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ACRP
AIRPORT
COOPERATIVE
RESEARCH
PROGRAM
REPORT 57
Sponsored by
the Federal
Aviation
Administration
The Carbon Market:
A Primer for Airports
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ACRP OVERSIGHT COMMITTEE* TRANSPORTATION RESEARCH BOARD 2011 EXECUTIVE COMMITTEE*
CHAIR OFFICERS
James Wilding CHAIR: Neil J. Pedersen, Administrator, Maryland State Highway Administration, Baltimore
Metropolitan Washington Airports Authority (re- VICE CHAIR: Sandra Rosenbloom, Professor of Planning, University of Arizona, Tucson
tired)
EXECUTIVE DIRECTOR: Robert E. Skinner, Jr., Transportation Research Board
VICE CHAIR
MEMBERS
Jeff Hamiel
MinneapolisSt. Paul J. Barry Barker, Executive Director, Transit Authority of River City, Louisville, KY
Metropolitan Airports Commission Deborah H. Butler, Executive Vice President, Planning, and CIO, Norfolk Southern Corporation,
Norfolk, VA
MEMBERS William A.V. Clark, Professor, Department of Geography, University of California, Los Angeles
James Crites Eugene A. Conti, Jr., Secretary of Transportation, North Carolina DOT, Raleigh
DallasFort Worth International Airport James M. Crites, Executive Vice President of Operations, Dallas-Fort Worth International Airport, TX
Richard de Neufville Paula J. Hammond, Secretary, Washington State DOT, Olympia
Massachusetts Institute of Technology
Kevin C. Dolliole
Michael W. Hancock, Secretary, Kentucky Transportation Cabinet, Frankfort
Unison Consulting Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley
John K. Duval Michael P. Lewis, Director, Rhode Island DOT, Providence
Austin Commercial, LP Susan Martinovich, Director, Nevada DOT, Carson City
Kitty Freidheim Michael R. Morris, Director of Transportation, North Central Texas Council of Governments, Arlington
Freidheim Consulting
Steve Grossman
Tracy L. Rosser, Vice President, Regional General Manager, Wal-Mart Stores, Inc., Mandeville, LA
Jacksonville Aviation Authority Steven T. Scalzo, Chief Operating Officer, Marine Resources Group, Seattle, WA
Tom Jensen Henry G. (Gerry) Schwartz, Jr., Chairman (retired), Jacobs/Sverdrup Civil, Inc., St. Louis, MO
National Safe Skies Alliance Beverly A. Scott, General Manager and CEO, Metropolitan Atlanta Rapid Transit Authority,
Catherine M. Lang Atlanta, GA
Federal Aviation Administration
Gina Marie Lindsey David Seltzer, Principal, Mercator Advisors LLC, Philadelphia, PA
Los Angeles World Airports Lawrence A. Selzer, President and CEO, The Conservation Fund, Arlington, VA
Carolyn Motz Kumares C. Sinha, Olson Distinguished Professor of Civil Engineering, Purdue University, West
Airport Design Consultants, Inc. Lafayette, IN
Richard Tucker Thomas K. Sorel, Commissioner, Minnesota DOT, St. Paul
Huntsville International Airport
Daniel Sperling, Professor of Civil Engineering and Environmental Science and Policy; Director, Institute of
EX OFFICIO MEMBERS
Transportation Studies; and Interim Director, Energy Efficiency Center, University of California, Davis
Kirk T. Steudle, Director, Michigan DOT, Lansing
Paula P. Hochstetler Douglas W. Stotlar, President and CEO, Con-Way, Inc., Ann Arbor, MI
Airport Consultants Council
Sabrina Johnson C. Michael Walton, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin
U.S. Environmental Protection Agency
Richard Marchi EX OFFICIO MEMBERS
Airports Council International--North America
Laura McKee Peter H. Appel, Administrator, Research and Innovative Technology Administration, U.S.DOT
Air Transport Association of America J. Randolph Babbitt, Administrator, Federal Aviation Administration, U.S.DOT
Henry Ogrodzinski Rebecca M. Brewster, President and COO, American Transportation Research Institute, Smyrna, GA
National Association of State Aviation Officials Anne S. Ferro, Administrator, Federal Motor Carrier Safety Administration, U.S.DOT
Melissa Sabatine LeRoy Gishi, Chief, Division of Transportation, Bureau of Indian Affairs, U.S.DOT
American Association of Airport Executives
Robert E. Skinner, Jr. John T. Gray, Senior Vice President, Policy and Economics, Association of American Railroads,
Transportation Research Board Washington, DC
John C. Horsley, Executive Director, American Association of State Highway and Transportation
SECRETARY Officials, Washington, DC
Christopher W. Jenks David T. Matsuda, Deputy Administrator, Maritime Administration, U.S.DOT
Transportation Research Board Victor M. Mendez, Administrator, Federal Highway Administration, U.S.DOT
William W. Millar, President, American Public Transportation Association, Washington, DC
Tara O'Toole, Under Secretary for Science and Technology, U.S. Department of Homeland Security,
Washington, DC
Robert J. Papp (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard, U.S. Department of
Homeland Security, Washington, DC
Cynthia L. Quarterman, Administrator, Pipeline and Hazardous Materials Safety Administration,
U.S.DOT
Peter M. Rogoff, Administrator, Federal Transit Administration, U.S.DOT
David L. Strickland, Administrator, National Highway Traffic Safety Administration, U.S.DOT
Joseph C. Szabo, Administrator, Federal Railroad Administration, U.S.DOT
Polly Trottenberg, Assistant Secretary for Transportation Policy, U.S.DOT
Robert L. Van Antwerp (Lt. Gen., U.S. Army), Chief of Engineers and Commanding General,
U.S. Army Corps of Engineers, Washington, DC
Barry R. Wallerstein, Executive Officer, South Coast Air Quality Management District,
Diamond Bar, CA
*Membership as of July 2011. *Membership as of June 2011.
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AIRPORT COOPERATIVE RESEARCH PROGRAM
ACRP REPORT 57
The Carbon Market:
A Primer for Airports
Melissa Ritter
Greg Bertelsen
PACE GLOBAL ENERGY SERVICES
Fairfax, VA
Zoe Haseman
LEIGHFISHER
Burlingame, CA
Subscriber Categories
Aviation
Research sponsored by the Federal Aviation Administration
TRANSPORTATION RESEARCH BOARD
WASHINGTON, D.C.
2011
www.TRB.org
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AIRPORT COOPERATIVE RESEARCH PROGRAM ACRP REPORT 57
Airports are vital national resources. They serve a key role in trans- Project 11-02/Task 18
portation of people and goods and in regional, national, and inter- ISSN 1935-9802
national commerce. They are where the nation's aviation system ISBN 978-0-309-21368-4
connects with other modes of transportation and where federal respon- Library of Congress Control Number 2011941329
sibility for managing and regulating air traffic operations intersects
with the role of state and local governments that own and operate most © 2011 National Academy of Sciences. All rights reserved.
airports. Research is necessary to solve common operating problems,
to adapt appropriate new technologies from other industries, and to
introduce innovations into the airport industry. The Airport Coopera- COPYRIGHT INFORMATION
tive Research Program (ACRP) serves as one of the principal means by
Authors herein are responsible for the authenticity of their materials and for obtaining
which the airport industry can develop innovative near-term solutions
written permissions from publishers or persons who own the copyright to any previously
to meet demands placed on it. published or copyrighted material used herein.
The need for ACRP was identified in TRB Special Report 272: Airport
Research Needs: Cooperative Solutions in 2003, based on a study spon- Cooperative Research Programs (CRP) grants permission to reproduce material in this
publication for classroom and not-for-profit purposes. Permission is given with the
sored by the Federal Aviation Administration (FAA). The ACRP carries understanding that none of the material will be used to imply TRB or FAA endorsement
out applied research on problems that are shared by airport operating of a particular product, method, or practice. It is expected that those reproducing the
agencies and are not being adequately addressed by existing federal material in this document for educational and not-for-profit uses will give appropriate
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tive Highway Research Program and Transit Cooperative Research Pro- the material, request permission from CRP.
gram. The ACRP undertakes research and other technical activities in a
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tors can cooperatively address common operational problems. The project that is the subject of this report was a part of the Airport Cooperative Research
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The ACRP was authorized in December 2003 as part of the Vision Governing Board of the National Research Council.
100-Century of Aviation Reauthorization Act. The primary partici-
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as program manager and secretariat for the governing board; and Council, and the sponsors of the Airport Cooperative Research Program do not endorse
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contract with the National Academies formally initiating the program. they are considered essential to the object of the report.
The ACRP benefits from the cooperation and participation of airport
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provide technical guidance and counsel throughout the life of the
project. The process for developing research problem statements and Published reports of the
selecting research agencies has been used by TRB in managing cooper- AIRPORT COOPERATIVE RESEARCH PROGRAM
ative research programs since 1962. As in other TRB activities, ACRP
are available from:
project panels serve voluntarily without compensation.
Primary emphasis is placed on disseminating ACRP results to the Transportation Research Board
Business Office
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results are implemented by airport-industry practitioners. Printed in the United States of America
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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific
and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the
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COOPERATIVE RESEARCH PROGRAMS
CRP STAFF FOR ACRP REPORT 57
Christopher W. Jenks, Director, Cooperative Research Programs
Crawford F. Jencks, Deputy Director, Cooperative Research Programs
Michael R. Salamone, ACRP Manager
Joseph Navarrete, Senior Program Officer
Melanie Adcock, Senior Program Assistant
Eileen P. Delaney, Director of Publications
Maria Sabin Crawford, Assistant Editor
ACRP PROJECT 11-02/TASK 18 PANEL
Field of Special Projects
Stephen P. Gordon, Oakland International Airport, Oakland, CA
Rusty T. Hodapp, Dallas/Fort Worth International Airport Board, DFW Airport, TX
John E. Putnam, Kaplan, Kirsch, and Rockwell, Denver, CO
Meenakshi Singh, Cleveland Airport System, Cleveland, OH
Mary L. Vigilante, Synergy Consultants, Inc., Seattle, WA
Thomas W. Cuddy, FAA Liaison
AUTHOR ACKNOWLEDGMENTS
The research reported herein was performed under ACRP Project 11-02 (Task 18) by Pace Global
Energy Services (Pace Global) and LeighFisher Inc. (LeighFisher). Pace Global was the contractor for
this study, with LeighFisher serving as the subcontractor.
Melissa Ritter, Director of Environmental Markets and Policy at Pace Global, was the Principal Inves-
tigator. The other key authors of this report are Zoe Haseman, Associate Director at LeighFisher, and Greg
Bertelsen, Manager of Environmental Markets and Policy at Pace Global.
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FOREWORD
By Joseph D. Navarrete
Staff Officer
Transportation Research Board
ACRP Report 57: The Carbon Market: A Primer for Airports provides the airport commu-
nity with current, relevant information on carbon and other environmental credit trading
markets, potential opportunities, and challenges to airport participation in these markets.
Carbon and other environmental markets are dynamic and present new terms and con-
cepts. The Primer will therefore be of interest to anyone desiring a basic understanding of
current markets in the context of airports, including their structure, driving forces, sponsor
obligations, and the impacts of current policies.
The growing concern for the impact of CO2 emissions on the environment has led to poli-
cies and regulations designed to control and limit greenhouse gas emissions. One outcome of
these regulations has been the development of carbon markets, where carbon credits are
bought, sold, and traded as a market-based approach to control emissions. Airports are now
exploring whether there may be revenue opportunities generated by selling credits in the car-
bon market. However, as the carbon credit market is complex and continually evolving, deci-
sion makers are faced with many questions regarding airport participation, including the kind
of credits airports can create or trade, who can take credit for various actions at an airport, the
minimum level of credits needed to be marketable, and how carbon trading would affect air-
port compliance obligations, including grant assurances made to the federal government.
The research, led by Pace Global Energy Services, shows that, while airports can poten-
tially gain monetary or reputational value by hosting carbon offset and renewable energy
projects, the opportunities for airports are limited for several reasons. First, the lack of a fed-
erally mandated, comprehensive carbon trading scheme limits demand for overall credits.
Second, the kinds of projects that can be practically implemented at airports are not often
conducive to selling the credit associated with the activity. Finally, there are regulatory fac-
tors that limit the types of projects that can be implemented on airport property. The Primer
also examines the potential opportunities of renewable energy credits for airports, which
are also a tradable instrument.
The Primer is organized into six chapters. Chapter 1 provides an introduction and back-
ground to greenhouse gases, carbon markets and instruments, carbon projects at airports,
and unique issues airports may face. Chapter 2 evaluates typical airport projects relative to
their marketability in carbon markets. An overview of North American compliance carbon
markets is provided in Chapter 3. Chapter 4 provides an overview of the global carbon mar-
ket, while Chapter 5 describes renewable energy and associated markets. Finally, Chapter 6
outlines how offset credits and renewable energy certificates are traded and the implication
of retiring credits. Throughout the document, the reader will find relevant case study exam-
ples drawn from several airports. The Primer also includes a list of abbreviations and
acronyms as well as a glossary.
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CONTENTS
1 Summary
5 Chapter 1 Introduction and Background
6 1.1 Overview of GHGs
8 1.2 Overview of Carbon Markets and Instruments
9 1.3 Carbon Projects at Airports
10 1.4 Airport Constraints as Related to Carbon Credits and Other Revenue
Opportunities
12 1.4.1 Use of Airport Revenue and Revenue Diversion
12 1.4.2 Airport Layout Plan and Compatible Land Use
13 1.4.3 Use Agreements and Bond Resolutions
14 Chapter 2 Carbon Offset and Value Opportunities for Airports
14 2.1 Offset Credit Origination
15 2.1.1 Airport Offset Project Applicability
15 2.1.2 Methane Destruction
17 2.1.3 Land Use Changes
20 2.1.4 Industrial Pollutants
21 2.1.5 Energy Efficiency
23 2.2 Voluntary Carbon Markets and Initiatives
24 2.2.1 Offset-Based Programs
25 2.2.2 Legally Binding Voluntary Programs
26 2.3 Role of the GHG Inventory in Airport Carbon Management
29 Chapter 3 North American Compliance Carbon Markets
29 3.1 State and Regional Regulatory Compliance Markets
30 3.1.1 Regional Greenhouse Gas Initiative
31 3.1.2 California Assembly Bill 32
31 3.1.3 Western Climate Initiative
32 3.2 Federal Approaches to Limiting GHGs
32 3.2.1 Legislative Attempts
32 3.2.2 Regulatory Approaches
34 Chapter 4 State of the Global Carbon Markets
and Aviation: Regulatory Requirements
and Voluntary Stewardship
34 4.1 Global Compliance Carbon Market Overview
36 4.1.1 European Union
37 4.1.2 New Zealand
38 4.1.3 Other Developed Economies
38 4.1.4 Developing and Emerging Economies
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39 Chapter 5 Renewable Energy and Associated Markets
39 5.1 Renewable Energy Certificates
41 5.2 REC Markets
46 5.2.1 Energy Efficiency Credits "White Tags"
48 5.3 Voluntary Airport Low Emission Program (VALE)
49 5.3.1 VALE Program Description
49 5.3.2 RECs and AERCs
51 Chapter 6 Trading Offset Credits and RECs
51 6.1 Implications of Retiring and Trading Environmental Instruments
52 6.2 Overview of Carbon and Environmental Instrument Trading
53 6.2.1 Exchanges
53 6.2.2 Wholesale Brokers
54 6.2.3 Retail Brokers
55 6.2.4 Bilateral Transactions
55 6.3 Offtake Demand Drivers
58 References
60 Acronyms
62 Glossary
Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale
for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions.
