Verification Protocol Version 1.9 Page 1

ECOSYSTEM CREDIT ACCOUNTING SYSTEM

THIRD PARTY VERIFICATION PROTOCOL

VERSION 2.0A product of Willamette Partnership’s

Counting on the Environment ProcessJune 2014

Contacts

Willamette Partnership4640 SW Macadam Ave, Suite 50Portland, OR 97239(503) 946-8350info@willamettepartnership.org

Acknowledgements

The Counting on the Environment process that developed the Ecosystem Credit Accounting System and the associated quantification methods and tools has been funded by several grants from the USDA Natural Resources Conservation Service, USDA Forest Service, U.S. Environmental Protection Agency, and other supporters. Their continued support has made possible the ongoing adaptation and evolution of this Verification Protocol into Version 2.0.

Since its inception, the project has been guided by a stakeholder working group made up of very knowledgeable and dedicated people and organizations. The Verification Protocol continues to be governed by the Counting on the Environment Coordinating Team, made up of stakeholder organizations.1 Willamette Partnership thanks everyone for all the hard and thoughtful work that has brought several years of experience and discussion into Version 2.0 of this protocol.

Open Content License

Willamette Partnership has developed all of its protocols, quantification methods, and associated tools (CONTENT) with an eye toward transparency and easy extension. As such,

1 The first use of all defined terms is capitalized.

permission to use, copy, modify, and distribute CONTENT and its referenced documentation for any purpose and without fee is hereby granted, provided that the notice appear in all copies or modified versions:

"This CONTENT was created in part through the adaptation of procedures and publications developed by Willamette Partnership (www.willamettepartnership.org), but is not the responsibility or property of Willamette Partnership.”

If any CONTENT is modified or not utilized in its whole, the modified content must carry prominent notices stating that you changed it, the exact nature and content of the changes, and the date of any change. Prior to use of CONTENT, you must notify Willamette Partnership of which CONTENT you intend to use, how it has been modified, and how it is intended to be used.

About Willamette Partnership

Since its beginnings in 2004, Willamette Partnership has leveraged its skills and relationships to change how conservation is delivered on the ground. The organization is active across the Western United States, with strong roots in the State of Oregon. Willamette Partnership uses market-based and voluntary approaches to build healthy and resilient ecological systems and communities by shifting the way people view and value nature, changing the pattern and flow of investment in the environment to best support critical ecosystem services, and using collaborative networks to institutionalize these approaches.

As an organization and as individuals, Willamette Partnership is committed to working in a way that embodies collaboration, leadership, integrity, service, passion, efficiency and consistency, and sustainability. Contact Willamette Partnership to learn more about how our current and emerging initiatives demonstrate those values and target investment toward real solutions.

Guiding Principles of the Ecosystem Credit Accounting System

The Partnership’s work, including development and implementation of this Verification Protocol, is based on the assumption that ecosystem markets can provide alternatives to complying with environmental policies, alternatives that help rebuild resilient ecological systems in a credible, rigorous, and cost-effective way. We believe that environmental markets should be tied to meeting overall environmental goals rather than strict interpretations of current rules and program guidelines. As such, the Ecosystem Credit Accounting System is designed to work within existing regulatory structures and constantly strives to:

1. Produce the highest quality restoration and conservation where it makes the greatest ecological impact;

2. Foster transparency, accountability, and credibility in emerging ecosystem markets and;3. Facilitate the connections between buyers and sellers that put the greatest amount of

resources towards measurable benefits with lowest transaction costs.

If there are ever any grey areas, exceptions to standards, or places where this Protocol is silent,

Verification Protocol Version 1.9 Page 3

refer back to these three guiding principles to inform case-by-case decisions.

Table of Content

S

Protocol Organization & User Guidance........................................................................................5Section 1. Introduction.................................................................................................................. 5

1.1 Terminology in Ecosystem Credit Accounting..................................................................61.2 Benefits of Verification....................................................................................................61.3 Relationship to ISO Standards & the Independence of Verification.................................71.4 Training, Technical Assistance, & User Feedback.............................................................81.5 Application & Audience of the ECAS Verification Protocol..............................................8

Section 2. Verification Process.......................................................................................................92.1 Verification Process Overview.........................................................................................92.2 Verification Standards...................................................................................................112.3 Agency Engagement in Verification Activities................................................................12

Section 3. Verifier Qualifications & Accreditation.......................................................................133.1 Becoming an Accredited Verifier (& Maintaining Accreditation)...................................133.2 Selecting, Assigning, & Contracting with Verifiers.........................................................133.3 Conflict of Interest.........................................................................................................143.4 Confidentiality of Project Documentation.....................................................................143.5 Dispute Resolution........................................................................................................15

Section 4: Conducting a Project Verification................................................................................164.1 Initial Verification.......................................................................................................... 164.2 Ongoing Verification (Minor Cycle)................................................................................174.3 Ongoing Verification (Major Cycle)................................................................................17

Appendix A. Protocols, Tools, Forms, & Templates......................................................................19Table A1. Description of Project Documentation.....................................................................19Table A2. Description of Forms & Templates............................................................................21Table A3. Protocols & Quantification Methods........................................................................22

Appendix B. Glossary of Terms.....................................................................................................23Appendix C. Water Quality Verification Protocol Appendix.........................................................27

C1. Introduction.......................................................................................................................27C2. Verification Process............................................................................................................27C3. Verifier Qualifications & Accreditation...............................................................................31C4. Conducting a Project Verification.......................................................................................31

Verification Protocol Version 1.9 Page 5

Protocol Organization & User GuidanceThis document describes the Verification Protocol used in Willamette Partnership’s Ecosystem Credit Accounting System for quantifying, tracking, selling, and reporting on ecosystem credits. The Protocol is organized to introduce the general requirements for verification across all credit types in the main body of this document, and then specific requirements for particular credit types in the appendices. Further requirements for individual project types are included in the guidelines for those project types. It is organized in the following sections:

Verification Protocol includes the steps and standards employed to verify individual credit-generating projects.

Verification Protocol Appendices, which describe specific verification standards for credit types in three categories: aquatic habitat, upland habitat, and water quality.

Protocol

Section 1: Introduction provides background and benefits of verification, terminology used in verification and Ecosystem Credit Accounting System, and relationship between this Verification Protocol and the ISO standards.

Section 2: Verification Process describes the components of verification review, standards to which credit-generating projects are held, and engagement by regulatory agencies in verification.

Section 3: Verifier Qualifications and Accreditation describes the qualifications to become a verifier and the process to obtain accreditation by Willamette Partnership.

Section 4: Conducting a Verification walks through the verification process step-by-step.

Appendices

Appendix A describes the forms and documentation needed to generate ecosystem credits, as well as the templates available.

Appendix B is a glossary of key terms used throughout this Protocol.

Appendix C is the Water Quality Verification Protocol Appendix outlining specific standards for reviewing documentation during verification of a water quality credit-generating project, specific verifier qualifications, and specifics around the process. Additional Verification Protocol Appendices will be added as Willamette Partnership begins actively providing verification services for additional credit-types.

Section 1. IntroductionVerification2 is the process of reviewing and confirming that credit-generating projects have met all relevant criteria and that credits have been estimated accurately using the appropriate quantification method and procedures. For verification of projects under Willamette Partnership’s Ecosystem Credit Accounting System, verification is typically conducted by accredited third parties, a regulatory agency, or in some cases, a permittee. This Verification Protocol provides guidelines for third party verification.

Where verification is conducted by a regulatory agency or a permittee, the process will be guided by agency rules and policies. In these cases, this Verification Protocol can inform, but is not intended as the primary guideline for those programs. The audience for the Protocol is the party conducting verification, but the guidance will also be useful for other market participants.

Different credit programs may require different intensities of verification for each of these components. For individual credits and project types, verification information may vary as to:

what project information is reviewed; how and when credits receive final approval; how disputes will be resolved; intervals at which multi-year projects are reviewed and approved; mechanisms for tracking credits through their lifecycle; and opportunities for public engagement in the verification and approval process.

1.1 Terminology in Ecosystem Credit Accounting

The Ecosystem Credit Accounting System (ECAS) described in the General Crediting Protocol,3 includes the protocols, standards, and quantification methods through which actions that affect the environment are translated into quantified, verified, and tradable units. Where the action improves ecological function, these units are known as credits, where the action results in reduced ecological function, these units are known as debits. Protocols are the steps of the credit issuance process and the rules for how credits can be bought, sold, and accounted for. Standards are thresholds that must be met at various stages of the process. Quantification methods are used to calculate the credit value of a given action. Willamette Partnership currently supports nine credit types in three categories, shown in Table 1.0.1 below.

1.2 Benefits of Verification

Third party verification is required for all credits generated under the Ecosystem Credit Accounting System. It is defined here as a neutral expert assessment of the accuracy and

2 Willamette Partnership. (2013). Ecosystem Credit Accounting System: General Crediting Protocol. Available at: www.willamettepartnership.org/protocols-tools-and-templates 3 ISO Quality Standards are available for purchase from the ISO website, available at www.iso.org (navigate to Standards > ISO Store).

Verification Protocol Version 1.9 Page 7

conformity of a project developer’s credit estimate with the Ecosystem Credit Accounting System protocols and standards. The purpose of verification is to provide confidence to market participants that credits represent a faithful, true, and fair account of credit benefits and debit impacts—free of material misstatements and conforming to accounting and credit generation standards.

Verification provides assurances to buyers that their credits have met the Ecosystem Credit Accounting System standards for additionality, suitability, and sustainability. It provides a standardized process for annual monitoring and reporting to support lead agencies overseeing mitigation and trading programs. Complete, consistent, and accurate verification provides the public with evidence that market activity is delivering real ecological benefits.

1.3 Relationship to ISO Standards & the Independence of Verification

This Verification Protocol is derived from the International Standards Organization’s ISO 14000 Quality Standards series on “Environmental Management”4, which form the basis of most carbon market verification protocols. A three-tiered framework for verification has emerged from the ISO standard:

1. A verifier to “provid[e] assurance to intended users that an organization's or project's GHG [greenhouse gas] assertions are complete, accurate, consistent, transparent and without material discrepancies”5;

2. An entity to approve, or accredit, the verifier as competent and neutral; and

3. A recognition body to approve the accreditor as competent and neutral.

This framework was used as the foundation for Willamette Partnership’s Verification Protocol Version 1.0, released in 2009. Since that time, the Verification Protocol has been applied on numerous credit-generating projects. A tremendous amount of learning has occurred, resulting in substantive improvements. Many of these improvements were the result of the collaborative and open dialogue between project developers, verifiers, buyers, Willamette Partnership, and the Counting on the Environment Coordinating Team. Verification Protocol Version 2.0. departs in some ways from the ISO’s framework, and that of most carbon market verification, recognizing that ISO’s standard may not represent the best balance of independence, cost effectiveness, and opportunities for learning among parties for the water quality and habitat markets that the Ecosystem Credit Accounting System and this Verification Protocol are intended to cover.

The Ecosystem Credit Accounting System places value first and foremost on providing maximum ecological benefits, which we have found benefits from more interaction between project developers and verifiers, and from attention to maintaining low transaction costs for smaller, distributed restoration projects.

4 ISO 14064-3:2006(E) at vii.5 www.willamettepartnership.org

There are risks associated with loosening the independence standard, especially risks for potential conflicts of interest. This Verification Protocol requires transparent disclosure of those potential conflicts, representing a belief that conflicts of interest pose less of a risk to program success at this point than does a lack of communication and learning.

1.4 Training, Technical Assistance, & User Feedback

The Verification Protocol is designed to be applied by individuals that already possess some specialized knowledge of resource management. Willamette Partnership offers training classes periodically or on demand for those seeking to further understand the verification process, as well as for groups interested in developing a verification program. The content, delivery, and depth of custom training sessions will be tailored to meet audience needs. Visit Willamette Partnership’s webpage6 or contact us at info@willamettepartnership.org to inquire about our training program or custom sessions.

Additionally, Willamette Partnership will provide technical assistance to buyers, sellers, and regulatory agencies using Version 2.0 of the Verification Protocol. Willamette Partnership believes that the Protocols and the science and information behind them can always be improved. Willamette Partnership welcomes feedback and ideas on improving protocols. Comments can be submitted to info@willamettepartnership.org

1.5 Application & Audience of the ECAS Verification Protocol

The process and tools in this Verification Protocol can be applied in either a regulatory or voluntary context. Where approved by the relevant regulatory agency, verified compliance-grade credits are used for mitigation or trading under regulatory requirements. voluntary credits provide increased accountability for those who want to invest in conservation actions, the benefits of which are consistently measured and tracked. Tracking credits is a way to measure progress toward internal goals or to articulate performance to a broader audience. Verification is a key component to building trust around reported outcomes. Verification Protocols may differ for compliance-grade and voluntary credits.

This Verification Protocol can also be adapted and applied by any organization or group of organizations seeking a way to systematically confirm the environmental benefits provided by on-the-ground actions at implementation and over time.

6 See Section 2.2 for definition and discussion of material errors.

Verification Protocol Version 1.9 Page 9

Section 2. Verification ProcessVerification begins when a project developer requests verification of a project and submits all final project documentation to Willamette Partnership. The verification process includes review of a project in its first year (initial verification) and throughout the life of a project (ongoing verification). Verification review can be divided into three main components:

1. Administrative review – project documentation is complete and conforms to ECAS standards

2. Technical review – credit quantification is complete, consistent with ECAS quantification method protocols, and free of material errors7

3. Confirmation of project implementation and conformance with performance standards

In some cases, Willamette Partnership may offer a program audit, where a representative sample of projects are reviewed. For purposes of this Protocol, an audit is not considered verification.

2.1 Verification Process Overview

Verification is conducted by individuals who have been accredited by Willamette Partnership and occurs on a cycle as follows:

Initial verification in project year 0, includes an administrative review of eligibility documentation, a technical review of credit calculations, and a site visit to confirm project implementation according to relevant quality standards. Table 2.1.1. describes notes some of the documentation required as part of initial verification.

Ongoing Verification (major and minor cycle) includes, as a default, annual collection and review of monitoring reports through the life of the project (“ongoing verification (minor cycle)”), and confirmation of project performance on regular cycle, defined by credit type (“ongoing verification (major cycle)”). The site visit confirms the project is meeting performance standards defined for the particular project and credit type. Where there have been changes that may affect the credit quantification (e.g., changes to the project boundary), technical review will also be conducted as part of ongoing verification. Where there have been material changes to project eligibility (e.g., answers to questions on the validation checklist have changed), adminsitrative review of eligibility criteria will be part of ongoing verification.

A Verification Report is issued following instances of both initial and the major cycle of ongoing verifications. The verification report contains a summary of verification activities, an opinion on the credit estimates, and a log of any outstanding findings,

7 http://willamettepartnership.org/tools-templates/tools-and-templates-1/

notes, or concerns. A template verification report is available on the Willamette Partnership website.8

Table 2.1.1. Documentation reviewed during verification

Supports

Project Documentation 9,10 Administrative Review

Technical Review

Confirmation of Project

Implementation

Validation Checklist

Validation Notice

Proof of Ownership

Proof of Rights to Credits

Land Protection Documents

Permits or Other Agency Approvals

Accounting Area Map

Service Area Map

Project Monitoring Plan

Project Stewardship Plan

Initial Project Design (50%) & Map

As-built Project Design (100%) & Map

Credit Modeling Report

Baseline Data

As-built Data

Table 2.1.2 Overview of the Verification Process

Verification Project Year/ Verification Objective Verification Activities

8 See Appendix A for a description of project documentation needs, forms, and templates.9 In some cases, one document may represent multiple project documentation needs. For example, a contract between the Project Developer and landowner may provide Proof of Ownership, Proof of Rights to Credits, and Land Protection. Similarly, the Project Management Plan and Project Maintenance Plan may be developed as a single document.10 Calculated as (Verifier Estimate - PD Estimate)/ Verifier Estimate * 100

Verification Protocol Version 1.9 Page 11

Phase CycleIn

itial

0

Administrative Review Review all project documentation Confirm sustainability (e.g., ownership &

stewardship) Confirm suitability (e.g., minimum quality

standards) Confirm additionality

Technical Review Review credit modeling report and supporting documentation (current conditions data, sample points, data inputs, model outputs, etc.)

Confirm credit calculation procedures were performed correctly and estimate is free of material errors

Confirm Project Implementation

Site visit to confirm project boundaries, implementation of planned activities adhering to quality standards

Ong

oing

Minor Administrative Review Review annual monitoring reports Conduct site visit if needed (e.g., site appears likely

to fail)

Administrative Review Review annual monitoring reports, confirm performance targets

Review any changes to eligibility

Major Technical Review If necessary, review revised credit modeling report and supporting documentation

Confirm Project Performance

Conduct site visit to confirm project implementation and attainment of performance targets

2.2 Verification Standards

In order to be verifiable, the credit estimate submitted by the project developer must meet standards of accuracy for be free from material quantitative and qualitative errors (collectively referred to as material misstatements).

Quantitative errors are those stemming from incorrect protocol calculations, transcription errors, or the use of incorrect default and numeric values. Willamette Partnership recognizes that there is inherent uncertainty involved in field data collection. As such, in order to be verifiable, the credit estimate proposed by the project developer must be within 15% of the technical review of credit quantity performed during verification.11 The 15% standard is meant to capture differences in reporting uncertainty, stemming from sampling and calculation

11 Other representatives may also accompany verifiers at the discretion of the project developer.

differences. It is not meant to capture errors in inputs or missing information. As a general rule, if the difference is within 15%, the credit quantities in the original credit estimate will be used to issue credits.

Qualitative errors occur when a project fails to conform to the standard’s rules and methodology requirements. Qualitative errors might include, but are not limited to, inaccurate project boundaries, missing documentation of eligibility, or other information that does not appropriately describe project conditions and differs greatly from the verifier’s assessment of that same information.

2.3 Agency Engagement in Verification Activities

Lead agencies may request to project developers that they be able to send representatives to accompany verifiers in the course of verification activities primarily for but not limited to information and educational purposes. 12 Where credits are being used to fulfill a regulatory obligation (e.g., water quality credits being used toward an NPDES permit obligation), the lead agency and/or other relevant regulatory agency retains the authority to visit or audit credit-generating sites at any time.

In the very rare instance when a project developer feels that information resulting from these visits should be kept confidential, the state agency and Partnership will consider the request to the limited extent authorized by ORS 468.095(2) governing state confidentiality and EPA's Regulations on the Confidentiality of Business Information (see 40 CFR Part 2).

12 Willamette Partnership expects its verifiers to carry professional liability coverage similar to other consulting activities. This does not imply that verifiers bear additional liability under credit verification beyond what is in current Federal, Oregon, and local statutes.

Verification Protocol Version 1.9 Page 13

Section 3. Verifier Qualifications & Accreditation

Verifiers must be accredited by Willamette Partnership before they are eligible to conduct verification review. A verifier is an individual that has demonstrated their ability to assess the underlying actions for credits and debits and their familiarity with the approved quantification tools for specific project and credit types. Individuals may become accredited for one or more credit types. The skill sets needed are generally the same for conducting field ecological assessments or implementing restoration projects. See the Verification Appendices for specific qualifications by credit and project type.

Verifiers must agree to accept limited financial liability13 for verification activities undertaken for a market participant. This liability will be determined in the Verification Services Agreement signed between the verifier and Willamette Partnership. A template agreement is available upon request.

3.1 Becoming an Accredited Verifier (& Maintaining Accreditation)

Willamette Partnership will offer accreditation programs as verifiers are needed for particular geographies, credit, and project types. Individuals seeking to become an accredited verifier must successfully complete a verification training and post-training assessment. Typically, the training program will include a session introducting crediting programs and walking through the Ecosystem Credit Accounting System, sessions on the relevant quantification method(s), and a session on conducting a verification.

Accreditations are typically issued for one year. To maintain an accreditation, a verifier needs to attend Willamette Partnership’s Verifier Check-in (a 2-3 hour refresher course), which is held annually. The check-in covers any changes to protocols, quantification tools, or other information important for verifiers to stay current. The check-in is also an opportunity for verifiers to work with Willamette Partnership to improve all aspects of the program and share lessons learned.

3.2 Selecting, Assigning, and Contracting with Verifiers

Verification begins when project developers submit their credit estimates to Willamette Partnership and request verification. At this point, Willamette Partnership will issue a call to all accredited verifiers for that geography, credit, and project type. Interested verifiers will notify Willamette Partnership. Verifiers are assigned on a rotating basis, moving through the list of the people qualified and interested in conducting verification for a given project. When assigning verifiers to a project, Willamette Partnership will also consider the proximity of the verifier to the project to limit travel cost.

13 Available at: http://willamettepartnership.org/tools-templates/tools-and-templates-1/

The verifier will work with Willamette Partnership to establish a budget for the verification. Willamette Partnership will enter into a contract with the project developer and a subcontract with the verifier to complete verification.

3.3 Conflict of Interest

The independence of verification is critically important. Verifiers acting on behalf of Willamette Partnership must work in a credible, nondiscriminatory, independent, and transparent manner, complying with applicable state and federal law. This includes disclosing any pre-existing relationships between the project developer or Buyer and the verifier. Verifiers must provide a conflict of interest form to Willamette Partnership at least 3 business days before verification activities can proceed.

As an added protection, a verifier can only provide verification services to a project developer for a period up to ten years. If a verifier violates these conditions, Willamette Partnership at its discretion, may disqualify an accredited verifier for a period of up to five years. See Willamette Partnership’s Conflict of Interest Code for full detail.14

3.4 Confidentiality of Project Documentation

Transparency and disclosure of information around credit-generating projects is critically important. Willamette Partnership is committed to making the ECAS as transparent as possible but also recognizes the need to maintain individual privacy and preserve the confidentiality of proprietary business information.

All credit generated under the Ecosystem Credit Accounting System are serialized and tracked in a ledger, or registry, along with substantiating project documentation. The Ecosystem Credit Accounting System uses a registry that is web-based and publicly accessible.15 The registry provides information on credit ownership and project documentation for public view. Some project documents or information may be withheld so long as the project developer complies with the Confidential Business Guidelines.16

To conduct their review, verifiers are typically provided with the full project record, free of omissions or redactions. Verifiers are expected to hold confidential information in strict confidence in accordance with the contract for verification services.

14 Willamette Partnership uses Markit Environmental Registry. Existing projects can be found on the registry public view at http://mer.markit.com/br-reg/public/index.jsp?s=ci15 Willamette Partnership. Protocols, Tools, and Templates. willamettepartnership.org. Retrieved November 5, 2013 from http://willamettepartnership.org/tools-templates/tools-and-templates-1

16 http://willamettepartnership.org/tools-templates/tools-and-templates-1/

Verification Protocol Version 1.9 Page 15

3.5 Dispute Resolution

There may be instances where a verifier and a project developer cannot agree on the findings in a verification report. In such instances, both parties can request Willamette Partnership’s Dispute Resolution Committee to review the dispute and recommend a solution. If the recommended solution is not acceptable to both parties, the dispute will be referred further per the Verification Services Agreement (e.g., either to the lead agency or to arbitration).

Section 4: Conducting a Project VerificationThis section contains a step-by-step guide to conducting verification as a third party verifier.

4.1 Initial Verification

1. Project developer requests verification: Verification is initiated when the project developer submits all required project documentation, including their final credit estimate reflecting as-built conditions, to Willamette Partnership.

2. Willamette Partnership assigns verifier and finalizes an agreement: Willamette Partnership selects a verifier (See Section 3.3) and works with that individual to negotiate agreement on the terms for providing verification services. If an agreement cannot be reached, the next verifier on the list is assigned. When an agreement is reached, the parties enter into a contract for verification services. The verifier must also submit a conflict of interest form to establish the likelihood of a conflict of interest between the parties is low or otherwise justified.

3. Verifier conducts verification activities: The verifier will work with the project developer to schedule the site visit and credit calculation desk audit (as necessary). The verifier follows the guidance in the Verification Protocol to review the project activities, eligibility, and credit calculation (See Section 2 of this document and the relevant Verification Protocol Appendix).

4. Issue preliminary findings and/or verification report: After accessing and reviewing all necessary information, the verifier completes a preliminary findings report detailing any issues, errors, or outstanding questions identified during administrative and technical review or confirmation of project implementation. The preliminary findings report is intended to clarify misinterpretation, misunderstanding, or miscommunication between the verifier and project developer. The project developer then has the opportunity to address any issues or errors identified by the verifier.

5. Issue draft verification report: Where there are no preliminary findings, or once all material issues (See Section 2.2 Verification Standards) have been addressed, the verifier submits a draft verification report to Willamette Partnership and the project developer. The verification report contains a project summary, an opinion on the credit estimates, and a log of activities and findings. A template verification report is available on Willamette Partnership’s website.17

6. Verifier submits final verification report to Willamette Partnership: Upon acceptance of the draft verification report by the project developer, a verifier completes a final, signed verification report and submits the report to Willamette Partnership. At this

17 http://willamettepartnership.org/tools-templates/tools-and-templates-1/

Verification Protocol Version 1.9 Page 17

point, the verifier’s role is complete until the next verification event (e.g., review of monitoring reports for ongoing verification in project year 1).

7. Willamette Partnership completes certification: Many credit types will need agency certification before credits can be issued. Once a verification report has been submitted, if required, the relevant agency(cies) will review the project documentation and give Willamette Partnership approval to issue credits. For some credit types, agency approval will not be required, and Willamette Partnership will act as the certifying entity.

8. Registration: Once project developers have assembled all of the necessary documentation and received their certification, they are ready to send their package to the registry to issue credits. The registry reviews the credit documentation for completeness. Once accepted into the registry, the credit will be available for sale and a project summary available to the public.

4.2 Ongoing Verification (Minor Cycle)

9. Project developer requests verification: This typically involves the project developer submitting an annual monitoring report to Willamette Partnership, who then contacts the project verifier and provides the monitoring report for their review.

10. Verifier reviews the monitoring report: The verifier follows guidance in the Verification Protocol to review the monitoring report (See Section 2 and the relevant Verification Protocol Appendices).

11. Verifier issues monitoring verification report and notes: The verifier develops and submits a monitoring verification report. The report is an attestation that the project remains valid. Any comments or issues may be documented in a notes section appended to the report. A template monitoring verification report is available on Willamette Partnership’s website.18

12. Monitoring verification report is posted to the registry: At this point, it becomes publicly available.

4.3 Ongoing Verification (Major Cycle)

The major cycle of ongoing verification includes the same steps and review components as the initial verification with the exception that, when submitting for verification, the project developer will indicate whether any material changes have occurred that may affect the project eligibility or the credit calculation. Where eligibility has not changed, administrative review will focus on confirming that performance criteria are met and that attainment of those standards is reflected in the annual monitoring reports.

18 http://willamettepartnership.org/tools-templates/tools-and-templates-1/

Appendix A. Protocols, Tools, Forms, & Templates This section contains lists and references to the documents created to guide credit development and verification under the Ecosystem Credit Accounting System.

Table A1. Description of Project Documentation: Describes each of the documents that are frequently required for credit generation. Project documentation is submitted by the project developer to Willamette Partnership and the verifier for review. In many cases, templates and examplse provide guidance on what information should be provided, this can serve as a reference for verifiers when reviewing project documentation

Table A2. Description of Forms & Templates: Describes the content and purpose of each form and template document used in the credit generation process. These forms and templates are issued by either Willamette Partnership (e.g., validation notice) or the verifier (e.g., verification report) during the credit issuance process. Templates provide guidance for verifiers when generating these forms.

Table A3. Protocols & Quantification Methods: All protocols, credit quantification methods, and protocols or guidance for applying those methods. These documents provide a reference to verifiers and project developers on the procedures and standards associated with credit generation.

Table A1. Description of Project Documentation

The following table provides a description of the different types of project documentation. The documents described here are those provided by the project developer to Willamette Partnership and the verifiers to substantiate the credit estimate and eligibility of the project. Templates are available on Willamette Partnership’s website19 for those documents marked with an asterisk (*). Templates and examples can be used as a guide for project developers as they generate proejct documentation. They can be used by verifiers as they review documentation as an indicator of the information that should be provided.

DOCUMENTATION DESCRIPTION

VALIDATION CHECKLIST

Initial screen of a project’s eligibility to generate ecosystem credits. The checklist is intended to guide project developers through demonstrating the project’s consistency with eligibility requirements for additionality, suitability, and sustainability.

PROOF OF OWNERSHIP

Confirmation of the legal ownership of the property on which project activities will take place.

PROOF OF RIGHTS TO CREDITS

Document confirming the project developer has legal title to the credits to be issued for the project. This could include an easement, legal agreement, legal opinion, deed restriction, letter of intent, contract or other form

19 U.S. EPA, Water Quality Trading Toolkit for Permit Writers, EPA 833-R-07-004. (Aug. 2007, updated June 2009). At Glossary. Available at http://www.epa.gov/npdes/pubs/wqtradingtoolkit.pdf.

Verification Protocol Version 1.9 Page 19

clearly stating who owns the underlying land and who has rights to own and sell credits generated from the project.

PROJECT PROTECTION DOCUMENTS

Confirms that the project site will be legally protected from development actions and alterations impacting project performance for the life of the credit. This may be the same as proof of rights to credits.

INITIAL PROJECT DESIGN*

Describes the intended project activities, considerations, and timelines, and demonstrates that minimum quality standards will be met.

PROJECT MAP Delineates the project site, indicating where project activities and any relevant geographic context. For users of Verification Protocol Version 2.0, additional information is available in the relevant Protocol Appendix.

AS-BUILT PROJECT DESIGN

Describes and depicts the completed project activities. This may be a full design document or developed as an appendix providing updated or supplementary information to the initial project design.

BASELINE & AS-BUILT DATA

Data files and model inputs used to represent the baseline and as-built condition during credit quantification. The form of these data (e.g., field data sheet, GIS layers) will vary based on the credit quantification method.

CREDIT MODELING REPORT*

Description of modeling inputs and assumptions used to generate the credit estimate.

ACCOUNTING AREA MAP

Delineates subareas for which accounting of credits will be linked (accounting units). Accounting units cannot overlap.

SERVICE AREA MAP

Delineates area within which the credits will be tracked or, for compliance credits, the area in which they can be sold.

WETLAND DELINEATIONS

Establishes the location and size of a wetland for the purposes of federal, state, and local regulations.

STEWARDSHIP AND MONITORING PLAN*

Describes how monitoring will be conducted over the life of the credit to ensure project success and the attainment of project performance standards in ECAS, and the project developer’s intent for project maintenance including the designation of stewardship responsibility, cost estimates, anticipated activities, and management of stewardship funds.

AGENCY PRE-APPROVALS

Where applicable, confirmation of agency approval to proceed. This may be an approved prospectus, bank, letter, or other form.

BANK PROSPECTUS Where necessary, detailed description of proposed mitigation bank that has undergone review and comment from the Interagency Review Team to assess technical feasibility of the bank development and operations.

BANK AGREEMENT Where necessary, the formal agreement between the project developers and agencies establishing liability, performance standards, management and monitoring requirements, and the terms of bank credit approval.

Table A2. Description of Forms & Templates

This table identifies the Forms and Instructions referenced in the Verification Protocol. These are forms are developed and issued by Willamette Partnership or accredited verifiers.

FORMS, TEMPLATES, AND INSTRUCTIONS

DESCRIPTION

NOTICE OF VALIDATION

Signifies that if the Validation Checklist and attached documents are accurate, the project developer is likely eligible to create or buy credits.

CREDIT RELEASE SCHEDULE

Outlines how many credits will be released to the Registry at different project development stages.

VERIFICATION REPORT

Report submitted by the verifier and project developer attesting to the verifier’s opinion of the project developer’s credit estimate.

VERIFICATION REPORT TEMPLATE

Provides a reference for verifiers as to the tone and type of information expected in a Verification Report.

CONFLICT OF INTEREST FORM

Notice Willamette Partnership about any conflicts of interest may be present between the verifier and project developer.

CERTIFICATION FORM Allows Willamette Partnership, agencies, or an agency’s designated proxy to signify that all project documentation is present, including the Verification Report. The Certification form represents final approval of credits for issuance.

SAMPLE CONTRACTS Templates to help speed contracting between participants.

APPROVAL OF SALE Notice from the Administrator that directs the Registry to finalize the transfer of credits and indicates to agencies that credits have been purchased toward a mitigation obligation

Verification Protocol Version 1.9 Page 21

Table A3. Protocols & Quantification Methods

The following table provides a list of all protocols, credit quantification methods, and protocols or guidance for applying those methods. The shaded cells indicate the credit types for which those documents are applicable. These documents outline the procedures that must be followed and standards that must be met by credit-generating projects. These documents contains the protocols and standards against which verifers will review project documentation. All documents are available on Willamette Partnership’s website.

Protocols & Quantification Methods

Applicable Credit Type

Wet

land

s

Salm

on

Floo

dpla

in

Oak

Prai

rie

Sage

brus

h/

Sage

-gro

use

Nitr

ogen

Phos

phor

us

Tem

pera

ture

General Crediting Protocol Version 1.0*

General Crediting Protocol Version 2.0

Verification Protocol Version 1.0

Verification Protocol Version 2.0

Oregon Rapid Wetlands Assessment Protocol

ORWAP Users Guide

Salmon Habitat Calculator

Salmon Habitat Metric Users Guide

Floodplain Habitat Metric Calculator

Floodplain Habitat Metric Users Guide

Oak Habitat Metric Calculator

Oak Habitat Metric Users Guide

Prairie Calculator v1

Prairie Calculator Crediting Protocol

Sagebrush/Sage Grouse Habitat Metric Calculator

Sagebrush/Sage Grouse Habitat Metric Users Guide

Nutrient Tracking Tool Users Guide

Heat Source v7 Manual

Shade-a-lator Protocol v6.2

Example Thermal Credit Calculation v6.2

Shade-a-lator Protocol v7,v8.0.5, v8.0.8

Example Thermal Credit Calculation v8

NRCS Practice Standards

Draft Riparian Planting Standards

* The General Crediting Protocol Version 1.0 is relevant for projects contracted before November 2013.

Verification Protocol Version 1.9 Page 23

Appendix B. Glossary of TermsAccredit: in ECAS, recognition by Willamette Partnership that an individual is qualified and authorized to provide verification services.

Additionality: in an environmental market, the environmental benefit secured through the payment is deemed additional‖ if it would not have been generated absent the payment provided by the market system.

Administrative Review: review by the verifier to confirm that project documentation is complete and conforms to ECAS standards.

Buyers: any public or private entity that chooses to invest in credits and other like quantified conservation outcomes. Buyers typically purchase credits to meet a regulatory obligation. Buyers might also include entities interested in voluntarily purchasing a credit to achieve environmental goals including conservation, corporate sustainability or the mitigation of environmental or regulatory risks.

Certification: the formal application and approval process of the credits generated from a BMP. Certification occurs after verification.

Counting on the Environment: the structured, collaborative, consensus-building process through which Willamette Partnership developed the science, policy, and protocols of the Ecosystem Credit Accounting System.

Counting on the Environment Coordinating Team: the governing body for the Ecosystem Credit Accounting System, composed of representatives of state and federal agencies, non-profits, and other stakeholders.

Compliance-grade Credits: see Credits (compliance-grade).

Credit: a measured or estimated unit of pollutant reduction per unit of time at a specified location,20 as adjusted by attenuation/delivery factors, trading ratios, reserve requirements, and baseline requirements.

Credit (Compliance-grade): credits that are eligible to offset to a regulatory requirement, where approved by regulators.

Credit (Voluntary): credits that are not eligible for use as offsets to regulatory requirements. Voluntary credits can be generated as a way to track the outcomes of conservation investments. Purchasing voluntary credits is a way for conservation funders to target their investments toward generating the outcomes most relevant to their environmental goals.

Credit Estimate: the quantity of credits, calculated by the project developer, that is reviewed during verification. Assumptions and other details around developing the credit estimate are documented in a credit estimate report.

Credit Life: see Crediting period .

20 Willamette Partnership. (2013). Ecosystem Credit Accounting System: General Crediting Protocol. Available at: www.willamettepartnership.org/protocols-tools-and-templates

Credit Release Schedule: defines the fraction of credits released at different project stages .

Crediting Period: sometimes called the “life of the credit,” generally begins when the conservation action is implemented and, for compliance-grade credits, has a duration tied to that of the impacts being mitigated.

Credit Registry: a service or software that provides a ledge function for tracking credit quantities and ownership. Credit registries may also act as a mechanism for public disclosure of trading project documentation.

Debits: quantified, verified, and tradable units of environmental impact, calculated as the difference between the functional scores of the pre-project and anticipated post-project conditions.

Ecosystem Credit Accounting System (ECAS): includes the protocols, standards, and quantification methods through which actions that affect the environment are translated into credits.

Initial Verification: See Verification (initial).

Material Misstatements: a significant occurrence, change, omission, or piece of information that would be dispositive or highly influential for regulators when determining whether the modeled benefits of trading are substantially likely to occur at a project site, or for a general trading plan.

Mitigation: the offset of an environmental impact with a compensatory environmental benefit, typically generated through ecological protection, restoration, or enhancement and verified through a crediting program.

Ongoing Verification: See Verification (Ongoing).

Project Boundary: the location of the entire area from which the Project Developer will seek to generate credits.

Project Developers: any entity that develops credits, project developers may be an individual landowner, land manager, or an aggregator.

Program Audit: in ECAS, process by which a subset of projects are selected from within a trading program or project developer’s portfolio to undergo verification review.

Project Year: length of time from project implementation, beginning at year 0.

Protocols: step-by-step manuals and guidelines for achieving particular environmental outcomes. Protocols include the actions, sequencing, and documentation that project developers should follow in order to generate credits from eligible BMPs.

Quality Standards: the necessary specifications associated with a particular credit-generating activity or BMP that ensures that the estimated ecosystem service benefits at a project site are actually achieved through implementation. Typically, a document that defines installation and maintenance quality standards and ongoing performance standards to ensure that each BMP is consistently achieving the desired environmental improvements.

Verification Protocol Version 1.9 Page 25

Qualitative Errors: discrepancies arising from failure to conform to the standard’s rules and methodology requirements. Qualitative errors might include, but are not limited to, inaccurate project boundaries, missing documentation of eligibility, or other information that does not appropriately describe project conditions and differs greatly from the verifier’s assessment of that same information.

Quantification Methods: methods, based on science, that are used to calculate the credit or debit value of a given action. Functional assessments may be required to apply quantification methods.

Quantitative Errors: those errors, typically in the credit estimate or credit estimate report, stemming from incorrect protocol calculations, transcription errors, or the use of incorrect default and numeric values.

Registry: See Credit Registry

Sellers: see Project Developers.

Standards: thresholds that must be met at various stages of the process of generating credits or debits (e.g., riparian plantings must contain at least 5 woody species).

Suitability: in the ECAS, standards for suitability are those that relate to ensuring credit quality, typically captured in Quality Standards by credit type and project type. Criteria for suitability are described in the General Crediting Protocol, Section 2.1, p15. and the relevant Protocol Appendices.

Sustainability: in the ECAS, standards for sustainability are those that relate to protecting the credit-generating activities at the project site for the entire crediting period. This includes standards for legal protection, maintenance, and available funds to support maintenance and monitoring. Criteria for sustainability are described in the General Crediting Protocol, Section 2.1, p16 and the relevant Protocol Appendices.

Technical Review: part of verification confirming that the credit estimate report is complete, consistent with ECAS quantification method protocols, and free of material misstatements.

Third-party Verifier: see Verifier.

Validation Lead: the entity that reviews the validation checklist to assess project eligibility, frequently Willamette Partnership and/or the lead permitting agency for the credit type.

Verifier: independent third parties or agency representatives who confirm that credits are eligible, accurately calculated, and maintained throughout the life of the project. Verifiers are trained and accredited to use the Verification Protocol.

Verification: an independent, expert check on the credit estimate provided by the Project Developer. The purpose of verification is to provide confidence to all program participants that credit calculations are a faithful, true, and fair account – free of material misstatement and conforming to credit generation and accounting standards.

Verification (Initial): occurring in project year 0, initial verification under this Verification Protocol includes administrative review, technical review, and confirmation of project

implementation.

Verification (Ongoing, Major): Occurring on a regular cycle within the credit life, major ongoing verification includes confirmation of project performance with administrative and technical review as needed (e.g., when eligibility or credit quantities change).

Verification (Ongoing, Minor): Occurring in interim years during the credit life, after initial verification and between major cycles. Minor ongoing verification includes review of annual monitoring reports and attestation that the project does not appear likely to fail.

Verification Protocol provides standardized, specific guidance on the review and assessment of credit issuance under the approved credit types described here and details the process for becoming an accredited verifier. The Verification Protocol is available online (http://willamettepartnership.org/tools-templates/).

Voluntary credits: see Credits (voluntary).

Verification Protocol Version 1.9 Page 27

Appendix C. Water Quality Verification Protocol Appendix

C1. Introduction

The purpose of this document is to provide information specific to verifying credits for water quality improvements. This appendix is meant to supplement the Verification Protocol by providing information specific to verifying these credit types. The credit types currently available for water quality are shown below, along with the applicable quantification methods, tradable units, and lead verification entity. Willamette Partnership leads verification for water quality credits through the use of accredited third parties, utilizing the process described in this Verification Protocol.Table C1. Water Quality Credit Quantification Methods

Method Tradable Units Verification Entity

Thermal Oregon DEQ Shade-a-latorVersions 6.3,7, 8.0.5, and 8.08 kilocalories Willamette Partnership

Nitrogen Nutrient Tracking Tool lbs Willamette Partnership

Phosphorous Nutrient Tracking Tool lbs Willamette Partnership

C1.1 Active Water Quality Programs & Relationship of ECAS to Regulatory Programs

At the time of publication, thermal water quality credits have been verified, certified, and registered projects located within the state of Oregon. Credit buyers include conservation organizations and NPDES permitees. All active thermal water quality credits were generated through riparian forest restoration, quantified in kilocalories/day of thermal load using the Shade-a-lator model.

Oregon

The Oregon Department of Environmental Quality (Oregon DEQ) holds authority over the use of credits toward regulatory obligations through the NPDES or other programs in the state of Oregon. Willamette Partnership has no formal delegation of authority, nor is this Verification Protocol formally approved. Willamette Partnership has collaborated closely with Oregon DEQ on the development and revision of the General Crediting Protocol and this Verification Protocol. The protocols for water quality credits were specifically designed to conform to credit-generation as it is described in the NPDES permits utilizing credits for compliance. Oregon DEQ will accept water quality currencies verified by Willamette Partnership. Oregon DEQ retains the right to audit an NPDES permitee’s trading plan at any time.

C2. Verification Process

The following sections detail specific activities and standards of review for the verification of water quality credits.

C2.1 Initial Verification

C2.1.1 Administrative Review

The purpose of this step is to ensure that project documentation is complete, documentation conforms with ECAS protocols and standards, and eligibility requirements are met. The following table describes the key components of each document that verifiers should review:

Table C2.0-1. Review criteria for documentation under Administrative Review during Initial Verification

Document Description of document review

Validation Checklist Questions or concerns relating to suitability, sustainability, and additionally appear resolved.

Validation Notice Document is present, signed by Willamette Partnership. Any issues identified in the notice have been resolived.

Proof of Ownership Legal representation of property ownership (e.g., title report, deed, or attestation of ownership in a signed contract). Sufficient documentation should exist to tie ownership to land parcel, tax lot, spatially (e.g., parcel name and tax lot ID can be used to lookup parcel through county tax assessor website).

Proof of Rights to Credits

Where the property owner is the project developer, proof of ownership is sufficient to demonstrate proof of rights to credits, barring legal agreements in which rights to credits have been forfeited.

Where the property owner is not the project developer, this document should represent a legally binding agreement (e.g., lease, contract, or easement to which the property owner is a party) approving generation and sale of credits from the property by the project developer.

This document must cover the entire credit life (e.g., 20 years for structural BMPs, 5 years for management BMPs).

Land Protection Documents

Legally binding agreement (e.g., lease, contract, or easement to which the property owner is a party) protecting the credit-generating activities from removal and unauthorized alteration, allowing for project maintenance.

This document should not allow for termination at will. This document must cover the entire credit life (e.g., 20 years for structural

BMPs, 5 years for management BMPs)

Permits or Other Agency Approvals

Executed, and covering the correct time period.

Accounting Area Map (multi-credit projects only)

Consistent with as-built project design and map, site conditions, and credit quantification.

Verification Protocol Version 1.9 Page 29

Service Area Map Consistent with default service areas or program-specific requirements, as described in the General Crediting Protocol.

Stewardship & Monitoring Plan

Information provided is consistent with that suggested in the stewardship and monitoring plan template (e.g., monitoring covers metrics related to performance criteria, sampling methodologies referenced and statistically sound, plan and steward identified for site maintenance).

Budget is provided and justified as covering stewardship and monitoring needs for a period covering the life of the project.

Initial Project Design (50%) & Map

Demonstrates understanding of and management toward quality standards and/or performance criteria for the credit-generating activities.

As-built Project Design (100%) & Map

Describes the location and extent of credit generating actions consistent with the credit modeling report and site conditions observed during the Site Inspection.

Credit Modeling Report

See C2.1.2

Baseline Data Present and complete, sufficient to re-run credit quantification. Consistent with modeling assumptions reported in the credit modeling

report and description of pre-project conditions in the initial project design.

As-built Data Present and complete, sufficient to re-run credit quantification. Consistent with modeling assumptions reported in the credit modeling

report, the as-built project design and map, and site conditions observed during the sit einspection.

C2.1.2 Technical review

The purpose of this step is to ensure that the credit quantification was performed in a manner consistent with quantification method protocols, and that it is accurate.

Document Review and Desk Audit – The verifier reviews the credit modeling report and meets with the project developer for a desk audit to walk through the credit modeling report and ask clarifying questions. The desk audit can be conducted remotely using webinar or screensharing software. The verifier confirms:

£ Model parameters are consistent with the relevant quantification method protocol (e.g., model version is correct, node spacing and stream direction is characterized correctly for Shade-a-lator).

£ Project boundaries and actions are consistent with those depicted in the as-built project design and map.

£ Data inputs are appropriate and consistent with the conditions on the ground. Data layers such as aerial photos, LIDAR, soil maps, etc. should accurately represent the site condition (e.g., no major changes after data

was acquired), during the correct time period (e.g., farm plan for pre-project condition represents the correct range of dates, river banks represent low flow conditions in the late summer, early fall, or other identified time period).

Site Inspection – See C2.1.3 Confirmation of Project Implementation. In some cases, the Site Inspection may precede the Desk Audit.

Verify Accuracy – After the validity of modeling assumptions and consistency with as-built conditions is confirmed, the credit quantification is re-reun. The project developer’s estimate must meet the standard for quantitative errors (i.e., default of 15%). For temperature credits, Willamette Partnership staff re-run the Shade-a-lator model and communicate the results to the verifier.

C2.1.3 Confirmation of Project Implementation

During the site visit, the verifier confirms that: Project boundaries and actions represented in the as-built project design and

represented in the credit modeling report verifier are consistent with conditions on the ground.

Qualitative visual assessment that any relevant performance standards are met. Identify any major threats to project success and attainment of future performance

standards.

C2.2 Ongoing Verification (Minor Cycle)

Administrative Review

Monitoring reports are collected by Willamette Partnership, who distributes them to the verifiers. The verifier conducts their review and develops a monitoring verification report to post on the registry. The verifier may also submit notes for the project developer and the project file, noting any concerns or issues that they wish to document.

Table C2.0.2. Review criteria for documentation under Administrative Review in Minor Ongoing Verification

Document Description of document review

Annual Monitoring Report (minor ongoing verification)

Criteria/metrics representing all relevant performance standards are reported

Project is not facing a high chance of failure

C2.3 Ongoing Verification (Major Cycle)

Major ongoing verification includes the same criteria for review as the initial verification (See Section F-2.1) with the exception that, when submitting for verification, the project developer will indicate whether any major changes have occurred relative to project eligibility. Where eligibility has not changed, administrative review will focus on confirming that performance

Verification Protocol Version 1.9 Page 31

criteria are met and that attainment of those standards is reflected in the annual monitoring reports. Table C2.3. Review criteria for documentation under Administrative Reviewin Ongoing Verification (5year cycle)

Document Description of document review

Annual monitoring report (major ongoing verification)

Criteria/metrics representing all relevant performance standards are reported

Project is not facing a serious risk of failure Project meets relevant performance criteria

C3. Verifier Qualifications & Accreditation

C3.1 Becoming an Accredited Verifier (& Maintaining Accreditation)

Credit Type Thermal Nitrogen Phosphorous

Qualifications Experience with riparian restoration. Generally includes ability to identify tree species and plants of the Pacific Northwest, restoration practices, and riparian ecology. General understanding of environmental models.

Experience with broad range of agricultural cropping and management practices, water rights, and/or environmental models. Additional qualifications may be required for specific BMPs (e.g., certified installer for certain irrigation upgrades)

C4. Conducting a Project Verification

At this time, the process for conducting a water quality credit verification is fully consistent with the steps listed in Section 4.