Tontitown: the regulatory test

The regulatory test is the big hurdle for Tontitown. Regulatory compulsion is a death knell for additionality. Although it is indisputably true that Waste Management was under no strict requirement to implement a methane flaring system, it is also true that WM used the methane flaring system to correct a groundwater contamination problem that it was under pressure to fix.

Whether this pressure amounted to de facto regulation hinges crucially on the details of the case. We’ve been uncovering a lot of interesting details in our conversations with project participants. All of this has been laid out in sketch form on our project review wiki, so I’ll just give a very brief rundown of the highlights:

  • Waste Management began work on the methane flaring system prior to the groundwater contamination system.
  • Waste Management considered five alternative means of addressing the groundwater issue (recall that identification of alternatives is the first part of the CDM process for measuring additionality).
  • The Arkansas Department of Environmental Quality (ADEQ) wrote a letter strongly urging WM to complete the methane flaring system in order to address the groundwater problem.
  • The minimal system required to address the groundwater contanimation problem would have consisted of 26 “out-of-refuse” methane wells.
  • WM has spent approximately $500,000 on additional “in-refuse” wells over the lifetime of the project.
  • The in-refuse wells account for an estimated 99% of the methane capture at the landfill.

The story is more complicated than this if you trace it over the entire project timeline, but this nickel version suggests that WM’s investment in the project far exceeds what was necessary to address the groundwater problem. It further suggests that the additional investments account for the bulk (99%) of the methane being captured (and offsets being generated).

Note that it could very well be that WM built the methane flaring system both to generate offsets and address the groundwater contamination problem. There is plenty of precedent for such situations. Such a scenario wouldn’t necessarily negate the additionality of the project, but might require an adjustment in the proportion of the project that is eligible for consideration as a source of offsets.

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  1. theo - March 23, 2007

    If your present summary is a full and accurate representation of the project, then that’s a slam dunk. You should be able to get Businessweek to issue a correction.

  2. Adam Stein - March 23, 2007

    We’re obviously happy that the facts seem to support our initial assessment, but we do want to get ADEQ’s perspective on the situation as well.