Amanda Sutton looks over a wheat field in northern Colorado and sees a potential project that could help curb greenhouse gas emissions linked to global warming.

“This is a patch of highly-cultivated land that could provide potential carbon offsets,” she said, standing by the field which is owned by the city of Fort Collins and the surrounding county.

“What we would do is take this wheat field and restore it to a native grassland which would sequester carbon from the atmosphere which we could potentially sell,” said Sutton, an environmental specialist with the city.

(See more Sutton comments in the video below)

Potential projects in the emerging carbon market are sprouting like wheat after a good rain across the United States in anticipation of “cap and trade” provisions in a climate bill that has narrowly passed the U.S. House of Representatives but could see significant revision in the Senate.

They could be part of a strategy to meet the bill’s current target to cut U.S. greenhouse gas emissions by 17 percent of 2005 levels by 2020. A cap and trade inspired market in Europe has been in place since 2005 and is the biggest by far.

Carbon trading and projects are already underway in various versions in the United States and contribute to a global voluntary market that last year saw turnover more than double to $705 million, according to Ecosystem Marketplace and New Carbon Finance, which track such trends.

Three regional U.S. groups are trading or in the process of creating regulated carbon trading markets.

To trade on such markets, a project must reduce greenhouse gas emissions or, in the case of converting a cultivated field to its natural state or reforesting a patch of land, act as a “carbon sink” to absorb emissions spewed elsewhere.

Once a project is certified and its “carbon offset” is measured in tons, it can sell them as “credits” to polluters unable to meet their emission targets, or even to groups that want to say they have cut their “carbon footprints.”

Some experts say carbon sinks are increasingly important because the world is failing to curb greenhouse gases from power plants, planes and cars fast enough, and so needs to buy more time to avoid dangerous climate change.

‘GET OUT OF JAIL FREE’

But some environmentalists feel trading in pollution is ultimately a ruse.

“By using offsets, industry will be able to sidestep emissions reductions. It is a get out of jail free card,” says Damon Moglen, the Global Warming Campaign Director for environment group Greenpeace.

Trees store carbon while they grow and release it back into the atmosphere when they rot. So in the vocabulary of carbon markets a healthy forest is a “carbon sink.” Tree growth in the United States currently sucks up about 12 percent of the country’s greenhouse gas emissions — a huge total.

The U.S. climate bill may provide an economic windfall to land owners including non-profit organizations, cities, farmers and forest owners who can turn farmland or cleared land back into forests. It may also reward “sustainable forestry” practices, though their carbon benefit will be tough to gauge.

“We see emerging carbon markets as a every exciting revenue source for small family forest owners,” said Bob Simpson, vice president for the Center for Family Forests.

But the cost to a small family landowner of having their offsets measured and certified remains unclear.

GROUPS BAND TOGETHER

Groups like Woodlands Carbon in Oregon are forming around the country to reduce the costs of market entry by joining several forest owners into one portfolio.

Many investments currently being made are essentially “bets” on the bill that ultimately emerges from Congress, according to Mary Grady, a director at the American Carbon Registry.

“The current legislation is very favorable … It is a wonderful first step and it is sending the first signals to the market. But the general feeling is that the legislation is not going to pass in its current form,” she said.

Once the bill passes, a billion tons of carbon could accumulate in the market by 2012 or 2013, when the regulations are supposed to take effect The American Carbon Registry currently has 22 projects worth about 30 million tons.

Grady also said carbon traders worried that the legislation currently says that the “administrator”, which depending on the project could be the Environmental Protection Agency or the U.S. Department of Agriculture will approve programs — but it does not name the programs yet.

“If it was clear people would have lots of confidence in making their investments but people don’t know where to place their bets,” she said.

Getting a project verified has spawned a whole new industry that could create some of the “green jobs” President Barack Obama has said will go with the new green economy.

These include independent, third party project verifiers who apply financial accounting techniques while also using gadgets like gas analyzers to measure carbon tonnage.

The American National Standards Institute accredits firms as third party verifiers but it is all so new that there is no official university degree to train in the profession.

Back at the field in Colorado, Sutton says if this project were to become a reality — a big if — it would have to meet the stringent standards of the voluntary market and show it is removing more carbon from the atmosphere than would have happened naturally.

For now, the wheat will remain.

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(Photo: Forest Service Rocky Mountain Research Station electronics engineer John Frank shows a carbon dioxide analyzer and a sonic anemometer in his laboratory in Ft. Collins, Colorado July 21, 2009. Such tools can be used for science and carbon markets)