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Building Assets for the Rural Future

Expand Rural Role in Renewable Energy and Ecosystem Services

Expand Rural Role in Renewable Energy and Ecosystem Services

The Opportunity


Rural communities are well-suited to take advantage of the expanding markets for renewable energy and ecosystem services.[1] Renewable energy opportunities in North Carolina are diverse: wind and solar power, biofuels, biomass energy (for example, from crop waste, logging waste, or hog waste), and hydro-electric power, among others. An example of ecosystem services is the planting of trees to generate carbon “offsets” which can be sold to a carbon emitting industry.

Rural areas are well-positioned to compete in these emerging markets because they possess an abundance of natural assets that provide space and fuel for renewable energy projects and ecosystem services. It is difficult to say how these markets will evolve, so there are inherent risks in applying this tactic. However, as these markets continue to expand, forward-thinking rural areas will position themselves to lead in the creation of new enterprises and to take advantage of emerging prospects as they materialize.

How the Tactic Is Applied

  • Develop expertise and local capacity for exporting rural renewable energy
  • Explore opportunities in ecosystem services markets (carbon credits)
  • Generate renewable energy and jobs at landfills

Develop Expertise and Local Capacity for Exporting Rural Renewable Energy

Southwest Initiative Foundation (Minnesota)

Irrespective of the type of renewable energy produced—whether wind, solar, biomass, or other—the foundation for renewable energy production is the same across all sectors. In order to export renewable energy, rural communities must first possess the necessary expertise and infrastructure for doing so.

The Southwest Initiative Foundation (SWIF) partnered with the state of Minnesota for its Rural Energy Development Initiative to develop and share that expertise with rural businesses throughout the state.[2] Once SWIF identified wind as a suitable renewable energy source for rural Minnesota, it developed expertise, resources, and training programs to assist rural communities with understanding the components of a successful locally-owned wind energy project.[3] For example, its training program explains how to raise capital for wind energy projects and estimates the amount of revenue likely to be generated by such projects. It also identifies electrical companies that will purchase renewable energy in the region and educates prospective producers on the transmission and infrastructure requirements imposed by those companies. Finally, the program includes direct project and business development assistance.[4] SWIF’s revolving loan fund for renewable energy businesses offers five-year loans amounting to 25% of the capital costs of a renewable project, not to exceed $500,000. Interest in the program has been strong, with more than 1,600 residents, business owners, and local government leaders attending workshops in 2009.[5]

Explore Opportunities in Ecosystem Services Markets (Carbon Credits)

Mountain Association for Community Economic Development (Kentucky)
Northwest Natural Resource Group (Washington)
Delta Pollution Prevention and Energy Efficiency Center (Michigan)

The most established ecosystem services markets involve the trade of carbon credits.  In basic terms, the market works as follows. Heavy carbon-emitting industries (such as a company that generates electricity by burning coal) are required by law in some jurisdictions to purchase carbon offsetsthat is,carbon credits—to counterbalance their carbon emissions. Those carbon credits might be produced in a rural area, for example, by a landowner who plants trees and agrees not to cut them down for a period of years.[6]

However, carbon emitters in the market to purchase carbon credits want to purchase all of their credits at one time rather than dealing separately with many small sellers. The key for rural communities is therefore to organize and aggregate the carbon credits generated by various producers in the community and sell those credits in a single large offering.[7] Once aggregated, the credits can be sold directly to carbon emitters or over one of the carbon credit market exchanges, such as the Chicago Climate Exchange. The resulting income could increase the economic viability of farmland preservation activities.

The pooling of carbon credits requires specialized expertise which is unlikely to be found in distressed rural areas. Rural leaders must therefore develop or seek out the necessary expertise. Several organizations have emerged to assist with aggregation efforts in rural areas.

In Appalachian Kentucky, the Mountain Association for Community Economic Development (MACED) works with small forest owners to aggregate or pool carbon credits in the region and then sell the carbon pools on the Chicago Climate Exchange.[8] In Washington and Oregon, the Northwest Natural Resource Group also aggregates carbon credits for private forest owners, but it sells the carbon credits over-the-counter to individual buyers.[9]  Similarly, the Delta Institute’s Pollution Prevention and Energy Efficiency Center also serves as a carbon aggregator for private farmers and forest owners, selling their carbon credits on the Chicago Climate Exchange.[10] Finally, recall that municipalities and counties that own forests may also be able to take advantage of these carbon credit markets, as the city of Arcata, California did for its community forest.[11]

These programs have proven that carbon credit trading can generate real income for rural areas,[12] but there are risks associated with entering this market. For example, carbon credit prices have seen fluctuations ranging from $0.10 per ton of carbon to $7.50 per ton, so the income stream is not guaranteed at any level. Additionally, the regulatory environment will remain uncertain as Congress continues to develop national policy on carbon emissions.[13]

Generate Renewable Energy and Jobs at Landfills

EnergyXchange (North Carolina)
Catawba County EcoComplex (North Carolina)

Active landfills have been a source of jobs and local government revenue for many rural communities, but they have also generated opposition from those who fear environmental repercussions from the activity.[14]However, some communities have begun to transform their landfills into opportunities not only for job creation, but also for waste reduction and the production of renewable energy.

Most of these landfill projects achieve these results by capturing the methane that escapes from decomposing landfills and using it to produce energy. There are currently fifteen landfill methane projects in operation in rural and urban communities in North Carolina, with thirty-nine more projects in development.[15]  Most of these operations occur at closed landfills. For example, the EnergyXchange in Burnsville, North Carolina, has been capturing methane gas from a closed landfill to power the EnergyXchange complex for over ten years.  The complex holds four greenhouses, a retail craft gallery, clay and glass studios, and a visitor’s center.  It also houses a craft business incubator program, which supports craft entrepreneurs and provides studio space at a nominal fee.[16]

Perhaps the most comprehensive landfill project in the state is located at an active landfill in Newton, NC. The Catawba County EcoComplex is operated by the county government and was developed in part because 78% of the county’s waste is industrial, which is one of the highest rates in the state.[17]  The goal of the EcoComplex is to develop a waste disposal system that recovers all useable products and by-products from private and public partners in the region.[18]  One component of its interconnected operations collects methane gas from the landfill to create heat and electricity that is used by resident companies. Even the by-products of companies on the site are put to use. For example, the wood by-products of a tenant lumber company are used by another company to build pallets, and there are plans to build a biomass power system fueled by wood waste.[19]The electricity generated at the landfill qualifies for renewable energy credits on the California renewable energy market, and most of it is sold to a regional power company.[20]

To spur business development at the landfill, regional universities have been invited to conduct research projects at the complex in hopes that the research will lead to the creation of new businesses.[21]  The EcoComplex seeks to partner with off-site private businesses to help them reduce their waste, and it recruits businesses to the site that can improve the Complex’s waste processing activities.[22]  The EcoComplex has won numerous awards and has attracted national attention for its innovative design.

Learn More

Cheryl Glaeser
Program Officer
Southwest Initiative Foundation      
Hutchinson, MN       
320-587-4848
cherylg@swifoundation.org
 
http://www.swifoundation.org

Stewart Matthiesen
Development Director/ Policy Analyst
Northwest Natural Resource Group
Port Townsend, WA
360-379-9421 x4
stewart@nnrg.org
http://nnrg.org

Barry Edwards
Director, Department of Utilities & Engineering
Catawba County
Newton, NC
828-465-8261
barrye@catawbacountync.gov
http://www.catawbacountync.gov/ue/

On the Internet

Payments for Forest Carbon: Opportunities & Challenges for Small Forest Owners
https://www.manomet.org/sites/default/files/publications_and_tools/Payments-for-Forest-Carbon-2009.pdf

U.S. Environmental Protection Agency, Landfill Methane Outreach Program
http://www.epa.gov/lmop/




[1] Ecosystem services are defined as processes and resources provided by an ecosystem that benefit people, such as clean water, biodiversity, flood control, or carbon sequestration. See United States Forest Service, Valuing Ecosystem Services: Capturing the True Value of Nature’s Capital 1 (2007), available at http://www.fs.fed.us/ecosystemservices/pdf/ecosystem-services.pdf.

[2] Southwest Initiative Foundation, Rural Energy Development Initiative, http://swifoundation.org/wp-content/uploads/Connect-Spring%202008.pdf Interview with Sherry Ristau, President and Chief Executive Officer, Southwest Initiative Foundation (Jan. 29, 2010).

[3] Interview with Sherry Ristau, President and Chief Executive Officer, Southwest Initiative Foundation (Jan. 29, 2010).

[4] Interview with Cheryl Glaeser, Program Specialist, Southwest Initiative Foundation (Feb. 9, 2010).

[5] Southwest Initiative Foundation, What Matters Most: 2009 Annual Report 10 (2010), available at http://swifoundation.org/annual-report-2009-what-matters-most/

[6] See the community forestry approach in Safeguard Farmland for Agricultural Uses.

[7] See Rebecca Brooke, Payments for Forest Carbon: Opportunities & Challenges for Small Forest Owners 9, 11 (2009),available at https://www.manomet.org/sites/default/files/publications_and_tools/Payments-for-Forest-Carbon-2009.pdf

[8] See Brooke, above note 7, at 36. MACED works through its Forest Opportunities Initiative in partnership with the Appalachian Carbon Partnership.

[9] Interview with Stewart Matthiesen, Development Director and Policy Analyst, Northwest Natural Resource Group (Sept. 29, 2009).

[10] See Brooke, above note 7, at 34.

[11] See the community forestry approach in 3.3. Safeguard Farmland for Agricultural Uses

3.3. Safeguard Farmland for Agricultural Uses, page 77.

[12] See, e.g., Andy Mead, Landowners Reap Cash Benefits in Carbon Program, Lexington Herald-Leader (Oct. 13, 2009) (describing how 7 landowners split $65,000 for their carbon credits sold over-the-counter); Nancy Cole, Carbon Credits win Foresters Over: State’s Owners of Tree-Covered Lands Paid in CO2-Reduction Program, Arkansas Democrat-Gazette at B1 (July 15, 2008) (describing how 18 landowners in the state were paid a total of $126,000 for their carbon credits).

[13] Brooke, above note 7, at 15-23.

[14] Scott Mason, N.C. Could Soon Be Dumping Ground For More Trash, WRAL.com (May 9, 2005), available at http://www.wral.com/news/local/story/116970 (last visited May 14, 2010) (reporting that the small town of Navassa stood to gain $1 million annually in revenue from a landfill located there, and that Camden County expected up to $4 million per year for its landfill).

[15] U.S. Environmental Protection Agency, Landfill Methane Outreach Program, Energy Projects and Candidate Landfills, http://www.epa.gov/landfill/projects-candidates/index.html#map-area (last visited Apr. 15, 2010). Assistance with developing methane capture projects at landfills is available from the EPA through the agency’s Landfill Methane Outreach Program (LMOP).  The LMOP offers technical assistance, networking opportunities, marketing tools, and assistance securing funding.

[16]

7.2. Create Artist and Artisan Space in the Community, on page 133, describes the award-winning Jackson County Green Energy Park in Dillsboro, NC. See also Will Lambe, Small Towns Big Ideas: Case Studies in Small Town Community Economic Development 47-50 (2008).

[17] Interview with Barry Edwards, Director of Utilities and Engineering, Catawba County (Apr. 8, 2010).

[18] Interview with Barry Edwards, Director of Utilities and Engineering, Catawba County (Jan. 8, 2010).

[19] Ibid.

[20] Interview with Barry Edwards, Director of Utilities and Engineering, Catawba County (Apr. 8, 2010).

[21] Ibid.

[22] Ibid.  Companies recruited for the EcoComplex enter into economic development contracts with the county that include job creation goals and require the companies to pay low-income employees 10% more than the county average wage for that occupation. Ibid.