0011] Although a small amount of nitrous oxide is emitted from coal fired power plants and in the manufacturing of cement, the largest nitrous oxide sources occur in ecosystems. From a process standpoint, nitrous oxide is produced as a consequence of nitrogen cycling in soils. In nature, fixed nitrogen that can be utilized by microbes and plants in the production of proteins, is at a premium. After water, fixed nitrogen availability is usually the next major limiting resource. Therefore most microbial processes in soil have evolved to conserve this valuable commodity. As a consequence, the emission of N₂O usually only occurs during transitional times when there is a “system upset”, analogous to the flare for an industrial process.

[0012] Though nitrous oxide can be produced during the process of nitrification, the major source of nitrous oxide is thought to occur during denitrification. More particularly, nitrification is the oxidation of ammonia with oxygen to form nitrites (primarily by bacteria of the genus Nitrosomonas and Nitrosococcus), followed by the oxidation of nitrites to nitrates (primarily by bacteria of the genus Nitrobacter). During these microbial processes, some loss of nitrates occurs though leaching, and ammonia, nitrogen and nitrous oxide can be lost to the atmosphere. However, in practice, the nitrous oxide losses from fixation are small compared to the losses from denitrification. Moreover, losses from denitrification vary substantially depending on differing conditions, in ways not fully appreciated nor compensated for in risk assessment relating to calculation and trading of EBCs.

[0013] It may even be said that existing verification processes are flawed, with leakage a particular problem when accounting for nitrous oxide emissions. For example, in areas of varying geography, for example, uneven agricultural land, “hotspots” of nitrous oxide leakage can periodically occur, and such occurrences may not be accounted for, such as when for short periods of time, low lying areas may be subject to pooling water created by runoff, and such wet spots can create anaerobic conditions conducive to denitrification. Land management practices may not be implemented to prevent such leakage and indeed may exacerbate such leakage, let alone account for such leakage on agricultural land.

[0014] The International Plant Panel on Climate Change (IPCC) assesses the scientific data such as field studies and modeling studies that measure and predict greenhouse gas (GHG) emissions. The IPCC then makes recommendations that are used in evaluating the GHG impacts of specific management scenarios and GHG emission reduction projects. With regard to nitrous oxide, the IPCC evaluation concludes that incremental nitrous oxide emissions (the secular trend) indicate a link between enhanced fluxes of nitrous oxide and the increased use of nitrogenous fertilizers. Further they have stated that increases in atmospheric concentrations of nitrous oxide are directly correlated with increased application of fertilizers. Therefore, it is likely that in the future carbon storage in soils will be discounted, based on leakage of nitrous oxide. In addition, this line of reasoning will lead to the erroneous conclusion that reductions of nitrous oxide emissions will closely follow reductions in fertilizer application rates.

[0015] Although a statistical correlation exists between increased fertilizer use and increases in the secular trend of nitrous oxide, field research indicates that nitrous oxide emissions are not uniform and continuous. Instead, emissions of nitrous oxide from soils tend to be concentrated in small spots over short time periods. In fact, most nitrous oxide emissions come from anaerobic areas where denitrification occurs agricultural fields. Therefore the currently-recommended mitigation strategy to reduce nitrogen fertilizer application rates as a way to lower nitrous oxide emissions is seriously flawed. On most of the land or on a specific agricultural field, only small plots, if any will actually respond to reduce nitrous oxide emissions. Therefore is greenhouse gas emission reduction credits or emission avoidance credits are awarded based on reduced fertilizer nitrogen usage alone, these credits will not result in actual reductions of nitrous oxide emissions and will therefore not be effective in mitigating global climate forcing.

[0016] It is worth noting that in agricultural practices, where water is the first limiting factor, nitrogen is the next limiting factor. This is why the application of nitrogen-based fertilizers, primarily anhydrous ammonia manure, is so prevalent worldwide. While some fraction of such fertilizers are emitted into the atmosphere (some estimate a range of ½% to 1% of the fertilizer), field research measurements that nitrous oxide emissions are in fact quite variable and emissions of nitrous oxide tend to occur in relatively small spaces over short time periods, and then emission stops. Thus, despite the extensive use of anhydrous ammonia manure and other urea based fertilizers, the largest portion of nitrous oxide emissions are not likely to be simply related to some fraction of the industrial fertilizer applications. However current biogeochemical models that describe the microbial production processes that control nitrous oxide are becoming well-understood. However the difficulty of extrapolating from the micro-scale and microbial-scale processes to predict nitrous oxide emissions over an entire field or land parcel limits the accuracy of current nitrous oxide predictive capability. This therefore limits the potential accuracy of the prediction of the effectiveness of specific landuse management actions to reduce nitrous oxide emissions. The lack of models to accurately link landuse management and nitrous oxide emissions also undermines the verification processes necessary for certainty in calculating EBCs involving nitrous oxide. In addition, since the global annual nitrous oxide sink or destruction rate due to reactions in the atmosphere can be readily calculated, and since the global distribution of nitrous oxide has been well-characterized, it is relatively easy to calculate the global source strength of nitrous oxide needed to generate globally-measured atmospheric concentrations. Also, since many scientists believe that the sources of atmospheric nitrous oxide are largely identified, Often scientists simply identify the general source, such as “agriculture” scale that source by total area weighted by an average nitrogen fertilization rate factor and divide by

[0017] In the face of the issues briefly described above relating to greenhouse gases generally, a market is emerging for trading CERCs, EBCs and other green tags. One type of CERC trading involves an industrial consortium, where each industrial entity determines a rough estimate of the number of CERCs generated by its activity or needed from others due to its activity. If an individual entity has generated CERCs by changing its business-as-usual activity, e.g., by reducing the amounts of greenhouse gases emitted, it can trade the CERCs and EBCs to others in the consortium.

[0018] There also have been entities involved specifically in CERC trading based on increasing the storage of carbon in soil. For example, in 1999 a consortium of Canadian power companies hired an insurance company to contractually obligate a group of Iowa farmers to twenty years of no-till farming. Based on general data, a broker for the power companies assumed that this land management practice would result in sufficient sequestration of carbon into the soil to generate CERCs. The power companies also purchased an insurance policy for protection against the possibility that no CERCs, or insufficient CERCs, would be generated by this arrangement. This trade was designed by the consortium of power companies to minimize the price that the farmers were paid. The difficulty and uncertainty of predicting these CERCs, obtaining indemnification or insurance, and banding together a sufficiently large number of farmers to generate a pool of potential CERCs large enough to overcome substantial baseline transactional costs and uncertainty whether the CERCs generated would meet current, pending or future regulatory requirements operated to drive up the costs incurred by the potential CERC purchasers, drive down the price paid to the producers and generally make it difficult to establish and engage in a market for CERCs by not efficiently maximizing incentives to producers and by not efficiently minimizing risks to purchasers.

[0019] Existing natural resource-based methods to trade CERCs generally share a number of shortcomings. Typically, the contracts specify certain land management practices, but do not require a certain number of CERCs to be generated. The estimated CERC values are highly variable and minimized due to uncertainties caused by using general regional data to try to estimate CERCs and by high transactional costs. Without a reasonably accurate method of quantifying CERCs generated, it is difficult for all to place a fair value on the trade. Also, trades generally have been designed and instigated by a potential CERC purchaser, or an entity representing one, and not by the CERC producer, such as a farmer or landowner. Further, each trade must be individually designed by the CERC purchaser to be consistent with current and anticipated legislative requirements and to maximize the likelihood that CERCs will be generated. Competition is also limited by the requirement of projects large enough to achieve economies of scale. For this reason, there has begun to emerge aggregators who attempt to produce CERCs by traveling from producer to producer with the object of having each producer sign a contract in which they agree to transfer ownership of CERCs to the aggregator, implement a specified management practice for a specified time period over a specified number of acres in exchange for a specified price. The aggregator who then makes general estimates of potential carbon sequestration, develops a project-specific verification protocol, and packages the CERCs into a “project”. The project is then marketed to purchasers through a broker who must convince clients that the project criteria and indemnification are sufficient to meet the standards of the specific country in which they are applied. In many Kyoto countries, a project approval board is designated and must pass judgment on each individual project. As a consequence, the price paid to CERC producers is driven down thereby decreasing incentives to engage in practices that result in carbon sequestration and therefore the market for trading CERCs is limited.

[0020] In the absence of a globally accepted process to generate, quantify and standardize CERCs, especially CERCs generated or projected to be generated by carbon sequestration in land or plants, the market for such CERCs remains relatively primitive, inefficient and uncertain. The existing attempts to identify and trade CERCs suffer from difficulties in quantifying accrued and projected CERCs, high administrative costs in quantifying and indemnifying accrued and projected CERCs, and the lack of a market for individuals and individual entities to effectively engage in CERC trades. These problems particularly restrict the ability of an individual landowner, or groups of landowners, to efficiently generate, quantify, standardize, market and trade CERCs.

[0021] A need exists for an improved method of generating, quantifying and standardizing CERCs, particularly so that a relatively smaller producer of CERCs, such as an individual landowner or groups of landowners, may be able to reliably and efficiently participate in a market for CERCs by generating and quantifying standardized CERCs by a method capable of adapting to meet a broad range of regulatory specifications.

[0022] More generally, a need exists for an improved method of generating, quantifying and standardizing other environmental attributes to generate environmental benefit credits (EBCs), in addition to CERCS, again, particularly so that a relatively smaller producer of environmental attributes may be able to reliably and efficiently participate in a market for such standardized environmental attributes. In addition, there is a need for systems that are specific so that they are performance based rather than only methods-based.

[0023] The present invention generally relates to a method and apparatus for determining standardized environmental attributes and, more particularly, to a method and apparatus for generating, quantifying and confirming standardized environmental attributes and reserve standardized environmental attributes. This method and apparatus also converts standardized environmental attributes and reserve environmental benefit credits into standardized environmental benefit credits (EBCs) that can be monetized.

[0024] More particularly, this invention relates to the application of science that can be translated into market systems for commodity attributes and environmental services provided by land managers engaging in practices that promote clean air, clean water, and sustainable land use, or other desirable environmental attribute. The invention describes methods and apparatus for land managers to optimize their operations to provide both profits and environmental benefits, e.g., by creating market systems to reward cropland management that increases soil carbon sequestration and reduces erosion, or to reward land use management systems that contribute to improved quality of ambient air, water or even the commodities produced. Further, the system links performance and rewards, thus maximizing market efficiencies as needed for efficient market-driven approaches.

[0025] This invention further describes a method and apparatus for standardizing environmental attributes by identifying, generating, quantifying and certifying environmental attributes, such as environmental attributes associated with the production of commodities. This invention describes a system to standardize and even monetize, the environmental attributes embodied in the production of commodities, such as meat, crops, and animal feed, in order to provide economic incentives for the avoidance of pollution, the production of clean water, the production of clean air, and/or the utilization of management practices that promote long-term agro-ecosystem sustainability. The standardized or monetized embodiments of commodity production can be attached to the commodity and travel through the production process to be added as a premium at the point of retail sale. For example, currently “rainforest friendly” coffee and “dolphin-free tuna” are sold at a premium in retail markets. Alternatively, the standardized or monetized attributes can be disaggregated from the commodity itself and traded independently. Or, in another embodiment, the standardized attributes can be disaggregated from the commodity that was produced, re-aggregated across various types of attributes, and re-attached in the market-place to a product in the form of an “eco-tag” or “green tag” or product premium to be paid by the commodity purchaser. Additionally, the standardized environmental attributes may be pooled with other standardized attributes. The method may be applied so that it is performance based. That is, those producers who do the most to maximize the production of EBCs will receive the highest rewards. The method may also be applied as a methods-based system, however methods-based approaches reward all who engage in specific management methods equally regardless of final results. Therefore methods-based approaches create substantial market inefficiencies. In addition this system can be utilized by those required to report on their net environmental attributes such as net greenhouse gas emissions. Also the system can be used by those engaged in EBC projects to provide independent third-party verification of the impacts of proscribed management programs.

[0026] In one embodiment of the invention, general data and specific data are selectively input and analyzed in a modeling program to quantify the effects of certain human activities on a particular environmental attribute. An uncertainty analysis is conducted to determine the quantity of the environmental attributes that are deemed to meet specified statistical confidence limits. This serves as a basis to establish a certified pool of EBCs, with a defined, higher level of certainty, and a reserve pool of EBCs, with a lower level of certainty. Preferably, a user-friendly interface, such as an interactive website, is used to allow a user to 1) establish a baseline status; 2) explore alternative future strategies to estimate the effects of changes in input data, particularly that involving human activities; and/or 3) perform a complete analysis and provide a final report for credit aggregation and marketing.

[0027] Examples of such standardized EBCs that may be generated through the present invention include: (1) green house gas (“GHG”) emissions offsets from farmers and ranchers due to soil conservation practices (carbon dioxide—CO₂), improved manure management (methane—CH₄, nitrous oxide—N₂O), improved fertilizer management or optimization (N₂O), or reduced energy use during operations (CO₂); (2) water pollution offsets from farmers and ranchers due to reduction of erosion and sediment delivery to water bodies (sediment), reduced or optimized irrigation to reduce water withdrawals and contaminated irrigation water delivery, or removal of drain tile (NO_X; phosphates—PO₄), reduced nutrient losses from fields and feedlots to surface and groundwater (NO₃, ammonia—NH₄, PO₄), reduced or optimized use of pesticides and herbicides of concern, such as Atrazine, improved management of livestock to prevent negative riparian impacts and maintain stream channel integrity (sediment, nutrients) and decrease direct and indirect GHG production; and (3) criteria pollutant reduction due to reduced use or improved efficiency of diesel and internal combustion equipment (oxygen—O₂, PM_X, NO₃,) and optimized crop processing and transportation. Examples of EBCs that may be traded between regulated entities include: (1) GHG emissions offsets due to implementation of GHG and pollution mitigation efforts in confined animal feeding operations, such as CH₄ recovery from covered manure lagoons or digesters, feed supplements to reduce enteric productions of CH₄, decreased production of nitrous oxide due to improved manure handling practices, and energy efficiency projects in commodity handling or storage at farm cooperatives or private processing centers; and (2) water pollution offsets from confined feeding operations due to waste handling and runoff mitigation projects in excess of regulatory requirements.

[0028] In an embodiment of the present invention, analysis of layers of satellite imagery data, topographical maps and data, hydrological data, historical weather data, current weather predictions, soil data and plant science information are evaluated for individual plots of land, portions of a property or portions of a region and for larger regions, to identify and/or predict potential nitrous oxide emission hotspots. Results are incorporated into uncertainty analyses relating to EBCs involving nitrous oxide emissions, risk assessment in trading same, and calculation of reserve EBCs which are not tradable. Results also may be used for land management practices to reduce unwanted nitrous oxide emissions and thereby decrease unwanted greenhouse gases generally. Such land management practices may involve precision application of a nitrogen stabilizer such as nitrapyrin. In another embodiment, a nitrogen stabilizer such as nitrapyrin is applied to agricultural acreage by other than a broadcast application, with application amounts and location coordinates provided using GPS (Global Positioning System) technology based upon the analyses of layers of data such as the imagery, topographic, hydrological, weather, soil and plant data described above, so that only portions of the agricultural acreage are treated with the nitrogen stabilizer.

[0034] This invention generally relates to a method and apparatus for determining standardized environmental attributes and, more particularly, to a method and apparatus for generating, quantifying and confirming standardized environmental attributes and reserve standardized environmental attributes. This method and apparatus also converts standardized environmental attributes and reserve environmental benefit credits into standardized environmental benefit credits (EBCs) that can be monetized.

[0035] More particularly, this invention relates to the application of science that can be translated into market systems for commodity attributes and environmental services provided by land managers engaging in practices that promote clean air, clean water, and sustainable land use, or other desirable environmental attribute. The invention describes methods and apparatus for land managers to optimize their operations to provide both profits and environmental benefits, e.g., by creating market systems to reward cropland management that increases soil carbon sequestration and reduces erosion, or to reward land use management systems that contribute to improved quality of ambient air, water or even the commodities produced. Further, the system links performance and rewards, thus maximizing market efficiencies as needed for efficient market-driven approaches.

[0036] This invention further describes a method and apparatus for standardizing environmental attributes by identifying, generating, quantifying and certifying environmental attributes, such as environmental attributes associated with the production of commodities. This invention describes a system to standardize and even monetize, the environmental attributes embodied in the production of commodities, such as meat, crops, and animal feed, in order to provide economic incentives for the avoidance of pollution, the production of clean water, the production of clean air, and/or the utilization of management practices that promote long-term agro-ecosystem sustainability. The standardized or monetized embodiments of commodity production can be attached to the commodity and travel through the production process to be added as a premium at the point of retail sale. For example, currently “rainforest friendly” coffee and “dolphin-free tuna” are sold at a premium in retail markets. Alternatively, the standardized or monetized attributes can be disaggregated from the commodity itself and traded independently. Or, in another embodiment, the standardized attributes can be disaggregated from the commodity that was produced, re-aggregated across various types of attributes, and re-attached in the market-place to a product in the form of an “eco-tag” or “green tag” or product premium to be paid by the commodity purchaser. Additionally, the standardized environmental attributes may be pooled with other standardized attributes. The method may be applied so that it is performance based. That is, those producers who do the most to maximize the production of EBCs will receive the highest rewards. The method may also be applied as a methods-based system, however methods-based approaches reward all who engage in specific management methods equally regardless of final results. Therefore methods-based approaches create substantial market inefficiencies. In addition this system can be utilized by those required to report on their net environmental attributes such as net greenhouse gas emissions. Also the system can be used by those engaged in EBC projects to provide independent third-party verification of the impacts of proscribed management programs.

[0037] In one embodiment of the invention, general data and specific data are selectively input and analyzed in a modeling program to quantify the effects of certain human activities on a particular environmental attribute. An uncertainty analysis is conducted to determine the quantity of the environmental attributes that are deemed to meet specified statistical confidence limits. This serves as a basis to establish a certified pool of EBCs, with a defined, higher level of certainty, and a reserve pool of EBCs, with a lower level of certainty. Preferably, a user-friendly interface, such as an interactive website, is used to allow a user to 1) establish a baseline status; 2) explore alternative future strategies to estimate the effects of changes in input data, particularly that involving human activities; and/or 3) perform a complete analysis and provide a final report for credit aggregation and marketing.

[0038] Examples of such standardized EBCs that may be generated through the present invention include: (1) green house gas (“GHG”) emissions offsets from farmers and ranchers due to soil conservation practices (carbon dioxide—CO₂), improved manure management (methane—CH₄, nitrous oxide—N₂O), improved fertilizer management or optimization (N₂O), or reduced energy use during operations (CO₂); (2) water pollution offsets from farmers and ranchers due to reduction of erosion and sediment delivery to water bodies (sediment), reduced or optimized irrigation to reduce water withdrawals and contaminated irrigation water delivery, or removal of drain tile (NO_X; phosphates—PO₄), reduced nutrient losses from fields and feedlots to surface and groundwater (NO₃, ammonia—NH₄, PO₄), reduced or optimized use of pesticides and herbicides of concern, such as Atrazine, improved management of livestock to prevent negative riparian impacts and maintain stream channel integrity (sediment, nutrients) and decrease direct and indirect GHG production; and (3) criteria pollutant reduction due to reduced use or improved efficiency of diesel and internal combustion equipment (oxygen—O₂, PM_X, NO₃,) and optimized crop processing and transportation. Examples of EBCs that may be traded between regulated entities include: (1) GHG emissions offsets due to implementation of GHG and pollution mitigation efforts in confined animal feeding operations, such as CH₄ recovery from covered manure lagoons or digesters, feed supplements to reduce enteric productions of CH₄, decreased production of nitrous oxide due to improved manure handling practices, and energy efficiency projects in commodity handling or storage at farm cooperatives or private processing centers; and (2) water pollution offsets from confined feeding operations due to waste handling and runoff mitigation projects in excess of regulatory requirements.

[0039] The methods and apparatus to generate standardized environmental attributes include a system designed to generate, quantify and standardize Carbon Emission Reduction Credits and Carbon Emission Offsets that accrue as a consequence of specific land use management practices.

[0040] In general, there are six elements of a CERC: (1) a baseline of emissions of specific greenhouse gases as a result of business as usual activities; (2) additivity; (3) permanence; (4) leakage; (5) ownership; and (6) verification. These elements also apply to standardized environmental attributes.

[0041] The business as usual baseline generally refers to the level of greenhouse gas emissions from continuing current management practices in that particular industry. In the case of farmers, business as usual typically is defined as conventional tillage agriculture, but may be specifically determined for each land parcel based on the land management history. Further, the business as usual baseline may be defined as an average of a larger community, rather than a business as usual for an individual or a single entity. The business as usual activities (“BAU”) can be based on the average management practice over a specified time. Often for small-grain agriculture, crop rotation systems may span two, three, five or more years. Therefore the BAU must be long enough to capture the average management variability over a specified land area. For industries such forestry, BAU is likely to span many decades.

[0042] The second element is additivity, which generally refers to human activity that causes a reduction in business as usual emissions. That is, the change between the level of greenhouse gas emissions under the business as usual baseline and the lower level of emissions must be caused by human intervention. In the case of farmers, this typically means changing land management away from the business as usual practice of conventional tillage agriculture. Even with crops removing carbon dioxide from the air, conventional tillage agriculture typically results in a net release of carbon dioxide into the air due to oxidation of carbon compounds contained in the soil. In general, as tillage intensity decreases, thereby decreasing the amount of soil exposed to the oxygen in ambient air, carbon turnover also decreases, resulting in a decrease in the net carbon dioxide emissions into the atmosphere. A change to minimum tillage, or to no tillage at all, typically results in less carbon dioxide emitted or even a net sequestration of atmospheric carbon. A change from cropland to grassland can result in the sequestration of substantial amounts of carbon dioxide in the form of organic carbon compounds that can accumulate in grassland soils. Human activity other than, or in addition to, changing land management away from conventional tillage agriculture may also be employed to cause a reduction in business as usual emissions. The concept of additionally is currently under development in international agreements. However, if a land parcel, e.g., a pasture, can be shown to have accumulated carbon over time, this carbon may not satisfy the concept of additionally if it accrued as a result of changes in climate that are not the result of human intervention.

[0043] The third element is permanence. The general objective of emissions trading is to reduce atmospheric concentrations of greenhouse gases to allow time to develop the technology to decrease emissions into the atmosphere directly from the source. In this case, permanence typically is defined as the storage of carbon dioxide in the form of biomass or soil organic carbon for a time period specified by regulation, typically twenty or thirty years. Generally, residence times for carbon removed from the atmosphere by forests can exceed decades, whereas soil carbon can have residence times that exceed hundreds to thousands of years. Therefore permanence is a contractual term that is defined by agreement. It may not mean “forever”.

[0044] The fourth element is absence of leakage, which generally means that the changed human activity intended to generate a CERC or other EBC does not result in an undesirable increase in greenhouse gas emissions in another part of the biogeochemical cycle. In the case of carbon sequestration, CERCs are more valuable if the landowner can demonstrate that the changed human activity that resulted in generation of the CERCs does not result in increased emissions of other gases, such as nitrous oxide or methane, as compared to business as usual emissions.

[0045] Another element to maximize the value of a CERC or EBC is documentation of ownership. That is, the entity offering to trade or sell a CERC or EBC must demonstrate that it is the owner of rights to the CERC or EBC. Although this typically will be the landowner-operator in the case of soil carbon sequestration, other scenarios are possible, e.g., where by agreement or operation of law another has rights to use all or part of the land.

[0046] Yet another requirement is verification, which generally refers to the ability of a third party to verify the generation of the CERC through an approved accounting process. Verification typically requires that the process employed be transparent, i.e., the process is documented so that a third party may review, analyze, understand and replicate it. For example, verification may include audits of data to ensure accuracy. The CERC or EBC value generally will be maximized where the process employed to establish the CERC EBC directly corresponds to the method of verification.

[0047] Direct measurement of the absolute amount of carbon or other element or compound sequestered in a given parcel of land is difficult and expensive. Further, the absolute amount of carbon in a specific soil sample may be highly variable for samples collected at individual points within the parcel of land, due to the mean residence time of organic matter in soils often being on the order of 1,000 years and due to soil characteristics often being quite spatially variable. Therefore, it may not be practical to obtain an accurate, precise, reproducible, cost effective direct measurement of the relatively small amount of carbon added to, or subtracted from, the carbon baseline for a land parcel over a period of several years to decades, the time periods required by current and pending legislative protocols.

[0048] This invention recognizes that, although the total amount of carbon, nitrogen or other element or compound in a specific soil sample may be quite variable, the incremental carbon, nitrogen or other element or compound stored as a result of specific land management practices over periods of decades is much less variable, particularly since most soils have been tilled in the past, at least in the United States and much of the industrialized world. This is because previously tilled soils contain levels of organic carbon that are much lower than their organic carbon saturation levels and therefore carbon storage over periods of decades is relatively insensitive to soil carbon variability.

[0049] This invention also recognizes that, to generate and quantify accrued and projected CERCs or EBCs with reasonable accuracy, it is not necessary to measure the total organic content of the entire soil profile, or even the absolute amount of carbon added to, or subtracted from, the soil since the baseline year. Rather, this invention recognizes that standardized CERCs or EBCs may be generated and quantified by estimating the incremental carbon, nitrogen, or other element or compound stored in the soil over time, e.g., since the base year, e.g., 1990.

[0050] This invention further recognizes that carbon sequestration, nitrogen capture, or the like, can be conceptualized as a national issue, which allows one to reconcile aggregate sequestration estimates with continental-scale carbon and nitrogen flux estimates. That is, by compiling CERCs and nitrogen-related EBCs from a number of landowners, one may more readily generate and quantify accrued and future values with reasonable accuracy for the compilation than for a single or smaller group of landowners. Therefore, the allocation of such attributes from the compilation to individual land parcels need not precisely accurate. However, to be fair to the individual landowner, and to maximize free-market efficiencies, the quantification system used should be relatively specific, transparent, reproducible, traceable and verifiable. Generally, the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0051] One embodiment of the invention is directed to generating and quantifying standardized CERCs for a parcel of land through the use of general data for a given region encompassing the parcel of land by utilizing a carbon sequestration model and an uncertainty analysis. That is, it would not be necessary to have detailed, long term site-specific data for a parcel of land. Preferably, the general data for the region dates back as far as possible, more preferably back to approximately 1900 and the region is as small a geographic region as possible, such as a county in the United States or an area of land that shares similar climate. Often continental climate regions are on the order of thousands of square kilometers. If available, site-specific data also may be used. More preferably, site-specific data from the base year (e.g. 1990) to date is used, along with the general data, to determine the standardized CERCs and reserve CERCs through a carbon sequestration model and uncertainty analysis.

[0052] Referring to FIG. 1, one embodiment of the invention is depicted by a flow chart showing a method of generating standardized CERCs and reserve CERCs. General data is obtained 12, preferably from a database containing geographically referenced data relevant to carbon sequestration in soil. As shown in FIG. 3, such general data 70 may include one or more of general land use history data 72, general climate data 74, general soil texture data 76 and other data 78. Site-specific data 14 preferably also is obtained, more preferably from the landowner or other rights holder to the parcel of land. As shown in FIG. 4, site specific data 80 may include one or more of recent specific land use history data 82, preferably since the base year, e.g., 1990, or other year from which standardized CERCs are desired to be generated, less recent specific land use history data, preferably from before the base year, e.g., 1990, or other year from which standardized CERCs are desired to be generated, specific soil texture data 86 and other data 88. General data 12, preferably with at least some site-specific data 14, are used to determine the approximate change in the level of carbon storage in a media over a specified time period 40 through the application of a carbon sequestration model. A confidence threshold is identified 42 and the standardized CERCs and reserve CERCs are determined 50 through the application of an uncertainty analysis. For future CERC estimation, the most recent management data is extrapolated based on past performance and future plans (treatment scenario). Data for climatic variables is also projected into the future. Then the BAU scenario and the treatment scenario both using identical data for variables such as climate and soils that are not under management control are analyzed in identical manner using the appropriate numerical models. A confidence threshold 42 for the future scenario is also identified and the standardized CERCs and future CERCs are determined 50 through the application of an uncertainty analysis. The uncertainty analysis for future scenarios may also include economic models and business models to include such variables as the projected price of CERCs and of competing land management strategies in order to estimate the projected management default rate for the specific land parcel and projected management scenario. These factors can then be included in the calculation of standardized CERCs and Reserve CERCs.

[0053] The method can be employed to generate standardized CERCs and reserve CERCs accrued over a specific time period, such as from the base year (e.g. 1990) to date, and/or project standardized CERCs and reserve CERCs based on projecting certain general data and site-specific data for a specified time period for both the BAU and the proposed future management scenarios. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0054] Alternatively, as shown in FIG. 2, the geographic location of the land parcel is obtained 10 and used to obtain relevant general data for that land parcel from data stored in a database containing geographically referenced data relevant to carbon sequestration 12.

[0055] Also as shown in FIG. 2, the general data and/or the site-specific data alternatively may be tested. One such test 16 may be to determine if the general data and the site-specific data is sufficiently complete to allow the method to generate standardized CERCs. A first negative response 18 preferably initiates a request to obtain additional site-specific data 14. A second negative response 20 preferably initiates a request to obtain additional relevant general data for the land parcel from the general database 12. A third negative response 22 preferably initiates a stop command 24. A positive response 26 allows the method to continue.

[0056] Another test 28 that may be conducted is to determine whether site-specific data are within prescribed ranges or values of possible responses. A negative response 30 preferably initiates a stop command 32. A positive response 34 allows the method to continue.

[0057] In another embodiment of the invention, a combination of elements can provide an integrated system to generate and quantify standardized CERCs. These elements can include a systematic approach for gathering and managing data, a modeling component for estimating CERCs based on available information, a scenario module to help landowners develop best management strategies for generating CERCs, a system to quantify the uncertainty and risk, and strategies for auditing and verifying data inputs that are consistent with current, pending and future greenhouse gas emissions legislation.

[0058] Yet another embodiment of the invention, a method is employed 1) to generate and quantify standardized CERCs that have accrued over a specific time period, such as from the base year, e.g., 1990, to the present date, and/or 2) to generate and quantify standardized CERCs that are projected to exist from the present date to a specific date in the future, based on land management practices or other commitments by the landowner, and/or 3) to advise a landowner of standardized CERCs that would be projected to exist based on commitments to one or more land management practices.

[0059] International greenhouse gas emission reduction protocols, such as the Kyoto Protocol, typically specify a base year, e.g., 1990, upon which to establish greenhouse gas emission reductions. Therefore, CERCs can be generated by demonstrating human-caused incremental carbon storage since the base year, e.g., 1990, compared to business as usual emissions. To estimate the incremental amount of carbon stored in the soil since the base year (e.g. 1990) for a specific land parcel, it is preferred to determine the available carbon reservoir, if any, of the soil from the identified land parcel. That is, it is preferred to determine whether the land parcel contains essentially all the carbon it is capable of containing, or whether the soil has a capacity to store additional carbon. If the carbon reservoir is not full, the land parcel may be amenable to land management practices to increase carbon storage and thereby demonstrate the element of additivity. The soil carbon reservoir need not be determined precisely, since the sequestration rate of carbon into soil is most often relatively independent of how much carbon is in the reservoir, as long as it is not full.

[0060] Several different carbon models are available to determine the available carbon reservoir, if any, within the soil and/or vegetation located on a particular land parcel. The type and level of detail of the required data are dependent on the carbon model employed, although typically such data may be characterized as general and site-specific. General data may include any data that has an impact on sequestration of atmospheric carbon and that is not necessarily specific to a particular land parcel, and preferably includes crop behavior, soil response, carbon behavior and calibration, as well as typical soil texture and land use referenced by geographic region or location. Site-specific data may include any data about the specific geographic site in question that has an impact on sequestration of atmospheric carbon, and preferably includes climate data, soil texture and land use history directed to the specific parcel of land.

[0061] For example, crop behavior refers to the impact of particular crops in increasing carbon storage in soil, which is readily available for typical crops, such as corn or soybeans. Climate data may include historical records of temperatures, precipitation, winds, etc., which is widely available in the United States through a variety of sources, such as the National Weather Service.

[0062] The soil texture for a given geographic location can be determined in a number of ways, such as testing or public records, preferably by reference to NRCS, SSURGO data and/or STATSGO data.

[0063] Land use history generally refers to the land management practices employed over a period of years. Land use history data may be characterized as general land use history data and site-specific land use history data. General land use history data may be typical and average data for a geographic area encompassing the parcel of land, such as a nation, state, or preferably a county in the United States, and may include typical practices in the given geographic area, such as types of crops, tillage methods, fertilization, irrigation, grazing, planting and harvesting practices, and other practices affecting carbon sequestration. General land use history data may be available from national, regional, state, county and local sources, such as the U.S. Department of Agriculture and other federal agencies, individual state agencies and county extension offices and other local sources.

[0064] Land use history data may also be characterized as site-specific, which may include the actual land management practices employed on that land parcel during specified time periods, e.g., types of crops, tillage methods, fertilization, irrigation, grazing, planting and harvesting practices, and other practices affecting carbon sequestration. Preferably, specific land use history data for a land parcel can be obtained from information provided by the landowner or, alternatively, from other historical sources, such as government and historical records, or from both sources.

[0065] Preferably, a numerical model known as CSU Century, developed at Colorado State University, is employed. CSU Century is a well-accepted numerical modeling computer program designed to generally predict how much carbon is sequestrated in various ecosystems over time. It was developed originally for grassland ecosystems, but has been found to be accurate for a wide range of ecosystems, ranging from the tropics of Africa to the Boreal regions of Canada. The CSU Century program generally requires extensive data regarding land use history, climate and soil texture, among other things. Other models can be used in addition to Century or as a substitute for Century. For example, an ensemble approach utilizing the output from several models can be utilized. In addition, site-specific data can incorporate measurements of the carbon content and of incremental carbon sequestration as technology makes the measurement approach more feasible. However, even approaches based purely on measurements of incremental carbon sequestered still will require the employment of a model utilizing general data and site specific data in order to accurately factor out non-human induced changes in carbon stores.

[0066] As noted, the invention recognizes that standardized CERCs may be generated and quantified without calculating the absolute amount of carbon in the soil profile. Rather, the incremental carbon stored in the soil over time, and especially since the base year, e.g., 1990, may be approximated. This recognition greatly simplifies the analysis by allowing the use of less detailed and less complete data, particularly as the time period in question lengthens.

[0067] For example, when used to determine the total organic carbon reservoir of an area of land, the CSU Century program generally requires extensive and detailed land use history data over relatively long periods of time, including, among other things, the types of crop, the amounts of fertilizer and when applied, the types and frequency of cultivation, irrigation amounts and when applied, organic matter additions, grazing systems, planting and harvesting dates, and the types of harvest. These data are gathered together as schedule files for use in the Century program. The present invention simplifies the use of carbon sequestration models by, among other things, recognizing that relevant data from greater than 100 years ago may be relatively general and incomplete, data from approximately 1900 to the base year, e.g., 1990, preferably may be more specific and more complete than the older data, but need not necessarily be so, and data from base year (e.g. 1990) to date preferably may be relatively even more specific and even more complete.

[0068] Preferably, general data regarding typical land management practices, climate and soil texture from approximately 1900 through at least base year, e.g., 1990, can be collected from national, regional, state, county and/or other local public records, compiled and converted into detailed schedule files to create a general database. Preferably, the general database contains general data relevant to carbon sequestration and referenced by geographic information, such as by nation, state, country, longitude, latitude and/or other geographic reference. General data from base year, e.g., 1990, to date also may be collected and compiled in the database.

[0069] The data in the general database more preferably can be compiled independently of individual landowner input or data and can generate a generic land use history for selected regions or locales. Such a generic land use history may have several uses. For example, generic land use histories can be used to define the ranges of plausible responses that are likely to be given by individual landowners within the geographic region. If landowner responses fall outside of these prescribed ranges, the response can be targeted for verification and auditing. Also, if site-specific data are unavailable or incomplete for a given landowner in that geographic area, general data may be used to substitute for or supplement site-specific data. A generic land use history based on general data for a particular region alternatively can be used for all of the land use history for a given land parcel within the region.

[0070] Preferably, the general database may provide much of the data required by the carbon sequestration model to determine the available carbon reservoir, if any, and to generate and quantify standardized CERCs, both accrued and future. It is particularly advantageous for the general database to contain sufficient data for the time period prior to base year, e.g., 1990, for the carbon sequestration model to determine the available carbon reservoir, if any. With public records providing the data for the time period prior to the base year, e.g., 1990, verification of resulting CERCs is simplified and expedited and the documentation requirements placed on the landowner are significantly reduced, thereby reducing barriers for the landowner to engage in the CERC market and increasing the value of such engagement by reducing uncertainty.

[0071] Site-specific data, preferably from the landowner, also may be used for certain land use history since the base year, e.g., 1990, such as the types of crops, tillage, fertilizer, irrigation, organic matter and grazing since the base year, e.g., 1990. More preferably, the landowner can provide and document detailed site-specific data, such as the crop type, the type and time periods of tillage, the type, amount and time periods of fertilization, the type, amount and time periods of irrigation, the type, amount and time periods of organic matter additions and the type and number of animals grazing, if any. Most preferably, the available information is provided for relatively short time intervals, such as by month. The landowner provided site-specific data also may be converted to detailed schedule files and stored in a data base.

[0072] To supplement or substitute for missing, incomplete or less accurate site-specific data, general data may be used, preferably from the general database. As the site-specific data are less accurate and/or less complete, the resulting CERCs will have a greater uncertainty, resulting in fewer standardized CERCs being generated and quantified, as described below. Similarly, if certain site-specific data are not available from either public records or the landowner, general data may be substituted, at the cost of increasing the fraction of CERCs held in the reserve pool.

[0073] Inputting the general data and available site-specific data into the carbon sequestration model can provide an initial analysis of whether or not the carbon reservoir of a land parcel is full and define the net carbon flux for the business as usual scenario. If this analysis shows the possibility of additivity, then more specific and more recent data from the base year, e.g., 1990, may be used, if available, to determine incremental carbon storage for the period beginning in the base year, e.g., 1990, to the year of the analysis.

[0074] Similarly, the incremental carbon to be stored in the soil into future years may be projected, preferably based on the data already inputted, e.g., based on continuing current land use practices previously input and based on entering variables not dependent on landowner behavior, such as long term weather projections. Also, the potential for storing incremental carbon into the future also may be projected by changing at least one variable that is dependent on landowner behavior, e.g., land use practices, particularly those associated with increasing carbon storage in soils.

[0075] In a preferred embodiment, future carbon storage can be determined based on the landowner providing alternative land use management practices that can be employed into the future. The relative carbon sequestration potential for each potential land use management practice can be determined by the methods described above and reported to the landowner. More preferably, the carbon sequestration potential for each alternative land use management practice can be determined through the use of a look-up table consisting of a series of scenarios that have been pre-analyzed for regionally important variables. Even more preferably, the landowner may provide such alternative land use management practices through an interactive media that is capable of identifying certain variables, offering alternatives to one or more variables, generating and quantifying standardized future CERCs based on the selected alternatives and providing a report. The analysis can include economic analysis to determine projected commodity prices and alternative management costs as well as potential income from CERC generation. The results preferably can be used by the landowner to assess variables to maximize the generation of net income, as well as the number and value of CERCs.

[0076] After the quantity of accrued and projected incremental carbon storage is determined, the results may be subjected to an analysis to check the data and the modeling. Preferably, the data provided by the individual CERC producer can be analyzed to verify that the data is within expected or prescribed ranges. Data found to be outside of such ranges can be flagged for independent verification and auditing. Auditing can include analysis of satellite data, aerial photographs or other data to insure historical accuracy and compliance.

[0077] The results also may be subjected to an analysis of uncertainty. This invention recognizes that the use of an uncertainty analysis can allow the use of general data for input variables into carbon sequestration models to determine the approximate change in the level of carbon compounds in soil over specified time periods. The use of general data in such models is particularly advantageous for data for years dating back into time, such as prior to the base year, e.g., 1990, and back as far as 1900 or earlier, for which site-specific data may be difficult or impossible to document. The uncertainty analysis allows one to quantify the relative level of uncertainty in the results of the sequestration model and express it as standardized CERCs and reserve CERCs, as explained in more detail below.

[0078] An uncertainty analysis generally performs a number of simulation runs in which certain key input variables are allowed to range across a distribution of reasonable values. The results for each simulation then can be compiled and compared to determine the potential range of variation in carbon sequestration due to uncertainties in the input data. For example, an uncertainty analysis generally takes a given range of the input data and determines a range of possible results. The uncertainty analysis can include submission of data to an ensemble of models. Since every model has specific strengths and weaknesses, this approach can be used to quantify uncertainty.

[0079] Preferably a Monte Carlo uncertainty analysis is employed, either with the individual models or with an ensemble of models, although a variety of other methods may be used. In a Monte Carlo uncertainty analysis, input variables that affect the result are randomly assigned values that follow a particular distribution, such as Gaussian, although other distributions may be used, if more appropriate. A number of simulations are conducted, each time again randomly assigning values to the key input variables. From the results accumulated from the simulations, the actual distribution U of values arising from the uncertainty in the key variables can be determined. If, for example, the actual distribution U is Gaussian, a mean value X and a standard deviation S may be determined using standard statistical equations. X and S define a distribution of possible CERC values for that land parcel. According to the properties of a Gaussian distribution, X is considered the most probable value and S defines a spread of possible values around the mean.

[0080] To quantify the number of standardized CERCs for a land parcel, a confidence threshold C may be defined in terms of the standard deviation of the calculated Monte Carlo distribution and expressed as a probability, P=f(C), that the standardized CERCs will actually be stored in the soil. For example, if C is chosen to equal 0.95, then for a normal two-tailed Gaussian distribution, f(0.95)=2S and the standardized CERCs would be equal to X−2S, and the reserve CERCs would be equal to 2S. In that example, one may characterize the standardized CERC in terms of being 95% confident that one metric ton of carbon is or will be actually stored in the soil. In other words, for 100 identical land parcels, the amount of carbon calculated to be accrued in the soil will be likely to lie within the defined range for 95 of those parcels. The actual threshold C used in commercial practice may vary, e.g., for different applications, for different collections of CERC producers, for different potential CERC purchasers and other variables. The preferred threshold C is approximately 0.90 or higher. The uncertainty analysis described here includes the effects of physical and environmental variables. Additional variables that can affect carbon sequestration for future scenarios can include economic factors related to competing land uses. Therefore additional model simulations can be performed in order to predict uncertainties for other sociological and market variables. For example, economic and marketing models can be utilized to estimate producer compliance/default factors. These additional sources of uncertainty would be included in the calculation of the standardized CERC pool and the uncertainty CERC pool.

[0081] One advantage of this approach is that the analysis may be immediately set up using standard Gaussian input distributions, but the expected distributions of input variables may be refined over time as more data becomes available, such that the distribution of random values may mimic more closely the distribution of values likely to actually occur.

[0082] In general, as the number of Monte Carlo simulations increases, and as the number of different model approaches are applied, the accuracy of the results increases. Preferably, a complete uncertainty analysis is conducted on each parcel of land to best characterize the uncertainty associated with that land parcel. Preferably, approximately 100 to approximately 1,000 small runs are conducted. Test results have shown that 800-1,000 simulation runs produce a stable distribution of results. Additional or different simulations can be run to further improve the accuracy of the results, particularly as computing technology continues to improve. However, current system constraints may limit the number of simulation runs per land parcel and other factors may reduce the number of simulation runs that can be conducted. Additional test results have shown that approximately 200 simulation runs for each land parcel can produce an uncertainty distribution similar to the results of 1,000 simulation runs and thereby provide a reasonable estimate of uncertainty for individual land parcels. This preferred embodiment of approximately 200 simulation runs currently provides a reasonable balance between accuracy and practicality, while still providing a customized uncertainty analysis for each parcel of land.

[0083] In addition to the uncertainty analysis for each parcel of land, additional uncertainty analyses may be conducted to improve the reliability of the results and to better understand the uncertainty distribution U, among other things. These analysis may include social and economic factors. Again, a Monte Carlo uncertainty analysis is preferred, wherein the results for one or more of the land parcels may be subjected to a similar analysis, but with a greater number of simulations, more preferably approximately 1,000 simulation runs. A greater number of simulations, conducted repeatedly for many landowners, can provide information on the form of U and assist in choosing the preferred function to calculate P=f(C), all as would be recognized by one skilled in the art.

[0084] In addition, these additional simulation results may be compared with the results for 200 simulation runs. From each 1,000 simulation runs, subsets of 200 simulation runs may be extracted to determine and compare their statistical means and standard deviations to those of the 1,000 simulation runs. This data preferably may be used to determine the amounts by which the results of a 200 simulation run set differs from the results of a 1,000 simulation run. For example, if a 200 simulation run subset is found to typically underestimate the uncertainty range by 2%, that variation may be added to the uncertainty calculated for each land parcel.

[0085] Land parcels may be randomly selected for these 1,000 simulation runs, although preferably each land parcel is selected. Using current technology on a single workstation, approximately 10 sets of 1,000 simulation runs can be run in one day. Depending on the number of landowner registrations received per day, this may result in as few as several percent or as many as 100% of landowners can be selected for full analysis. Additional workstations may be dedicated to running these simulation runs, if necessary or desirable. Preferably, a minimum of approximately 5% of all land parcels would be subjected to these 1,000 simulation runs.

[0086] Additional audits may be conducted. For example, selected input data may be compared with satellite imagery or Farm Service Agency records to independently confirm land use histories. As FSA data becomes computerized, it becomes more practical to directly input this data into the model using a computer script interface. For example, a landowner's assertion that corn had been planted on a land parcel during a specific year dating back to approximately 1980 may be verified by selected landsat images. Candidates for this type of auditing preferably would be identified by specific indicators, such as certain landowner responses falling outside of expected ranges, e.g., as established by the general database. Some candidates also can be selected at random.

[0087] Although carbon sequestration is sensitive to many variables, those variables have been shown to be definable fairly accurately. In tests conducted according to the invention, data for sample parcels of land in South Dakota generally have resulted in an uncertainty of approximately 5% for most runs conducted on the key variable of soil texture. Other uncertainties, such as future climatic variables, can be evaluated as part of the uncertainty analysis and generally will tend to be additive.

[0088] From the results of the uncertainty analysis, a fraction of the CERCs generated may be standardized and identified as available for trade, with the remaining CERCs placed in reserve. For example, if the total uncertainty calculated were approximately 5%, preferably approximately 95% of the CERCs generated would be certified as standardized CERCs available for trade and the remaining approximately 5% would be placed into a reserve pool. In that example, if 100 CERCs had been calculated, then up to 95 standardized CERCs can be certified for trade and 5 CERCs would be included in the reserve pool. In the future, as data and carbon sequestration certification technology improves, the reserve pool preferably may be reduced. Conversely, if future climate change or other factors demonstrate that the uncertainty is increased, the reserve pool preferably may be increased. The actual percentage variation is currently being determined by uncertainty analysis and may be greater than the above example of 5%. Through this process, each CERC certified and traded may be standardized, such that it is equal in value regardless of where it was generated. That is, a standardized CERC generated and quantified by the present invention may be a tradable commodity.

[0089] The CERCs can then be compiled for trade, preferably in an open market to a variety of potential CERC purchasers. Preferably, additional standardized CERCs from one or more other CERC producers, from a variety of sources and geographic locations, can be additively pooled to increase the size and value of the compilation. Ownership of the CERCs can remain with the landholder and the pooled CERCs can be marketed on the basis of date of generation, or on the basis of the producer's contribution to the pool (similar to a cooperative). In this case, the individual landowner is liable for his portion of the CERCs delivered and a portion of the proceeds must be reserved for future monitoring and verification expenses. Another embodiment would be to transfer ownership of individual credits to a third-party aggregator who assumes liability for monitoring and delivering CERCS to purchasers. Once standardized CERCs and EBCs are generated many aggregation and marketing strategies are possible as has been demonstrated for other commodities. Through such a system of the present invention, CERC generators and CERC purchasers can more readily communicate and evaluate the availability of CERCs of demonstrated quality and quantity, resulting in a lower risk to the CERC purchaser, higher price to the CERC generator and a more equitable result for all involved.

[0090] The quantity of incremental carbon storage that was initially calculated, but determined to not meet the established standards for a CERC certified for trade, may be identified and retained in a reserve or indemnification pool. Preferably, these results and the underlying data are maintained and combined in the indemnification pool with similar results and data from other landowners. This process preferably may reduce or eliminate the need for CERC purchasers to buy relatively expensive insurance for protection against the carbon storage being less than expected.

[0091] The standardized CERCs, whether accrued or projected, also may be subjected to confirmation or testing. This invention recognizes that, by collecting and offering for trade a collection of CERCs generated by land use management of a number of landowners over a relatively larger geographic area, the aggregate reduction of business as usual greenhouse gas emissions need only be independently confirmed, e.g., by regulatory agencies. That is, the accuracy of CERC generation for an individual parcel of land within that aggregate generally would not be an issue to the CERC purchaser. Generally, as the land area increases, the testing for CERC generation becomes easier, more accurate and more cost efficient. For example, CERCs generated over a several hundred or several thousand square mile region are more readily susceptible to testing, such as by reconciling with ambient carbon dioxide concentrations and isotopic tracer techniques.

[0092] For the global CERC market, the potential CERC purchaser is concerned that the number of CERCs actually has been, or will be, generated to the satisfaction of the applicable governing bodies. Currently, this typically requires independent verification to determine that the method to generate and quantify the CERCs is transparent and repeatable. In the long run under current protocols, the aggregate carbon balance of an entire nation would be validated based on independent assessment technology. In the case of carbon sequestration, the validation would likely be based on the results of intensive long term research at selected research sites and it is unlikely that each parcel of land, or a random selection of parcels of land, would be tested. Currently such a process would be difficult scientifically and not feasible economically for each CERC trade. However, additional technological and scientific improvements can change those dynamics to allow individual or random verification. Such advances can be readily incorporated to generate and quantify standardized CERCs according to the present invention. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0093] In another embodiment of the invention, standardized CERCs may be generated and quantified by identifying categories of information to determine the relative level of carbon sequestration, obtaining available information, estimating the change in carbon storage in a selected media since the base year, e.g., 1990, estimating the change in carbon storage in selected media into the future depending on certain input variables, conducting an uncertainty analysis and quantifying standardized CERCs.

[0094] In a preferred embodiment of the invention, individual CERC producers can register and provide site-specific data regarding carbon sequestration, the producer provided site-specific data may be combined with general data from a general database of previously acquired information, and input into a carbon sequestration model, incremental carbon storage can be calculated that has been previously generated and/or that is projected to be generated, the calculated result can be subjected to an uncertainty analysis to quantify the number of CERCs that meet an established standard of certainty, the standardized CERCs can be collected into a primary pool with standardized CERCs from other landowners, other incremental carbon storage can be collected into a reserve pool with similar results from other landowners, and the primary pool can be marketed to potential CERC purchasers. As data and/or analyses is improved or updated, incremental carbon storage from the reserve pool may be released to the primary pool. This invention allows an individual landowner, or a group of landowners, to generate, quantify, certify, market and trade standardized CERCs, both accrued and projected.

[0095] For the example of an individual or individual entity landowner, the landowner preferably may identify the parcel of land and receive an advisory report that quantifies possible accrued and/or future standardized CERCs, based on the previously stored general data in the database. Alternatively, the landowner may be requested to provide available site-specific data in response to particular inquires regarding the land and land use history in order to generate a more customized advisory report. Preferably, the advisory report would include the number of accrued standardized CERCs determined to be available for trade and the quantity of reserve CERCs. Alternatively, the landowner can select to change one or more of the input variables regarding future land management practices and receive a report that includes projections of future standardized CERCs based on the one or more changed input variables. The landowner preferably may conduct multiple analyses to better assess the impact of certain land management practices on CERC generation. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0096] In another embodiment of the invention, a method to generate and quantify standardized CERCs includes obtaining selected information from at least one landowner, obtaining selected information from a data base, inputting selected information from the landowner and from the data base into a carbon sequestration model to determine the approximate change in the level of carbon sequestered in the land parcel over a specified time period, conducting an uncertainty analysis on the results and providing a report to the landowner.

[0097] Information from a landowner preferably is obtained through an interface, which may be any media through which the landowner may identify the geographic location of the land at issue and optionally input other data, such as land use history data, relevant to carbon sequestration. For example, the interface may involve the landowner manually completing written forms, verbally responding to inquiries, forwarding other documentation or information, otherwise providing requested data or combinations thereof. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0098] In a preferred embodiment, the interface comprises an automated inquiry and response system, allowing the landowner to input certain information in response to certain inquiries. For example, the interface preferably would request the landowner to identify the landowner, the parcel of land and other site-specific data relevant to carbon sequestration. More preferably, the results from the landowner interface are compared with a database containing general data, and optionally site-specific data, relevant to generating and quantifying standardized CERCs to identify missing, incomplete or mis-entered data and to request additional information.

[0099] The interface also preferably requests site-specific data regarding the land and land use history of that parcel of land, including the actual land use practices employed during specific time periods, e.g., types of crops, tillage, fertilizer, irrigation, etc., as described in more detail above. More preferably, detailed and documented site-specific data is requested on a monthly basis for each year dating back to at least the base year, e.g., 1990.

[0100] In a more preferred embodiment, the interface includes a website accessible to a potential CERC producer that facilitates the data input from the potential CERC producer. Additionally, the website preferably includes additional information and reference material, such as background information regarding carbon sequestration and the global CERC market, current news relevant to CERC markets, a description of the process employed to generate and quantify standardized CERCs and the indemnification pool, a compilation of statistics relating to CERCs, and a compilation of accrued and projected CERCs from other CERC producers.

[0101] The database may be any compilation of data relevant to sequestration of atmospheric greenhouse gases and preferably includes a compilation of geographically referenced information. Preferably, the database contains both site-specific data and general data that have an impact on sequestration of atmospheric greenhouse gases. As described above, site-specific data preferably includes climate, soil texture and land use history, among other things, and general data preferably includes crop behavior, soil response, carbon behavior and calibration, among other things. More preferably, the general data can be obtained from public records and placed in a format referenced or indexed by geographic location.

[0102] The site-specific data from the landowner and the relevant general data from the database can be input into a carbon sequestration modeling program to determine the available carbon reservoir, if any, in the particular parcel of land and the incremental carbon stored in the land since the base year, e.g., 1990. Again, preferably the CSU Century program is employed to make this determination.

[0103] The information from the landowner may be entered into the carbon sequestration modeling program or programs in a variety of ways, preferably data input is automated and more preferably data input is automated through a website accessible to the landowner. In one embodiment of the invention, the system receives site-specific data from the landowner, determines or obtains the geographic location of the parcel of land, identifies the site-specific data, if any, and the general data relevant to that parcel of land stored in the database, identifies the business as usual scenario for the land parcel and submits the collected information to the carbon sequestration modeling program. The system may further compare the data inputted by the landowner with the data from the database to identify potential errors or mis-entries, which preferably may be flagged for independent review.

[0104] The carbon sequestration modeling program then can calculate the available carbon reservoir, the incremental carbon stored since the base year, e.g., 1990, and the incremental carbon projected to be stored for a specified time period into the future, based on continuing the current land management practices and projecting other variables not dependent on the landowner, all as described above. The results can be subjected to an uncertainty analysis, preferably a Monte Carlo uncertainty analysis, again as described above. Accrued and projected standardized CERCs can be calculated and compiled, with other incremental carbon storage being quantified and held in a reserve pool.

[0105] The results of the analysis can be communicated to the landowner, preferably in a report and more preferably in a report directly through the interface. Preferably, the system can allow the landowner an opportunity to run the analysis multiple times for future scenarios, with the landowner or another selectively changing one or more of the variables, in order to determine the impact of the change on the generation of standardized CERCs. For example, the landowner may desire to analyze the impact of changing the type of crops planted, the amount of fertilizer used, the frequency of irrigation, the level of tillage, the time of harvest, etc. The system allows the farmer to input any variable, or combination of variables, run the analysis and receive a report quantifying projected standardized CERCs. More preferably, the system identifies the variables that the landowner is able to change, identifies multiple choices for that variable and provides a mechanism for the landowner to select one or more of the choices.

[0106] In a more preferred embodiment, the system comprises a computer interface with the landowner, in which the landowner is requested to input requested information regarding the location of the parcel of land and land management practices employed on an annual basis since at least as early as the base year, e.g., 1990. More preferably, the information is requested in the form of multiple choice responses to particular inquires of land management practices. The system can take the information inputted from the landowner, identify and obtain relevant information from the database, submit the landowner and database information into a carbon sequestration modeling program, submit the results to an uncertainty analysis program, calculate accrued and projected standardized CERCs available for trade, as well as accrued and projected reserve CERCs, and generate a report for the landowner.

[0107] In an even more preferred embodiment, the landowner can input requested site-specific data via a website. The inputted data can be electronically transferred, along with relevant data retrieved from the electronically stored database containing the other site-specific data, if available, and general data relevant to that land parcel, to a carbon sequestration modeling program and to an uncertainty analysis program. From the results, standardized CERCs can be quantified, whether accrued or projected, and placed in a compilation of other standardized CERCs from other landowners. Results that do not meet the standards for a standardized CERC are placed in a compilation of other similar results and held as a reserve or indemnification pool. The compilation of standardized CERCs can be offered for trade on the open market.

[0108] More specifically, a more preferred embodiment of the invention comprises linkages between at least four components: 1) a website to obtain information from, and disseminate information to, one or more landowners; 2) a database structure to store collected information from the one or more landowners; 3) a database structure, such as a general database, to store collected information from other sources relevant to carbon sequestration; and 4) one or more data processors adapted to run a carbon sequestration modeling program and/or an uncertainty analysis program. The linkages allow information to be passed between the components, and allow that actions in one component, such as the submission of a request from the website to “quantify the standardized CERCs,” initiate a sequence of actions whereby each component performs its designated task in its designated order to produce the desired result. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0109] In the more preferred embodiment, the linkages operate automatically through a collection of computer programs, scripts and daemons, which together pass the needed information between the components and initiate the desired actions. For example, when the landowner submits a request to quantify the standardized CERCs, the database transfers the landowner's input data in a specific format to a specific directory on the computer running the carbon sequestration model. A daemon in that computer watches for information to appear and, when finding data in the input directory, initiates a master script program. The master script program calls a geographic information system routine to process the site location of the land parcel and obtain stored values in the database for general data, such as soil texture, climate and general land use history. These obtained values are placed in a data directory and control is returned to the master script. The master script then calls a set of Perl scripts which parse the appropriately formatted input files required by the carbon sequestration model. The master script calls the carbon sequestration model to perform its program and then the uncertainty analysis program to perform its program. The results are placed into a special output directory in specifically formatted files and the master script deletes the input files to prevent the initiation of another run. A different daemon watches for output files to appear and, when such output files are found, it calls a script to parse and interpret the results and a final report file containing the standardized CERCs and uncertainty is produced. Another daemon on the database system watches for this output file, transfers the results into the database and notifies the landowner by an appropriate method that the results are completed and may be viewed, e.g., on the website.

[0110] Another embodiment of the invention comprises an apparatus to generate and quantify standardized CERCs, which may include an interface with the landowner, a data structure adapted to store data relevant to carbon sequestration, such as land use history, soil texture and climate data, a data processor adapted to run a carbon sequestration modeling program, a data processor adapted to run an uncertainty analysis program and a mechanism to generate and provide a report to the landowner. The apparatus preferably is designed to allow individual landowners, or groups of landowners, to input requested information and receive reports quantifying accrued and projected standardized CERCs, as well as CERCs to be held in reserve.

[0111] Referring now to FIG. 5, an apparatus 100 comprises a producer interface 110, an operator interface 120, a data structure 130 and a data processor 140. Preferably, the producer interface 110 is adapted to receive data input by a potential CERC producer, more preferably in response to particular inquiries regarding the geographic location and size of the land parcel and its land use history. The producer interface 110 also preferably is adapted to receive a report from the data processor 140 and provide it to the potential CERC producer. The operator interface 120 is adapted to receive data by an operator, preferably geographically referenced general data relating to factors having an impact on carbon sequestration, such as climate, soil texture and land use history.

[0112] The data structure 130 is adapted to receive and store data from the producer interface 110 and preferably also is adapted to receive and store data from the operator interface 120. Alternatively, a separate data structure (not shown) may be used to receive and store data from the operator interface 120. More preferably, the data structure 130 is adapted to receive and store site-specific data 112 from the producer interface 110 and general data 122 from the operator interface 120. As described above, the general data 122 preferably is geographically referenced.

[0113] The data processor 140 is adapted to identify the appropriate data from the data structure 130, including the data from the producer interface 110 and the data from the operator interface 120. Preferably, the data processor 140 is adapted to use the input geographic location of the land parcel to identify and obtain geographically referenced general data 122 stored in the data structure 130. The data processor 140 is adapted to use the site-specific data 112 and the identified general data 122 to determine the approximate change in the level of carbon compounds stored in the defined media over a specified period of time, preferably through the operation of a carbon sequestration modeling program.

[0114] Preferably, the data processor 140 also is adapted to receive the results of this determination and the data on which they were based and conduct an uncertainty analysis, preferably a Monte Carlo uncertainty analysis, to quantify standardized CERCs and reserve CERCs. Alternatively, a separate data processor (not shown) may be used to conduct the uncertainty analysis. The data processor 140 also may be adapted to generate a report and provide the report to the potential CERC producer, more preferably through producer interface 110.

[0115] In another embodiment of the invention, a system to generate, quantify, standardize, pool and trade carbon emission reduction credits is disclosed. This system includes a method and apparatus to obtain data and commitments from one or more potential CERC producer, combine the obtained data with data obtained from other sources, quantify accrued standardized CERCs, projected standardized CERCs, and remaining carbon emission reductions not included in the standardized CERCs and compile accrued and projected standardized CERCs for trade. Preferably, the compiled accrued and projected standardized CERCs are marketed for trade after a certain quantity of such standardized CERCs has been compiled.

[0116] The accrued and/or projected standardized CERCs may be marketed or sold through a wide variety of means, including direct solicitation to potential CERC purchasers, advertising, auction, etc. Preferably, the standardized CERCs are placed in the open market for sale or trade via an on-line auction or through one or more on-line auction services.

[0117] In another embodiment of the invention, one or more other variables which limit the acceptance of a standardized CERC may be identified, analyzed, estimated or preferably quantified and communicated to the potential CERC purchaser. This can operate to reduce, or preferably remove, a variable for the potential purchaser, thereby increasing its value to the CERC producer.

[0118] For example, the CERC requirement of ownership may be analyzed, an uncertainty determined and the conclusion presented to the potential CERC purchaser. Preferably, the landowner is requested to provide information in response to questions directed to ownership and other rights to the land that may have an impact on the ownership of CERCs generated from the prior or future land use. Such inquires may include the identity of all entities with potential rights to ownership, use, occupation, easement, etc. of the land, the nature of such rights and the parties practices. The inputted ownership information is compiled and can be directly communicated to the potential CERC purchaser. Preferably, the inputted ownership information is analyzed, whether by a person or a program, to assess possible ownership issues and to provide a report. Generally, a response that no such other entity exists would decrease the risk of an ownership issue, whereas a positive response would enable a potential CERC purchaser to more accurately assess such a risk.

[0119] Similarly, the requirements of leakage and permanence may be included in the determination of establishing a standardized CERC. Preferably additional inquiries are submitted to the landowner designed to identify, ascertain and assess issues related to leakage and/or permanence of any CERCs generated through the management of the parcel of land. For example, to establish permanence, the landowner may be required to certify the practice of a specific agricultural rotation sequence for defined time period. In a more specific example, the landowner may document past land use history and certify the practice of no-till wheat cultivation for three out of the next ten years. Based on landowner submissions, a fraction of the CERCs generated, if any, can be standardized for trade and a fraction can be held in reserve.

[0120] An example of the operation of one embodiment of the invention follows. A potential CERC producer accesses a website that includes background and reference material, as well as an interactive interface capable of receiving and transmitting data. In response to an inquiry, the potential CERC producer identifies a parcel of land by geographic location.

[0121] The geographic location is utilized to identify the specific land parcel and the total area of the land parcel. The geographic location also is used to obtain general data relevant to carbon sequestration in soil for that land parcel from a database containing geographically referenced general data relevant to carbon sequestration in soil, such as land use history, climate and soil texture. A baseline level of business as usual carbon emissions is also obtained, preferably from a database of such baseline levels referenced by geographic location and/or type of activity, such as farming. The relevant general data is input into a carbon sequestration model to determine whether the carbon reservoir of the soil is full. If it is full, the soil is not capable of satisfying the requirement of additivity and CERCs will not be generated. If the carbon reservoir is not full, the potential CERC producer is prompted to provide additional site-specific data.

[0122] The site-specific data requested may depend on the geographic location of the land parcel. Typically, the potential CERC producer would be requested to identity, as accurately and as completely as possible, detailed land use history for each year since the base year, e.g., 1990, such as 1) the type, planting month and senescence of annual plants on the land; 2) the type, first growth month and senescence of perennial plants on the land; 3) the type of cultivation each month; 4) the type, form and amount of each fertilizer each month; 5) the type and amount of organic matter additions each month; 6) the type and amount of irrigation each month; 7) the type and yield of harvest each month; 8) whether winter grazing or pasture grazing; and 9) if pasture grazing, the type and number of animals grazing each month.

[0123] The site-specific data may be tested. For example, if the site-specific data is not complete, the website may prompt the potential CERC producer for additional information. If the site-specific data is still not complete thereafter, the general database may be accessed to determine if general data is available to substitute for the missing site-specific data. If such general data is obtained or used, the uncertainty analysis is adjusted to reflect the greater level of uncertainty of that data. Other tests also may be conducted, such as testing the site-specific data to determine if it falls within prescribed ranges or values of related general data from the database and comparing input data for specific years to satellite-imagery to determine congruence.

[0124] The site-specific data, along with the general data relevant to the land parcel obtained from the general database, as well as the baseline level, are input into a carbon sequestration model to determine the approximate change, if any, in the level of carbon compounds stored in the soil since the base year, e.g., 1990. In this example, the potential CERC producer is only requested to provide data back to the base year, e.g., 1990, while the database provides all data prior to the base year, e.g., 1990. Even with the use of such general data, standardized CERCs may be generated and quantified with reasonable and acceptable accuracy by the use of an uncertainty analysis.

[0125] The data input and therefore the results of the carbon sequestration model are subjected to an uncertainty analysis, whereby the relative uncertainty of the results can be quantified, based on a desired confidence threshold. The approximate change in the level of carbon compounds in the soil may then be expressed as standardized CERCs and reserve CERCs, accrued since the base year, e.g., 1990, to the date of the analysis. The results are communicated to the potential CERC producer through the website. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0126] The website also will allow a determination of the amount of future standardized CERCs that may be generated if the CERC producer were to commit to certain actions into the future. For example, in response to inquiries, the potential CERC producer inputs data as to future actions for defined time periods, such as changing to no till agriculture for ten years, or rotating soybeans and corn every other year for eight years, etc. Preferably, the website identifies possible actions that would most increase standardized CERC generation, based on the site-specific data and general data previously entered, and prompts the potential CERC producer to select from one or more of a plurality of choices. The selected data is inputted, the carbon sequestration model program and uncertainty analysis are conducted, future standardized CERCs and future reserve CERCs are quantified and the results are communicated to the potential CERC producer.

[0127] The potential CERC producer optionally may request one or more alternative runs to determine the projected number of future standardized CERCs, based on changing selected input variables. The potential CERC producer preferably is given the opportunity to contractually commit to a specific course of action for a specific time period, and is awarded the number of projected future standardized CERCs and reserve CERCs based thereon.

[0128] The accrued standardized CERCs are placed into a pool of accrued standardized CERCs with those of other CERC producers, the future standardized CERCs are place into a pool of future standardized CERCs with those of other CERC producers and the reserve CERCs are placed into a reserve pool with those of other CERC producers. These pools, separately or in combination, may be offered for sale, preferably on the open market though competitive bidding.

[0129] Because the landowner supplies much of the data used to generate and quantify standardized CERCs, the costs can be reduced. Because a landowner is not required to supply detailed land use history data or other data prior to the base year, e.g., 1990, and perhaps not even complete data after the base year, e.g., 1990, and is not required to supply other data such as climate data, greater numbers of landowners can participate in generating CERCs and contributing to a pool of CERCs with other landowners. Because the process to generate and quantify the standardized CERCs is transparent and reproducible, it is well suited for independent verification and auditing by third parties. Because the process is flexible, it may be modified to respond to evolving carbon trading and greenhouse gas reduction policies and regulations and to incorporate evolving technology and science findings. Overall, the method and apparatus of the present invention are designed to facilitate the participation of individual landowners in the CERC market, maximize the value of the CERC generated, increase the price paid to the CERC generator and lower the risk to the CERC purchaser. Generally the same principles and characteristics in total or in part as described above also apply to the production of EBCs.

[0130] The invention described herein may alternatively be used in a variety of resource management related issues. For example, a module may be added that is linked to soil-erosion and hydrology models. A landowner then may enter the coordinates for a specific land parcel and receive a plan for the specific locations of grassland buffer strips that would decrease soil erosion by specific amounts. Alternatively, a module may be added to generate and quantify standardized CERCs based on capturing methane emissions from manure storage and processing lagoons. These alternative projects share several common elements, including a customized data base, such as a general database, to define important controlling variables, a producer-accessible interface for project-specific data, linkages to data processors adapted to run numerical models and data processors adapted to run uncertainty analyses. These systems are designed to readily adapt to current and evolving regulatory requirements.

[0131] The invention also may be advantageously applied to sequestration and/or reduction of emissions of greenhouse gases other than carbon dioxide. These greenhouse gases may include nitrous oxide and methane, or any other greenhouse gas identified by the International Panel on Climate Change (IPCC), regulatory agency or other authority. The invention also may be advantageously applied to reduction of business as usual greenhouse gas emissions and/or sequestration into media other than soil, such as trees, other vegetation, aquatic systems and marine systems.

[0132] The invention also may be advantageously applied where CERCs are produced as a consequence of substitution of renewable carbon, such as biomass and/or methane from landfills, for fossils fuels. The specific module would be designed to define the CERC production and uncertainty to normalize their value and document their compliance with regulatory requirements.

[0133] In another embodiment of the invention, one or more of the methods described herein can be used to quantify and normalize CERC generation for businesses engaged in carbon sequestration projects or to other greenhouse gas mitigation efforts, including, e.g., emissions of methane from animal feedlots and manure storage facilities. Modules can be added to quantify CERCs that will meet the regulatory requirements for documenting CERC generation for those applications. This reduces and preferably eliminates uncertainty for the potential CERC purchaser, thereby increasing the value of the CERC to the CERC producer.

[0134] In yet another embodiment of the invention, one or more of the methods described herein can be used by those who regulate and/or report greenhouse gas emissions and/or mitigation efforts. This would provide verification of local, regional, national and international greenhouse gas reduction efforts.

[0135] The invention also may use the methods and apparatus described above to generate a variety of other standardized environmental attributes that result from specific land use, or other practices involved in the production of services or products, such as commodities, or other practices in the use of land. In one application, the invention may be used to generate standardized environmental attributes of land-parcel-specific land use management. This allows the disaggregation of the environmental attribute from the commodities that are produced as a result of these specific land use management practices. In addition, the environmental attributes can be monetized through application of appropriate economic models. This standardization process allows the mixing of various types of attributes. The attributes can then be sold independently or they can be re-attached to products at the point of sale in the form of “eco-tags”, or “green tags.” The framework of such a method and apparatus can be utilized and modified as necessary in order to keep track of the “eco-tags” generated by specific producers and allocate the income generated at the point of sale back to the producers in an equitable, transparent, accountable way.

[0136] These embodiments of the invention build on the framework of the systems described above for gathering temporally and spatially-specific management data from producers (for example farmers and ranchers), and placing these data within the context of a geographic information system (GIS) containing the geo-rectified data necessary to quantify the physical, and/or the biological and/or the ecological impacts of said specific management practices used and/or projected to be used during the production of the commodities. The data, gathered through a series of questionnaires preferably delivered over the Internet or alternatively gathered through interviews with the producer, are then utilized as input for a numerical model or as input for a series of numerical models. These models are then used to quantify the physical and/or the biological and/or the ecological impacts of the specifically-defined management practice located on the specifically-defined land parcel.

[0137] An analysis of uncertainty is then performed, preferably as described above, however applied here for the purpose of accounting for sources of uncertainty inherent in the quantification of the physical, and/or the biological and/or the ecological impacts of the management strategy used to produce a specific commodity, in order to allow quantification that will produce standardized units of effects. Examples of relevant units may include the mass of a specific pollutant that was avoided, the amount of greenhouse gas avoided, and/or the amount of energy required for production compared to a business as usual scenario.

[0138] Further, the process of utilizing producer-specific questionnaires, linked to and incorporated within a GIS system and delivered to a numerical model or delivered to a series of numerical models and further linked to a process to quantify the uncertainty of the data, preferably the Monte-Carlo process, thus producing a pool of quantified effects “certified” to exist at a specified confidence interval, preferably the 95% confidence interval (any specified confidence interval can be used) and also creating a pool of “uncertain effects” will be designed in order to accurately quantify and to standardize the specific physical, and/or biological, and/or ecological units of impact. This process is designed to facilitate the aggregation of such impacts across watersheds, ecological regions and even across continents.

[0139] Further, the quantified physical, and/or biological and/or ecological impacts may be linked to an economic model or to a series of economic models designed to quantify the value of such quantified, standardized attributes. In the preferred embodiment, these models are based on the theory that the value of the said attributes will related to the cost of remediation. For example, the value of installing a vegetated buffer-strip to keep soil from eroding from a field and into a watershed can be calculated to be equal to the cost of dredging sediment from the watershed and replacing it back on the land parcel. This process facilitates the conversion of said attributes into economically liquid units or “eco-tags” that are thus standardized across various commodity production systems and across various physical, and/or biological, and/or ecological attributes.

[0140] The infrastructure of a method and apparatus of this invention may further be leveraged with the addition of modules to produce “eco-tags” in order to generate producer income for attributes for which society is willing to pay. Additionally, the invention preferably is adapted to track the eco-tags to the point of sale and provide the proper accounting so that producers, such as farmers and ranchers, are rewarded appropriately. For this point, the eco-tag can be virtually created and tracked. Alternatively, each standardized or “certified” eco-tag can incorporate a rf-tag, which is a small transmitting chip uniquely coded to identify and track the original generator of the specific tag and/or class of tags. In this case, the tag can be physically attached to the product. When the product is sold and the rf-tag is scanned, the revenue generated by the sale can be tracked, removed from the appropriate purchaser account and placed into the appropriate generator account. This process facilities tracking, reduced accounting and other costs and reduced layers of involvement by third parties.

[0141] One embodiment of the invention is as follows. Farmers and ranchers produce commodities, such as milk, meat, hay, grain, etc. These commodities are valued by society. The production of these commodities by some producers also imposes costs to society in the form of pollution and sedimentation. The positive attributes or embodiments of such production can be quantified and standardized, aggregated or disaggregated from the commodity produced, and re-bundled to create a marketable, enhanced value product, such as a “Green Tag” for consumer products. For example a farmer can produce pesticide-free corn. This invention can be used to quantify the pesticide reduction from a baseline level and issue green tags to the producer. The producer can then bundle the tags with the commodity if, for example the pesticide would be present at trace levels in the corn produced, or, preferably, the tags can be disaggregated from the commodity and sold separately to those who must remediate pollution downstream.

[0142] The following are additional illustrative examples of the invention.

[0143] Atrizine is a herbicide that has been demonstrated to be mobile, persistent, and to adversely affect the environment. A module to a CERC System infrastructure can be used to collect information from producers so that they can certify that they did not use atrizine to produce the current crop. This documented, quantified attribute can then be bundled with the commodity to its point of use. However, isolating and tracking commodities such as grain from producer to market is extremely expensive and often impossible. Since atrizine is not physically present in the commodity that is to be sold, the attribute can be separated in the form of a premium, or “green tag,” for atrazine-free grain. The green-tag can then be marketed to clean-water stakeholders in a similar way as “green tags” for energy are sold to electricity consumers. Alternatively, the value of the eco-tag can be normalized through the use of an economic model to estimate remediation costs. This will allow mixing of various kinds of eco-tags. These tags can then be attached to products at the wholesale or retail level.

[0144] The CERC System to certify carbon sequestration can also be expanded to evaluate whole-farm energy usage, resulting in the production of various eco-tags, such as “carbon neutral” crop tags. Such carbon-neutral tags can then be marketed to stakeholders, or alternatively be quantified, disaggregated from the commodity, normalized and mixed with “atrizine-free” or other eco-tags and re-attached to the commodity at the market place.

[0145] A farmer can utilize an Internet interface, preferably an interface as described above for a CERC system, to identify a specific land parcel. The producer can then request an analysis of erosion potential. Based on the information in the underlying GIS system (also preferably used to quantify carbon sequestration), numerical models can be used to design and place buffer strips in appropriate places to minimize the production of sediment. The farmer is delivered a map, preferably over the internet, upon which a system of buffer strips designed to meet a specified level of sediment reduction have been drawn, preferably by an automated computer system. Buffer strips that cover only about five percent of the land area typically can reduce sediment production by 50%. The farmer can then plant the required buffer strip and a designated time period later, such as two years, the CERC System can be used to verify buffer placement, such as by satellite imagery. If appropriate, the farmer will be issued sediment-reduction “eco-tags”.

[0146] In one embodiment, stakeholders would purchase such tags. For example, in the Missouri River in South Dakota, it has been estimated that sediment will completely fill the reservoirs within less than forty years. The costs to the Corps of Engineers for dredging are enormous. With the system described, it would be much less expensive for the Corps of Engineers to purchase sediment reduction eco-tags.

[0147] Alternatively, the eco-tags can be normalized through the application of appropriate economic models and converted into general eco-tags. Since the environmental benefit is not embodied in the actual commodity, it can be disaggregated from the crop commodity, bundled with other such premium attributes and offered for sale to private and public stakeholders. The eco-tag can then be sold through mitigation banking brokers, or re-bundled with a retail product to produce, for example “green tag bread.”

[0148] Non-point releases of nutrients into watersheds are transported into reservoirs where flow rates slow, mixing decreases, and stimulated biological activity rapidly depletes dissolved oxygen. For example, organic contaminants from urban areas, organic contaminants from feedlots, and multiple non-point sources accumulate in the dam and cause eutrophication, lowering dissolved oxygen and sometimes causing fish kills. Remediation usually is the responsibility of the power-company that operates the dam. Often in order to improve water quality and prevent disasters such as fish die-offs, the company must spend millions of dollars to pump water from the depths of the reservoir in order to increase oxygen content to minimum acceptable levels. Using an embodiment of this invention, such as one of the systems described above with respect to CERCs, upstream polluters can prevent nutrients from entering the river through such measures as the placement of fences to keep cattle out of riparian zones, through the isolation of manure and nutrient run-off and other such measures. These mitigation efforts would be quantified through responses to questionnaires and other data input to a CERC System, an underlying GIS and appropriate numerical models to produce eco-tags that would be purchased by the power company.

[0149] In another embodiment of the present invention, practices directed at supporting EBCs relating to nitrous oxide emissions are contemplated. The related methods of the present invention are adapted to more accurately calculate baseline determinations of nitrous oxide emissions, predict nitrous oxide emission hotspots, conduct meaningful risk assessment analysis in support of EBCs based upon nitrous oxide emissions or reductions, develop better land management practices to decrease undesired nitrous oxide emissions, assess costs and benefits associated with such changes in practice, and verify results of such changes in practices.

[0150] As an initial matter, to identify and/or predict nitrous oxide emission hotspots, image analysis is performed on a particular property, portion of a property or portion of a region, a region or regions, to identify, for example, regions of rocks, regions of vegetation and areas of reflectivity indicative of bodies of water. It is contemplated that such image analysis will use texture recognition, pattern recognition or other analyses to differentiate between rocky or arid soil where undesired denitrification and related nitrous oxide leakage is less likely to occur, heavily overgrown areas adjacent a marshy area, lake or stream which is a permanent, year round ecosystem, and a temporarily wet area, such as drainage bottom or seepage areas, which are potential nitrous oxide hotspots. The image analysis is preferably performed on satellite imagery obtained on a periodic basis, to identify seasonal or other changes in textural patterns indicative of changes in vegetative growth, water content in soil, marsh formation, and other geographic changes. Such analysis may use available indices, such as the Normalized Difference Vegetation Index (NDVI), for example. NDVI is a simple numerical indicator that can be used to analyze remote sensing measurements and assess whether the target from which the measurements are taken contains live green vegetation and the condition of the vegetation.

[0151] However, NDVI calculations are sensitive to atmospheric effects and soil moisture effects. For these and other reasons, image analysis results are most preferably combined with topographic analysis using digital elevation mapping, to derive, for example, drainage patterns, identify areas of potential pooling, identify portions of seeded crop lands where crop growth is minimal and application of nitrogen-based fertilizer is poorly used and/or likely to lead to nitrous oxide leakage.

[0152] In addition to image and topographic analysis, other data layers are also analyzed, and assigned a scaled value of indicative of likelihood of undesired nitrous oxide leakage. One or more of such data layers may comprise hydrological data, which may include historical precipitation data, current weather predictive reports, geologic data relating to water tables, groundwater flow patterns and the like. Other generic land use data, cultural land use practices, and numerical models to predict carbon and nitrogen cycling in ecosystems as well as numerical process models for nutrient cycling in soils, may also be relevant and used as appropriate. Other data layers preferably include soil data, which may include mineral analyses for a property or region. Soil data may also include other characterizations about soil, such as friability or clay characteristics, each of which could contribute to the soils tendency to be leached, to form anaerobic micro-environments, or to pool water, for example. Other data layers might include plant science information. Each layer, including the hydrological data layer(s), image analysis layer(s), topographic layer(s) and other layers are then analyzed for relevant indicators of nitrous oxide emissions and portions of each layer are designed a value, for example, a value of 0-10, with 10 indicative of a risk factor having a high probability of nitrous oxide leakage, for a part of a property or region of interest. The part may be a whole contiguous field, a single acre, a large fraction of an acre such as ¼ of an acre, a smaller portion of a piece of land such as a 3 ft.×3 ft. square, a 1 ft.×1 ft. square, or even smaller, or even on a pixel or point level, so that a matrix of pixels or points representing the larger property or region is analyzed. By combining the values designated for each data layer, for example, the values resulting from image analysis, topographic analysis and historical rainfall data, values predictive of nitrous oxide hotspots may be obtained.

[0153] Once potential nitrous oxide hotspots are identified, the predictive data may be used, for example, to develop land management techniques to minimize nitrous oxide leakage, and thereby decrease risks associated with trading of EBCs relating to nitrous oxide emissions. One such land management technique involves the precision application of a nitrogen stabilizer conventionally used to delay nitrification of ammoniacal and urea nitrogen fertilizer compositions in the soil of whole fields by controlling the nitrification process. One such commercially available product is N-Serve® 24 a product of Dow AgroServices LLC of Indianapolis, Ind. The active ingredient in N-Serve® 24 is commonly known as nitrapyrin (2-chloro-6-(trichloromethyl) pyridine) and is conventionally applied with anhydrous ammonia, dry ammonium and urea fertilizers. N-Serve® 24 may conventionally be mixed with a liquid animal manure or impregnated on dry ammoniacal fertilizers. The fertilizer/N-Serve® 24 combination is then applied together using conventional broadcast techniques to the whole agricultural acreage.

[0154] However, for use in the present invention, a nitrogen stabilizer such as N-Serve® 24 is preferably applied without any such fertilizer, and instead is applied only for the purpose of controlling undesired nitrous oxide emissions. Preferably, the nitrogen stabilizer is applied precisely to those portions of land which are predicted to constitute nitrous oxide hotspots, and is not applied broadly across all of a particular field, property or region. Most preferably, a data analysis like that described above to identify nitrous oxide hotspots, is used to identify on a point by point basis, spots where nitrous oxide hotspots are likely to be centered. The data is then interpolated to predict values between the various points, so that a matrix developed whereby application amounts of a nitrogen stabilizer are defined for all areas of a property of interest. Thereafter, as the agricultural equipment applying the nitrogen stabilizer is driven across the property of interest, utilizing GPS (global positioning satellite) technology, the nitrogen stabilizer is applied in varying but precise amounts only to those portions of the property where control of nitrous oxide leakage is desired.

[0155] Use of other nitrogen stabilizers (also known as nitrification inhibitors) is also contemplated. For example, dicyandiamide, ETT (5-ethyoxy-3-trichloromethyl-1,2,4-thiadiazole) and DMPP (3,4, dimethylpyrazole-phosphate) are other known compounds used to stabilize fertilizers.

[0156] After application of a nitrogen stabilizer, such as late in the fall when plant growth may be minimal but snow has not blanketed the ground, further assessments based on, for example, updated data from satellite imagery, and hydrology reports, may be used to perform validation assessments. The results of such validity studies would be taken into account in risk and other assessments used to support the tradability of EBCs relating to nitrous oxide emissions, thereby decreasing uncertainty associated with such EBCs/environmental attributes and decreasing the proportion of reserve EBCs/reserve standardized environmental attributes, associated with a particular property.

[0157] In sum, the present example involves identifying areas and time periods having a high likelihood of nitrous oxide emissions. For each area identified, topographic information, most preferably digital elevation data is collected. The identified area is then divided into grids, preferably 1 meter grids. The grid elements likely to accumulate moisture are then identified. For example, the digital elevation data may suggest collection points such as drainages, naturally dammed geography, pockets and the like likely to result in temporary pond, marsh or wetland. Digital elevation data is preferably incorporated with soil type information, field boundaries, crop histories, hydrological data and whether information, both historical and predictive. Satellite remote sensing data, both current and historical, is then utilized to identify grid elements remaining green the longest. Risk factors are then assigned based upon sustained greenness, it being understood that areas that stay green the longest are likely to be the same areas that retain soil moisture the longest and also have higher soil nitrogen availability. Land management data is also assessed. Preferably, data from precision agriculture sensors (e.g., fertilizer application data, yield data and irrigation data) is used if available. A numerical risk factor is assigned for each data element. Based on this information, the identification of specific areas and time periods that are at the highest risk for emission of nitrous oxide can be made. Such areas may be identified as nitrous oxide hotspots.

[0158] Most preferably, application of N-Serve® or similar nitrogen stabilizer product is applied to stop denitrification processes in soil is undertaken to stop nitrous oxide emissions that occur as a consequence of denitrification. A nitrogen-cycling model to quantify the decrease in likely nitrous oxide emissions as a result of remediation activities is recommended. An uncertainty analysis is performed on the local area data and general data from the region, to estimate the range of uncertainty for the nitrous oxide reduction credits, normalize and standardize these credits in the same way as carbon credits are normalized and standardized. A report can then be generated which summarized nitrous oxide emissions avoided using the above analysis, for independent third-party verification.

[0159] In this way, a geographic information system that stores critical variables that affect the likelihood of carbon sequestration and nitrous oxide emissions is created. The system utilizes several dimensions of data including general GIS data, field-specific management data, remotely-sensed data from aerial photographs and satellite imagery as well as process-based numerical models to specifically identify areas at high risk of nitrous oxide emissions. Recommendations land management practices generally and particular treatment plans to reduce or eliminate nitrous oxide emissions are developed thereby. Most preferably, the resulting plans take into account, where applicable, application of chemical amendments and provide implementation of specific spot-tillage practices that will reduce the occurrence of anaerobic conditions, recommendations for improved drainage, and recommendations to limit fertilizer application in identified emission hotspots.

[0160] The invention will assist the development of new producer revenue sources, improved land stewardship, the creation of a powerful, nationally-competitive interdisciplinary science consortium, and the generation of revenue to help sustain research and education in applied biogeochemistry.

[0161] A number of variations and modifications of the invention can be used. It would be possible to provide for some features of the invention without providing others.

[0162] In addition to generating standardized EBCs, the methods and apparatus described herein can be utilized by entities such as nations to perform GHG accounting for the natural resources sector as may be required by protocols or treaties, such as Kyoto. Also, the invention can be used by those using other methods, such as project based, management-based approaches, to provide independent third party performance monitoring and verification. Additionally, modules can be developed that are directed and applicable to a variety of environmental problems and industries. For example, the use of generalized historical data and more specific performance data, analyzed with the aid of biogeochemical and economic or other models, and submitted to an analysis to quantity the level of certainty, could be applied to any problem where EBC and/or GHG accounting is required. The uncertainty analysis can be expanded to include estimates of default rates for a specific management practice, for the costs of future monitoring and verification, as well as for biogeochemical model variables so that the final EBC is normalized with respect to its final value to potential purchasers.

[0163] The foregoing discussion of the invention has been presented for purposes of illustration and description. The foregoing is not intended to limit the invention to the form or forms disclosed herein. In the foregoing description for example, various features of the invention are grouped together in one or more embodiments for the purpose of streamlining the disclosure. This method of disclosure is not to be interpreted as reflecting an intention that the claimed invention requires more features than are expressly recited in each claim. Rather, inventive aspects lie in less than all features of a single foregoing disclosed embodiment.

[0164] Moreover and although the description of the invention has included description of one or more embodiments and certain variations and modifications, other variations and modifications are within the scope of the invention, e.g. as may be within the skill and knowledge of those in the art, after understanding the present disclosure. It is intended to obtain rights which include alternative embodiments to the extent permitted, including alternate, interchangeable and/or equivalent structures, functions, ranges or steps to those claimed, whether or not such alternate, interchangeable and/or equivalent structures, functions, ranges or steps are disclosed herein, and without intending to publicly dedicate any patentable subject matter.