Business Model Innovation: GHGs & Adaptation


Tierra Resources for pioneering the research, development and monetization of the "blue carbon" contained in coastal wetland ecosystems, such as estuaries, mangroves, and salt marshes. Carbon finance can be an important revenue stream to expedite large-scale wetland restoration which can slow and even reverse the trend of rapid wetland loss, while providing multiple other environmental and economic benefits including GHG mitigation.

Tierra Resources developed the first wetland carbon methodology, "Restoration of Degraded Deltaic Wetlands of the Mississippi Delta" that introduces wetlands as a new carbon offset sector for entities to invest in to offset their carbon emissions. The first-of-its kind methodology provides a new means to quantify the carbon benefits from wetland restoration projects in order to receive carbon credits that can be sold in the global carbon market.

Carbon markets may offer a valuable source of new funding for critical wetland restoration projects. Tierra estimates carbon finance can bring about $5 billion in private funding for wetland restoration to the State of Louisiana over the next 40 years. Tierra Resources is now working with companies such as ConocoPhillips, Shell, and Entergy Corporation to start implementing wetland carbon offset projects.

Florida PACE Funding Agency for bringing the effective PACE financing model to the cause of GHG mitigation and climate risk resilience by funding both energy efficiency upgrades and structural improvements to make Florida homes more resistant to hurricanes. Run by the technology and engineering firm Leidos, Florida PACE is a special purpose local government formed by Flagler County and the City of Kissimmee and since joined by Nausau County.

Like other PACE programs, the Florida outfit provides streamlined financing for energy efficiency and renewable power projects-performed by vetted contractors-with the loans paid back on property tax bills. But in hurricane-exposed Florida, the PACE funding is also available for wind-hardening upgrades. Most of the state's 4.9 million single-family homes are vulnerable to hurricanes and high winds because they were constructed before 2002 when the state implemented modern engineering-based building codes that are credited with reducing the frequency of hurricane losses by 60% and the severity of those losses by 40%, according to a presentation at a Florida PACE Funding Agency seminar by Tim Reinhold of the Institute for Business and Home Safety.

Among the upgrades that can provide older buildings with greater resiliency: when re-roofing, re-nailing and sealing roof decks and installing high wind-rated shingles; fortifying soffits to withstand high winds and protect attics from rain; install covers on gable end and ridge vents to withstand winds and prevent water intrusion.

With financing from Samas Capital (see Business Achievement: Finance) and a growing roster of trained contractors, Florida PACE Funding Agency is urging counties across Florida to subscribe. And so are two competing Florida PACE programs: EcoCity Partners' Florida Green Energy Works, which focuses on commercial properties; Ygrene Energy, which has signed up Cutler Bay in a Clean Energy Green Corridor.

CH2M HILL for establishing Green Path Partners, a joint venture with EKO Asset Management, to use private financing to develop green, resilient infrastructure that is designed and built to adapt to climate change and provide other long-term benefits to communities and the environment.

Green Path is an extension of CH2M Hill's ongoing work with government clients to finance infrastructure development and upgrades through innovative public-private partnerships and an approach known as performance based infrastructure.

In announcing Green Path in April 2013, CH2M Hill noted the huge gap in infrastructure needs and available funding. "In developed countries, governments are dealing with upgrading and replacing aging infrastructure, while in the rapidly developing countries of Asia, Latin America and Africa there is a need to design and build new infrastructure for growing populations and growing economies. In both cases, the needs far outweigh available funding. Traditional sources of infrastructure finance are either tapped out [or] cannot keep pace with the new scale and scope of infrastructure growth."

Green Path Partners will target projects that utilize natural infrastructure or offer an opportunity to integrate it into traditional infrastructure; provide positive ecological, social and economic outcomes; and afford an opportunity to use innovative financial structures, non-traditional impact investment capital, or both.

"These types of projects could be delivered on a 'pay-for-performance' basis by private entities raising private capital and using environmental approaches (e.g. bioswales, permeable pavement, rain gardens, etc.)," noted the company in its news release. "In this way, private actors take the risk of financing the infrastructure development and only are paid by government if and when the infrastructure is built and delivers the desired services."

In Q2 2013, CH2M Hill project managers highlighted for CCBJ a model stormwater management project in the City of Philadelphia that it hoped to replicate elsewhere. Philadelphia established a parcel-based stormwater billing structure that provides credits up to 100% of stormwater fees for non-residential property owners who retrofit impervious surfaces and demonstrate that they can manage onsite the first inch of rainfall in storms. The city is targeting nearly 10,000 acres of impervious surfaces on public and private property to reduce demand on the city's wastewater treatment plant and create more park land.

While retrofitting streets and alleyways will play an important role in reducing stormwater runoff, the private sector is also in the mix identifying acres to be greened, including parking lots and roof tops from commercially owned properties, according to CH2M Hill's Mike Tilchin, vice president, Environmental Services. "The parcel owners will get significant relief from stormwater fees, and the companies making these conversions of currently impervious surfaces will realize a portion of the savings."