How much will DU pay? 

DU will provide a one-time carbon payment based on the following formula: the Chicago Climate Exchange’s “Exchange Soil Offset” rate for grass cover times 10 years for native prairie times $4.00 per ton.  A 10% aggregator fee will be deducted to cover the cost of program administration.

The Exchange Soil Offset (XSO) is an accepted rate used by the Chicago Climate Exchange (CCX) and the North Dakota Farmers Union to value the carbon associated with a particular practice – in this case “grass cover”.  The rate is 1.0 metric tons CO2 per acre per year.

The 10 years reflects market reluctance to purchase future carbon streams beyond one decade.  The $4.00 per ton value equals the average, monthly, closing price of vintage 2008 carbon offset credits traded during the period June 2007 to June 2008 on the Chicago Climate Exchange (http://www.chicagoclimatex.com/). 

An example of DU’s payment for native prairie would be:
1.0 XSO rate x $4.00 per ton x 10 years = $40.00, less a 10% ($4.00) aggregator’s fee equals a one-time payment of $36.00 per acre.