The Climate Trust 2007 Annual Report

The Climate Trust 2007 Annual ReportCover photo by John MacMurray | Punchbowl Falls in Oregon’s Columbia River Gorge National Scenic Area.Other photos by Eric Melzer“?The?Climate?Trust?has?been?a??well-respected?and?thoughtful?leader?in?the?offset?market?for??a?decade.”? —Diane Wittenberg Executive Director, The Climate RegistryMike Burnett Executive DirectorDiana Bodtker Board ChairThe Climate Trust celebrated its 10th anniversary in 2007— a remarkable milestone in such a nascent industry as the greenhouse gas (GHG) offset market. As pioneers in the industry, we were the first institutional buyer of GHG offsets in the United States. Today we remain an active purchaser of high-quality GHG offsets, as well as one of the leading nonprofits shaping regulatory offset policy in the United States. Our leadership in the offset industry stems from our roots as the first—and only—qualified provider of GHG offsets that meet Oregon’s Carbon Dioxide Standard. In 1997 Oregon enacted the first legislation in the United States aimed at reducing GHG emissions. In recent years there has been a move toward the regulation of GHGs at the state, regional and federal levels, including the states of Washington and California, the Northeast with the Regional Greenhouse Gas Initiative, the Midwest with the Midwestern Greenhouse Gas Reduction Accord and the West with the Western Climate Initiative. There has also been an explosion of climate policy deliberations at the federal level, with national legislation expected in the next few years. The voluntary GHG offset market also has experienced exponential growth over the past decade. In its report titled, “Forging a Frontier: State of the Voluntary Carbon Markets 2008,” Ecosystem Marketplace and New Carbon Finance have provided conservative estimates of 42.1 million tons of carbon dioxide equivalent worth $258.4 million traded on the voluntary carbon market in 2007. That is nearly triple the volume of carbon dioxide equivalent reported in 2006. The same report called 2007 the “year of the standard,” meaning that as many as 50 percent of the transactions conducted in 2007 involved a third-party standard such as the Voluntary Carbon Standard, which we played a key role developing.The Climate Trust has long promoted quality standards both by participating in and by helping shape the GHG offset market. We firmly believe that our commitment to quality is the key to our success. We also believe that quality is the key to ensuring a robust and viable offset marketplace that provides verifiable and enduring reductions in GHG emissions.As part of our ongoing effort to promote high quality principles in the offset market and advance sound offset policy, we have created a National Board of Directors and spearheaded creation of the Offset Quality Initiative, a coalition of six leading nonprofit organizations formed to provide leadership on GHG offset policy and best practices. We believe both of these developments will position us to meet the challenges and opportunities we will face in our next 10 years. Finally, we would like to use our 10th anniversary as an opportunity to thank the visionaries in the state of Oregon, as well as our financial supporters, partners, developers, concerned citizens and other stakeholders for their support throughout the years. Together we are making a difference in combating global climate change. The Climate Trust celebrates 10 years as a leader in climate change solutionsSincerely,1The Climate Trust’s mission is to promote climate change solutions by providing high-quality greenhouse gas (GHG) offset projects and advancing sound offset policy. That dual mission sets us apart. As a pioneering practitioner in the regulatory and voluntary offset markets, we provide an important experience-based perspective as a nonprofit to policy proceedings at the state, regional and federal levels.We?are?leaders?in?the?regulatory??and?voluntary?offset?marketsREGULATORY OFFSET MARKETWe operate the Oregon Power Plant Offset Program. The Climate Trust was founded in 1997 to enable Oregon’s new fossil-fired power plants to meet their regulatory requirement to offset CO2 emissions by funding new, high-quality GHG offset projects. Ten years later, our Oregon Power Plant Offset Program continues to flourish and grow. In 2007 we added two innovative projects to our Oregon portfolio: the Oregon State University cogeneration project and the Biotactics geothermal project (see page 7). We operate the Large Emitter Offset Acquisition Program. Entities in other states come to us requesting services similar to those of our Oregon program. They are drawn by our experience as the first state-sanctioned provider of offsets in the United States and our reputation for quality. We identify and secure GHG offset projects for regulatory purposes for entities in Washington, Montana and Massachusetts. One example is a fuel replacement project in Montana (see page 7). VOLUNTARY OFFSET MARKETWe help companies and individuals offset their carbon footprints. Increasing awareness and concern about climate change has led both individuals and organizations to seek to reduce and offset the GHGs they produce and are responsible for, commonly called a carbon footprint. The Climate Trust accepts donations from individuals, businesses and institutions. The donations are used to fund our high-quality offset projects and programs.One key way people are able to donate to offset their GHG footprint is through our companion web site, CarbonCounter.org. This site allows users—both individuals and businesses—to calculate their GHG emissions, donate money to offset their emissions and learn ways to reduce their emissions. The site experienced a whopping 360 percent growth in donations in 2007. We attribute that explosive growth to a redesign and re-launch of the site in late 2006 and to a growing awareness and desire to take action on global climate change.More and more organizations and businesses are electing to offset their emissions through donations to our offset program, and it has been gratifying to see some of those organizations increase their commitment. In 2006, for example, Transamerica Insurance offset its business travel. A year later the company offset its entire GHG footprint through our programs. We develop and implement voluntary offset programs. We also provide organizations with customized voluntary GHG offset program development and implementation. 2“?We?are?proud?to?partner?with?The?Climate?Trust?in?the?creation?of?the?Offset?Quality?Initiative.?We?believe?this?initiative?will?substantially?contribute?to?the?development?of?robust,?effective?and?comprehensive?regulatory?offset?programs.” —Eileen Claussen President, Pew Center on Global Climate ChangeThe Climate Trust’s dual mission is unique in the offset marketOur MissionFor example, in 2007 the Sacramento Municipality Utility District asked us to provide an analysis and recommendations for establishing a voluntary offset program for its customers, and to perform a market assessment to identify potential GHG offset projects in its region. Transamerica Insurance had different needs. The company asked us to help establish a program in which employees could elect to offset their personal carbon footprints through a customized page on our web site. In both cases we provided specialized services to meet the unique goals of those organizations.We?inform?climate?policy?that?promotes??offsets?and?market?integrityThe Climate Trust continues to serve as a leader and advocate for quality and environmental integrity in the GHG offset market. As part of our ongoing effort to advance sound offset policy and promote high quality principles in the offset market, we initiated the Offset Quality Initiative (OQI) in early 2007. The six organizations of the OQI are: The Climate Trust, Pew Center on Global Climate Change, California Climate Action Registry, Environmental Resources Trust, Greenhouse Gas Management Institute and The Climate Group. The nonprofit organizations represent a broad spectrum of engagement in the offset market, including offset project selection and acquisition, protocol and standard development, registration, validation and verification of offset projects and policy analysis. The four primary objectives of the OQI are: • To provide leadership, education and expert analysis on the issues and challenges related to the design and use of offsets in climate change policy.• To identify, articulate and promote key principles that ensure the quality of GHG offsets.• To advance the integration of those principles in emerging climate change policies at the state, regional and federal levels.• To serve as a source of credible information on GHG offsets, leveraging the diverse collective knowledge and experience of OQI members. The official launch of the OQI took place in November 2007 and the remainder of the year was spent laying the foundation for 2008 activities. In addition to the OQI, The Climate Trust has been an active participant in helping inform and shape climate change policy at the regional and state levels, including the Western Climate Initiative and California’s Assembly Bill 32, which spells out California’s plan for reducing its GHG emissions. We have participated in meetings, submitted testimony regarding the role of offsets in emerging regulatory regimes and helped promote key aspects of offset quality. Finally, we have contributed to the standardization and advancement of high-quality offset standards in the international offset market. We served on the steering committee of the Voluntary Carbon Standard, which adopted our additionality assessment tool as the foundation for its additionality test. Released in late 2007, the Voluntary Carbon Standard is expected to play an important role in providing standardized and transparent guidance and criteria for offset sellers and purchasers in the global voluntary offset market.3The Climate Trust is reducing emissions from coal by implementing energy efficiency measures at a coal-fired steam plant.2 Evaluating the offset project design by performing due diligence on the project, including monitoring and verification, offset ownership and co-benefits.3 Applying rigorous quantification procedures through the use of conservative measurement methodologies and verification of project performance by independent third-party experts. 4 Negotiating strong contracts by developing a rigorous Emission Reduction Purchase Agreement that addresses performance risk and the clear and uncontested transfer of offset ownership. 5 Providing ongoing project oversight through regular contact with developers and work with third-party verifiers to evaluate offset delivery, certification and registration.U.S.?Greenhouse?Gas?Offset?Acquisition?Initiative:?Valuable?lessons?learnedIn 2007, in partnership with M.J. Bradley and Associates, The Climate Trust facilitated the U.S. Greenhouse Gas Offset Acquisition Initiative, in which five power companies with combined annual revenues of more than $60 billion sought offset proposals for more than 10 million metric tons of carbon dioxide. The power companies were most interested in offsets that could satisfy the requirements of the Regional Greenhouse Gas Initiative (RGGI). Several project developers were invited to negotiate Emission Reduction Purchase Agreements, but the initiative ended without an acquisition. Participants of the initiative are sharing the valuable lessons learned with RGGI and other policy leaders, in the interest of developing high-quality GHG offsets as a viable part of U.S. climate change policies.4Offset Quality“?The?Climate?Trust?is?well?positioned?to?advance?sound?offset?quality?due?to?its?unique?blend?of?practical?experience?and?high?quality?standards.?The?Voluntary?Carbon?Standard?benefited?greatly?from?the?contributions?of?The?Climate?Trust.” —Ken Newcombe Board Member, Voluntary Carbon Standard The Climate Trust believes that use of greenhouse gas (GHG) offsets is an important market-based solution to mitigating climate change. An offset represents the reduction, removal or avoidance of greenhouse gas emissions from a specific project that is used to compensate for emissions occurring elsewhere. Offsets can help transform our economy to a low-carbon future by providing real and verifiable reductions in global GHG emission levels and by providing investment in new low-carbon technologies.Offsets must be of the highest quality in order for them to ensure the integrity, accountability and stability of the global GHG offset market. That is why we utilize and promote stringent quality standards. We have pioneered and refined a rigorous five-step process for evaluating, selecting and overseeing the performance of offset projects:1 Evaluating offset quality by using widely accepted offset evaluation criteria such as project additionality, quantification, permanence and leakage. Additionality requires proving emission reductions from a project are “in addition to” reductions that would have occurred without the incentive provided by offset funding. Additionality is one of the most important—and one of the most difficult—evaluative criterion. We use three tests to determine additionality:a. Regulatory surplus—Ensure that the project is not mandated by law or regulation.b. Implementation barriers—Prove that a financial, technological or institutional barrier to a project’s implementation exists.c. Common practice—Examine market penetration of mitigation technology or measure to ensure that it is not commonplace.The Climate Trust sets the standard for quality among offset providers55The Climate Trust is reducing emissions from the transportation sector by implementing truck stop electrification projects. Transportation, which accounted for nearly 30 percent of U.S. green-house gas emissions in 2006, is the fastest growing source of emissions, according to the Environmental Protection Agency. The college community spent quite a bit of time discussing whether to purchase GHG offsets, debating their theoretical implications, the difficulties entailed in making sure they are additional and verifiable, and whether offsets represent an appropriate usage of college funds. Ultimately, they decided to purchase offsets provided by The Climate Trust based on our rigorous adherence to high quality standards and strong additionality tests. The College of the Atlantic donation helped fund our traffic signal optimization project, which improved traffic flow on 17 major arteries in Portland. Reducing the amount of time vehicles spend idling decreases carbon dioxide emissions. The project was chosen because it met the stringent tests of additionality. Doubletree?Hotel:?Guests?can?offset?their?carbon?footprintThe Doubletree Hotel Portland, which has received significant national recognition for its sustainable practices, sought a partner that shared its commitment to quality and the environment. Doubletree chose The Climate Trust to create what is believed to be the first carbon calculator tailored for a hotel. Doubletree’s carbon calculator allows guests to determine the carbon footprint of their stay and offset their GHG emissions. Doubletree donations have supported a Climate Trust project that reduces emissions caused by idling at truck stops in Oregon and Washington. The program allows long-haul truck drivers to plug into an electric grid to power their trucks during their 8- to 10-hour mandated rest periods. The six key lessons derived from the U.S. Greenhouse Gas Offset Acquisition Initiative are: 1 Several market factors could be impacting the liquidity of the RGGI offset market due to: a. higher prices on voluntary market, b. higher volume of offsets from non-RGGI methodologies, andc. uncertainties of who will be capped. 2 Regulatory uncertainties are impeding market development.3 Offset projects that meet regulatory requirements of RGGI are currently limited in number.4 Most offset projects require upfront financing, while most initiative participants were interested in purchasing offsets upon delivery.5 Third-party participants are needed to bridge the financing gap outlined above.6 A standardized Emission Reduction Purchase Agreement for RGGI-eligible GHG offsets is critical.College?of?the?Atlantic:?Quality?is?why??The?Climate?Trust?offsets?were?chosenCollege of the Atlantic in Bar Harbor, Maine, chose to offset its GHG emissions with The Climate Trust because of our rigorous evaluation of offset quality. In October 2006, College of the Atlantic declared it would reduce and offset all its GHG emissions by the end of 2007. College staff, students and faculty spent the year both calculating the campus carbon footprint and working to reduce and avoid GHG emissions wherever possible. 5Offset Portfolio6“?When?we?decided?to?become?the?first?local?natural?gas?company?in?the?nation?to?launch?a?voluntary?carbon?offset?program,?we?needed?a?partner?who?shared?our?innovative?vision?and?our?commitment?to?excellence.?We?looked?no?further?than?The?Climate?Trust.” —Mark Dodson CEO, NW NaturalPROJECT?CATEGORY? PROJECT?NAME? CONTRACT? PROJECT? CO2?OFFSETS?? ? SIGNING?DATE? TERM? OVER?PROJECT?TERM?? ? ? (Years)? (Metric?Tons)ENERGY EFFICIENCY Duluth Steam Plant Upgrade 2006 15 210,328 Blue Heron Industrial Efficiency Upgrade 2004 10 191,232 Portland Building Efficiency Program 2002 5 392,035 TOTAL? ? ? 793,595SEQUESTRATION Deschutes Riparian Restoration 2002 52 233,333 Ecuadorian Rainforest Restoration 2002 99 58,890 Preservation of a Native NW Forest 2001 99 263,159 TOTAL? ? ? 555,382COGENERATION Oregon State University Cogeneration 2007 20 338,790 Newark Group Cogeneration 2006 15 114,259 TOTAL? ? ? 453,049TRANSPORTATION EFFICIENCY Truck Stop Electrification 2005 16 90,000 Traffic Signal Optimization 2002 10 171,786 Internet-Based Carpool Matching 2002 10 1,021 TOTAL? ? ? 262,807MATERIAL SUBSTITUTION Cool Climate Concrete 2004 6 250,000 TOTAL? ? ? 250,000RENEWABLE ENERGY Innovative Wind Financing 2002 2 23,893 TOTAL? ? ? 23,893FUEL REPLACEMENT Biotactics Geothermal Heating 2007 10 25,500 Montana Fuels for Schools 2007 15 59,100 TOTAL? ? ? 84,600? TOTAL?CO2?OFFSETS?(metric?tons)? ? ? 2,423,326Changing technology or systems to use less energy while maintaining the same or increasing the level of output. Removal of CO2, either through biological processes (e.g., plants & trees) or through geological processes such as CO2 storage in underground reservoirs.High-efficiency method of producing electricity from wasted steam after use in an industrial process.Changing technology or systems to reduce CO2 emissions while maintain- ing the same or higher mobility. May also include reducing the need for transportation services.Replacing a carbon-intensive material with one that is less carbon-intensive in industrial applications. Electricity created by renewable energy sources such as sun, wind, biomass and other sources. Displacing the use of a higher carbon intensity fuel with a lower carbon intensity fuel.The?Climate?Trust’s?Portfolio?of?Offset?ProjectsBy the end of 2007, The Climate Trust had placed $8.3 million in a diverse portfolio of projects that are expected to offset 2.4 million metric tons of carbon dioxide. That is equal to taking 478,088 cars off the road for a year. NW?Natural:?Biogas?creates?energy??from?cow?manureNW Natural chose The Climate Trust to partner with on its new Smart Energy Program, the first voluntary greenhouse gas (GHG) offset program in the nation created by a local gas company. Smart Energy allows customers to offset their natural gas use by paying an additional $6 a month, or a fee based on the amount of natural gas they use. The funds will be used to support projects, such as the installation of biodigesters on dairy farms, that reduce GHG emissions.Biodigesters capture methane gas from decomposing cow manure and avoids its release into the atmosphere. That captured methane can then be combusted to generate additional electricity. Biogas projects have other benefits, including keeping manure and bacteria out of ground and surface water and reducing odor and infections on farms. Oregon?State?University:?Cogeneration?encourages?energy?independenceOregon State University sought to build a cogeneration plant on its Corvallis campus as a means of reducing its environmental impact and becoming more energy independent. The combined heat and power plant, which utilizes fuel-efficient cogeneration technology, will reduce the university’s use of grid-generated electricity by an estimated 50 percent annually. The Climate Trust was able to provide vital funding for the project, which is expected to reduce CO2 emissions by about 340,000 metric tons over its lifetime. Biotactics:?Geothermal?power??reduces?emissionsBiotactics is reducing its GHG emissions, thanks to GHG offset funding from The Climate Trust. The California company cultivates predatory mites that eat spider mite eggs, eliminating the need to use chemical pesticides. Biotactics’ process requires a substantial amount of heated space, leading the company to seek a less expensive and less carbon-intensive heating source than propane. The solution was to build greenhouses heated by geothermal systems in Klamath Falls, Oregon. We provided the critical funding that allowed Biotactics to move its operations from California to Oregon and install the geothermal system, reducing CO2 emissions by approximately 25,000 metric tons over 10 years. Montana:?Schools?eliminate??fossil?fuels?as?heat?sourceThe Montana Department of Natural Resources and Conservation sought funding for its Fuels for Schools program, in which wood waste materials from forest management practices are burned to generate heat instead of fossil fuels. High costs were a barrier preventing some schools from participating. The Climate Trust’s offset funding allowed those schools to participate in the program when they otherwise would not have been able to. In 2007, we provided funding for four schools to participate in the project, which is expected to produce about 60,000 metric tons of offsets over 15 years. Other benefits include job creation and school savings on heating costs.7The Climate Trust is reducing emissions from heat production by implementing projects with renewable heat sources such as geothermal systems. Strategic Direction“?I?am?proud?to?join?The?Climate?Trust?National?Board?of?Directors.?I?believe?The?Climate?Trust?will?provide?badly?needed?leadership?in?developing?sound?climate?policies?that?tap?the?great?potential?for?offsets?to?protect?and?sustain?our?environment?and?our?economy.”? —Truman Semans Principal, GreenOrderRegulatory uncertainty and lack of standardization cloud U.S. offset marketIn 2007, the U.S. greenhouse gas (GHG) offset market continued a period of rapid development and advancement. However, growing uncertainty about the shape and scope of climate change regulation in the United States is having a ripple effect throughout the GHG offset market. Regulatory uncertainty has contributed to delayed investment in certain sectors. Some reasons cited for such delays have been price differentials between voluntary and expected regulatory markets, lack of standardized Emission Reduction Purchase Agreements and stockpiling of potential projects in anticipation of higher prices in the future.In the meantime, the voluntary offset market continues to grow rapidly. While sales of voluntary emission reductions are increasing, so, too, are questions about the integrity of the carbon market and distrust of GHG offsets as a viable means of achieving real reductions in GHG emissions. Such questions have arisen because the development of both regulatory and voluntary markets has preceded the establishment of universal quality standards for offsets. This has left the industry vulnerable to criticism and has led to negative mainstream news coverage of voluntary GHG offset projects and programs.Due, in part, to the inherent challenges in the commoditization of GHG reductions, the GHG offset market in the United States stands at a critical juncture. The Climate Trust believes that offsets are not a panacea for the climate crisis, but, when correctly implemented, they can be an efficient and cost-effective means of achieving real reductions in GHG emissions. The precedent set now, in both voluntary and regulatory markets, will greatly influence the role that GHG offsets will play in global climate change mitigation. We are positioning ourselves to ensure that we can contribute our 10 years of experience and expertise to creating robust GHG offset markets that are effective and of the highest quality. The Climate Trust increases its national presenceThe Climate Trust continues to select and fund high-quality GHG offset projects that meet the Oregon Carbon Dioxide Standard and the rigorous project assessment methods we have developed over the past decade. We continue to lead the market through the implementation of high quality standards and to refine our business practices when necessary to reflect important changes in industry standards and norms. We also continue to advocate for sensible climate solutions that include GHG offsets as one part of GHG-reduction measures, and to promote the groundwork necessary for a rigorous, robust and effective offset market in the United States. 8In September 2007, the Business Council for Sustainable Energy recognized The Climate Trust as a valuable example to inform development of federal GHG offset policy. Such a commendation was very opportune, because two months later we launched the Offset Quality Initiative, a coalition of six leading nonprofit organizations created to provide leadership on GHG offset policy and best practices.Our engagement in a wide variety of policy activities at the state, regional and federal levels through the Offset Quality Initiative is an important component of our growth strategy. We expect that policy engagement will play a larger role in our overall activities and funding in the next few years. Much of the groundwork is now being laid for future regulatory regimes, and our early engagement in these processes is the most effective way to ensure market stability, integrity and effectiveness. To that end, we have created a National Board of Directors, which will complement the work of our Oregon Board of Directors. The Climate Trust’s National Board of Directors includes four members of the Oregon board: Alan Zelenka, Bob Therkelsen, Susan Anderson and Bettina von Hagen. In addition we are proud to announce the recruitment of three new members: Winston Hickox, Truman Semans, and Carter Bales. Winston Hickox’s experience in environmental policy and regulation includes serving five years as Secretary of the California Environmental Protection Agency and seven years as Special Assistant for Environmental Affairs for California Governor Jerry Brown. Truman Semans has worked to advance sustainability through business, government and technology, serving on the Executive Committee of the U.S. Climate Action Partnership and growing the Business Environmental Leadership Council of the Pew Center on Global Climate Change. Carter Bales, formerly a Director of McKinsey & Co., is a trustee of such venerable groups as The Nature Conservancy, the Grand Canyon Trust and the Echoing Green Foundation.The National Board of Directors was created in response to the growing uncertainty and rapid changes affecting the emerging U.S. regulatory and voluntary GHG offset markets. The National Board is wasting no time, working to develop a new strategic plan that will ensure our continued national growth and impact. The plan will leverage our 10 years of experience and secure our position as a market and policy leader. In 2008 we look forward to finalizing the plan for this exciting new chapter in our history. With the experience and commitment of our Boards of Directors, our new strategic goals and the expertise and passion of our staff, we are prepared to grow with the burgeoning offset market and continue to contribute our practitioner’s experience and expertise to the rapidly developing landscape of offset markets and policy. 9The Climate Trust is reducing emissions from electricity by implementing cogeneration projects.ASSETS Cash and cash equivalents $1,425,904 $1,023,785 Accounts receivable $107,021 $91,788 Grants receivable $24,500 $23,750 Other current assets $81,755 $53,666 Investments $8,795,623 $10,305,863 Office equipment, net depreciation $47,848 $38,245TOTAL ASSETS $10,482,651 $11,537,097LIABILITIES AND NET ASSETSLiabilities Accounts payable and accrued expenses $42,220 $74,393 Offset contracts payable $3,621,529 $3,406,977 Unearned offset contract revenue $5,850,410 $7,533,283TOTAL LIABILITIES $9,514,159 $11,014,653NET ASSETS Unrestricted $906,054 $471,783 Temporarily restricted $62,438 $50,661 Total net assets $968,492 $522,444TOTAL LIABILITIES AND NET ASSETS $10,482,651 $11,537,097 2007 2006Statements of Financial Position – December 31, 2007 and 200610Offset Funds Tracking — December 31, 2007 (US $)Offset Mgt. Funds SpentOffset Mgt. Funds UnspentTotal For Offset Mgt. Funds162,5081,796,111596,21813,996204,32586,828680,739Balance Left to ObligateOffset Contract AmountObligated ContractsTotal CommitmentOffset Purchase Agreements Offset Management1,197,6974,218,7602,643,09823,567262,537434,1425,400,565500,462 33,641551,162475,785454,29216,195,708958,1583,375,0082,114,47818,853210,029347,3134,320,452400,46226,913450,000360,000373,65812,955,324795,6501,578,8971,518,2604,8575,704260,4853,639,7130 0450,000360,000343,6588,957,224400,46226,9130030,0003,998,100239,539843,752528,6204,71452,50886,8291,080,113100,0006,728101,162115,78580,6343,240,384166,738493,128413,44876079850,708236,1530025,48121,51439,9241,448,65272,802350,624115,1713,95351,70936,120843,960100,0006,72875,68194,27140,7101,791,729Offset Funding SourceKlamath CogenerationHermiston PowerCoyote Springs 2NW NaturalKlamath ExpansionHermiston Power Phase 2Port WestwardKlamath Cogen True UpMolalla Gate True UpMassachusettsMontanaPartnersTOTALUNEARNED CONTRACT REVENUEAll offset contract revenues received under the Oregon Program are restricted for selecting, contracting, acquiring, and managing offset contracts. Offset contract revenues are recognized in the period the offset contracts are obligated and management and oversight services are performed. Offset contract funds received but not yet obligated are recorded as unearned offset contract revenue. Unearned offset contract revenue is summarized as follows: 2007 2006 2007 20062007 Expenses93% Program Services 6% Management & General 1% Fundraising 64% Offset Contract Revenue1% Other Income 12% Investments (net of expenses) 18% Contributions/Grants 5% Other Contract Revenue 2007 Revenues11REVENUES Offset contract revenue $2,888,404 $2,310,547 Other contract revenue $236,823 $89,107 Investment income, net of expenses $540,323 $484,566 Contributions and grants $802,714 $204,108 Other income $11,040 $32,000TOTAL REVENUE $4,479,304 $3,120,328EXPENSES Program services $3,773,827 $2,702,146 Management and general $247,463 $104,480 Fundraising $11,966 $26,854TOTAL EXPENSES $4,033,256 $2,833,480Change in net assets $446,048 $286,848 Net assets—beginning of year $522,444 $235,596Net assets—end of year $968,492 $522,444Balance at beginning of year $7,533,283 $7,139,750 Funds received $1,205,531 $2,704,080 Funds obligated and revenue earned ($2,888,404) ($2,310,547)Unearned offset contract revenue $5,850,410 $7,533,28312Funders & ClientsOregon?Power?Plant?ProgramAvista Corporation Calpine City of Klamath Falls Iberdrola Renewables Northwest Natural Portland General Electric Large?Emitter?Offset?Acquisition?ProgramAmerican National Power Basin Creek Power Conectiv Energy Supply, Inc. Dominion Resources Services, Inc. Entergy Corporation Northwest Natural Smart Energy Program NRG Energy, Inc. Public Service Enterprise Group Sacramento Municipal Utility District Seattle City Light Offset?Donations?(>$500)Businesses:Bainbridge Graduate Institute British Embassy Bumbershoot 2007 Compton Foundation, Inc. DoubleTree Hotel, Lloyd Center, Portland, OR Ecotrust Great Pacific Iron Works Green Car Company Hawthorne Auto Clinic HDR Engineering, Inc. HOK, Inc. Irubin Consulting, Inc. King Moses Matan Walder Foundation Magnolia Thriftway The Nature Conservancy New York City Partnership Foundation Organic Bouquet Portfolio 21 Investments, Inc. Portland Energy Conservation, Inc. Quantec, LLC The Rejuvenation Community Plan Rodland Toyota Ross & Associates Environmental Consulting, Ltd. Schwabe, Williamson & Wyatt ShoreBank Pacific Simon & Associates, Inc. SRG Partnership Inc. Sundry Organization of the Claremont Colleges Transamerica Insurance & Investment Group TSD Loreto Partners University Temple UMC US Green Building Council Valley Forge Fabrics Village Market Thriftway Washington Law School FoundationIndividuals: Michael Arney Mr. and Mrs. Frederick Beckett Claude Blackburn Barbara Boxer David Buecker Yvonne Camacho Geoffrey Chapman Gun Denhart Michael Dussault Christine Ervin Charles Ewald James Fernow Michael Grant Bert Gregory David Johnson David Kepler Kenneth Kristl Walter Kwan Alan Linning Norris Lozano Bruce Maguire Kelley McLendon Weston Milliken Peter Murchie Lila Preston William Reed Karen Reibel Jonathan Robbins Beth Studley Jeremy Wenokur Joan Woodward Naomi Zikmund-FisherFoundationsM.J. Murdock Charitable Trust Surdna Foundation The Oregon Community FoundationLeadership?CircleThe following are individuals who contributed $500 or more, and organizations that contributed $1,000 or more to support The Climate Trust.Individuals:Sheryl Alstrin Emily Barry Randi Becker Mr. and Mrs. Frederick Beckett Mr. and Mrs. Ken Chapman Michael Dussault Paul Harcombe Evan Hensleigh Kurt Hurley Vladimir & Betsy Jelisavcic Neil Koehler & Cindy Toy Eli & Madeleine Lamb Richard May Talia Milgrom-Elcott We are grateful to our funders who make our work possible.Steve and Karen Motenko Massimiliano Poletto Marilyn Richen Mark and Mary Seabright Julie Steinhardt Daniel TomOrganizations:Beef & Pie Nametag International Threshold Foundation The Vervane Foundation Wisdom Works GroupBoard of Directors & Advisory Council13Oregon?Board?(Voting)Diana Bodtker Former Energy Facility Siting Council Member (Board Chair)Bob Therkelsen Professor, Southern Oregon University (Vice Chair)Susan Anderson Director, Portland Office of Sustainable Development (Secretary)Laura Beane Market Structure Manager, Iberdrola Renewables (Treasurer)Jake Polvi Member, Oregon Energy Facility Siting CouncilBettina von Hagen Vice President, EcotrustAlan Zelenka Energy Services Leader, Kennedy/Jenks Consultants Oregon?Board (Non-Voting)Tim Carlberg Construction Manager, Avista Corp.Rick Colgan Plant Manager, Hermiston Power Project, CalpineBill Edmonds Director of Environmental Policy and Sustainability, NW NaturalArya Behbehani-Divers Manager, Environmental Services, Portland General Electric National?BoardAlan Zelenka Energy Services Leader, Kennedy/Jenks Consultants (Board Chair)Bob Therkelsen Professor, Southern Oregon University (Vice Chair)Susan Anderson Director, Portland Office of Sustainable Development (Secretary)Bettina von Hagen Vice President, Ecotrust (Treasurer)Carter Bales Managing Partner Emeritus, The Wicks GroupWinston Hickox Partner, California StrategiesTruman Semans Principal, GreenOrderAdvisory?CouncilGail Achterman Director, Institute for Natural Resources, Oregon State University Dale Bryk Senior Attorney, Natural Resources Defense Council Tom Casten Chairman, Recycled Energy Development Christine Ervin Christine Ervin/Company; Former President & CEO, U.S. Green Building Council Ross Gelbspan Former Boston Globe reporter and the author of “The Heat is On” Judi Greenwald Director of Innovative Solutions, Pew Center on Global Climate Change Jan Hamrin Former Executive Director, Center for Resource Solutions Joel Makower Executive Producer of the Green Business Network Andrei Marcu CEO, BlueNext David Nemtzow Consultant, Energy Efficiency and Sustainability Ken Newcombe Former Managing Director, U.S. Carbon Emissions Desk, Goldman SachsJonathan Pershing Program Director, Climate and Energy, World Resources Institute Glenn Prickett Executive Director, Center for Environmental Leadership in Business, and Senior Vice President, Conservation InternationalDavid Sandalow Environment Scholar, The Brookings InstitutionDiane Wittenberg President, Climate Action Registry StaffMike Burnett Executive DirectorSean Clark Director of Offset ProgramsCraig Diamond Director of Strategy and OperationsMaggie Albertson Office ManagerLucy Brehm Senior Manager, Business DevelopmentDrew Bryenton Offset Portfolio CoordinatorErica Keeley Offset Portfolio ManagerAlexia Kelly Policy Program ManagerBecky Ostrom Administrative AssistantAmy Phillips Marketing and Communications ManagerMonica Thilges Offset Project CoordinatorPeter Weisberg Offset Project AnalystSheldon Zakreski Senior Program ManagerSteve and Karen Motenko Massimiliano Poletto Marilyn Richen Mark and Mary Seabright Julie Steinhardt Daniel TomOrganizations:Beef & Pie Nametag International Threshold Foundation The Vervane Foundation Wisdom Works Group65 SW Yamhill St., Suite 400 Portland, OR 97204The Climate Trust | 65 SW Yamhill, Suite 400, Portland, OR 97204 | 503.238.1915 | www.climatetrust.org