Pacific Carbon Trust Today and Tomorrow: Carbon Finance in BC Forestry

1. Pacific Carbon TrustToday and Tomorrow: Carbon Finance in BC Forestry February 25, 2014

2. Carbon Finance – One of the tools • Carbon Finance builds opportunity in BC forestry by creating a carbon market framework for proactive, decentralized, entrepreneurial action. • Sounds like a fit for the people of the silviculture industry? • We know BC has significant problem with not-sufficiently-restocked land. How can we use Carbon Finance to address this and other forestry issues?

3. Pacific Carbon Trust – What we do 1 Introduction • Transitioning into Government April 1 • BC Carbon Neutral Government commitment 2 • Offset projects in BC • Ensuring quality offsets • From concept to issuance Creating Offsets Using Offsets • How offsets are used • 1.4 million tonnes of forest carbon 2010-2012 • $14 million in 2010-2012, more in 2013+ 3

4. International Standards, BC Standards, Portfolio mix Offset projects must meet BC emission offsets regulation, and then are evaluated on further selection criteria to ensure best projects for BC Ongoing Annual Demand 750,000+ tonnes (2012 Carbon Year) Key Criteria to Consider: • BC emission offsets regulation • Portfolio mandate • Build low-carbon economy (BC/ shareholder value) • Project economics (bottom up) • Market economics (top down)

5. Tree Planting in the Voluntary Carbon Market • BC pioneers like ERA Ecosystem Restoration Associates and others have issued millions of reforestation offsets into the voluntary carbon market since 2006. • Temperate reforestation projects are difficult to make work using ex-post carbon accounting method. • Ex-ante takes a longer view but doesn’t fit within contemporary annual carbon flux balance. Needs buyers with broader, and voluntary demands.

6. BC Forest Carbon Partnership Program • MFLNRO program. Aims to restore damaged public forests and take advantage of the carbon value of our public forests. • An open competition was tendered. The Prince George-based Carbon Offset Aggregation Cooperative (COAC) was the successful bidder. COAC has named their program the TreeGen Project. • Goal to encourage and stimulate ecosystem restoration and reforestation on Crown land while helping restore the carbon balance of our forests and without costs to taxpayers.

7. BC Forest Carbon Partnership Program • Program was successfully launched May 2013 with the first 19,000 trees planted on provincial forest land in Quesnel and Kelowna. • 160,000+ trees will be planted in Fort Nelson in 2014. Projects may also salvage low value timber for bioenergy. • COAC is partnering with Tree Canada and other private corporations to reforest the 1,100 hectare commitment. • Forests for Tomorrow is expected to restore as much as 300,000 hectares by 2028, leaving 700,000 hectares or NSR land needing other routes to restoration.

8. Offset Project Cycle Idea Offset Credits Emissions Reduced Project Report Initial Planning PID Formal planning Project Plan Validation Stmt of Assurance Operation Monitoring Verification Stmt of Assurance Sell Offsets Revenue

9. Innovation needed • Tomorrow’s promise lies in dreaming and deploying new, innovative uses for the offset tool. • Can JVs between tree planters and consumer companies monetize the marketing benefit of new forests, financing the gap between offset value and planting costs? • Could the “Sharing Economy” enable everyone who says they want to help restore the beetlekill to actually do so? • What are your ideas?

10. Let’s grow! Joseph Pallant Associate, Business Development Pacific Carbon Trust Direct: 250-216-7964    Fax: 250-952-6783 joseph.pallant@pacificcarbontrust.com “Building a low-carbon future for BC.”