Tag: Article News Analysis

21 November, 2014 |When Climate Action Reserve (CAR) President Gary Gero started thinking about the perfect corporation to partner with the Chatina indigenous community of San Juan Lachao in Oaxaca, Mexico for the first forest carbon offset project under CAR’s Mexico protocol, he knew exactly who to call.

Gero dialed the folks at the Walt Disney Company’s Climate Solutions Fund, an active buyer in the voluntary carbon markets. “The CAR folks thought we would like this project and they were absolutely right, said Bob Antonoplis, Disney’s assistant general counsel.

The community of San Juan Lachao has launched the first pilot project under CAR’s Mexico forest protocol approved in October 2013 with the assistance of Mexican environmental nonprofit Pronatura and financial support from Disney to get the project off the ground. The project is currently estimated to generate 20,000 tonnes of offsets per year. The size of the area is about 25,000 hectares.

The forests of San Juan Lachao have been grazed and left in poor conditions with an increased risk of wildfire and reduced water quality. Hundreds of thousands of people from the state of Oaxaca, Mexico have migrated from their homes to the US state of California in search of better economic opportunities.“They immigrate because they have no income and no alternatives and they haven’t really figured out how to get resources out of forests, said Carlos Sada, Mexico Consul General in Los Angeles.

However, the community will receive financial revenues from the sale of the offsets to support forest management and protection, provide clean water and improve the standard of living of its people. The project will provide about 30 direct jobs and 150 indirect jobs to the local community, at an average salary of $15 per day for each person, which is well above the $10 per day minimum wage in the area, said Adolfo Alaniz, General Director of Pronatura.

The Chatina community consists of 4,531 people. And for the project proponents, one of the key highlights is that the community members themselves are doing the work rather than outside consultants. CAR and Pronatura conducted a general training session on global warming and then focused on teaching community members the technically complex tasks of measuring trees and installing plots. They just finished putting in 300 plots for the project.

“It’s creating an employment opportunity for them, said CAR Director of Forestry John Nickerson. The young men and women are getting a lot of technical expertise that will stay with them for a long time and are demonstrating a “strong willingness to succeed and a lot of local pride, he said.

It is exactly those clean water and employment and economic benefits that made the project so attractive to Disney, as well as the partnership with and participation of the local community, Antonoplis said. “This project just has a fantastic story to tell, he said.

In Mexico, about 80% of the forests belong to the local or indigenous communities so it is crucial to understand how they feel about and interact with their forests through projects such as this one, according to the project proponents, who are looking to expand the pilot activities elsewhere in the country.

“This project will have a very direct impact on the communities all over Mexico, Sada said.

The First Test

This community-led project is the first test of CAR’s Mexico forest protocol, which provides standardized guidance for carbon enhancement projects within a reduced emissions from deforestation and forest degradation (REDD+) framework and addresses eligibility, baseline, inventory, permanence, social and environmental safeguards, and measurement, reporting and verification requirements.

The project involves improved forest management activities, with uneven-aged management of native species the most popular management strategy among project developers in 2013, according to the State of the Forest Carbon Markets 2014 report, to be released later this afternoon. It is also flexible to include urban forestry and agroforestry activities.

The project is more akin to the domestic forestry projects allowed into California’s cap-and-trade program than an avoided deforestation project, but CAR sees this as the type of project activity that could be nested under a jurisdictional REDD program and potentially eligible for a compliance program such as California’s.

“We developed it to be adaptable to Mexico’s REDD+ program as a nested project in the future, Nickerson said.

“I would love to see (the Mexico protocol) built into the California program and other regulatory programs, Antonoplis added.

A Broader Impact

Disney is no stranger to investments in Latin America-based forest carbon projects. With the help of a $3.5 million donation from the company, Conservation International was able to develop a REDD+ project in the dwindling Alto Mayo Protected Forest in Peru. The project has generated at least three million tonnes of emissions reductions so far, and delivered a host of benefits for the local populations.

Disney’s operations do not subject it to compliance obligations under California’s cap-and-trade program, meaning it purchases offsets for strictly voluntary reasons.

“But that didn’t stop us obviously, Antonoplis said. “We felt we had an obligation, irrespective of what (California’s GHG reduction law) was going to require, to do something about our own greenhouse gas (GHG) emissions and to encourage others to do the same.

The company has generated more than $48 million for these types of projects by charging an internal carbon price to its business units for their GHG emissions and has openly discussed its carbon pricing program in its corporate social responsibility reports and public events.

“It’s very powerful tool, he said. “So when the private sector does something like that and tells its story, it encourages other companies to do the same.

The project comes after a historic agreement between the governments of Mexico and the US state of California to cooperate on climate issues in July and could pave the way for more international cooperation ahead of the upcoming United Nations negotiations in Lima, Peru in December and Paris in 2015.

“While we’re waiting for national governments to come together, to take the broader action they will hopefully take, it’s these actions that demonstrate real and positive benefits in the community and that we can address climate change on a broader scale, Gero said.

For their part, private companies such as Disney can provide critical seed funding and partnership expertise to allow these voluntary projects to flourish, which will demonstrate to governments that carbon projects can be successful and should be a part of regulatory carbon pricing programs.

“We think the private sector, even if you’re not subject to a compliance program, plays a vital role in advancing the cause of greenhouse gas emissions reductions, Antonoplis said.

Gloria Gonzalez is a Senior Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at [email protected].

This article was originally published in the V-Carbon newsletter. Click here to read the original.

19 November 2014 | The world’s two largest emitters of greenhouse gases (GHG) reached a surprise deal to reduce their impact on climate change, which could send a strong signal ahead of the upcoming United Nations (UN) climate negotiations.

President Obama of the United States and President Xi Jinping of China each announced new emissions reduction targets during the Asia-Pacific Economic Cooperation meeting last week. The U.S. committed to cut GHG emissions 26-28% below 2005 levels by 2025. China pledged that its carbon dioxide (CO2) emissions will peak no later than 2030 and it will increase its proportion of non-fossil fuel energy generation to 20% by 2030.

While light on details, the deal is significant in setting the tone for the Conference of Parties (COP) in Lima this December and in Paris in 2015 since the two countries constitute 42% of worldwide GHG emissions. The world is looking to the COP in 2015 to establish a new international agreement that limits global GHG emissions to replace the Kyoto Protocol established in 1997. The U.S. was an important driver of cooperation among developed and developing countries during the Kyoto COP. However, the treaty was never adopted domestically based largely on objections that emerging economies, such as China, were not doing their share to curb future emissions.

Each country will submit their respective targets to the United Nations Framework Convention on Climate Change (UNFCCC) as an “Intended Nationally Determined Contribution” in early 2015. The targets could increase the role of domestic carbon markets in each country. The US has established emissions trading systems (ETS) in California and in the Northeast with the potential for more programs as the administration’s Clean Power Plan comes into force later this decade. China currently has seven provinces and cities with pilot ETSs and has plans for a national carbon market to be established in 2016.

In other news, Ecosystem Marketplace just launched a series exploring carbon finance related to cookstoves. The series comes on the heels of the recent launch of the Results Report 2013, the second effort by the Global Alliance for Clean Cookstoves and Ecosystem Marketplace to track activities in the improved stoves and fuels market.

The first piece, Cookstove Distribution Soars; Carbon Finance Now Top Funding Source, provides a closer look at exclusive data found in the report around cookstove carbon offsets. The report highlights carbon financing’s new status as the top funding source (up to 36% from 6% in last year’s report), along with a 5% increase in overall price per tonne of carbon dioxide equivalent (tCO2e).

The second in the series, Carbon, Cookstoves, and Kids, follows Richard Lawrence’s first-hand account of children suffering from smoke inhalation problems to his organization’s current efforts to scale up clean cookstove distribution through carbon finance to reach Honduras’ poorest and most rural households.

The most recent article, Carbon Conservation: From Giant Pandas to Swiss Grocer, goes halfway across the world to China, where the giant pandas remain at risk from encroaching human populations and deforestation. WWF teamed up with Swiss grocery chain Coop to finance the distribution of cookstoves that will use less firewood for fuel, thus decreasing panda habitat loss. Next up is the Dutch non-profit SNV’s efforts to create a clean cookstove market from scratch in rural Nepal and help the government meet its goal of clean cooking for all by 2017.

More news from the voluntary carbon marketplace is summarized below, so keep reading!

Ecosystem Marketplace invites you to join us for the State of the Forest Carbon Markets 2014 report launch event this Friday at the World Bank beginning at 4:00 PM. This year’s report is chock full of data-driven findings on pricing, standard use, and project types as well as new findings on project co-benefits, payments for emissions reductions at the jurisdictional level, and the climate risks that forest carbon offset buyers are facing.

Event details and the forthcoming report are available at http://www.forest-trends.org/fcm2014.php. Space is limited so please RSVP with full contact details to [email protected] before November 20th.

Can we count on your support in the final days to publish this year’s report? Please take a look at the sponsorship prospectus and contact Molly Peters-Stanley or Allie Goldstein with any interest.

The Editors

For comments or questions, please email: [email protected]

VOLUNTARY CARBON Like a duck to water Chevrolet has purchased the first-ever verified carbon offsets from the avoided conversion of at-risk grasslands to cultivation. The purchase of 40,000 tCO2e was announced by Agriculture Secretary Tom Vilsack. The methodology was developed by Ducks Unlimited and the American Carbon Registry (ACR) with support from the U.S. Department of Agriculture. The deal was negotiated by The Climate Trust with Bonneville Environmental Foundation on behalf of Chevrolet and its Carbon Reduction Initiative. The project spans six counties within the Prairie Pothole Region of North Dakota. Prairie landscape is important for wildlife habitat, especially ducks, and for livestock grazing. In addition to GHG sequestration, grassland conservation provides ecosystem service benefits including water retention and flood control. Read more here Third time is a charm BM&FBOVESPA, a Brazilian stock exchange, has maintained its commitment to carbon neutrality for the third straight year by purchasing 4,859 tCO2e of offsets to meet its sustainability goals. The offsets were purchased through the UN’s Clean Development Mechanism from three Brazilian renewable energy projects: Celtins and Cemat grid connection of isolated systems, Garganta da Jararaca small hydroeletric power plant and the Termoelétrica Santa Adélia cogeneration project. Read more here A model train company Norfolk Southern, a U.S. railroad company, has received the first 10,000 offsets from its 3-year-old Trees and Trains initiative. The offsets, verified and registered by ACR, are generated through the company’s $5.6 million investment to reforest 10,000 acres in the Mississippi Delta. The project is expected to generate 1.1 million tonnes carbon dioxide equivalent (MtCO2e) of offsets through its 15-year cycle, about one fifth of Norfolk’s annual GHG emissions from its diesel-burning locomotives. This winter, developer GreenTrees will begin its fourth planting season as part of a 5-year collaboration with Norfolk to restore six million native cottonwood and hardwood trees. The railroad is GreenTrees’ largest corporate partner in its goal to reforest one million acres in the Mississippi Alluvial Valley. Read more here Where the rubber meets the road Kyomo Tyre has planted more than 12,500 native trees in Australia over the last three years in partnership with Greenfleet, a carbon offset provider. Kyomo Tyre’s program plants a tree for each of its environmentally-friendly Ecowing tires sold in Australia. The Ecowing tires are fuel efficient from low-rolling resistance and made using a non-petroleum based compound. Greenfleet has planted over 8.5 million native trees in more than 400 biodiverse forests around the country to offset carbon emissions since 1997. Read more here COMPLIANCE CARBON The long and short of it South Korea’s emissions trading scheme will likely face a surplus of 53 million allowances between 2015-2017, but power producers are still projected to face a permit shortage, according to an analysis by Point Carbon. This could mean a carbon price that rises from $7.50/tCO2e to $30/tCO2e by 2017, which would make South Korea the most expensive carbon market in the world. But the producers could ensure a stable price for themselves if they purchase permits ahead of time to cover future needs. The scheme is set to launch January 1, 2015. Read more here Steeling for change  China’s National Development and Reform Commission just announced new emissions reductions goals for the steel and cement industries, which currently contribute to 20% of the country’s total emissions. Under the guideline’s 2020 goal, these emissions would stay at the same level as 2015 emissions. If the goal is realized, alongside other initiatives to reduce coal, Natural Resources Defense Council senior adviser Yang Fuqiang predicts the country will likely achieve peak carbon emissions before its 2030 projection. Read more here A recipe for destruction California regulators stuck to their guns by invalidating 88,955 ozone-depleting substances offsets generated from a destruction project by developer EOS Climate at the Clean Harbors Incineration Facility in El Dorado, Arkansas. Offsets from an Environmental Credit Corp project set for invalidation dodged a bullet when the regulators determined the offsets were not generated during the period the Arkansas destruction facility was allegedly out of compliance with a federal permit. The ARB moved forward with the invalidation despite public uproar from a diverse group of carbon market stakeholders, who painted a picture of the market chaos created by what they called a subjective and error-prone investigation by the regulators. Read more here Expecting the expected No surprise: emissions dropped 3.3% in 2013 among companies regulated by California’s cap-and-trade program, primarily from reductions of imported power. One power trader linked the decline to power outages at out-of-state plants, while another utility trader said that, “this is in line with what most people expected and presumably priced into the market. All regulated companies were required to surrender allowances or offsets covering 30% of their 2013 emissions by November 3, 2014. They all met this first partial compliance deadline another occurrence predicted by traders. Read more here Hints of green amid the red Though Republicans swept the majority of seats in the United States’ mid-term elections, the climate gained some small victories. Pennsylvania elected new governor Tom Wolf, who promised the state would join the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program for power plant emissions in the Northeast. Adding Pennsylvania would practically double RGGI’s current footprint and bring in a state with a more diverse energy mix. To the west, Oregon Democrats gained an extra seat that will allow them to move forward on coal traffic, carbon pricing and renewable energy measures that had previously stalled. But Washington state Republicans maintained a narrow edge that will complicate the environmental agenda of carbon price proponent Governor Jay Inslee. Read more on the West coast Read more about Pennsylvania Creating a GHG paper trail Mexico’s Secretariat of Environment and Natural Resources just issued new GHG registry and reporting regulations. The regulations mark a next step for the country’s 2012 General Climate Change law, which aims to reduce GHG emissions 35% below a 2000 baseline by 2020. A wide range of industries must calculate their direct and indirect emissions under the new regulation, including the energy, transportation, agricultural, commercial and service sectors. Though the regulation lacks any reduction commitments, the reporting of emissions data could bring more scrutiny to emitters by the NGO community or Green Party. Read more here To Phase 4 and Beyond! The European Council released an initial “Conclusions” document following the announcement in late October of new 2030 GHG reduction commitments. The document’s language provides insights into the future direction of the European Union’s Emissions Trading System (EU ETS) Phase 4 and the EU’s position for the 2015 COP in Paris. Two key points include reaffirmation of the EU ETS as a primary tool in reducing GHG emissions beyond 2020 and the endorsement of a market stability reserve to fix its current oversupply problems. The conclusions aren’t binding, but represent unanimous political commitment at the highest level. The European Commission will now draft legislation based on the conclusions for the EU Parliament, with the first draft set to appear in early 2015. Read more here CARBON FINANCE Rolling in the green The U.S. and Japan last week announced pledges to the Green Climate Fund (GCF) totaling $4.5 billion. The U.S.’s $3 billion and Japan’s $1.5 billion contributions add to established commitments to bring the GCF funding up to $7.5 billion. The UN has set a goal of a $10 billion initial investment for the GCF. Other new pledges are expected at this week’s first GCF donor conference in Berlin, Germany. The GCF’s climate financing will leverage private sector investment in low-carbon development and climate adaptation projects in poor countries affected by climate change. Read more here Making a conservation impact Over the last five years, $23 billion in funds have flowed into conservation impact investing, according to a new report from EKO Asset Management Partners and The Nature Conservancy’s NatureVest division. Conservation impact investment is intended to return a profit while also having a positive impact on natural resources and ecosystems. This class of investments encompasses projects such as watershed protection and habitat conservation, but excludes renewable energy or green buildings that conserve nature as a secondary effect. Nearly $21.5 billion of the funding came from development finance institutions such as the International Finance Corporation, with the remainder originating from the private sector. Read more here SCIENCE & TECHNOLOGY Back on the range Generously spreading finished compost on rangelands globally could potentially sequester eight gigatons of atmospheric carbon, according to research from the University of California, Berkley. The researchers estimate a half inch layer of compost on 5% of California’s rangeland would remove 28 MtCO2e from the atmosphere, or about three tCO2e per hectare annually from a single application. Finished compost demonstrated a much higher carbon sequestration potential than raw manure because the carbon is in a more stable form. Tests showed 90% of the compost’s carbon still in the soil after four years and projected to stay there for the next 30 to 100 years. ACR approved protocols developed by the Environmental Defense Fund and Terra Global Capital to allow ranchers to earn offsets to sell in the voluntary carbon markets. Read more here Staff Accountant Forest Trends Based in Washington, D.C., the Staff Accountant will focus on accounts payable, project audits and payroll. Candidates should have a bachelor’s degree in accounting, finance or equivalent with two to five years of experience in a non-profit setting. More information here Programme Manager, Secretariat – Plan Vivo Foundation Based in Edinburgh, Scotland, the Program Manager will manage and provide support to a growing portfolio of Plan Vivo projects, from reviewing Project Idea Notes to annual reviews and ongoing project verification activities. Successful candidates will have over three years of experience in a relevant sector and be accustomed to dealing with scientific and technical documentation. More information here Program Assistant – Natural Resources Defense Council (NRDC) Based in Washington, D.C., the Program Assistant will provide administrative support to NRDC’s energy team and research support for its advocacy work. Applicants should have a bachelor’s degree and one to two years prior administrative experience. Knowledge of environmental and clean energy issues is a plus. More information here Forests and Carbon Inventory Expert Agriconsulting Based in Sierra Leone, the Forest and Carbon Inventory Expert will assist with Agriconsulting’s technical assistance for REDD+ and capacity building project. Ideal candidates will have post-graduate qualifications and at least eight years experience with designing and implementing forest inventories. A minimum two years of practical experience using geographic information systems and remote sensing techniques for forest and carbon inventories, ground-truthing or mapping is required. More information here Director, Claims, Traceability, & Trademarks – Rainforest Alliance Based in New York, New York, the Director will be responsible for overseeing strategy, operations, and general management of Rainforest Alliance’s Claims, Traceability & Trademarks team. Preferred candidates will have a master’s degree and 10 years of experience in market-based conservation, change-management, certification and traceability with a background in financial systems management More information here Senior Consultant – Planet First Based in London, United Kingdom, the Senior Consultant will support delivery of the Planet Mark certification by conducting carbon footprint assessments and verifications. Applicants should have three to five years of experience in sustainability and environmental management plus knowledge of GHG reporting and standards such as GHG Protocol and International Organization for Standardization 14064. More information here Consultant International Climate Policies Ecofys Based in any one of several European offices, the Consultant will be responsible for research projects on international climate policy topics. Preferred candidates will have three to five years of professional experience in consultancy with a market focus in the field of international climate and energy policies. Fluency in English and German is required with other languages being beneficial.More information here ABOUT THE ECOSYSTEM MARKETPLACEEcosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].

18 November 2014 | California regulators shook the North American carbon markets to their core with their plans to invoke the invalidation provisions featured in the state’s carbon offset program for the first time. While the affected producers of ozone-depleting substances (ODS) offsets and their allies loudly lobbied the regulators to change their minds, developers of forest and livestock carbon offsets quietly mulled what the decision means for them.

The ODS invalidation “could be the most important topic affecting California offsets right now, said Kevin Townsend, Chief Commercial Officer of Blue Source, which develops forestry and other types of carbon offset projects. “This is immensely important for all California offset types, including forestry.

Keep reading (for free!) at the Forest Carbon Portal.

14 November, 2014 | California regulators rejected pleas from carbon market stakeholders to abandon their effort to invalidate ozone-depleting substances (ODS) offsets generated at an Arkansas facility, but limited the invalidation to one particular carbon offset project.

The California Air Resources Board (ARB) the agency tasked with overseeing the state’s cap-and-trade program and its offset component in May began reviewing offsets issued for ODS destruction events at the Clean Harbors Incineration Facility in El Dorado, Arkansas. These substances, which include foam-blowing agents and refrigerants, are much more potent than carbon dioxide in terms of their global warming potential, so the ARB adopted a process to count the greenhouse gas (GHG) emission reductions associated with destroying these materials in the United States and allow these reductions to be used for compliance in its program.

In October, the ARB issued a preliminary plan to invoke the so-called buyers liability provisions that allow the regulators to invalidate offsets found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. The ARB ruled the offsets generated by two ODS projects one developed by Environmental Credit Corp (ECC) and the other by EOS Climate should be invalidated because the Arkansas facility was out of compliance with its operating permit issued under the Resource Conservation and Recovery Act (RCRA). Of the 231,154 offsets the ARB is seeking to invalidate, 142,199 were generated by ECC’s offset project and 88,955 from the EOS Climate project.

On Friday, the ARB decided to proceed with the invalidation of the offsets generated by the EOS Climate project. But the regulators backed away from plans to invalidate the offsets generated by the ECC project because the ARB ultimately concluded that the destruction activities related to that project occurred outside of the timeframe when the Clean Harbors facility was purportedly out of compliance with its RCRA permit. ECC and EOS Climate could not be reached for immediate comment.

“It’s not good news, but I don’t think it’s market-destroying news either, said Peter Weisberg, Program Manager, The Climate Trust.

The ARB’s final determination clears the vast majority of the 4.3 million compliance offsets it was investigating to be returned to the accounts from which they were removed on May 29 when the investigation was launched.

A Shocking Turn of Events

While expressing support for the regulators efforts to protect the environmental integrity of the program, in the weeks following the preliminary determination, stakeholders painted a picture of the market chaos created by what they called a subjective and error-prone investigation.

For example, the ARB’s seizure of the 4.3 million offsets before determining the validity of the offsets was called “improper and unlawful by Nicholas van Aelstyn, a lawyer representing ECC, a comment echoed by many other stakeholders in more measured terms. He also alleged serious errors by the ARB, including the fact that the ODS destruction related to the ECC project occurred several hours after the alleged RCRA violation was resolved, meaning the offsets should not have been subject to invalidation at all.

The preliminary decision was shocking to market participants for many reasons, not the least of which was that ARB seemingly had the discretion based on the language in the regulation to decide not to invalidate the offsets because the alleged violation was unrelated to generation of the offsets. By the ARB’s own admission, the offsets generated during the time when the facility was allegedly in non-compliance with its RCRA operating permit met the ARB’s criteria of representing real, quantified and verified emissions reductions. Market stakeholders lobbied the ARB not to invalidate the offsets given that their environmental integrity was not in question.

The preliminary decision was also surprising because ODS had been the top choice for compliance offsets for some time as buyers were reassured by the accuracy of the emissions reductions created by these projects a critical consideration when California regulators retained the right to force buyers to replace invalidated offsets. But the preliminary determination demonstrated the inherent risk associated with developing ODS projects when there are only seven commercially available destruction facilities, according to some developers.

Responding to complaints about a lack of clarity and transparency in its preliminary determination, the ARB laid out its argument for invalidation in the final determination. The ARB cited the language of the ODS protocol, which states that offset projects are ineligible to receive ARB or registry offset credits for GHG reductions that occur as the result of collection or destruction activities that are not in compliance with regulatory requirements. The regulatory compliance requirement extends to the operation of destruction facilities where the ODS is destroyed. All destruction facilities must meet all applicable regulatory requirements during the time the ODS destruction occurs, according to the language of the protocol.

The cap-and-trade regulation and the ODS protocol are complementary regulatory documents that “must be read in harmony with each other according to the ARB’s final determination. The regulators interpreted these provisions to require that both the project activities associated with the destruction of ODS as well as other activities at the facility in question must be in “accordance with all local, state, or national environmental and health and safety regulations. ARB interpreted this provision to be applicable to all requirements that have a bearing on the integrity of the generated offsets; and environmental and health and safety requirements associated with the collection, recovery, storage, transportation, mixing, and destruction, including the disposal of the associated post-destruction waste products.

The Fallout

The invalidation rules are often blamed for a lack of transactions in the California offset market and there is a general consensus that the ARB’s decision could only further dampen what little liquidity currently exists.

The investigation disrupted commercial processes in the offset market because of its length and lack of clarity, remarked Mark Krausse, Senior Director for State Agency Relations for Pacific Gas & Electric, during the public comment period. The ARB’s investigation took more than four months and was characterized by a lack of transparency, according to several stakeholders.

And the ARB’s approach raises questions about potential scenarios under which forestry or livestock offsets other project types eligible for California’s cap-and-trade program could be invalidated, Weisberg said.

“There’s so much uncertainty in these markets, he said. “It’s very difficult to convince investors that it’s worthy investing.

The ARB should consider alternatives to buyers liability such as a buffer account to cover these types of losses, Krausse, Weisberg and other stakeholders suggested. Quebec the Canadian province partnering with California on carbon trading via the Western Climate Initiative established a buffer pool that sets aside 4% of offsets to cover reversals or invalidations.

In discussions with Oregon and Washington, which are both considering options to comply with upcoming federal carbon regulations, Weisberg has encouraged them to follow Quebec’s model or the approach of voluntary standards in ensuring offset integrity rather than California’s approach. However, he also noted that there are potential solutions to the risk created by California’s buyers liability provisions, including insurance policies designed specifically to cover the invalidation risk.

“It’s definitely an unfortunate risk, he said. But “we still think this is a risk that can be managed.

Gloria Gonzalez is a Senior Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at [email protected].

This post first appeared on The AnthropoZine. You can view the original here.

17 November 2014 | Last week, the United States and China, the world’s leading polluters, announced plans to limit their greenhouse gas emissions and strengthen cooperation on issues related to climate change and clean energy. While the announcement centered on the nations pledges on carbon dioxide (CO₂) emissions targets (a reduction of 26-28% of 2005 levels by 2025 for the United States, and a goal for China’s emissions to reverse their upward course by 2030), a White House fact sheet offered a more detailed glimpse at additional actions.

The document announces a renewed commitment to the U.S.-China Clean Energy Research Center, established by a 2009 agreement between President Obama and China’s then-president Hu Jintao. It also includes a cooperative effort to phase out hydrofluorocarbons, a “Climate-Smart/Low-Carbon city-planning initiative, and an effort to encourage trade in “green goods.

Perhaps most interesting, deep in the fact sheet’s second page, is the document’s description of “a major carbon capture and storage project in China that supports a long term, detailed assessment of full-scale sequestration in a suitable, secure underground geologic reservoir. As it goes on, the plan announces a “new frontier in CO₂ management, with “a carbon capture, use, and sequestration (CCUS) project that will capture and store CO₂ while producing fresh water, thus demonstrating power generation as a net producer of water instead of a water consumer. According to the fact sheet: “This CCUS project with Enhanced Water Recovery will eventually inject about 1 million tons of CO₂ and create approximately 1.4 million cubic meters of freshwater per year.

The description is loaded with promise yet bogged down with technical language. So how will it all work?

Carbon capture and storage projects aim to collect CO₂ from industrial emissions and store it someplace generally underground or underwater where it won’t be released into the atmosphere. Some such projects aim not only to keep CO₂ from entering the atmosphere, but also to produce something useful or marketable in the process. In the example discussed here last month, a Canadian energy company designed a facility to collect unwanted CO₂, which was then sold to be injected beneath an oil field to free up oil that had been stuck in rock formations. The U.S.-China plan suggests a similar approach, but with the byproduct of extra oil swapped out in favor of fresh water something China badly needs.

Those seeking a comprehensive explanation of the process should seek out scientific writings, but here we can provide some basics. Once CO₂ is captured from emissions, it can be compressed and transported to a geologic formation where it will be securely, and permanently, stored. Depending on conditions at the storage site, the injection of CO₂ into these spaces can effectively push water from the ground, allowing it to be collected for industrial use or distribution to areas in need. In some cases, water extracted in the process can be clean enough to drink.

The project certainly has its share of unanswered questions, technical challenges, and areas for concern. And there is also the question of whether this non-binding agreement will receive continued long-term commitment from each country. But with proper safeguards and execution, the carbon-capture water project could represent a novel approach to an urgent problem, and potentially a meaningful blueprint for cooperative climate actions to come.

Mike Noren is a Chicago-based writer and editor with more than 15 years of experience across a wide variety of educational and reference publications. He can be reached at [email protected].

12 November 2014 | Last year, when Hillary Clinton announced the Results Report 2012 at the Global Alliance for Clean Cookstoves (“the Alliance”) Leadership Council, she spoke to a crowd including a President, former President, and other notable guests. This year’s report launched quietly online with little fanfare. Though lacking the star-studded attention, the results remain just as important in understanding the latest progress toward ending the four million annual deaths from household air pollution that occur across the globe.

The Results Report 2013 is the second year-long effort by the Alliance to track activities in the improved stoves and fuels market. Like last year, Forest Trends’ Ecosystem Marketplace assisted with this effort. Unlike 2013, Ecosystem Marketplace administered, analyzed and wrote the most recent report.

A total of 456 Alliance partners responded to this year’s survey, up from 246 in 2012, which means that greater insights can be gleaned about market activities. Of particular note are the headline numbers of stoves distributed: an all-time high of 14.3 million stoves were tracked, a 75% jump from 2012 estimates.

However, both the volume and overall value of cookstove project offsets fell by 63%, to 6.3 million offsets worth $61 million. Likewise, the number of stoves distributed with carbon finance dropped from four million last year to one million stoves in 2013. A look beyond 2012 reveals that the 2013 changes still represent a gradual increase from 2008-2011 (Figure 1); meaning that the market should be viewed as cyclic rather than declining.

The 2013 report did feature some good news for carbon finance in that it was the top reported source of funding, edging out government grants. Last year, government grants totaled 36% of all reported finance while carbon finance made up only 6%. This year, the latter jumped to 36% and government grants subsided to 25%.

Another positive outcome for carbon developers is that pricing remains strong, with the overall price rising a modest 5% to $10.4 per tonne of carbon dioxide equivalent (tCO2e). The average voluntary emissions reductions and certified emissions reductions (CER) spot price both rose significantly, to $12.2/tCO2e and $6.4/tCO2e, respectively.

The higher prices found on the voluntary market are reflected in the shift of primary certification types. Last year, over half of cookstoves were developed in compliance with Clean Development Mechanism (CDM) guidelines and only 36% were verified through the Gold Standard (GS) Foundation. This year, GS offsets represented 61% of all transacted volumes, which marks a shift towards targeting voluntary buyers. The CDM made up an additional 37%, with Verified Carbon Standard and dual CDM/GS offsets making up 1% each. While CDM/Joint Implementation (CDM/JI) offsets averaged $6.3/tCO2e, an improvement from 2012, they still don’t match the GS $12.1/tCO2e average.

Despite this shift, compliance markets remain committed to cookstoves. European governments remained willing to pay higher-than-average pricing for cookstove CERs as evidenced by the jump in CER prices. This includes a substantial commitment from the Swedish Energy Agency (SEA) to pay above-average prices for offsets that comply with the Europe Union’s Emissions Trading System (EU ETS). In late 2013, the SEA confirmed two large-scale contracts to deliver 500,000 offsets each by 2020; scales the project developers said were not possible with constrained voluntary market demand.

Luckily for large-scale projects, Sweden is not the only country considering this. The United Kingdom (U.K.) developed the Carbon Market Finance Programme, which will contribute £50 million between 2013-2025 to support greenhouse gas mitigation and renewable energy generation in least developed countries though increased access to carbon finance.

In December 2013, the World Bank’s Carbon Initiative for Development Fund received additional financial support from Sweden, the U.K. and the Swiss-based ClimateCent Foundation in the form of a $125 million pledge. The Fund targets carbon projects that focus on clean energy technologies.

In September, the Nordic Environment Finance Corporation announced a second call for proposals for the Norwegian Carbon Procurement Facility to “prevent the reversal of emission reduction activities by procuring credits from projects whose survival or continued emission reductions depend on a higher carbon price than achievable under current market conditions.

These initiatives reflect the EU ETS’s new regulation beginning in 2013, which requires compliance buyers to purchase any new CERs from Least Developed Countries (LDCs). Unsurprisingly, Africa, home to the most LDC countries, provided 78% of all carbon offsets. Asia and Latin America snagged an equal share of the rest, with 12% and 10%.

Kelley Hamrick is an Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at [email protected].

When Hurricane Mitch blew through Central America in 1998, the result was catastrophic. The second deadliest Atlantic hurricane in history claimed 11,000 lives and caused an estimated $6 billion in damage.

Honduras, a poor country with even poorer infrastructure, did not fare well. Humanitarian aid groups flocked to the region, including medical mission volunteers Richard Lawrence and his daughter Skye. The medical mission headed towards Atima, a town in the mountainous coffee growing-region of the country surrounded by countless rural villages.

Richard Lawrence, Executive Chairman of Overlook Investments and future Founder of Proyecto Mirador, acted as a translator for doctors on the trip. Standing in the midst of the crush of people who waited to see the doctors in a primary school temporarily converted to a medical clinic, he was struck by the number of children lined up against one wall of the schoolroom breathing with nebulizers.

“I’m not a doctor, and I thought, the air seems really clean so it beats me what it’s about, he said.

Skye stumbled upon the explanation by chance, when she visited one of the local children’s homes. The inside of the house was black and filled with smoke from the cooking stove. The stove was constructed of adobe mud, with an oil drum for a cooktop and a wide stove mouth stuffed with logs. There was no chimney, so the smoke curled around the room and turned the ceiling black.

After research some improved stoves, the family raised money from friends to build 29 stoves designed by Aprovecho Research Center, a US-based stove research organization. An investor by trade, Lawrence couldn’t help making some quick calculations. With improved stoves using half the wood, how long would it take families to earn the rate of return on investment? The answer: in a few short months. People will line up to improve their stoves, he thought.

Thus, Proyecto Mirador was born. But despite the fact that the stoves were popular with users, turning it into a sustainable enterprise wasn’t as easy as those calculations.

Finding the finance

For one, selling the stoves outright was out of the question. In rural Honduras, poverty affects almost two-thirds of the population, and more than half of rural households struggle with extreme poverty, living off of $1.25 a day. Proyecto Mirador targets these villages in Honduras.

While a few families could afford the stoves, the majority couldn’t or wouldn’t purchase one even if the families might recover their costs within two months. Even with available money, men control the purse strings. Since most work outside, fewer health impacts from cookstove smoke and didn’t see the necessity of spending money on cleaner stoves.

Instead, Lawrence’s family and friends financed the early installations. Co-director Do Emilia Mendoza, the wife of a Honduran Episcopal minister and cook for the mission trips, kept costs down by running the enterprise out of her house. Metal sheets and clay parts littered her backyard, and she drove the materials to homes in a pickup truck.

The Lawrences decided early on against relying on donors (or friends) for future funding. They wanted a steady source of financing and – at the time – carbon offsets provided that.

Using initial “donated equity from foundations, Proyecto Mirador spent three years certifying their carbon offsets under the Gold Standard. Though the complicated process took far longer than expected, the gamble worked. Mirador became the 4th project to be certified under the Gold Standard methodology that includes consultation with local stakeholders and provides sustainable outcomes; this was before the UNFCCC (United Nations Framework Convention on Climate Change) developed an official Clean Development Mechanism (CDM) cookstove protocol.

Family with clean cookstove. 

“We’ve been fortunate to have success with carbon, Lawrence said, referring to the more than 430,000 metric tons of carbon dioxide offsets sold. “But it’s harder than it should be… I’ve got two people who spend 24-7 reaching out to corporations to try and convince them to offset.

Carbon offsets finance 75% of the stove costs, with families contributing the rest in the form of cement, sand, bricks, adobe and labor. The latter is part of Mirador’s philosophy that stoves are not gifts and that families must “have skin in the game or “No Cuesta, No Cuida (no cost no care). Mirador uses the income from the sale of offsets to provide the plancha cooktop, firebox and chimney; technicians to build the stove; and supervisors who make three regular follow up visits to ensure the proper stove use and maintenance.

Revving up the impact

If the beginning of Proyecto Mirador seems a bit homespun, the result is anything but. The organization has scaled up from building 250 stoves in a year to nearly 125 a day now. With more than 80,000 stoves disseminated in the last five years, the organization has become the largest in Latin America.

While selling the carbon offsets remains an unpleasant task, verifying the offsets has only gotten easier. Though the process takes at least nine months of documentation, reports and technical review, the actual site visit only takes four or five days. The main reason for this quick turnaround is technology.

Around 2010, the stoves were really taking off. Community solicitations, requiring at least 10 families to sign on from a single village, poured in and started the beginnings of the now 2-year backlog of requests. Copycat chimneys started appearing on houses Proyecto Mirador hadn’t visited, making it difficult to follow up with customers. Carbon finance couldn’t cover the costs, so the organization once again turned to foundations.

Using the donations, they hired a consulting firm to build a platform and implemented the first use of Salesforce.com, a well-known customer relationship management product, in Latin America. It took a year for the program to be implemented and an additional three months to train the staff. Donations were used to equip all stove builders and field supervisors with GPS and reporting system to upload information online.

Entrepreneur teams, called Ejecutores, and Proyecto Mirador staff use smartphones to record and upload data while in the field. Salesforce and GPS points are stored in the cloud, allowing staff to monitor installations and material needs or to provide interactive imagery of stove locations in real time.

“It’s really something,” Lawrence said. “All the employees at the office have been trained and know Salesforce. We built a special holder for the phones on the front of each motorcycle, so when supervisors make home visits, they can identify exactly where the houses are that have our stoves.

Though initially made to keep track of stoves by staff on the ground, the investment also paid off for remote staff. “We use it as much in California as they use it in Honduras, he said, referring to Proyecto Mirador USA, the non-profit side of the organization that manages Gold Standard certification, finds donors and helps with the business issues of Proyecto Mirador, Honduras.

A smoke-free Honduras?

Now, Proyecto Mirador supports 17 full-time businesses: six Ejecutore construction companies, nine suppliers and two consultants. Outsourcing has allowed the organization to go from 250 stoves in a year to a predicted 29,000 stoves this year. However, Proyecto Mirador is still dealing with a backlog of stove requests. These households may have to wait a little longer for their stoves.

“The idea is that we would rather grow in a very measured way than grow exponentially and have troubles and have to stop, he said.

However, health remains at the heart of the organization’s work. Mirador surveyed stove recipients and almost all 99% – reported cleaner indoor air and improved respiratory health after switching. One grandmother, Maria Claudina Diaz Vargas, said: “my granddaughter suffers from a chest ailment and today without smoke she has improved.

Kelley Hamrick is an Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at [email protected].

This article was originally posted in the Forest Carbon newsletter. Click here to read the original.

12 November 2014 | If you build it, will they come? That’s the question that the authors of blue carbon methodologies are now asking.

“Blue carbon” ecosystems include seagrasses, tidal salt marshes and mangroves that provide a myriad of benefits and store an incredible amount of carbon. These coastal oases are also some of the most threatened natural places on the planet and are being lost at a rate of about 2% per year, due mainly to aquaculture and coastal development.

Despite their importance, the significance of coastal ecosystems to climate change was not widely recognized until recently. The Intergovernmental Panel on Climate Change (IPCC) didn’t release its Wetlands Supplement for national-level wetlands carbon accounting until 2013. Before that, wetlands were not considered to be a “managed” land base.

However, over the last five years, coalitions such as The Blue Carbon Initiative, which aims to develop financial incentives and policy mechanisms for restoring and conserving blue carbon ecosystems, have emerged rapidly. The group released a manual for measuring blue carbon stocks last month and hopes that the guide will be used to produce data that will flow into emerging carbon methodologies, as well as IPCC accounting.

The American Carbon Registry (ACR) released the first carbon methodology for wetlands restoration in the Mississippi Delta in 2012 and now hopes to expand its geographic scope to California. At the global scale, the Verified Carbon Standard’s (VCS) methodology for Tidal Wetland and Seagrass Restoration is wrapping up its first assessment and is expected to be available early in 2015.

Could carbon finance be a game-changer for these fast disappearing ecosystems? It depends.

“Generally I think the price of carbon is too low to support really most land-use activities, including wetlands. And wetlands projects are expensive,” said Steve Emmet-Mattox, one of the lead authors of the VCS methodology, speaking at the Restore America’s Estuaries Summit last week.

Some project developers hope that blue carbon restoration methodologies will pave the way for blue carbon conservation methodologies that will function more like the avoided deforestation (REDD) methodologies available for forest ecosystems and perhaps achieve economies of scale.

Blue carbon and other emerging land-use carbon methodologies are discussed in more detail in our State of the Forest Carbon Markets 2014 report, to be released next week. This year’s report is chock full of data-driven findings on pricing, standard use, and project types as well as new findings on project co-benefits, payments for emissions reductions at the jurisdictional level, and the climate risks that forest carbon offset buyers are facing.

If you’re located in Washington, D.C., we’d love to have you join us for our launch event at the World Bank on Friday, November 21st at 4 p.m. We’ll present findings from the report, followed by commentary from an expert panel. Forest Trends’ President Michael Jenkins will moderate the discussion.

If you plan to attend, please email Ben McCarthy with your RSVP (please include your name and organization). Details will follow.

Can we count on your support to publish this year’s report? Please take a look at the sponsorship prospectus and contact Molly Peters-Stanley or Allie Goldstein with any interest.

More news from the forest carbon marketplace is summarized below, so keep reading! The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at [email protected].

INTERNATIONAL POLICY Aiming for an A+ in REDD+ The UN Reducing Emissions from Deforestation and forest Degradation (REDD) Programme launched the REDD+ Academy, a series of technical courses developed by the program in conjunction with Yale University to provide participants with hands-on knowledge of REDD+. A training program in Indonesia was the first in a series of REDD+ Academy events, with the next session scheduled for early 2015 in Buenos Aires, Argentina for Latin America countries and a third to be held in Nigeria for the Africa region next year. The Academy courses present an overview of key REDD+ issues such as national forest monitoring systems, monitoring, reporting and verification requirements, reference emissions levels, safeguards, stakeholder engagement and climate finance. Reporting from Africa Representatives from 21 UN-REDD Programme countries in Africa participated in an October workshop to discuss the building of national strategies for REDD+, including the value of establishing specific teams to lead these efforts. The countries also discussed the importance of conducting in-depth analysis to fully understand the drivers of deforestation and to identify best practices in sustainable forest management. The stakeholders were urged to fully consider three key questions to facilitate REDD implementation in their countries: why, what and how? NATIONAL POLICY Down in the delta Nigeria ranks in the top 10 of a list no country would brag about: the highest deforesters. The country lost 55.7% of its primary forests between 2000 and 2005. However, the Delta state of Nigeria has made a pitch to access financing from the UN-REDD Programme, presenting its readiness plan and hosting a site visit to the local forests. “Delta is a state that is very much interested in protecting its environment,” said Permanent Secretary of the Ministry of Environment and Forestry Felicia Adun. “We know that trees in the forest are very important for the sequestration of carbon, so we need to conserve the forest.” Nigeria’s Cross River state is the only state in the country already participating in the program. Trick or treating down under On October 31, the Australian Senate passed the Carbon Farming Initiative (CFI) amendment, which will establish the AUS$2.6 billion Emissions Reduction Fund (ERF) to replace Australia’s repealed carbon pricing program once the House follows suit. The legislation aims to remove barriers to project development, such as a requirement for project proponents to hold carbon sequestration rights landowners were often reluctant to part with. However, wetland restoration projects will not be supported by the fund. New land-based projects can register under current CFI or the new ERF rules until July 1, 2015, but must utilize the fund’s rules and updated methodologies afterwards. FINANCE We can always send the IRS after them Tax evasion in the Brazilian Amazon state of Parí¡ is widespread, topping $108 million a year, mostly from landowners declaring below market values for their assets and skirting limits on how much forest can legally be cleared, according to a new report by the NGO Imazon. The authors argue that updating rules governing productive use of land for cattle ranching the largest source of deforestation in the region would weaken incentives for land speculation. Raising the cut-off for tax breaks to two head per hectare would encourage more productive use of pasture, they say. SUSTAINABLE COMMODITIES Bunge-jumping toward zero deforestation Bunge, a food ingredient company and one of the world’s largest traders of palm oil, announced a commitment to source deforestation- and peat-free palm oil. The announcement follows recent pledges from two of its buyers, Krispy Kreme and Dunkin’ Brands, and earlier policies from competitors Wilmar and Cargill to ensure zero deforestation across a range of commodities. The new policy focuses on protecting primary and secondary forests and updating its labor and human rights safeguards. However, Bunge has yet to set target dates or timelines for implementation. Green is the new black Clothing companies Levi Strauss & Co., Marks & Spencer, Aritzia, ASOS, Under the Canopy, and Portico recently joined the environmental non-profit Canopy’s Fashion Loved by Forest Initiative, which requires members to commit to source clothing fiber that doesn’t come from old-growth and high conservation forest. Current membership, which now totals over 25 companies, represents more than $75 billion in annual sales of clothing. This and other details of the initiative’s recent work can be found in the new report by Canopy, A Snapshot of Change: One Year of Fashion Loved by Forests. HUMAN DIMENSION Crafting a better future Women of the Paiter-Suruí­ tribe just opened a store to sell their homemade bead necklaces, feather earrings, and other handicrafts. The move marks another step in the tribe’s 50-year-life plan for its territory, which seeks to preserve the tribe’s cultural traditions and maintain its forest through sustainable economic paths. A larger-scale initiative is the tribe’s Suruí­ Forest Carbon Project, which became the first to produce carbon offsets under internationally recognized standards for an indigenous tribe. The craft store offers both a way for women to economically support their families while also keeping local bead making and other traditions alive. Getting this show on the road Ama Kudom Agyeman, a member of the Planning Committee of Ghana REDD+, has taken to the road to spread the word about REDD+. Through the project, “Think Development, Think Sustainability, Think REDD+”, Agyeman recently addressed major stakeholders of the Ghanian municipality Hohoe and students in a two-day program to explain REDD+’s benefits to the region. The meetings are part of a larger Ghana REDD+ Road Show, which seeks to educate metropolitan, municipal and district assemblies about the benefits of sustainable forest management. Hohoe was the last stop before the National REDD+ Forum held in Accra. The show previously visited Damongo, Dormaa Ahenkro and Tarkwa. A point of contention Peru’s forests have become “increasingly contentious” with the recent murder of Edwin Chota and other environmental activists, said Richard Smith, Executive Director of Peruvian conservation NGO Instituto del Bien Comíºn. His remarks kicked off the 16th Dialogue on Forests, Governance, and Climate Change. More than 100 participants met to discuss the theme “Investments, Communities and Climate Change: Risks and Opportunities” in late October. Central to the discussion were the rights of indigenous and local communities in processing land tenure claims, and the importance of both governments and private businesses incorporating the principles of Free, Prior, and Informed Consent. SCIENCE AND TECHNOLOGY Scientists love the Walking Dead too Climate change will present “severe, widespread, and irreversible impacts,” according to the United Nations’ IPCC. “Which for scientists, conservative by nature, falls just short of announcing that climate change will produce a zombie apocalypse plus random beheadings plus Ebola,” said Bill McKibben, founder of 350.org. The IPCC Fifth Assessment Synthesis Report on climate change uses the strongest language to date indicating that governments and businesses need to make unprecedented reductions in their greenhouse gas (GHG) emissions and reverse deforestation and forest degradation in the near future to avoid even more extreme disruptions. The report comes on the heels of a record 300% surge in deforestation in September. STANDARDS AND REGISTRIES For future forest reference The UN-REDD Programme released a report on establishing forest reference emissions levels that draws on case studies from Brazil, Chile, Costa Rica, the Democratic Republic of Congo, Ghana, Guyana, Mexico, Nepal, the Republic of the Congo and Vietnam. Brazil utilized a 10-year rolling average to establish the baseline for calculating emission reductions under its Amazon Fund, an approach the report highlighted for its simplicity, strong country ownership and high degree of transparency. Brazil’s approach also allows the fund’s administrator to direct monies to areas where they are most needed. However, the approach is conservative in estimating actual emission reductions, according to the report. One flew over the country’s nest VCS revised its Jurisdictional Nested REDD (JNR) requirements to ensure jurisdictions can align their JNR programs with the World Bank Forest Carbon Partnership Facility’s Carbon Fund, simplifying the process for JNR programs to access the Carbon Fund. Additionally, a JNR Monitoring Report template and several JNR representations were released to provide more functionality for governments looking to use the JNR framework. PUBLICATIONS Delta dawn, what’s that carbon you have on? A recent study published in the journal Global Change Biology gives credence to efforts to tap into the carbon markets to finance US wetlands restoration. Researchers measured carbon dioxide (CO2) and methane in the Sacramento-San Joaquin delta in California  drained more than a century ago for agriculture and human settlement and experiencing one of the highest subsidence rates in the world. The drained areas were carbon sources, but the flooded region was a carbon sink. A case can be made for restoring wetlands, even though the same study also uncovered the release of methane a GHG 20 times more potent than CO2. The ACR and partners are developing a methodology to quantify GHG emissions from wetlands restoration in the California delta and other coastal areas. JOBS Program Director Dogwood Alliance Based in North Carolina, U.S., the Program Director will ensure seamless team management, development, program delivery and quality control and evaluation. Successful candidates will have at least three years of experience working in environmental advocacy in a team management role, along with demonstrated knowledge of and experience in climate change and/or forest conservation policy analysis and strategy development. Read more about the position here. Program Manager, Secretariat Plan Vivo Foundation Based in Edinburgh, Scotland, the Program Manager will manage and provide support to a growing portfolio of Plan Vivo projects, from reviewing Project Idea Notes to annual reviews and ongoing project verification activities. Successful candidates will have over three years of experience in a relevant sector and be accustomed to dealing with scientific and technical documentation.  Read more about the position here. Global Climate Change Advisor – Management and Engineering Technologies International, Inc. Based in Addis Ababa, Ethiopia, the Global Climate Change Advisor will work with Ethiopia’s Ministry of Environment and Forestry to provide technical assistance and capacity-building services for the Government of Ethiopia to implement specific aspects of a Climate-Resilient Green Economy strategy. Successful candidates should have a master’s degree in a related field and at least five years of international work experience in a natural resource or environmental field, preferably related to REDD+, climate change or other global initiatives. Read more about the position here. Senior Conservation Planner, The Nature Conservancy (TNC) Based in Samarinda, Indonesia, the Senior Conservation Planner will support the development of the Berau Forest Carbon Program (BFCP), a key REDD+ demonstration program in Indonesia. In particular, the Planner will lead TNC’s support for the development of a sustainable palm oil sector in BFCP through spatial planning, conservation and land-use planning. Successful candidates will have at least seven years of experience in conservation practice along with fundraising and management experience. Read more about the position here. Senior Project Managers/Project Managers, Responsible Sourcing – Proforest Based in Oxford, United Kingdom, the Project Manager will consult on responsible sourcing for international brands and consumer goods clients. Work includes proposal writing, budgeting, technical work and managing client relationships. Successful candidates should have at least five years of experience and a clear understanding of sustainability issues affecting forest products and agricultural commodities sectors.  Read more about the position here. .

ABOUT THE FOREST CARBON PORTAL

The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.

ABOUT THE ECOSYSTEM MARKETPLACE

Ecosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].

22 October, 2014 | About 30,000 runners competed in the 26-mile Beijing Marathon in China this week. But a dark cloud hung over what should have been a joyous event, literally, as in the thick smog that forced many participants to race with masks over their mouths.

Beijing and six other jurisdictions launched pilot carbon trading systems within the last 18 months to address the pollution problem that has plagued the country. The city of Qingdao is set to join the mix in 2015 after recently approving plans to start its own carbon market in preparation for the expected implementation of a national market in 2016.

China’s pilot programs combined already constitute the second largest carbon market after the granddaddy of trading schemes the European Union’s Emissions Trading System (EU ETS), according to a World Bank analysis. However, the anticipated national carbon market in China would regulate 40% of the country’s economy, making it by far the largest in the world, by covering roughly 3-4 billion tonnes of carbon dioxide up to 2020 and worth up to $65 billion if fully implemented.

The stakes are high because a successful national program in China, which is now responsible for a third of global greenhouse gas emissions, could trigger more widespread adoption and possible linkage of national and subnational carbon markets across the globe. Given the stakes, experts are taking a hard look at how China’s pilot carbon markets have fared to date. And they are finding plenty of room for improvement.

“This is still a work in progress a real experiment, Barbara Finamore, Senior Attorney and Asia Director, Natural Resources Defense Council (NRDC), said during a Climate Action Reserve webinar on Tuesday. “Of course (China is) the big kahuna. If China is able to succeed it will set a standard that others will follow.

The Key Three

Resources for the Future (RFF) just examined the three longest-running pilot cap-and-trade programs likely to serve as models for a national program in China: Guangdong, Shanghai, and Shenzhen.

“The pilots in Guangdong, Shanghai and Shenzhen have made significant progress in building a cap-and-trade market, RFF stated in a paper called Assessing the Design of Three Pilot Programs for Carbon Trading in China. “Some aspects of pilot designs represent a deft tailoring of a fundamentally market-based instrument to a socialist market economy. Yet potential design deficiencies remain.

Allowance prices in the three programs are relatively stable, with Guangdong generally having the highest carbon price of around ¥60 or US$10 per tonne of carbon dioxide equivalent (tCO2e). Volumes of traded allowances remained very low until right before compliance deadlines and the total number of traded allowances constitutes a small fraction of the total number of available allowances. For example, the most active market Shenzhen traded a total of 1.6 million allowances throughout its first compliance year, equal to nearly 4% of the total allowances available in the market, which indicates a very low liquidity market, the RFF paper noted.

Two of the three pilots, Shanghai and Shenzhen, met their compliance deadline of June 30, 2014, with Shanghai achieving 100% compliance and four out of 635 industrial firms in Shenzhen failing to comply on schedule.

Local governments, however, had to go through significant effort to ensure full compliance with the programs, sometimes at the expense of their environmental integrity, the RFF authors noted. Regulators in Shanghai, for example, unexpectedly held a one-off auction to introduce additional allowances into the market on June 30. Companies purchased 7,200 allowances at this auction, meaning the effective cap likely rose by the same amount, which potentially increased overall emissions and weakened the environmental integrity of the Shanghai pilot, said Clayton Munnings, RFF Research Associate and co-author of the paper. It’s unclear if this occurred because Shanghai has yet to publish official estimates for the overall cap.

Guangdong postponed the first compliance deadline by nearly a month, with two out of 184 firms ultimately failing to comply by the later deadline. Regulators also conducted a fifth and unplanned auction on June 25 with nearly two million allowances.

“The challenges we’re seeing with the pilots will certainly be exacerbated once we move to a national system, NRDC’s Finamore said.

No Easy Fixes

Strengthening the legal and administrative foundations was at the top of the list of recommendations RFF made on solidifying the carbon trading pilots. It’s a concern shared by Finamore, who noted that 25% of covered entities in Beijing’s program were still refusing to participate near the end of the first compliance period. It wasn’t until the local government started cracking down inspections and talking about fines potentially three to five times the average market price for each tonne of carbon dioxide exceeded that there was a last-minute rush to obtain permits, which drove up prices in July to nearly $12/tCO2e.

“There is a lack of a strong legal foundation for carbon trading in China, she said. “There isn’t anything in the law or even in the plan that requires companies to participate.

To ensure compliance, RFF suggested that lawmakers state in a national environmental law that regulated firms should be fined on a per tonne instead of per violation basis, with the fine being equal to a multiple of the average market price of allowances for each tonne of excess emissions. This national environmental law should also explicitly mention that such penalties apply to cap-and-trade systems for carbon.

RFF also proposed incorporating achievement of emission reduction goals to the individual performance reviews of participating government officials and executives of state-owned entities (SOEs). Tying the achievement of environmental goals to the possibility of promotion and demotion helped China achieve its sulfur dioxide reduction goals in the late 2000s, the authors noted.

Coverage of these SOEs will be an important issue in moving toward a national program, Munnings said. A small number of SOEs constitute a majority of carbon emissions coming from the electricity sector and a national program would likely need to cover these SOEs from the electricity sector to control carbon emissions, he said. This makes fining on a per-tonne basis and tying achievement of goals established by a cap-and-trade program to performance reviews of SOE executives particularly applicable, Munnings said.

Increasing transparency of the cap by publicizing business-as-usual emissions and the emissions impact of complementary policies is also on RFF’s list of recommendations. Transparency about emissions levels remains a critical issue in the pilots, including in Beijing even though the world’s eyes are on the city due to its air pollution problem, Finamore observed. Beijing highlighted a 4.5% drop in GHG emissions in 2013, but did not identify the baseline for the reduction or how many permits were issued in the program, she said.

“It’s very difficult to get a clear picture from any of these pilots about what’s going on, Finamore said.

China’s pilots have not yet linked to allow trading between the programs, but Guangdong may consider interprovincial trading with Hubei and other provinces, with regulators calling for further research on linking and setting a goal of designing an interprovincial market before 2020. However, the RFF authors recommended regulators attempt to identify the sources of low levels of liquidity before trying to increase trading activity and noted that such links may not be established if a national program starts in 2016.

Shenzhen which is part of Guangdong Province, but has its own pilot trading program because of its independent, sub-provincial division status has experimented with innovations designed to attract foreign investors such as allowing trades to be settled in foreign currency, Finamore said.

“They would love to link to the international carbon markets as soon as possible, he said.

Offsetting Not a Factor Yet

The local governments largely set the rules and oversee the pilot carbon markets, with the exception of the offsets component, which is administered by China’s National Development and Reform Commission (NDRC).

Offsets for China’s pilots are known as China Certified Emissions Reductions (CCER) a reflection of the fact that the approval process closely resembles the United Nations’ Clean Development Mechanism (CDM) Certified Emission Reduction (CER) program. The NDRC plays the role of the CDM Executive Board in overseeing the development of project methodologies and registrations and hosting a national registry. The NDRC has already announced it will allow 14 projects to generate six million offsets that could be sold into the pilot markets.

Offsets generated in China’s pilot trading programs have a unique advantage over allowances issued during the pilot phase because the offsets are being developed under regulatory guidelines by the NDRC and are therefore likely to be carried over into any national scheme that emerges.

Offsets can generally be used for compliance in the pilot programs for up to 5-10% of obligations, but there are restrictions. Companies in Guangdong cannot use CCERs to comply with more than 10% of their annual emissions, and 70% of the CCERs used must originate in the province.

Producers of HFC-23 offsets banned from the EU ETS because of perverse incentives that encouraged their production remain eager for new buyers and are hoping the NDRC will approve and issue CCERs for their projects, Munnings said.

“Even though all pilots do contain provisions that allow for limited use of offsets, I remain slightly skeptical that many offsets will be used in the pilots at least in the near future, he said. “First, I think the NDRC will act very cautiously to only approve and issue offsets with high environmental integrity, which would limit the overall supply of offsets. Second, even if a healthy supply of offsets emerges, I think pilot regulators might act to further discourage regulated firms from purchasing offsets in order to ensure price discovery in the allowance markets.

Gloria Gonzalez is a Senior Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at [email protected]

30 October 2014 | In 2007, the forests of Indonesia’s Ulu Masen Ecosystem were rapidly disappearing, thanks to encroaching development caused by the country’s burgeoning palm oil sector. The problem caught the attention of Governor Irwandi Yusuf of Aceh Province, who saw REDD (Reducing Emissions from Deforestation and forest Degradation) as a possible solution.
A consulting team hired by Yusuf estimated that an 85% reduction in deforestation in the ecosystem, which spread across 750,000 hectares, would prevent more than three million tons of carbon dioxide from entering the atmosphere every year.

Yusuf launched what would have become the largest REDD project to date one designed to slow deforestation in part by jump-starting sustainable palm oil, coffee, and cocoa programs, as detailed in the latest installment of Ecosystem Marketplace’s series, Palm Oil vs The Peatland Forest. This would ensure that the activities driving deforestation in Ulu Masen don’t just migrate down the road, but are instead transformed into more sustainable practices that continue to meet existing demand without killing the forest. He also implemented a moratorium on illegal logging across the entire province and even began to personally lead raids on loggers’ camps to enforce the moratorium and show potential investors that he was serious.

It was a gamble that cost his province millions in the short term, but it also made sense because the Bali climate talks of 2007 were supposed to culminate with the creation of a successor to the Kyoto Protocol. To do that, officials needed to bridge a schism between industrialized nations and developing countries a bridge built in part on REDD offsets. The World Bank had already created the Forest Carbon Partnership Facility (FCPF) and Australia had pledged $100 million to support REDD efforts on Borneo.

Ecosystem Marketplace’s State of the Forest Carbon Markets 2014 report will have much more information about the FCPF and other financial mechanisms that countries are now looking to tap to support their REDD+ initiatives. And we’re mining lots of interesting new information this year, including a closer look at buyer motivations and activities, and robust data on the co-benefits of forest carbon programs, from employment to endangered species protection.

We’re $37.5k away from being able to publish this year’s report in a few weeks’ time. Can we count on your support? Please take a look at this sponsorship prospectus for more information, and contact Molly Peters-Stanley (Director of Ecosystem Marketplace) orAllie Goldstein (Forest Carbon Associate) with any interest. We’d be happy to discuss sponsorship opportunities with you in more detail.

Many thanks to EcoPlanet Bamboo and New Forests for their generous sponsorships.

From October 27-December 5, Forest Trends Ecosystem Marketplace’s parent organization is part of a Crowd-Funding Campaign where donations will be matched. Your gift helps protect endangered ecosystems and contributes to local livelihoods.

More stories from the forest carbon market are summarized below, so keep reading.

The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at [email protected].

NATIONAL STRATEGY THERE’S A NEW LEGEND IN MEXICO A new map of aboveground forest carbon stocks in Mexico could help the national government enhance the measurement, reporting and verification system governing its mitigation efforts under the United Nations (UN) REDD+ program. The map integrates Mexico’s National Forest Inventory, which provides field measurements for 26,000 plots across the country, with spatial imagery data from the Japanese ALOS PALSAR radar and U.S. Landsat satellite sensors.   SUSTAINABLE COMMODITIES YOU DON’T WANT TO WIN THIS POPULARITY CONTEST One-third of the world’s deforestation stems from four popular products: beef, palm oil, soy and wood, according to a new report called Trading Forests: Quantifying the Contribution of Global Commodity Markets to Emissions from Tropical Deforestation. These four commodities were responsible for the loss of 3.9 million hectares of forest, an area roughly the size of Switzerland, in 2009. Many of the eight locations tracked Argentina, Bolivia, Brazil, the Democratic Republic of Congo, Indonesia, Malaysia, Papua New Guinea and Paraguay are known deforestation hotspots. The deforestation is driven by consumer demand from international markets, with China as the biggest importer of these commodities, followed by the European Union (EU).   NEW LAW OF THE JUNGLE The Indonesian government jeopardized palm oil companies’ zero deforestation commitments when it revised its Plantation Act last month, according to a new report by Greenomics. Palm oil giant Golden-Agri Resources (GAR) successfully demonstrated its commitment to conserving high-carbon stock forests through a pilot project being implemented across eight concessions in West and Central Kalimantan. But the revised law states all concessions must be “fully cleared and converted for its intended purpose within six years of the license being granted.” If the land isn’t cultivated, it can be seized and turned over to another entity for conversion, meaning forest lands set aside by GAR could wind up in the hands of companies that have not pledged to end deforestation.   FINANCE & ECONOMICS A FINANCIAL ATTRACTION Inching closer to its $150 million target goal, the Althelia Climate Fund just received a $5 million investment from the Packard Foundation, a non-profit investing in conservation and environmental sustainability initiatives. The investment helps increase Althelia’s funding to about $117 million ahead of a planned December closing. Althelia made headlines in May when it received a loan guarantee worth up to $133.8 million from the US Agency for International Development (USAID) to lend to forest conservation and sustainable land use projects in developing countries. In September, the fund announced it would make a $12 million investment over seven years to finance conservation of 570,000 hectares in Madre de Dios, Peru.   HUMAN DIMENSION NIGHT TERRORS IN THE AMAZON Every night, empty trucks fade into the Amazon only to return filled with timber in the morning. Greenpeace-Brazil uncovered this illegal logging after activists secretly tagged the trucks with GPS (Global Positioning System) locator beacons. This is the first time the organization has used these tactics, but they are not without danger in a country with the most murders of environmental activists every year. The new report, called Amazon’s Silent Crisis: Night Terrors, details the flow of this illegal timber from source to the international market.   A TREE-TO-TREE SALESMAN The Nature Conservancy (TNC) has a new way of communicating to loggers: the sales pitch. The organization has started using ex-loggers to pitch company owners on the notion that switching to greener logging techniques will reduce their costs and increase the profitability of their businesses. The organization is working with Karya Lestari, a timber producer in East Kalimantan, to implement reduced-impact and cost-saving logging practices. Currently, the company will only test the suggestions in a 100-hectare plot, but TNC hopes this pilot will pave the way for broader acceptance of climate-friendly logging practices in the industry.   STANDARDS & METHODOLOGIES NO DUDE RANCHES HERE The American Carbon Registry approved a protocol that rewards ranchers for land management practices that put more carbon in the soil, which improves soil health and reduces GHG emissions. The Compost Additions to Grazed Grasslands protocol provides a clear process for calculating the GHG reductions from applying compost to rangeland, which allows ranchers to generate revenue from the sale of emission reductions on voluntary carbon markets. But some observers see a faster approach to developing a carbon farming model that includes composting through the Natural Resources Conservation Agency, which is incorporating carbon planning into its voluntary national farm conservation protocols.   PUBLICATIONS CONSIDER THE SOURCE A new publication called A Sourcebook: Biodiversity Monitoring for REDD+ shows how the United Nations Framework Convention on Climate Change’s Cancºn Safeguards for REDD deliver biodiversity benefits and how the Convention of Biological Diversity’s Aichi Targets support healthy forests. It also provides side-by-side comparisons of the four biodiversity safeguard initiatives already in place for REDD two emerging under the UN and World Bank, one created by two NGOs but for government programs, and one program that serves the voluntary sector.   NOT A WELL-OILED MACHINE Is palm oil a miracle plant or a grave threat to land rights and the environment? Depends on who you ask. A new book called Palms of Controversies: Oil palm and development challenges tackles the question, which concedes that the environmental impact of palm oil has been “disastrous,” particularly in Southeast Asia, but asserts that the plant itself bears no responsibility for this and should not be demonized. “The problem is not the oil palm but the way people have chosen to exploit it,” authors Alain Rival and Patrice Levang say.   JOBS COMMUNICATIONS COORDINATOR II, GLOBAL FOREST WATCH WORLD RESOURCES INSTITUTE (WRI) Based in Washington, D.C., the Communications Coordinator will support WRI’s Global Forest Watch, an online forest monitoring and alert system, through media engagement, blogging, event management, online communications, social media and writing. Global Forest Watch uses satellite technology, open data and crowdsourcing to provide timely and reliable information about forests for free. Successful candidates will have a degree in communications or journalism with a minimum two to three years of relevant experience. – Read more about the position here.   FORESTS AND CARBON INVENTORY EXPERT – AGRICONSULTING Based in Freetown, Sierra Leone, the Forests and Carbon Inventory Expert will design and implement forest carbon stock inventories for the EU-funded project Technical Assistance for the REDD+ and capacity building project in Sierra Leone. The Expert will also train field staff in forest inventory techniques, including Geographic Information Systems (GIS) proficiency, and produce training materials, guidelines and manuals. Successful candidates should have a minimum of eight years of proven experience in implementing such inventories, as well as two years of proven experience using remote sensing techniques, ground truthing and mapping. – Read more about the position here.   INTERNSHIP IN TROPICAL FOREST CARBON RESEARCH SMITHSONIAN TROPICAL RESEARCH INSTITUTE Based in Barro Colorado Island, Panama, the intern will assist in collecting, managing and analyzing field data on forest carbon budgets. The intern will also be responsible for data management, data quality checks, and some data analysis, and will be expected to contribute to (and coauthor) resulting scientific publications on the carbon budget of this forest. The successful candidate will have a bachelor’s degree in a relevant field, with field experience, quantitative and data management skills, and basic Spanish communication skills. Read more about the position here.   PROGRAM OFFICER, CONSERVATION AND SUSTAINABLE DEVELOPMENT MACARTHUR FOUNDATION Based in Chicago, Illinois, the Program Officer will be responsible for grant-making related to implementation of the foundation’s 10-year strategy for conservation and sustainable development in the Tropical Andes region (Colombia, Ecuador, Bolivia, Peru). The successful candidate will have an advanced degree in a field relevant to conservation of natural resources and at least five years of professional experience as a conservation practitioner or doing applied conservation research. Special consideration will be given to candidates with expertise or experience in Latin America, and with expertise or experience in natural resources economics and/or forest carbon/REDD+ project development. – Read more about the position here.   DEPUTY CHIEF OF PARTY: LOWERING EMISSIONS IN ASIA’S FORESTS (LEAF) PROGRAM WINROCK INTERNATIONAL Based in Bangkok, Thailand, the Deputy Chief of Party will assist the Chief of Party (COP) in the operational and technical leadership of USAID’s LEAF program. The Deputy will also provide critical contributions to program planning and implementation, including technical guidance as appropriate; and assume administrative and supervisory responsibilities as specified by the COP. Successful candidates should have 10 or more years of experience working on donor-funded projects in a management role and be familiar with USAID regulations and forestry and/or natural resources management. – Read more about the position here.   GOVERNANCE SPECIALIST, UN-REDD PROGRAMME UN OFFICE FOR PROJECT SERVICES Based in Copenhagen, Denmark, the Governance Specialist will provide technical advice on the Participatory Governance Assessment for REDD+ (PGA). The specialist will have a particular focus on Vietnam’s PGA process, and will provide broader support as needed. Successful candidates should have at least five years of experience managing development projects and processes in tandem with counterparts at the country/local level, and strong knowledge of governance issues, REDD+ and UN programming. – Read more about the position here. ABOUT THE FOREST CARBON PORTALThe Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers. ABOUT THE ECOSYSTEM MARKETPLACEEcosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].