Tag: Special Interest Business Finance

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

28 May 2014 | Voluntary buyers were driven to purchase carbon offsets for many reasons in 2013, but at the top of the list was a desire to combat climate change. Corporate social responsibility and leadership also remained prominent motivations, according to early findings from Forest Trends’ Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, the executive summary of which was unveiled today at Carbon Expo in Cologne, Germany. This year’s launch event is sponsored by ClimateCare, EcoAct and Santiago Climate Exchange.

Voluntary demand for carbon offsetting declined 26% in 2013, with buyers transacting 76 million tonnes (MtCO2e) of greenhouse gas (GHG) emissions, according to the annual report. At first blush that may seem like a steep drop, but it reflects in part the fact that carbon offsets previously captured in Ecosystem Marketplace’s voluntary survey under the pre-compliance category are no longer featured in the data. With California launching its cap-and-trade program in January 2013, millions of tonnes generated by forestry, livestock and US ozone-depleting substances projects migrated into the compliance market. In addition, enthusiasm for pre-compliance activity in Australia dwindled last year amid the new federal government’s aggressive efforts to repeal the country’s carbon tax. Overall, pre-compliance declined to an all-time low on the list of primary motivations for voluntary offset buying.

That’s not to say the voluntary market is not facing many challenges. Buyers paid a total of $379 million for carbon offsets last year, a 29% decline compared to the previous year, with a sizeable decline in the average price to $4.9 per tonne of carbon dioxide equivalent (tCO2e), amid an overall drop in demand.

The affection that voluntary buyers have for forest carbon projects continues to grow, in large part because of the very attractive co-benefits of these projects. The Ecosystem Marketplace report shows REDD (Reduced Emissions from Deforestation or Degradation of forests) and avoided conversion projects firmly in the lead, with a 38% share of the voluntary carbon market, displacing perennial chart-topper renewable energy. But REDD prices did suffer amid an oversupply in the market, the lack of a firm signal of acceptance from a compliance market and competition from other, less expensive project types. The average price for REDD/avoided conversion offsets dropped 44% to $4.2 tCO2e, a price decline that would have been even sharper had it not been for a major transaction of about 8 MtCO2e between the Brazilian state of Acre and the German government that featured emission reductions priced at $5/tCO2e.

Ecosystem Marketplace will continue to publish a series of interviews with key participants in the voluntary carbon markets conducted as part of the research for this year’s State of report. We’ve already highlighted how Chevrolet is driving in the voluntary carbon market’s fast lane, why CarbonFund.org is hoping California’s carbon program steps up to the plate to accept REDD offsets, how the BioCarbon Group is investing in projects for both the voluntary and compliance markets and how Environmental Credit Corp is developing a new charismatic project type that could be added to California’s program in the future.

Save the date for Forest Trends’ Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 full report launch event on June 24 in Washington, DC from 4:30 – 6:00 PM EDT. Look for more information including registration and webinar details soon.

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading!

Every year, Ecosystem Marketplace relies wholly on offset market participants to financially support the State of research. In return, sponsors ($7.5k+) and supporters ($3k) benefit from the report’s growing exposure, early insight into our findings, and opportunities to engage directly with Ecosystem Marketplace in report-related outreach and events. Interested organizations should contact Molly [email protected]

—The Editors
For comments or questions, please email: [email protected].

Voluntary Carbon More benefits for your buck The Gold Standard has always touted the social and environmental “co-benefits” of its certified carbon mitigation projects, which are key to obtaining above-average offset pricing. Its new report, The Real Value of Robust Climate Action: Impact Investment Far Greater than Previously Understood, claims to have the number to back up those assertions. The study, published by NetBalance and commissioned by the Gold Standard, examined 109 projects certified to the standard – and found that their co-benefits contributed an estimated $686 million in additional annual value tied to their environmental, economic and social initiatives. The Gold Standard hopes this study will strengthen the value proposition for voluntary offset buyers while influencing policy discussions at the global scale.– Read more at Ecosystem Marketplace   Riding the climate risk roller-coaster A new report by CDP, formerly known as the Carbon Disclosure Project, reveals that US corporations consider climate change risks to be more urgent and physically immediate than they did just a few years ago. Of the physical climate risks that 62 participating companies disclosed in 2013, 45% are currently being felt or expected to be felt in the next one to five years, up from 26% in 2011. Many companies that disclosed information about climate risks voluntarily purchase carbon offsets, use internal carbon pricing – or both.– Read more here   Be our guest Hotel Verde in Cape Town, South Africa recently announced a partnership with impactChoice to neutralize carbon emissions by purchasing carbon offsets from the Sofala Community Carbon Project in Mozambique. The Plan Vivo REDD project, which has now been running for seven years, covers 11,744 hectares in Gorongosa National Park and is estimated to avoid the emission of 1 MtCO2e per year (342,423 Plan Vivo certificates have been issued so far). “We have committed to offsetting each guest’s stay or conference with us at no additional cost to the guest, taking straight from our bottom line,” said Mario Delicio, the hotel owner.– Read more at Independent Online   All about the bennies Emissions reductions are great, but reductions with added environmental, social and economic benefits are better. The Verified Carbon Standard, a leading voluntary offset standard, and SOCIALCARBON, a certification standard for contributions to sustainable development, have partnered to make going the extra mile easier. The two organizations have released new templates that will allow developers and auditors to validate or verify projects simultaneously to both standards, while only having to complete one set of documents. The resulting offset is a Verified Carbon Unit with a SOCIALCARBON tag. Other standards have demonstrated that offsets that can demonstrate additional co-benefits garner a price premium in the market.– Read more here   A climate by any other name TerraPass has sold its retail business to JustGreen, an initiative of Just Energy Group, and will take on a new name, Origin Climate. Origin Climate will continue the ongoing work of TerraPass in carbon offset verification, wholesale and energy consulting services. Erin Craig, CEO of TerraPass, said: “This transaction is a big step forward for us, for our customers, and for the environment. Just Energy’s scale and expertise in serving the retail market means greater support for our retail customers, while allowing us to focus on more tailored carbon offset and renewable energy solutions for our large commercial and industrial clients.” Origin Climate expects to originate more than 1 MtCO2e of new carbon offsets over the next two years.– Read more here   Climate North America Going, going, sold On May 16, the California Air Resources Board conducted its seventh auction, selling all of the 16.95 million vintage 2014 allowances at a clearing price of $11.50/tCO2e. Also on auction were 9.26 million allowances which can be used in 2017, known as “advance” allowances. The state sold 4.04 million of those future allowances at the floor price of $11.34/tCO2e each. California has linked its emissions trading system with the Canadian province of Quebec, which will be holding its next auction on May 27.– Read more from Bloomberg – Read full auction results from ARB   Fitting the carbon tax for cement shoes The Cement Association of Canada (CAC) is again calling on the British Columbia (BC) government to change how its carbon tax is applied to the cement sector. Since the carbon tax began in 2008, BC producers have lost nearly a third of the market share to imports from the US and Asia not subject to a price on carbon. The disparity exposes the cement industry to unfair competition, according to CAC. “The cement industry wants to be part of the solution to climate change through equitable application of the carbon tax,” said Michael McSweeney, CAC’s president and CEO.– Read more here   Clean bill of health The Regional Greenhouse Gas Initiative (RGGI) has once again passed its annual checkup. Independent market monitor Potomac Economics released RGGI’s 2013 annual report showing no evidence of anti-competitive conduct. RGGI is a regional cap-and-trade program for electric power generators in nine northeastern US states. According to the report, the average auction clearing price was $2.92/tCO2e in 2013, a 51% increase from the $1.93/tCO2e average in 2012, after RGGI officials announced a major overhaul of the program. The most recent auction held on March 5 had a clearing price of $4.00/tCO2e. Carbon emissions in the region were down for a third straight year, to 86 million short tons in 2013 from 92 million tons in 2012.– Read more here   75 million people can’t be wrong “More than a quarter of the US population lives in a state with a price on carbon,” said Janet Peace from the Center for Climate and Energy Solutions (C2ES). Two weeks ahead of the US Environmental Protection Agency’s anticipated release of emission rules for existing power plants, C2ES has published a report looking at another option for addressing GHG emissions. Its report, “A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues”, gives an overview of the implementation potential of a carbon tax and looks closely at how to design the policy equitably for all households.– Read more here   Kyoto & Beyond Plugging the loophole A new budget bill has closed a loophole in New Zealand’s emissions trading scheme (ETS) that allowed foresters who planted their trees after 1989 to earn New Zealand Units (NZU) from the government, sell them to emitters, and then buy cheaper international Emissions Reduction Units (ERU) to give back to the government. NZUs are currently worth 23 times ERUs, and foresters were able to earn several hundred million dollars through trading – with zero benefit to the climate. The budget bill came as a surprise to the Forest Owners Association, which said foresters who have bought ERUs in the last year will now be selling them at a loss.– Read more here   The back-up plan Jos Delbeke, Director General for Climate Action of the European Commission, said the commission is open to early consideration of a proposal to reduce the oversupply of permits in the European Union Emissions Trading System. The commission in January proposed a “market supply reserve” that would start in 2021 to address the oversupply of allowances blamed for low permit prices. This is a follow-up to the March program to temporarily withdraw or “backload” 900 million allowances between 2014 and 2016, including 400 million this year. The allowances would be reintroduced to the market at the end of the decade. “We are confident backloading will work, but it was always only a short-term fix,” he said.– Read more here   Liquidation sales Eco-Synergies Ltd, a wholesaler of voluntary carbon offsets, was at the center of an investigation by the United Kingdom’s Insolvency Service of 13 firms improperly selling voluntary offsets. Those firms, which have now been liquidated by the UK High Court, misleadingly sold voluntary offsets to individuals as investment instruments that would gain value. The Insolvency Service said Eco-Synergies had sourced credits for a total of 2.3 million pounds, or at an average of 65 pence each, and then sold them to investors via ostensibly unrelated companies at a mark-up of as much as 869%.– Read more here   Global Policy Update A promise is a promise In 2009, President Susilo Bambang Yudhoyono committed Indonesia to cut GHG emissions by 26% on its own by 2020, and by 41% with sufficient international help. The announcement gained Indonesia international attention and investment through REDD project financing. But Yudhoyono will step down after elections are held on July 9. According to Deni Bram, an environmental law expert at Jakarta’s Tarumanegara University, the next president will have to live up to those promises at the risk of losing face with the international community. In an exclusive interview with Ecosystem Marketplace, Heru Prasetyo, head of Indonesia’s REDD agency, outlined the country’s national REDD+ strategy.– Read more from the Forst Carbon Portal – Read more at Reuters   A little help from friends The European Union (EU) has announced a three-year carbon market cooperation project with China to provide 5 million Euros in financial and regulatory assistance. The partnership will help China expand its current pilot programs and establish a national emissions trading system. The EU will also provide access to policy makers to help China develop medium to long-term programs for implementing emissions trading systems. The European experts will help China in critical areas such as establishment of emission caps, allowance distribution, monitoring, verification and reporting protocols.– Read more here   Carbon Finance Africa needs money to adapt Monique Barbut, Executive Secretary of the United Nations Convention to Combat Desertification, said millions of people in Africa are at risk if soil erosion and deforestation problems aren’t prioritized. She called on the board members of the Green Climate Fund (GCF) to focus not just on those countries with the greatest GHG emissions reduction potential, but to also address adaptation measures in other countries that won’t benefit from mitigation financing. At its March meeting, the GCF board promised that at least 50% of all its finance flows would go towards adaptation in vulnerable regions.– Read more here   Investing in the Earth Representatives from Coady Diemar Partners, Equilibrium Capital, The Lyme Timber Company, Credit Suisse and others are exploring ways to scale up investments in ecosystem services that provide benefits such as clean water, clean air and carbon storage. Wetlands mitigation is fully investable, but the participants have yet to find other models. However, Peter Stein of Lyme Timber said: “We’re on the cusp of having the attention of institutional investors and that’s good news.”– Read more here   Science & Technology It’s hump day in Australia The Australian government has withdrawn support for a camel culling carbon offset proposal under its Carbon Farming Initiative offset program. Recent amendments to the Carbon Credits Act say that “the federal government no longer believes that removing feral animals for an emissions reduction purpose is viable or important to Australia’s international commitments.” Camels in Australia are feral and have contributed to significant environmental degradation and are a source of methane, a powerful GHG. The Australian government has sponsored a $19 million camel cull between 2009 and 2012. Without further sources of funding for culls, some believe that the camel population will explode.– Read more here Programme Coordinator – WWF Based in South Africa, the programme coordinator will support the work of the Fynbos Succulent Land Programme. The position will support and mobilize civil society participation in conservation. Qualified candidates will have a minimum four years experience in protected area management, environmental or biodiversity management, or biophysical research sectors. Ideal candidates will be familiar with South Africa’s Protected Areas Network and Stewardship Programmes. Fluency in at least two South African languages as well as South African citizenship or resident status is required.– Read more here   Verification Program Assistant – The Climate Registry Preferably based in Los Angeles or New York City, the program assistant will support The Registry’s verification and accreditation programs. The position involves maintain relationships with verification bodies, performing quality assurance checks on verified emissions inventories and developing or maintaining The Registry’s verification documentation.The ideal candidate will have two years of professional experience and interest in climate change, corporate environmental management, or air quality issues.– Read more here   Director of Finance – EcoZoom Based in Portland, Oregon or Nairobi, Kenya, the Director of Finance will drive the global growth of EcoZoom’s suite of clean cookstoves products for developing countries. The position involves working with senior management to develop a strategy for bilateral aid mechanisms such as carbon finance and Nationally Appropriate Mitigation Actions. The ideal candidate will have at least seven years work experience in finance, with a minimum of five years at a multinational company, preferably with offices in Africa.– Read more here   Forestry Senior Program Associate – American Carbon Registry Based in Sacramento, California (preferred) or Washington, DC, the Senior Program Associate will provide support on all aspects of registry management, support business development and outreach activities, and help to coordinate the development and/or approval of new quantification methodologies. A master’s degree in forestry and three to six years of experience working with forest projects in the carbon market or related fields is required. Candidates who have completed California Air Resources Board training and passed the exam in the US Forests Compliance Offset Protocol are preferred.– Read more here   APX – Renewable Energy and Carbon Markets Intern Based in Washington, DC, the Renewable Energy and Carbon Markets Intern will kick-start an analytics and research program through APX Environmental. The internship will emphasize learning and preparation for a potential future career in the field. Candidates must have a passion for research and analysis, strong communication skills, and enthusiasm about working in a start-up environment. Proficiency in Spanish is a plus.– Read more here 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].

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EcoPlanet Bamboo yesterday announced that its Nicaragua bamboo projects successfully verified their first carbon offsets. These projects are expected to reduce 1.5 million tonnes of carbon dioxide (CO2e) over their 20-year lifetime. This milestone came after a patient process of navigating the voluntary carbon markets and – as Troy Wiseman explains in the interview below – is part of the company’s truly long-term vision for triple bottom line profitability.

28 May 2014 | Troy Wiseman, CEO and Co-Founder of EcoPlanet Bamboo, never understood the idea of a zero-sum game when it came to corporate responsibility and profits. To him, achieving both simultaneously is all about the execution – and having the patience to do things right the first time around.

That patience paid off last week when EcoPlanet Bamboo, a company that aims to “make bamboo the timber of the 21st century” completed verification of its 2014 vintage offsets under the Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Alliance Standard. The verification marks the debut of carbon offsets from bamboo plantations. In 2012, EcoPlanet Bamboo also became the first carbon offset project to receive political risk insurance (to the tune of $27 million) from the World Bank Group’s Multilateral Investment Guarantee Agency.

When he founded EcoPlanet Bamboo, Wiseman recognized that the only way to ‘move the needle’ on deforestation is to find alternatives to wood fiber. The company is working with major corporations that source paper, activated carbon (used to trap mercury emissions from coal-fired power plants and mines) and other wood products from boreal and other endangered forests to see if they can fill those same product needs with bamboo, at the same price point.

Based in Barrington, Illinois, the company owns seven bamboo plantations covering more than 8,000 acres in Nicaragua and 1,200 acres in South Africa. EcoPlanet Bamboo does extensive research and development on dozens of the more than 1400 types of bamboo, so they know which varieties fit which business need – from biofuels to pulp to furniture.

Wiseman, a lifelong entrepreneur, spoke with Allie Goldstein about the company’s long-term business vision, and how carbon offset sales fit in.

Allie Goldstein: Many of your bamboo plantations are validated as VCS, CCB and Forest Stewardships Council (FSC). Why did you make this effort to validate against multiple standards?

Troy Wiseman: The reason we went thought this intense triple certification process and spent the money to do this right, all the way from the community level to the top of our organization, was to set the benchmark for how bamboo should be industrialized. That is as a sustainable alternative fiber with high potential for reforestation, rather than as a species that otherwise has the potential to become another problem crop.

In addition to the carbon finance, the multiple certifications allowed that to be validated externally. EcoPlanet Bamboo only plants on degraded land that was deforested more than 10 years ago, in line with the VCS requirements, and we don’t compete with food security. If you’re using land like ours that doesn’t have good soils – either acidic, clay or very compacted – it’s going to cost an additional hundreds of thousands of dollars each year per plantation, because it’s going to take one or two years longer for that bamboo to mature. That’s real money. But we know that that’s the right way to do it, and because we’re building a company for 100 years – the long term – we’re trying to be a responsible market leader and set the benchmark.

Read more on the Forest Carbon Portal.

It was a topsy-turvy year in voluntary carbon, with some volume migrating to California’s cap-and-trade market and new government entities coming in on the buy side. Through it all, most corporate buyers who used offsets in the past continued to do so, but newcomers were hard to find. Here’s a preview of our latest “State of the Voluntary Carbon Markets” report.

28 May 2014 | COLOGNE | GERMANY | In a bid to reduce their contribution to global greenhouse gas emissions, corporate leaders like Chevrolet, Marks & Spencer, and Allianz continued to voluntarily purchase carbon offsets in 2013, locking 76 million metric tonnes of greenhouse gases out of the atmosphere, according to the annual State of the Voluntary Carbon Markets report, previewed by Forest Trends’ Ecosystem Marketplace this week in Cologne, Germany.

These and other diverse actors paid $379 million for carbon offsets to neutralize emissions that they couldn’t directly reduce. This value supports hundreds of environmental projects, particularly those that reduce or avoid deforestation (“REDD”), install wind energy, or distribute cleaner-burning cookstoves in the developing world.

Roughly 90% of 2013 purchases came from “repeat customers” – a testament to many companies’ ongoing loyalty to their offsetting commitments, but also a stark reminder of the challenge the market faces in attracting new voluntary offset buyers. Overall, global demand fell short of 2012 levels by 26.7 million tonnes and $144 million, and saw the average per-tonne price drop 16% to $4.9.

Millions of these “lost” tonnes were probably still transacted – but not voluntarily. When the US state of California’s cap-and-trade program came into force in 2013, many buyers that had voluntarily purchased offsets in prior years (averaging 10 million tonnes/year) to prepare for the law last year began obtaining the same offsets – which had their origins in the voluntary market – to comply with the law. Ecosystem Marketplace’s report series does not track carbon offsets purchased for direct compliance, only for “pre- compliance” preparations. Compared to around 15 million tonnes of carbon offsets purchased for pre- compliance in 2012, 2013’s offset suppliers reported just 300,000 tonnes of such demand.

“The absence of these North American transactions from our report is a win, not a loss, for the voluntary offset markets,” said Ecosystem Marketplace Director Molly Peters-Stanley. “It validates those who backed what were originally voluntary instruments that are finally seeing demand from California’s compliance market, and indicates to governments with similar policies in development that the voluntary market can drive early action, inform policy, and successfully transition to meet compliance needs.”

Dampened pre-compliance demand was driven not only by California’s market launch, but also from the disintegration of Australia’s pre-compliance market as the country failed to sustain its offset-inclusive carbon tax. Offset sales in the United States also ceased to reflect any expectation of a national carbon market, which had once driven significant activity on the now-shuttered Chicago Climate Exchange (CCX). Activity under the CCX legacy program constituted 8.3 million tonnes transacted in 2012 that did not see a repeat in 2013.

This means companies that purchased offsets last year did so because they wanted to – not because they had to. Europe-based organizations were the market’s biggest “purely voluntary” buyers once again, purchasing 28 million tonnes of carbon offsets last year. This represented a 36% decline from 2012, for which the region’s offset suppliers blame slow economic recovery, pessimism regarding the state of the region’s regulatory carbon market, and competition with trendier approaches to business and supply chain sustainability. Even so, European buyers grabbed up the largest proportion of offsets that enable sustainable development.

Forestry again found the spotlight, with REDD projects transacting 22.6 million tonnes – a record for forest conservation projects and up from 8.6 million tonnes in 2012. This volume was boosted by an historic agreement between German development bank KfW (Kreditanstalt fí¼r Wiederaufbau) through Germany’s REDD+ Early Movers Programme and the Brazilian state of Acre. Last year Acre agreed to retire at least 8 million tonnes of carbon credits earned by protecting its forests over four years. Acre will also match KfW’s offset retirement on a one-to-one basis as its “own contribution” – effectively doubling the agreement’s impact.

“The work being done in Acre, alongside 2013’s historic transaction between Brazil’s indigenous Paiter Suruí­ people and Natura Cosmeticos [a Brazilian company], indicate that emerging economies in Latin America and elsewhere are willing and able to protect their forests’ future,” said Forest Trends founding president and CEO Michael Jenkins. “It will be interesting to see if and how these same governments will recognize early leaders in the voluntary offset market as countries commit to new climate goals in coming months.”

Last year’s giant leap in demand for REDD offsets came at a lower price, falling 44% to $4.2/tonne from $7.4/tonne. This volume-weighted average price was heavily influenced by fewer than five project developers that transacted 28% of all REDD offsets at less than $3/tonne. The remaining forty REDD transactions reported through the survey were priced at between $3/tonne and $20/tonne.

In other developments, projects in Africa experienced a record year, supplying over 11 million tonnes of transacted offsets. A large proportion of these offsets was also from forestry. Clean cookstove distribution projects, which saw sizable demand from voluntary buyers in 2012, saw both transacted volumes and prices reported by the sector decline by 26% and 18%, respectively, transacting 4.3 million tonnes at an average price of $9.2/tonne.

The report’s executive summary is available here. The full report will be made freely available at the same link in late June.

Additional resources

12 June 2014 | – California was the big story in the North American carbon markets in 2013, dominating headlines with the launch of the state’s cap-and-trade program in January, which opened up an ocean of opportunity for project developers to push forward with emissions reduction projects. And Environmental Credit Corp (ECC) was one of the biggest fish swimming in that sea.

In September 2013, State College, Pennsylvania-based ECC became the first project developer to receive carbon offsets issued by the California Air Resources Board (ARB), the state agency charged with overseeing the state’s cap-and-trade program aimed at reducing greenhouse gas emissions. But the developer didn’t shy away from the voluntary market, focusing on a new type of “charismatic” carbon offset project that could eventually make its way into the regulated market in which buyers surrender offsets for compliance.

Ahead of next week’s release of Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, Derek Six, ECC’s CEO/CFO, recapped activity in the voluntary market and offered the ARB some advice on streamlining its offsets program.

Gloria Gonzalez: What were the key highlights in the voluntary markets in 2013?

Derek Six: One of the key project types we do is organic waste composting. I describe it as a pre-compliance type. I have some hope of the ARB taking a look at that as a future compliance protocol. But for the meantime, it’s a voluntary protocol. That protocol was off to a very slow start. But 2013 was a year where we signed a lot of delivery contracts for organic waste composting projects. We saw the first registrations of organic waste composting projects at the beginning of 2013 and now we’re taking a lot more of those projects through the verification process. There’s some volume in the space now and it’s been really well received. I guess it’s the new type of charismatic project. There are a lot of different co-benefits to the projects.

2012, 2013 and 2014 have been extremely tough times for people with project types that have fallen out of favor such as landfill gas offsets. The market was amply supplied with those, to say the least. If someone wanted a voluntary credit over this whole period, we’ve been seeing them at a dollar or less. Now that we’re bringing in a new charismatic project type, we’re back into the range of higher prices where you can actually do the projects and move things forward.

GG: Aside from organic waste on the voluntary side, are you seeing any other interest in strictly voluntary-type projects?

DS: I wouldn’t say that the voluntary demand is so robust that they’re out trying to pool new project types and protocols in this space. It’s almost like we’re custom-building our projects. In organic waste composting, when we get a buyer we move forward. It’s probably a delicate balance right now with supply and demand.

GG: What do you see on the compliance side?(Editor’s note: To date, ECC has been issued a total of more than one million offsets by the ARB under the ozone-depleting substances (ODS) and livestock project types allowed into the California cap-and-trade program, with nearly half of those offsets coming from early action projects that were originally developed under voluntary protocols and transitioned for use in the compliance program.)

DS: We’re still working very hard to get early action projects converted. It’s really tough. Faster motion through (the ARB’s) process would probably provide a lot of market participants a lot more confidence. When they take this long, for whatever reason, you have the buyer of the credit who is probably waiting to use it. It’s hard for project developers to redirect capital into new projects. It’s really choking things. But it’s also a problem that resolves itself within a definite time period. Next year, there won’t be any more new early action projects.

GG: Is there anything we should be watching for in 2014, either on the voluntary or the compliance side?

DS: On the compliance side, you should be watching to see whether ARB makes any changes to the invalidation provisions, which I believe it should. (Editor’s note: The ARB retains the right to invalidate offsets found to be faulty or fraudulent, but entities can reduce the period that their projects are at risk of being invalidated from eight years to three years by undergoing a second verification by a different verification body.)

But if they don’t, you should be watching to see how long this second verification process takes and how many projects start to move through that, what the costs are and if anyone is ever not successful with the process. Will buyers start to decide whether three years is that much better than eight years? Because there’s still a period of time and it’s not really certain what might cause someone to look at the project.

I’ll be interested to see what happens with the coal mine methane protocol (adopted in April 2014). I think it will take a long time for those credits as compliance offsets to hit the marketplace because you have to make that investment and you have to get the permitting done and the design done and then you have to run the project for a whole year. Then you have to verify it. I’m guessing the first coal mine methane offsets from a compliance protocol from a new project – not from a Climate Action Reserve-converted project – won’t appear until 2016, 2017.”

GG: What about rice cultivation? The ARB is scheduled to consider adding a rice cultivation project type in September.

DS: I’m agnostic on that protocol. I don’t think it will result in a whole lot of volume. But if it helps people to change their practices, that’s great.

GG: Anything else the ARB can do to improve the offsets program?

DS: I’m going to continue to press for projects to be batch verified or sample verified for smaller projects such as agriculture methane. I know it’s challenging, but we need some way for 10 or 20 or 50 small ag methane projects to all be bundled together into a verification. These small farms can’t pay the program participation costs. It’s nice that we’re creating incentives for large farms to implement capture systems, but I think the penetration rate will probably reach only the largest four to four-and-a-half percent of dairy farms.

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

21 May 2014 | Indonesia’s peat forests are a climate change ‘line in the sand.’ The country’s 22 million hectares of peat contain an estimated 200 billion tonnes of carbon – a third of Earth’s remaining ‘carbon budget’ through 2050 if we are to limit global temperature rise to 2 degrees Celsius. Through a $1 billion REDD+ (Reducing Emissions from Deforestation and Degradation of forests) agreement with Norway in 2010, Indonesian President Susilo Bambang Yudhoyono imposed a two-year moratorium on the palm oil concessions that have turned one of the largest carbon sinks in the world into a carbon source.

That moratorium has now been extended through 2015, but it doesn’t affect concessions already in place before it was signed, leaving millions of hectares of forest slated for conversion to palm oil. Heru Prasetyo, who took the helm of Indonesia’s new REDD+ Management Agency in December, is tasked with preventing this climate nightmare. In a wide-ranging, exclusive interview with Ecosystem Marketplace’s Steve Zwick, Prasetyo talks about Indonesia’s plan to move palm production to degraded land, why REDD+ is the new oil, and everything in between.

“We’ve spent 50 years developing this economy, and if we simply stop producing palm oil, we will be taking a massive economic hit, and production will just go elsewhere,” Pratseyo explained. “So we have to engineer a land-swap. This means identifying degraded land that could be used for palm oil and trying to see if there is a way to persuade the people who have palm-oil concessions to switch over.”

Zwick describes such a land swap as “a task comparable to asking the corn farmers of the American Midwest to move their crops en masse to the apple orchards of the Northeast.” Pratseyo recognizes that it won’t be easy, but he sees REDD+ as an essential tool for rebalancing the economic equation to make standing forests more valuable. He advocates for incorporating site-specific reference levels into a national strategy, and for taking the time to do multi-stakeholder consultation, even if it’s “messy.” When asked which complexities on the ground surprised him most, Pratseyo had an interesting answer:

“We knew that we’d have a lot of issues with tenure. That’s a problem we inherited from the Dutch, and then we made worse ourselves. So, we knew that, but the biggest surprise was that our institutions were not prepared for doing what needs to be done to make REDD+ work. But then we also found this benefit: that the reforms we needed to make for REDD+ were reforms that would have knock-on benefits across the agriculture sector. So, we’re using REDD+ to align our institutions and straighten out all of our tenure issues,” he said.

The interview, available here, is worth reading in full.

More stories from the forest carbon markets are summarized below, so keep reading!

Forest Trends’ Ecosystem Marketplace invites you join us for an event exploring findings from our 2014 State of the Voluntary Carbon Markets survey. This year’s launch event at Carbon Expo in Cologne, Germany is sponsored by ClimateCare, EcoAct, and Santiago Climate Exchange.

We’ll address questions such as: What were the most popular standards and project types in 2013? What average prices were forestry and other carbon offsets sold at? What buyer sectors are interested in forest carbon offsets, and how does offsetting fit into corporate supply chain management?

Join us, and panelists from BioCarbon Group, ClimateCare, EcoAct and the International Carbon Reduction and Offset Alliance (ICROA) on Wednesday, May 28, 13:00 – 13:45 in the Plenary Room. Our latest report builds on data collected from a global pool of offset suppliers worldwide to provide insights that will once again become an industry benchmark.

—The Ecosystem Marketplace Team

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

INTERNATIONAL POLICY No to déjí  vu Speaking at the Forests Asia Summit in Jakarta, Indonesia, Peru Environment Minister Manuel Pulgar-Vidal called for a bottom-up climate agreement at the United Nations talks in Lima this December. “It should be clear that we are not going to repeat Kyoto,” he said. Pulgar-Vidal called for a central role for forestry, recognizing that deforestation is the biggest source of emissions in some countries in Latin America. “For me the forestry topic, it is still the younger brother of the climate debate,” he said. The Minister lamented the low price of carbon and said that resolving tenure rights will be key to building trust in forest carbon mechanisms. NATIONAL STRATEGY AND CAPACITY Less loopy A new budget bill has closed a loophole in New Zealand’s emissions trading scheme (ETS) which allowed foresters who planted their trees after 1989 to earn New Zealand Units (NZUs) from the government, sell them to emitters, and then buy cheaper international Emissions Reduction Units (ERUS) to give back to the government. NZUs are currently worth 23 times ERUs, and foresters were able to earn several hundred million dollars through trading – with zero benefit to the climate. The budget bill came as a surprise to the Forest Owners Association, which said foresters who have bought ERUs in the last year will now be selling them at a loss. If you abandon it, they will come A report by Italy’s National Inventory of Forests finds that the country now has more than double the trees it hosted just after World War II. The widespread abandonment of farmland, particularly in the south, has led to massive reforestation, and forests now cover 27 million acres – about 35% of the country. As a Kyoto Protocol signatory, carbon sequestered by Italy’s forests is counted against its emissions targets, but that hasn’t stopped some Italian forest owners from participating in the voluntary carbon market. “There is the need to organize in a way to make sure that we are not monetizing twice the same credits,” Lucio Brotto, a researcher involved in developing the Italian Forest Code, told Ecosystem Marketplace. PROJECT DEVELOPMENT Zambia zooming BioCarbon Partners, a Zambian-based REDD+ project developer, announced last week that its Lower Zambezi REDD+ project achieved Verified Carbon Standard (VCS) verification. The project has also achieved validation against the Climate, Community and Biodiversity Alliance Standard at the ‘triple gold’ level, indicating ‘exceptional’ biodiversity, social, and climate adaptation benefits. It protects 39,000 hectares of intact miombo forest along the northwestern boundary of the Lower Zambezi National Park and supports sustainable charcoal production, among other efforts to improve local livelihoods and reduce the drivers of deforestation. BioCarbon Partners is now actively seeking buyers to purchase carbon offsets from the project. How hospitable Hotel Verde in Cape Town, South Africa recently announced a partnership with impactChoice to neutralize carbon emissions by purchasing carbon offsets from the Sofala Community Carbon Project in Mozambique. The Plan Vivo REDD project, which has now been running for seven years, covers 11,744 hectares in Gorongosa National Park and is estimated to avoid the emission of 1,000,000 tonnes of carbon dioxide per year (342,423 Plan Vivo certificates have been issued so far). “We have committed to offsetting each guest’s stay or conference with us at no additional cost to the guest, taking straight from our bottom line,” said Mario Delicio, the hotel owner. FINANCE AND ECONOMICS Above and beyond A recent study commissioned by the Gold Standard (GS) and published by NetBalance valued the environmental, economic and social initiatives associated with 109 GS projects at $686 million. GS held 14% of market share in 2012, according to the State of the Voluntary Carbon Markets 2013, and its co-benefits-centric approach led to prices that were among the market’s highest – an average of $10 per tonne of carbon dioxide equivalent. Some buyers may actually be more interested in the co-benefits than the carbon, but carbon provides a straightforward metric for monitoring and reporting. “People don’t give money for good causes anymore – they give money for results,” said Thomas Vellacott, CEO of World Wildlife Fund Switzerland, at this year’s GS conference. Carbon Map taking off The Democratic Republic of Congo’s (DRC) Carbon Map and Model project, financed through Germany’s KfW Development Bank to the tune of six million euros, was important to the Carbon Fund’s acceptance of DRC’s Emissions Reductions Program Idea Note. Implemented through World Wildlife Fund and GFA Consulting Group, the mapping project used a combination of field plot measurements and remote sensing data from an airplane-based sensor to create a national biomass map. DRC hopes to receive $60 million in emissions reduction payments through 2020 for avoided deforestation in Mai Ndombe Province. It will be the first jurisdictional REDD+ program in Africa.   SCIENCE AND TECHNOLOGY Carbon queens Mirror mirror on the wall, who stores the most carbon of them all? A new study published in the Journal of Ecology yields an answer: the rainforests of Borneo beat out the Amazon for the fastest woody growth – 49% faster, in fact – and therefore the most above-ground carbon storage. The research is based on 12,000 trees that were monitored for more than two decades. Borneo’s forests, however, have been under siege: more than 29,000 square kilometers of the lowland forests of Kalimantan were chopped between 1985 and 2001. In 2011, the first forest carbon project in Borneo was registered in Sabah under the VCS. HUMAN DIMENSION Hand-to-forest combat Rudi Putra of Indonesia is one of six winners of this year’s Goldman prize, the most prestigious global award for environmental activists. Putra is fighting to save the 2.25 million-hectare Leuser Ecosystem in Sumatra, home to elephants, rhinos and orangutans – a quarter of which has already been destroyed. His efforts exposed illegal deforestation by more than two dozen palm oil plantations and helped to stop a 2013 provincial government plan to open up new tracts of forest to mining and palm. “We have basically no funding for the work we are doing, but we all stood together to protect the Leuser,” he said. The $175,000 prize money will go right back to the effort. Scout’s dishonor At age 11, Madison Vorva and Rhiannon Tomtishen started a campaign to get Girl Scouts of America to source more sustainable palm oil for their cookies. The result was Kellogg Company’s eventual adoption of a zero deforestation policy. But Vorva and Tomtishen – who are now of voting age – aren’t satisfied yet since ABC Bakers, the other company that bakes Girl Scout cookies, has not adopted a zero deforestation policy. The Girl Scouts’ bakers source palm oil from members of the Roundtable on Sustainable Palm, a standard-setting body for social and environmental safeguards that does not explicitly exclude land conversion. Miss Deforestation Critics call her ‘Miss Deforestation,’ but she’d prefer ‘Miss President.’ Kí¡tia Abreu, a senator from the Brazilian state of Tocantis, is known as the staunchest supporter of agribusiness in the country. “There are many things holding back progress – the environmental issue, the Indian issue and more,” she told a journalist from The Guardian. Abreu does not plan to run in October’s election, but she says that campaigning someday is “fate.” Abreu is a stark contrast to Marina Silva, Brazil’s former environment minister who introduced policies to slow deforestation and who last month announced she will run alongside Socialist party candidate Eduardo Campos against current president Dilma Rousseff. PUBLICATIONS Let’s play 20 questions The Center for International Forestry Research’s (CIFOR) 2013 annual report, released this month, highlights gains for forest carbon, including the Intergovernmental Panel on Climate Change’s adopted Wetlands Supplement, which allows national governments to include peatlands and mangroves in carbon accounting. At its Forests Asia Summit in early May, the organization launched its Top 20 Questions for Forestry – “t20q” – survey, which will steer coming research and policy work. Getting engaged A recent study by Tetra Tech for the Forest Carbon, Markets and Communities program of the United States Agency for International Development compared four forest carbon projects in Eastern Africa – one in Uganda, one in Ethiopia, and two in Kenya. The study found that all the projects “effectively engaged” thousands of farmers to plant trees or regenerate forest, but “at current carbon prices, carbon revenues seem insufficient incentive for tree-planting.” Investment costs for Clean Development Mechanism and VCS compliance were often upwards of $1 million, and continue throughout the project. JOBS Forester / Forest Biometrician – Green Assets Based in Wilmington, North Carolina, the Forester/Forest Biometrician will evaluate large forested tracts for development of forest carbon projects, utilizing forest management plans, inventories, mapping and harvest data to make recommendations to Green Assets. The successful candidate will have a bachelor’s degree in Forestry with at least five years of experience in forest inventory design and mensuration. Strong understanding of remote sensing analysis techniques and experience with forest carbon project protocols such as Climate Action Reserve, American Carbon Registry, and California Air Resources Board preferred. – Read more about the position here Forestry Senior Program Associate – American Carbon Registry Based in Sacramento, California (preferred) or Washington, DC, the Senior Program Associate will provide support on all aspects of registry management, support business development and outreach activities, and help to coordinate the development and/or approval of new quantification methodologies. A master’s degree in forestry and three to six years of experience working with forest projects in the carbon market or related fields is required. Candidates who have completed California Air Resources Board training and passed the exam in the US Forests Compliance Offset Protocol are preferred. – Read more about the position here Senior Associate Forest Certification – Rainforest Alliance Based in Northfield, Minnesota, the Senior Associate will provide essential leadership in management and growth of Rainforest Alliance’s US forest management portfolio in the US Region. Responsibilities will encompass management and leadership, client service, and quality assurance. Preferred candidates will have an advanced degree with five to seven years of experience in forestry or a related field. – Read more about the position here Director of Finance – EcoZoom Based in Portland, Oregon or Nairobi, Kenya, the Director of Finance will drive the global growth of EcoZoom’s suite of clean cookstoves products for developing countries. The position involves working with senior management to develop a strategy for bilateral aid mechanisms such as carbon finance and Nationally Appropriate Mitigation Actions. The ideal candidate will have at least seven years work experience in finance, with a minimum of five years at a multinational company, preferably with offices in Africa. – Read more about the position here APX – Renewable Energy and Carbon Markets Intern Based in Washington, DC, the Renewable Energy and Carbon Markets Intern will kick-start an analytics and research program through APX Environmental. The internship will emphasize learning and preparation for a potential future career in the field. Candidates must have a passion for research and analysis, strong communication skills, and enthusiasm about working in a start-up environment. Proficiency in Spanish is a plus. – 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].

Click here to view this article in its original format.

The BioCarbon Group is a major investor in cookstove and forestry emissions reduction projects for both the voluntary and regulated carbon markets in Europe and North America. Jason Patrick, Investment Director for the BioCarbon Group, talked with Gloria Gonzalez about a recent evolution in the corporate social responsibility world and its impact on the voluntary carbon markets.

21 May 2014 – The BioCarbon Group is playing both sides: that is, developing projects for both the voluntary and regulated carbon markets in Europe and North America.

In 2013, the investor announced several major transactions aimed at both voluntary buyers who purchase emissions reductions for reasons related to corporate social responsibility (CSR), ethics, and reputational or supply chain risk, as well as compliance buyers who surrender offsets for compliance as part of a regulated carbon market. Projects that distribute highly-efficient cooking stoves to households in Africa were a major theme for the group in 2013. The organization also announced a recent investment in the Lower Zambezi community forest conservation project in Zambia.

Ahead of next week’s release of Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, Jason Patrick, New York-based Investment Director for the BioCarbon Group and a panelist at the launch of the report at Carbon Expo 2014 in Cologne, Germany on May 28th, spoke to Gloria Gonzalez about how the organization is operating in both markets and how committed European buyers are to voluntary carbon offset purchasing as part of their corporate social responsibility (CSR) initiatives compared to their US counterparts.

Gloria Gonzalez: How would you characterize the voluntary carbon market in 2013?

Jason Patrick: I would say that the voluntary market, especially in the US and a bit in Canada because of the linking of those two markets, has changed because of changes in the CSR world. There’s more work and attention and initiative than ever in the world of CSR today in the US, but I would say relatively less of that CSR activity is focused on voluntary offset purchases compared to a few years ago.

GG: Is it in relation to their budgets for CSR? Do they have limited dollars for these types of initiatives so they move on to other things or are there non-financial reasons that would cause them to shift their attention elsewhere?

JP: People like to focus on the new hot issue, which is a non-financial issue. But there are financial reasons too. In the US, there are still lingering impacts from the financial crisis of a few years ago. And when somebody in a sustainability department can implement initiatives that will make the operations of a company more efficient – thereby saving dollars – or put dollars to work by, for example, buying renewable energy, a lot of firms believe – and I’m not saying that I think this point of view is correct –that that is a better use of their money than purchasing offsets, even though they recognize the quality of offsets and the high positive impact that the purchase of offsets can have, especially in developing countries.

GG: Aside from the big players that we know about, are other companies starting to look at international offsets versus domestic offsets? JP: There are definitely some. We hear about the Disney’s when they do it. I would say it’s a little bit more common for the European firms to support international projects. I feel like the US firms and the Canadian firms are much, much more likely to want to purchase projects that are tied to their operations. Now there are exceptions. But it seems to be more likely for the US firms to opt to do that.

GG: For your projects in particular, what was the focus in 2013 and what types of projects are you focusing on this year and going forward?

JP: We have a new agroforestry project in Africa. That’s one that we’re marketing to voluntary buyers. We have another already in the books in Latin America. That started issuing last year in November. We also moved forward over the last year with a couple of cookstove projects in developing countries that we’re marketing to compliance buyers in Europe and successfully so. Projects such as cookstoves and agro-forestry projects are easy to get behind because of the co-benefits at the village level such as health impacts. We’re developing our projects with compliance buyers in mind simply because there’s more volume and a better price point. Voluntary buyers will pay a very high price for cookstove projects, but the volume is typically so small that it doesn’t really matter.

GG: Have you noticed any impact from a voluntary perspective from things that are happening on the compliance side?

JP: Yes, not so much in what I call the pure voluntary market – CSR buyers who only buy for that purpose – but (Ecosystem Marketplace) in your analysis is capturing pre-compliance buyers, voluntary projects that people believe will have value in a compliance program in the future that do not qualify today. There’s definitely been some activity around project types that probably will be approved by the regulator in California. I haven’t seen much activity in new project types with the European market in mind given the oversupply in that market.

GG: Any similar trends in Europe and North America?

JP: Sustainability work in Europe is a little bit deeper. Offsetting as part of voluntary CSR work in Europe is more common than in the US.

GG: Any legislative or regulatory factors that could propel offsetting going forward?

JP: The one in the US, of course, is the promulgation of regulations by the (US Environmental Protection Agency) for new and existing power plants. There are some people who think offsetting will be an option for firms covered by the regulations, that EPA will essentially allow an offset program as part of that regulatory development. I think most of that talk is wishful thinking by US-based offset project developers. It’s possible, but we don’t have any clear indication from the EPA that that is going to occur.

I do believe there will be consolidation of developers because there were some firms set up years ago in anticipation of widespread international compliance markets. Of course, those markets haven’t come to pass. For those firms to survive, they need to see more international demand.

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

19 May 2014 | State of the Voluntary Carbon Markets 2014 Report Launch! Forest Trends’ Ecosystem Marketplace invites you join us for an event exploring findings from our 2014 State of the Voluntary Carbon Markets survey. This year’s launch event at Carbon Expo in Cologne, Germany is sponsored by ClimateCare, EcoAct, and Santiago Climate Exchange.

Join us to find the answers to questions like, “At what stage in the project cycle are most offsets sold, and at what price? How does voluntary offsetting fit into corporations supply chain sustainability? How did voluntary and compliance offset markets relate in 2014?” Our latest report builds on data collected from a global pool of offset suppliers worldwide to provide insights that will once again become an industry benchmark.

Taking place at Carbon Expo 2014

Wednesday, May 28, 13:00-13:45

Plenary Room

With panelists representing: Ecosystem Marketplace, BioCarbon Group, ClimateCare, EcoAct, and International Carbon Reduction and Offset Alliance (ICROA).

Introduction

Russia has been in the news a lot lately, but a signal from Moscow in early April caught the attention of the carbon markets. The Russian government has approved a number of measures aimed at helping the country meet its target of reducing greenhouse gas (GHG) emissions 15% to 25% percent below 1990 levels by 2020.

The measures to be established include monitoring, reporting and verification procedures, inventory guidelines for GHG emissions among sectors, and an assessment of the reduction potential for each sector. The Ministry of Economic Development and Trade will be responsible for evaluating current emission reduction efforts and proposing new efforts for mitigation and funding for low-carbon development. A compliance or voluntary carbon pricing system is a possible outcome, according to Germany-based GFA Consulting Group. An unofficial translation of the decree is available on GFA’s website.

If Russia allows voluntary offsetting, it would become the latest country or subnational jurisdiction to tap into the expertise of the voluntary carbon markets. South Africa’s recently released policy paper carves out a strong role for offsets – and pitches a plan to include standards first developed for the voluntary carbon markets. If all regulated sectors choose to purchase offsets, the tax could generate demand for up to 30 million tonnes of carbon dioxide equivalent (tCO2e) reductions from energy efficiency, forestry and other offset projects located in South Africa.

“It’s really nice to be able to use something that’s already built,” said David Antonioli, Chief Executive Officer of the Verified Carbon Standard (VCS), one of several voluntary standards that will be folded into South Africa’s carbon tax.

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading!

Every year, Ecosystem Marketplace relies wholly on offset market participants to financially support the State of research. In return, sponsors ($7.5k+) and supporters ($3k) benefit from the report’s growing exposure, early insight into our findings, and opportunities to engage directly with Ecosystem Marketplace in report-related outreach and events. Interested organizations should contact Molly Peters-Stanley. [email protected]

—The Editors

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

Voluntary Carbon Don’t waste the water Project developer Tierra Resources is turning wastewater into blue-carbon offsets and saving Louisiana’s coastline in the process. The company identifies restoration projects and utilizes nutrient rich treated wastewater to facilitate regrowth. Carbon offsets are generated through the additional sequestration of carbon as determined by an American Carbon Registry methodology that was developed with assistance from utility Entergy Corporation. Its 950-acre pilot project near Luling, Louisiana is expected to generate between 1,000 tCO2e to 7,000 tCO2e of reductions annually. In addition to storing carbon, restoring wetlands in the Mississippi Delta will help rebuild a natural buffer against hurricanes and ocean swell, plus help guard against saltwater intrusion. – Read more here   Bringing home the Canadian bacon Vancouver, British Columbia-based project developer Offsetters Climate Solutions doubled its sales revenue to north of $7 million last year, more than twice the sales it experienced in 2012, following its merging of ERA Ecosystem Restoration Associates, Offsetters Clean Technology and Carbon Credit Corp. Total carbon offset sales rose 4% last year, aided by the sale of Verified Emission Reductions from the firm’s Mai Ndombe REDD+ (Reducing Emissions from Deforestation and Degradation) project. About 93.5% of offset revenues were generated through the voluntary markets, despite the launch of cap-and-trade markets in California and Quebec, while the remaining 6.5% were generated via BC’s Pacific Carbon Trust transactions. But Offsetters sees new revenues potentially emerging from participating in regional compliance markets in 2014. – Read more here   Striking gold in Zambia The Lower Zambezi REDD+ Project has achieved VCS verification, becoming the first VCS-verified REDD+ project in Sub-Saharan Africa to have also achieved “triple gold” level validation against the Climate, Community and Biodiversity Standard. The project, which received an undisclosed investment from the BioCarbon Group earlier this year, is protecting 39,000 hectares of intact miombo forest along the northwestern boundary of the Lower Zambezi National Park. Zambia has one of the highest deforestation rates relative to land area in Africa, according to United Nations estimates, due to unsustainable agricultural practices and urban charcoal demand. The project is working to mitigate this problem by supporting sustainable charcoal production, as well as improved conservation farming practices and other initiatives. – Read more here   Climate North America If the carbon price is right Washington could become the next US state to put a price on carbon, joining its Pacific Coast neighbor California in taking a step that the federal government has so far failed to take to address carbon pollution. The details are still to be worked out, but many experts see Washington closely following California’s lead to ensure the two state carbon pricing systems are compatible. However, each state is unique and analysts say differences in state laws could result in auction revenues in Washington being utilized differently than in the Golden State. – Read more here   You Stay CLASSY, CAR! Offset project registry Climate Action Reserve (CAR) is the winner of a CLASSY award, which honors organizations for their social impacts. The awards – presented in partnership with the United Nations Foundation – are given in eight categories, with CAR voted the winner in the environmental protection category’s climate and energy subcategory for its work supporting voluntary carbon projects. Fellow nominees included the World Wildlife Fund for its Nepal biogas project, Amazon Watch for protecting the Ecuadoran rainforest against oil development, the Paradigm Project for its distribution of clean cookstoves and other products in Kenya, and Acterra for its energy efficiency program in California. – Read more here   Kyoto & Beyond There is such a thing as a free lunch The European Commission has proposed that 175 out of 245 industry sectors continue receiving free allocations from 2015-2019 for their obligations under the European Union Emissions Trading System (EU ETS). The industries include those exposed to competitive global trade and therefore at risk of carbon leakage, meaning their businesses and associated emissions could be relocated outside the EU ETS jurisdiction if additional costs are imposed on their activities. A majority of member states must agree to the proposal before it becomes law. A vote is expected in July. – Read more here   Hidden data The total number of international offsets used in the EU ETS for 2013 was 132.8 million, down nearly 75% from 493 million in 2012. Unlike previous years, this information was presented by the European Commission in aggregate, omitting what types of offsets were used for compliance and making it impossible to verify whether China-based projects that have traditionally dominated the market are being kept out, as promised, according to Carbon Market Watch. Some market experts argue transparency about offset location is important to the ongoing reform debate driven by low permit prices, which are seen in some circles as negatively affecting the efficacy of the EU ETS. – Read more from Bloomberg here – Read more from Carbon Market Watch here   Global Policy Update Upping their game Su Wei, a senior climate official with China’s National Development and Reform Commission, said the countryis making plans to expand the number of provinces participating in pilot emissions trading systems (ETS). Beijing and Tianjin could link their existing markets and be joined by Hebei, a province with one of the highest levels of emissions, as well as the provinces of Inner Mongolia and Shanxi. The manufacturing provinces of Jiangsu and Zhejiang could join Shanghai’s current ETS, while Guangxi and Hainan may link with the Guangdong ETS. Officials previously stated they intend to announce an initial draft plan for a national ETS as early as October. China has committed to reduce its GHG intensity by 40% to 45% from 2005 levels by 2020. – Read more here   Drafting REDD into service India has released a draft national policy on REDD+ that aims to enable local communities to receive financial incentives for forest conservation and sustainable forest management initiatives. The proposed policy could allow India REDD+ projects to access millions of dollars provided by developed countries by creating a national regulatory body, establishing policies to safeguard local community rights, and developing a mechanism to fairly channel REDD+ funds to these communities. India’s Ministry of Environment and Forests noted that forest cover in the country neutralizes 11% of its GHG emissions. But India only added three million hectares of forest from 1997 to 2007, according to its State of Forest Report. Comments can be made on the draft policy until May 27. – Read more here   A Closing Window Australian analysis firm RepuTex said the federal government could use existing legislation to implement its proposed Emissions Reduction Fund – the centerpiece of its plan to replace Australia’s carbon tax program. Developing new rules under the Carbon Farming Initiative Act that established Australia’s carbon offsets program would allow Prime Minister Tony Abbott’s administration to bypass the legislature, which has stymied his attempts to repeal the carbon tax. But offsets are likely to be scarce in the fund’s first year because the government must develop methodologies and pre-approve and register projects. Developers of land-based projects could choose to take advantage of the tax’s closing window by selling offsets at A$22 until February 2015, when companies have to pay their final carbon liabilities. – Read more here   Carbon Finance Time is money Developed countries have pledged to mobilize $100 billion in climate finance every year starting in 2020, including for the Green Climate Fund – the United Nations Framework Convention on Climate Change (UNFCCC) mechanism to fund adaptation and mitigation initiatives such as REDD+ projects. But developing countries are concerned that the ongoing debate over the potential private sector contribution to reaching that $100 billion target is delaying the flow of public dollars for climate initiatives, according to Adis Dzebo of the Stockholm Environment Institute and Pieter Pauw of the German Development Institute. Developed countries have a responsibility to provide public dollars, particularly for adaptation, where private -sector engagement may be more limited, they argued. – Read more here   Passing carbon notes China launched its first carbon-linked financial product, a debt note linked to the performance of carbon offsets on the Shenzhen Emissions Exchange. On offer are 1 billion yuan (US $161 million) of five-year notes. Unlike direct trading in carbon permits, the debt notes offer a steadier return over the five-year period and are seen as more attractive to institutional investors. The notes were issued by a unit of China General Nuclear Power Group and underwritten by Shanghai Pudong Development Bank. Shenzhen is one of six cities and provinces currently operating pilot ETSs in China. – Read more here   Science & Technology Assessing the Damage The newly-released National Climate Assessment makes even clearer than ever that the Earth’s climate is changing in dangerous ways and that the United States is already feeling the consequences of these changes. The report details the effects of climate change on different geographic regions and segments of the US economy. It documents recent increases in the factors that jeopardize forests and agriculture such as floods, drought, wildfire, disease and infestations—risks projected to intensify even further in the future. – Read more here   A Dubious Record For the first time in human history, carbon dioxide (CO2) levels in the Earth’s atmosphere stayed above 400 parts per million (ppm) on average for an entire month. The month-long record set in April was documented at Hawaii’s Mauna Loa monitoring station. The same site also recorded the first measurement exceeding 400 ppm on May 9, 2013. Scientists expect CO2 concentrations to remain above 400 ppm through May or June before summer’s sequestration by plants begins to lower the level in July. Scientists estimate that a similar month-long average will be reached earlier in 2015 with year- round measurements above 400 ppm as early as 2016. – Read more here   It’s only natural (capital) The Natural Capital Coalition has released the first draft of a framework for valuing natural capital in business decision making. The coalition’s aim is to enable better measurement, management, reporting and disclosure of natural resources and ecosystem services that businesses rely on. The rationale is similar to the GHG Protocols, which harmonized measuring practices for GHG emissions. The proposed protocols build on previous efforts such as the World Business Council for Sustainable Development’s Guide to Corporate Ecosystems Valuation. After a review and consultation process, the coalition will update its framework in late 2014. – Read more here   Smoother sailing A new coating for ship hulls will prevent marine life from hitching a ride and slowing the vessels down. The resulting fuel efficiency gains will generate carbon offsets for ship owners through a methodology developed by International Paint and the Gold Standard. Emissions intensity is measured before and after application of the Intersleek coating to determine the fuel. International Paint will handle the administration of offsets and distribute the revenue annually to ship owners. A ship forfeits eligibility for offset generation if any other energy saving devices are fitted because of difficulties quantifying energy savings associated solely with the coating. As the practice becomes accepted, the organizations plan to address that limitation through further methodology development. – Read more here Forest Carbon Program Research Assistant – Ecosystem Marketplace Based in Washington, DC, the Forest Carbon Program Research Assistant will help in the development of a research product focusing on public-private partnerships for financing REDD+ projects, and support the development of the State of the Forest Carbon Markets report. The ideal candidate will have excellent writing and research skills (journalism skills a plus); strong Spanish-language speaking and writing skills; and the ability to work well in a team environment, but also with minimal management. This is a three-month position, paid hourly. – Read more here   Forestry Senior Program Associate – American Carbon Registry Based in Sacramento, California (preferred) or Washington, DC, the Senior Program Associate will provide support on all aspects of registry management, support business development and outreach activities, and help to coordinate the development and/or approval of new quantification methodologies. A master’s degree in forestry and three to six years of experience working with forest projects in the carbon market or related fields is required. Candidates who have completed California Air Resources Board training and passed the exam in the US Forests Compliance Offset Protocol are preferred. – Read more here   Costa Rica Climate Change Advisor – Management and Engineering Technologies International Based in San José, Costa Rica, the Climate Change Advisor will work with the Government of Costa Rica to provide technical assistance on its REDD+ readiness efforts. Candidates should have a master’s degree or doctorate and five years of international experience in natural resource management, environmental science, or a related field. Ideal candidate will have experience with Geographic Information Systems and remote sensing technologies for land use change estimation and forest inventories. Fluency in Spanish is preferred. – Read more here   Senior Associate Forest Certification – Rainforest Alliance Based in Northfield, Minnesota, the Senior Associate will provide essential leadership in management and growth of Rainforest Alliance’s US forest management portfolio in the US Region. Responsibilities will encompass management and leadership, client service, and quality assurance. Preferred candidates will have an advanced degree with five to seven years of experience in forestry or a related field. – Read more here   Environment and Climate Adaptation Specialists – Management Systems International (MSI) Based in various locations, MSI seeks to build a roster of environment and climate adaptation specialists for short- and long-term assignments on upcoming US Agency for International Development initiatives. Consultants will lead and manage technical work related to a variety of donor-funded projects, including climate change programming and adaptation; biodiversity conservation; coastal, fisheries and wildlife management; wildlife trafficking; land tenure reform; and public sector management. Ideal candidates will have an advanced degree and 10 years technical experience in a relevant analytical field, with doctorate-level credentials a plus. – Read more here 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].

Click here to view this article in its original format.

Chevrolet remains one of the leading buyers of carbon offsets in the voluntary market as it closes in on a commitment to reduce its emissions by up to eight million tonnes of carbon. But David Tulauskas, director of sustainability for General Motors (GM), Chevrolet’s parent company, says the road does not end there.

19 May 2014 | May 19, 2014 | In 2010, General Motors’ Chevrolet division embarked on a plan to revolutionize the automobile market by launching the Chevrolet Volt plug-in hybrid electric vehicle. But at the same time, officials knew that to gain traction with environmentally-conscious auto buyers, the company would have to do a lot of work to shed its reputation as a mass producer of gas-guzzling vehicles such as the Hummer.

One way the company chose to revamp its image was to announce a $40 million plan to voluntarily reduce its emissions by up to eight million tonnes of carbon by 2015 – a reduction equal to the US emissions caused by driving the 1.9 million vehicles Chevrolet sold in the United States during that year. The automaker is closing in on that goal, with commitments from carbon projects to deliver nearly 7.7 million tonnes – 3.6 million tonnes of which have already been delivered and retired – of emissions reductions. The company is continuing to assess the benefits of the program and evaluate next steps.

But even as it approaches its target, Chevrolet hopes to build on its offsetting program, partly by promoting widespread adoption of a new methodology financed by the automaker that aims to reward US-based colleges and universities for renewable energy and energy efficiency projects. That program began with Valencia College and Ball State University in February, and it added the University of Illinois last week.

Ahead of next week’s release of Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, David Tulauskas, director of sustainability for General Motors (GM), Chevrolet’s parent company, spoke to Gloria Gonzalez about the challenges and opportunities going forward for the voluntary market and what Chevy officials hope will be the legacy of the automaker’s carbon reduction initiative.

Gloria Gonzalez: How would you describe Chevrolet’s offset program and its relationship with the voluntary carbon markets?

David Tulauskas: We continue to remain very active in the voluntary market. We’ve been actively looking at projects in early stages that we can be an early supporter of.

GG: What is the predominant project type in Chevrolet’s offset portfolio?

DT: We have everything from the traditional carbon credits such as wind and landfill gas to coal methane flaring to Idleair – a service provided to long-haul truckers to enable them to turn off rigs when they stop for breaks and sleeping. Our goal is to really get as diverse a portfolio as possible that can impact many communities across America in many different ways.

GG: Is Chevrolet’s offsetting all done on a voluntary basis or is any of it done for compliance reasons (to surrender offsets for compliance as part of a regulated carbon market)?

DT: This is purely voluntary. We announced this project in late 2010 about the same time as we came out with the Chevrolet Volt, and that was no coincidence. People who buy electric vehicles, people who are educated and articulate about carbon and the carbon market – we didn’t have to do much study to know that those people were probably not considering Chevrolet products. This was an opportunity to engage a key market – the United States – on a very important issue to General Motors and Chevrolet in particular as it initiated an aggressive launch of an innovative electrified vehicle. It’s important that Chevrolet changes peoples’ perception about the brand and it’s important as we engage consumers that are passionate about issues that we’re passionate about. But if we’re going to change peoples’ perception, we can’t just do it the traditional way and that was the thinking behind this carbon reduction initiative. We needed to do something completely different, something that no other off-taker has done, and engage a consumer that’s not considering us today. That’s why it was a significant financial contribution and a multi-year commitment to do this.

GG: What do you see as the key challenges and opportunities in the voluntary market?

DT: Raising the visibility and awareness of the market is more of a short-term challenge. The longer-term challenge for the voluntary market is understanding its place in the world of climate-related, carbon-related policy. You’ve got California cap and trade. You’ve got other states looking at adopting that, following a similar approach. And then hopefully we’ll have a US economy-wide policy at some point in the future. And I think there’s just a question of how and what role will the voluntary market play when larger, more economy-wide policies come into effect. But in the short term, it’s really important that more people are educated about it and more corporations are engaged.

The voluntary market in the US has a great story to tell of having real impact in communities and businesses and overall carbon emissions reduced. I think those should be celebrated. That can address the challenge of visibility and understanding. I think the voluntary market should take advantage of the opportunity to collaborate with more organizations in more unique collaborations.

GG: Like the partnership that led to the work you’re doing with US-based colleges and universities?

DT: I think what we did between the Verified Carbon Standard, the US Green Building Council, Valencia College and Ball State University is a real unique collaboration that may provide an example of what the voluntary market in general should be encouraging.

In February, these organizations teamed up on a program that helps US schools
harness carbon markets to develop renewable energy and energy efficiency projects.
Click here to read more.

GG: What are your expectations for growing the program?

DT: We’ve signed three other universities to (memorandums of understanding) and are working on final contracts and communications plans. We’re on track to retire close to 500,000 tonnes through the program. We’re looking at ways to increase the visibility of this methodology, so that as Chevrolet achieves its goals, hopefully there are other buyers for those institutions for those particular types of carbon credits.

We’re working on a few things that could continue the legacy of this carbon reduction initiative. We think this methodology is an important aspect of this initiative and could become the key legacy that’s left. But we still have ways to go. We’re looking at ways to build upon it.

GG: How difficult was it to put together this type of partnership given that it was so different from what had been previously done in the voluntary markets?

DT: It was a big investment in time, but it was absolutely worth it. It took longer than we anticipated it, but we stuck with it, as did our partners. There was a lot of learning that we all went through, but I can tell you from GM’s perspective, we’d do it again in a heartbeat.

15 May 2014 | Last year, a study unveiled in Nature made a seemingly simple connection: switching away from fossil fuels can reduce air pollution and save lives. Instead of rehashing familiar ground, the research took this proposition one step further. Using a statistic called the “Value of Statistical Life,” which measured how much individuals would pay to reduce fatal risks, the study found that every tonne of CO2 not emitted was worth an average $50-$380. In this way, switching away from fossil fuels not only saves lives – it can also save money.

When The Gold Standard came across this study, they immediately thought of the applications to their work, given that carbon mitigation projects seeking The Gold Standard certification must demonstrate their “co-benefits” – the additional environmental, social (e.g. health), or economic benefits accompanying a carbon project. In fact, The Gold Standard was created over ten years ago in response to the Clean Development Mechanism’s lack of sustainable development criteria for certifying international carbon offset projects under its jurisdiction.

Fast forward to today, as the Gold Standard just unveiled their new study The Real Value of Robust Climate Action: Impact Investment far Greater than Previously Understood. The study, published by NetBalance and commissioned by the Gold Standard, examined 109 projects certified to the standard – and found that their co-benefits contributed an estimated $686 million in additional annual value tied to their environmental, economic and social initiatives.

This is a conservative estimate, explains the Director of Net Balance Neil Salisbury. “It is highly likely the additional 800 projects in the Gold Standard pipeline would present similar benefits, valuing The Gold Standard’s impact far higher.” Additionally, many projects have been structured to last multiple years – potentially snowballing the effect of any co-benefits.

Imaginary Money or Real Results?

In last year’s State of the Voluntary Carbon Market 2013 report by Forest Trends’ Ecosystem Marketplace, the Gold Standard commanded 14% of the overall market share among third-party offset project standards and earned prices that were among the market’s highest, at an average $10 per tonne of carbon dioxide equivalent (tCO2e).

Some offset market participants point to this level of uptake as evidence that buyers already recognize and value carbon projects with demonstrated co-benefits. However, these benefits have usually been considered “secondary” – in part, because carbon markets focus on, well, carbon. Yet many voluntary buyers approach carbon markets for a different reason: the monitoring, reporting and verification (MRV) components make it easy to measure specific outcomes of a project.

“People don’t give money for good causes anymore – they give money for results,” explained Thomas Vellacott, the CEO of WWF Switzerland, at this year’s Gold Standard conference, The Future of Results Based Finance: Measuring Environment and Social Impacts Beyond Carbon, where the report was first unveiled. He and other panelists spoke of the need for results-based finance (a.k.a. “payments for performance”) to extent to biodiversity and other co-benefits.

Valuing Benefits Before Carbon

At the same event, Vallacot went a step further to speak to WWF’s own experience with co-benefits laden carbon offset projects. “Why is ‘the panda’ interested in the Gold Standard?” Vellacott asked, referring to WWF’s funding of the study. “Well, the Mamize Project helps the Great Pandas – maybe that makes it more self-evident.”

He refers to the fact that the Firewood Saving Cookstoves project is located in the Mamize Nature Reserve, which encompasses the southern edge of the Great Panda’s habitat. In its efforts to save the pandas, WWF realized that a primary cause of deforestation was due to nearby communities collecting firewood for cooking and heating. On average, these people would spend three months finding wood to heat their inefficient stoves and experienced negative health effects from associated indoor air pollution.

Enter the Firewood Saving Cookstoves – a technology used throughout rural China, but with prohibitive initial costs. WWF-Switzerland provides the outside financial support, so locals can upgrade their stoves. The new installations can save as much as 50-70% in firewood use, which it in turn hopes will improve health, enhance livelihoods, and conserve biodiversity.

The Mamize Project is one of the four case studies found in the study’s appendix; together, they provide greater detail on the methodology for analyzing and concluding the cost-benefit figures found in the report. Ultimately, Vellacott says he would like to see the Gold Standard developing methodologies that certify biodiversity, water or other approaches independently of carbon offsets.

Luckily, he found support at the Gold Standard conference. Speakers and employees made it clear that they are giving primary consideration to carbon’s co-benefits. Within the Gold Standard’s Land Use and Forestry (LUF) team, Peiter van Midwoud, Director of Business Development Use & Forests, indicated that they are working to develop standards specifically for water and biodiversity ecosystem services into the next year.

“That’s how we envision the future,” added colleague Moritz Vohrer, “You have a landscape with different activities but also with different ecosystem values.”

Next Steps

This study offers a first attempt at identifying outcomes, measuring results, and defining proxies so that intangible co-benefits can also be valued. “It is the beginning of an iterative process. We hope that we can build upon this work as a first step” explains Tanya Petersen, ‎Director of Marketing and Communications at The Gold Standard. The report recognizes it is not without its flaws – the Executive Summary has two pages detailing researchers’ key challenges and limitations – but hopes this first attempt will encourage greater dialogue about these issues. In particular, the standard hopes this study will help shape discourse leading up to the United Nations Convention on Climate Change 21st Conference of Parties (“COP21”) in Paris in spring 2015, which many anticipate will adopt a focus on measuring both the costs and benefits of carbon mitigation.

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

12 May 2014 | The Brazilian state of Acre is “the best in the world when it comes to subnational jurisdictions working on REDD, (Reduction of Emissions from Deforestation or Degradation of forests),” Brian McFarland of the Carbon Fund told Ecosystem Marketplace. The state’s 2010 payment for ecosystem services (PES) law, known as SISA from the Portuguese acronym, aims to place economic value on forests, biodiversity, water, soil, climate – and even traditional knowledge – to create mechanisms to invest in ecosystem and cultural survival. The forest carbon aspect of the law is the furthest along, and in 2012 Acre partnered with the Verified Carbon Standard (VCS) to pilot their Jurisdictional Nesting REDD+ framework.

However, it was a long road before finance actually began to flow, especially for the rubber tappers and small farmers who constantly face competing demands. Last November, Chief Jose Maria Arara of the Arara people expressed his frustration at a workshop in Acre.

“When will PES arrive?” Zé Maria asked. “We’ve held about five different meetings…”

This year, he got his answer – at least in part. The Acre Association of Indigenous Agroforesty Agents received 3.6 million Reais (US $1.6 million) in January, and the state put up an additional 3 million Reais (US $1.35 million) in April. The funding is part of the German development bank KfW’s commitment to spend 50 million Reais (US $24.2 million) in Acre through 2018 – and it marks the German government’s first grant to a state rather than a country.

To disperse the first 1.5 million Reais this year, Acre’s government will issue a series of calls for proposals to support indigenous people’s long-term development visions, known as “life plans.” The awards will range from 50,000 to 210,000 Reais and can be used for a variety of activities, from strengthening land management practices to generating income for women. Though international REDD+ payments are based on the state’s ‘performance’ against emissions targets, Acre’s government has the leeway to distribute the funds internally based on a variety of activities consistent with the SISA law, including payments for watershed services and payments for habitat restoration. The state government believes these targeted payments will ultimately result in lower deforestation rates across its territory – and that means more REDD+ income down the road.

“We’re talking about 2.4 million hectares of forest being managed by indigenous peoples,” said Beto Borges, who heads Forest Trends’ Communities and Market Initiative, which has been working in Acre for years. “That’s 15 distinct ethnicities dispersed among 35 indigenous territories. Their traditional territories have been demarcated. They’re official. Now, the new funding from SISA will strengthen the management and conservation of their forests.”

More stories from the forest carbon markets 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].

INTERNATIONAL POLICY Passing the torch Speaking to the nearly 2,000 attendees of the Center for International Forestry Research’s (CIFOR) Forests Asia Summit on May 5, Susilo Bambang Yudhoyono, the outgoing President of Indonesia, called on his successor to continue the moratorium on deforestation he declared in 2011. Indonesia reduced its deforestation rate from 1.2 million hectares annually between 2003 and 2006 to 450,600 hectares annually between 2011 and 2013 under the policy, he said, avoiding the emission of 211 million tonnes of carbon dioxide. However, more work remains to be done. Illegal logging and slash-and-burn practices contributed to the recent debilitating fires in Riau province, and more than a hundred individuals and a dozen corporations are currently facing court trials for related crimes. NATIONAL STRATEGY AND CAPACITY All smoke and mirrors? Australia’s Carbon Farming Initiative (CFI) will be folded into the Emissions Reduction Fund partly to create new opportunities for land-based carbon projects, perhaps including offsets developed under a proposed methodology that would allow soil carbon sequestration projects in grazing systems. The CFI announcement was made in an April white paper outlining the details of the fund, which the federal government sees as the centerpiece of its plan to repeal and replace the country’s carbon tax. However, the Labor Party’s Shadow Environment Minister Mark Butler said the plan was “nothing more than smoke and mirrors” because of the lack of funding certainty in future years. CFI offsets can be used for compliance under the carbon tax until February 2015. Drafting REDD into service India has released a draft national policy on REDD+ that aims to enable local communities to receive financial incentives for forest conservation and sustainable forest management initiatives. The proposed policy could allow India REDD+ projects to access millions of dollars provided by developed countries by creating a national regulatory body, establishing policies to safeguard local community rights, and developing a mechanism to fairly channel REDD+ funds to these communities. India’s Ministry of Environment and Forests noted that forest cover in the country neutralizes 11% of its greenhouse gas (GHG) emissions. But India only added three million hectares of forest from 1997 to 2007, according to its State of Forest Report. Comments can be made on the draft policy until May 27. PROJECT DEVELOPMENT Plan Vivo looking lively After a relatively slow year of project development in 2013, with only two projects added to its pipeline, Plan Vivo, a standard for payment for ecosystem services projects, has already approved seven new Project Information Notes in the first quarter of 2014. Among these are the standard’s first non-forest carbon project, located in Mongolia, through which the University of Leicester and the Mongolian Society for Range Management will work with herders to conserve threatened grasslands. Another proposed project called ‘Two Worlds – One Bird‘ will finance habitat restoration for the Bicknell Thrush, a bird that migrates between the Dominican Republic and New York in the United States. Project activities will include reforestation in both countries. FINANCE AND ECONOMICS You snooze, you lose Pakistan has failed to sign a formal agreement worth $3.8 million with the World Bank’s Forest Carbon Partnership Facility’s (FCPF) Readiness Fund by a March 31 deadline. The FCPF assists developing countries through compensation for REDD+ activities, including conservation, sustainable management and enhancement of forest carbon stocks. Pakistan was one of eight new countries to be selected from 27 that competed for the funds in December 2013. A pledge of $100 million to the fund from Norway allowed new entrants into the program, including Bhutan, Burkina Faso, Cote d’lvoire, Fiji, Dominican Republic, Nigeria and Togo, aside from Pakistan. SCIENCE AND TECHNOLOGY Houston, we have a problem Since 2011, the National Aeronautics and Space Administration (NASA) has been monitoring forest loss using a global imaging satellite called MODIS (Moderate Resolution Imaging Spectroradiometer). So far in 2014, Bolivia, Malaysia and Cambodia have recorded some of the worst losses, and NASA officials suspect the cause is human activity. NASA releases deforestation reports quarterly that can assist conservationists and officials in detecting illegal logging or burning. The Quarterly Indicator of Cover Change identifies land areas that have lost at least 40% of their green vegetation cover annually. Reverse the carbon curse The latest Intergovernmental Panel on Climate Change (IPCC) report describes the actions that people need to take to maintain a safe and stable global climate, including carbon capture and storage (CCS) efforts to keep global temperatures from rising more than 2 °C. But trees remain the only CCS “technology” that can deliver on a meaningful scale. Jonah Busch of the Center for Global Development dissects the latest IPCC report and offers his own meta-analysis. “Not many models project that it’s possible to limit warming to +2 °C without CCS technology, but those that do require not only stopping deforestation altogether, but reversing it to create a massive terrestrial carbon sink of regrowing forest vegetation by 2030,” he wrote. Putting the trees out to pasture A recent study from the University of California, Berkley finds that if Brazil subsidized more productive use of pastureland and taxed less sustainable practices, deforestation rates in the country could be cut by half (or 25% of all global GHG emissions). Recommended practices include rotating where animals graze, planting better grasses more frequently, and amending the soil to unlock more nutrients. These practices result in doubling productivity for a given land area, potentially reducing pressure to clear more forest for pasture. “These practices are already used commercially on some ranches in Brazil, but they’re not yet cost-competitive because of higher upfront costs, so subsidies can provide a needed boost to make the investment worthwhile,” said study lead author Avery Cohn. HUMAN DIMENSION What not to wear Major clothing brands H&M, Zara and Stella McCartney recently announced that, within three years, they will find alternatives to the viscose and rayon fabrics that may be sourced from endangered or ancient forests. Straw and recycled fabrics are possible substitutes for fabrics made from dissolvable pulp. H&M’s environmental sustainability manager, Henrik Lampa, said that prior to working with non-profit Canopy on the issue, company officials hadn’t been aware that their viscose and rayon might be driving deforestation. “The sustainability issue is a big learning curve for fashion companies. Consumers are expecting us to make good choices for them – and yet we can only make good decisions with good awareness of what is going into our products,” he said. No more (forest) tears From mouthwash to baby powder to Band-Aids, you probably have your medicine cabinet well-stocked with Johnson & Johnson (J&J) products – and, by association, palm oil. As of May 1, the personal care products company has committed to a new, comprehensive palm oil sourcing policy that includes no conversion of high conservation value areas, high carbon stock forests or peatlands, as well as social criteria such as respecting the land rights of indigenous peoples. Implementing the sourcing policy will not be straightforward, since most of the palm oil J&J buys is in a derivative form that doesn’t come directly from the plantation. But NGO The Forest Trust says that J&J is eager to take on the challenge Not fit for man or beast? Between 1990 and 2010, Zimbabwe lost nearly 30% of its forest cover – an alarming average of 327,000 hectares were felled per year. This destruction of habitat is at least in part to blame in the apparent spike in human-wildlife interaction in recent years. “If the lions are not eating our livestock, they are trying to eat us,” Zimbabwean villager Donotio Nyoni told Reuters. Organizations such as Carbon Green Africa are trying to change the financial incentives around forest conversion by developing REDD+ projects, but forests have stiff competition against the lucrative tobacco and timber industries and smallholders’ need for fuelwood. Lions, cheetahs, hyenas and buffalos may continue to be displaced. STANDARDS AND METHODOLOGY All risks being equal Since the launch of California’s cap-and-trade program, buyers of forest carbon offsets have dodged a bullet faced by purchasers of other types of compliance offsets: the invalidation risk that could force them to replace problematic offsets. But the risk is one that all California offset buyers will soon have to bear as regulators approved a change shifting the invalidation risk for forestry offsets away from forest owners to the buyers. The change – designed to ensure consistency – was approved by the California Air Resources Board as part of a package of amendments that will become effective on July 1. The Sixth Sense A new tool developed by Terra Global Capital could allow project developers to use remote sensing instead of traditional ground-based forest inventory plots to estimate forest carbon pools. The remote sensing biomass measurement tool could help mitigate the challenges in estimating Aboveground Live Forest Biomass through a combination of remote sensing data and field measurements. This tool is designed to be used with VCS methodologies in the Agriculture, Forestry, and Other Land Use arena. The methodology is open for public comment until May 24. Technically speaking The UNFCCC Secretariat has published a technical paper on land use, land-use change and forestry (LULUCF) under the Clean Development Mechanism (CDM). The paper explores options for more possible LULUCF activities and alternative approaches to address the risk of non-permanence under the CDM, as well as their implications for validation, monitoring and verification of projects under the CDM. PUBLICATIONS Perception is nothing The ‘gender debate’ in forest communities has seesawed from pre-1970s perceptions that men were the main contributors to family income to the post-1970s view that overemphasized women’s role in collecting forest products. An analysis of forest and rural livelihoods covering 8,000 households in 24 developing countries twists the assumptions again, finding that men and women contribute almost equally to the household income from unprocessed forest products. However, the study also shows considerable regional variability. In Latin America, men bring in about seven times more income from forest projects such as Brazil nuts than women. In Africa, “women tend to dominate,” said Terry Sunderland, a principal scientist with CIFOR. Some pain, little gain A review of REDD+ pilot projects in Nepal found that community forest user groups received little overall gain from these projects. There were some noticeable benefits, including better control over forest fires, but local groups had to make sacrifices to maximize the carbon offsets developed under the projects, such as cutting back the amount of wood they would normally use. “REDD+ is not a poverty reduction strategy; it is for reduction of emissions,” said Bhaskar Singh Karky, resource economist at the International Centre for Integrated Mountain Development. “But given our context, the drivers of deforestation and forest degradation stem from livelihoods needs. We have to enhance the livelihoods of forest dependent populations to prevent it.” JOBS Forest Carbon Program Research Assistant – Ecosystem Marketplace Based in Washington, DC, the Forest Carbon Program Research Assistant will help in the development of a research product focusing on public-private partnerships for financing REDD+ projects, and support the development of the State of the Forest Carbon Markets report. The ideal candidate will have excellent writing and research skills (journalism skills a plus); strong Spanish-language speaking and writing skills; and the ability to work well in a team environment, but also with minimal management. This is a three-month position, paid hourly. – Read more about the position here Program Associate – Forest Trends’ Katoomba Incubator Based in Washington, DC, the Program Associate will support the development of pilot payment for ecosystem services projects in Latin America, Africa and Asia under the Katoomba Incubator. The successful candidate will have excellent analytical, research and time management skills; demonstrated interest in valuing ecosystem services; intercultural experience and language proficiency in Spanish, Portuguese or Chinese; and the capacity for extended travel. A master’s degree and/or experience with Geographic Information Systems, forest carbon standards, hydrology or forestry are highly desirable. – Read more about the position here Senior Ecological Economist and Team Leader – Asian Development Bank Based in the Philippines, the Senior Ecological Economist and Team Leader will review and synthesize methods and tools for ecosystem service valuation and REDD+ and analyze barriers, constraints and opportunities for their wider adoption in Asia and the Pacific, including potential entry points for the Asian Development Bank. The successful candidate will have a master’s degree in environmental or ecological economics and at least 10 years of experience related to PES or carbon finance; experience in Asia and the Pacific is highly desirable. – Read more about the position here Malawi REDD+ Advisor – US Forest Service International Programs Based in Lilongwe, Malawi, the REDD+ Advisor will advise the Department of Forestry in convening and coordinating governance structures of the Malawi REDD+ Program and lead coordination of REDD+ activities in Malawi. The successful candidate will have a master’s degree in natural resource management or a related field; at least five years of international work experience, preferably related to REDD+; experience living and working in Africa; and experience in program management and monitoring. – Read more about the position here Product Manager Fairtrade Certification – FLO-CERT Based in Bonn, Germany, the Product Manager will develop, implement and drive FLO-CERT’s strategy for its core Fairtrade service, representing FLO-CERT at industry events and driving business development activities. The ideal candidate will have at least five years of work experience in product management, a background in certification, and extensive know-how about the Fairtrade core services. Advanced language skills in German and/or Spanish would be a plus, as would experience with other schemes such as Rainforest Alliance or Utz Certified. – 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].

Click here to read this article in its original format.

12 March 2014 | Calen May-Tobin recently confessed to using Old Spice since he was 15, and he says that isn’t the worst of his transgressions.

“On a bad day nothing cheers me up quite like a bowl (or six) of Lucky Charms or Cinnamon Toast Crunch,” he wrote in a recent blog post for the Union of Concerned Scientists (UCS). “(A)nd seeing a Taco Bell sign or McDonald’s golden arches on a long car trip never fails to reinvigorate me.”

But those products, he points out, contain palm oil, which often comes from carbon-rich peat swamps. Draining those swamps pumps hundreds of millions of tons of carbon dioxide and methane into the atmosphere every year, and that accelerates climate change. Some of the world’s largest private conservation efforts, like the Rimba Raya REDD Project, are devoted to reversing that trend, and the Indonesian government has stepped up with support as well, but those efforts will fail if the global economy doesn’t wake up to the challenge.

That’s where May-Tobin comes in. He’s a policy analyst with UCS’s Tropical Forest and Climate Initiative, and he’s been tracking the small but influential gaggle of consumer-facing companies that vowed to source palm oil from degraded lands instead of from peat swamps. The result is Donuts, Deodorant, Deforestation, a scorecard that grades 30 top consumer companies in the fast food, personal care, and packaged food sectors.

Published last week, the scorecard shows that while some companies are at least coming clean on their impact, most are keeping mum, and even those who have come clean haven’t yet reduced their impact enough to make a difference.

Out of ten fast food companies, for example, only two – McDonald’s and Subway – qualified to even receive points on the scorecard, and both scored quite low. Still, he gives them credit for at least acknowledging there is a problem and promising to take action – unlike the other eight.

Companies that make personal-care products scored higher, but only one of them – L’Oreal – had become peat-free and only two – L’Oreal and Reckitt Benckiser – had committed to letting their supplies become traceable.

Packaged food companies scored the highest, with four out of ten – namely, Kellogg’s,  Mondelez,  Nestlé,  and Unilever – committing to both purge their supply chains of palm oil that led to deforestation or peat depletion and let their supplies be traced.

Now, he says, it’s up to consumers to make sure those promises are kept.

“Even those companies that have made strong commitments…still have a long road ahead of them,” May-Tobin concludes. “Commitments are only the first step, and are only as good as the paper they’re printed on. The real change takes place when companies act on their commitments and put them into practice.”

Reason For Optimism

May-Tobin’s colleague Doug Boucher says there are plenty of reason to believe those commitments will, in fact, be put into practice. He is UCS’s senior scientist and director of climate research and analysis, and he believes that the shift in emphasis from palm-oil producers to consumer-facing companies like these has pushed the sector towards eliminating palm-driven deforestation.

“Until recently, the palm oil producers, the global companies that produce palm oil – not the companies that used that palm oil in their products, which is the focus on the scorecard – were hiding behind the Roundtable on Sustainable Palm Oil rather than addressing deforestation head on,” he points out. “But, since December, two major suppliers have committed to producing deforestation-free and peat-free palm oil. These two suppliers, Wilmar and Golden Agri-Resource (GAR), together sell 55 percent of the world’s palm oil.”

None of this means consumer companies are off the hook, and neither are consumers. Sustainably-harvested palm oil is more expensive in the short-term, but if we don’t pay a little bit extra now, we’ll pay a lot more later.

Source: www.ucsusa.org/palmoilscorecard

Additional resources

Clean cookstoves save lives and forests. They’re also increasingly being paid for by carbon finance, but carbon projects with their own up-front costs. Now the Clean Cooking Loan Fund wants to lower the barrier to entry by financing the certification costs of cookstove projects using carbon finance. The deadline is May 1. Here’s who qualifies and how to apply.

10 April 2014 | The Global Alliance for Clean Cookstoves distributed 8.2 million cookstoves in 2012, and 4.1 million of them were at least partly paid for with carbon finance, according to a report that Ecosystem Marketplace prepared for the Alliance last year.

To keep that momentum going, the Alliance has teamed up with the Gold Standard Foundation and Nexus Carbon For Development, which is a cooperative of different aid organizations, to provide a vehicle for loaning money for early-stage carbon projects that distribute clean cookstoves. The funds are earmarked to cover certification costs only.

“The Fund is designed to take on financial risk associated with the carbon process by offering a loan to project developers,” said Marion Verles, executive director of Nexus. “It will not purchase emission-reductions, but these will be used as collateral to the loan.”

Clean cookstove projects often want for funding between the 1-2 years of registering their project and getting their first carbon credit revenues.

Money will be distributed through the Clean Cooking Loan Fund, which is a not-for-profit loan created by the Alliance, Gold Standard, and Nexus, which is acting as fund manager.

What Activities Will be Covered?

The CCLF’s call guide says the program is designed to cover general certification costs, “including, but not limited to, screening costs, validation, registration, verification and issuance fees, any costs related to studies establishing baselines or designing monitoring systems.” It also identifies specific stakeholder inclusion activities that will be covered for Gold Standard projects.

It further explicitly excludes marketing costs, carbon transaction costs, and general operating costs except for those stakeholder inclusion activities that were explicitly included.

How to Apply

Applications can be made online by clicking here, and eligibility requirements can be found in the call guide.

Further questions can be addressed to the Nexus Secretariat at [email protected], but but only until noon Singapore time on Monday, April 14. For best results, write “CCLF ENQUIRY” in the subject header.

Additional resources

8 April 2014 | Brazilian company Natura caused quite a stir in the global carbon markets in 2013 when it engaged in a first-of-its-kind deal to purchase 120,000 tons of carbon offsets from a project developed by the Paiter-Suruí­ indigenous community in the Amazon under the Verified Carbon Standard’s Reduced Emissions from Deforestation and forest Degradation (REDD) methodology.

In 2007, the cosmetics giant launched its corporate carbon neutral program, which now supports 15 carbon offset projects in Brazil and one in Colombia, Mariama Vendramini told attendees of the Navigating the American Carbon World conference in San Francisco. Vendramini is the commercial and financial director for Biofilica, which provides environmental services and develops REDD offsets for Brazilian companies. She estimated the total number of offsets voluntarily purchased by the company at 1.5 million tonnes of carbon dioxide equivalent (MtCO2e).

It turns out that Natura is not alone in terms of Brazilian companies looking to voluntarily offset their greenhouse gas (GHG) emissions. In October 2013, Ticket Car launched a pilot program to allow its clients to manage and offset their vehicle emissions at about 1,500 tonnes of carbon dioxide equivalent (tCO2e) per year. Brazilian banking giant Santander also launched a pilot project to allow its clients who purchased cars to offset their emissions, with the pilot project leading to demand of about 70, 000 tCO2e in six months.

Click here to continue reading this story on the Forest Carbon Portal.

REDD finance is one of many pay-for-performance mechanisms designed to jump-start climate-safe agriculture across the developing world, but it’s emerging slowly and uncertainly. REDD+ Bonds, however, can help states and other sub-national jurisdictions harness tomorrow’s funding today. Here’s how.

31 March 2014 | Norway, Germany, the UK and the US drew headlines at December climate talks in Warsaw last year when they unveiled a new financing mechanism designed to help developing countries save endangered rainforests.

Their mechanism kicks in over a period of years, and it works by promoting climate-safe agriculture. Its funding will be contingent on tons of Reduced Emissions from Deforestation and forest Degradation, which technically makes it a “REDD+” initiative. Its sponsors, however, have made it abundantly clear that it’s a development mechanism and not an offsetting mechanism. That means it won’t be able to harvest pools of private funding from companies looking to reduce their carbon footprints.

It is, however, typical of the “payments for performance” that governments seem willing to endorse without reservations, and that makes it something you can take to the banks, meaning borrow against. That’s something you can’t say about offsetting – at least not at the regional level.

Because such payments for performance are more certain than offsetting, they present an opportunity for regions in tropical rainforest countries that have made progress in reducing rates of deforestation to lock in that progress now rather than risk backsliding.

Brazil’s Quandary

Brazil has been leading the way with an ambitious target to reduce deforestation by 80% while still increasing agriculture production. Both the national government and states such as Mato Grosso and Acre have been improving regulation and targeting a portion of public agriculture finance toward more sustainable production practices.

Those efforts led to six years of reduced deforestation until the country relapsed last year – some say because of short-term financial pressures.

The Power of Now

Making the investments necessary to improve agriculture productivity while conserving forests across entire regions and countries is an exciting prospect but will require a great deal of capital today and cannot wait for performance payments after the meticulous readiness phase of REDD+ is complete and actual emissions reductions have been created years down the line.

This is where REDD+ Bonds can come in. In our recent report –“Jurisdictional REDD+ Bonds: Leveraging Private Finance for Forest Protection, Development, and Sustainable Agriculture Supply Chains”, we have been working on a financing structure that might address these themes and help integrate REDD+, the efforts of governments, farmers, indigenous communities, NGOs and commodity buyers and to source funding from the capital markets.

“Green Bonds are seen as important in attracting investment from institutional investors like pension funds, for capital-intensive developments such as renewable energy infrastructure. Indeed, there has been growing interest from investors, but generally only if they yield as much as and are no riskier than “plain vanilla” bonds. After all these investors have a legal responsibility to look after the funds they hold on trust for pensioners and others.

However, the hoped for investment in bonds for forest protection has thus far foundered in the absence of credible guarantees and revenue lines. Our proposal is that Jurisdictional REDD+ Bonds would have the yield and risk characteristics that investors are used to seeing in Brazilian or Colombian or other sovereign bonds. (Higher risk countries with a poor credit rating would need additional support from development finance institutions such as the World Bank to provide some protection to investors).

The critical missing piece in the jigsaw, we believe, is to link the emerging trend for donor government ‘payment for performance’ to bond cash flows.

The Finance

In our paper we illustrate how payments of $5 per tonne of carbon dioxide equivalent (the standard metric of the carbon market) over 10-15 years for meeting emission reduction targets versus agreed upon baseline scenarios for Brazilian states, would offset the interest rate that states would have to pay to bondholders; and could thus attract hundreds of millions of dollars in investment.

To secure the best interest rate possible we would suggest that, in a Brazilian context, the bonds be issued under a Federal/State partnership, because individual states do not have the investment-grade credit rating easily to access the international capital markets, and their ability to borrow is restricted by federal law.

This would require the federal government and the relevant state to agree on the correct split of revenues from payments for REDD+ credits, as well as the baseline, monitoring and accounting approaches. Thus state level emission reduction targets would be linked to the national REDD+ strategy.

The proceeds from bond issuance can support, upfront, the local financing mechanisms for sustainable agriculture of the kind that many forest countries are already initiating. Some of the funds could help pay for the direct costs of conservation or support for indigenous communities. And some for investment, lending and risk-reduction mechanisms for improved productivity, infrastructure or processing facilities that would themselves generate financial returns and therefore support a viable long-term funding model.

The fundamental assumption is that access to significant funds at zero or even negative interest rates would support the combined goals of increased agriculture production and reduced deforestation, and allow for countries to guarantee the return of the Bond principal to investors, just as they do for normal bond issues with more onerous market rates of interest.

With REDD+, the international community would monitor and verify reduced emission reductions generated at the ‘jurisdictional’ level. Such a framework could in time provide commodity buyers with an entire region of zero deforestation supply chains. Those states defined as territories with ‘no net forest loss’ would ultimately secure a competitive advantage in accessing markets and therefore a whole further round of investment from commodity buyers.

Relatively small donor funding, predicated on successful REDD+ outcomes, can unleash a lot of private investment – initially from bondholders, but also from local and international agriculture supply chain actors.

Financing instruments like Jurisdictional REDD+ Bonds, with an ambition to operate at scale, can harness international climate finance to support developing countries’ own efforts, then in turn link to global demand for sustainable commodities and therefore support a truly integrated landscape approach that could be transformational in overcoming costs or barriers that stand in the way of reduced deforestation, resilient ecosystems, improved livelihoods, and sustainable agriculture production.

Rupert Edwards is Senior Finance and Carbon Advisor for the Forest Trends Public Private Co-Finance Initiative. He was formerly a Managing Director of Climate Change Capital, where roles included Head of Strategy Development and Head of Portfolio Management, Carbon Finance. He can be reached at [email protected].

Additional resources

This article was originally published in the Forest Carbon Newsletter. Click here to read to read the original.

25 March 2014 | Let’s face it: Donuts are delicious. But we all know that sugary, fried goodness comes at a cost, and thanks to Donuts, Deodorant, Deforestation, a new scorecard, we now know that donuts may be bad news for forests as well as our waistlines. Published last week, the scorecard ranks fast food, personal care, and packaged food companies according to their commitments to keep deforestation-driving palm oil out of their supply chains.

Packaged food companies ranked the highest on the scorecard, with Kellogg’s, Mondolez, Nestlé, and Unilever committing to purging their supply chains of palm oil. And, facing pressure from groups such as Greenpeace and their own consciences, more companies are getting on board. Just last week, Nordic consumer goods giant Orkla promised to remove peatland destruction from its supply chain by 2017. And as of early March, Mars, the maker of M&Ms and other guilty pleasures, committed to no-deforestation sourcing and full traceability by 2015. Further upstream in the supply chain, suppliers Wilmar and Golden Agri-Resources, which together sell 55% of the world’s palm oil, have recently committed to sourcing palm that does not threaten the peat forests that sequester huge amounts of carbon.

However, as the creator of the palm scorecard, Calen May-Tobin, points out, these no-deforestation commitments are much easier said than done. Supply chains are long and winding, and altering the drivers of deforestation requires new relationships and understanding among consumers, corporations, and communities.

The nineteenth Katoomba event hosted by Ecosystem Marketplace’s parent organization Forest Trends in Iguazíº Falls, Brazil last week attempted to do just that by putting palm buyers such as Nestlé and McDonald’s in the same room with producers such as Fiagril and advocates such as Greenpeace. The event brought up questions about the effectiveness of the Roundtable on Sustainable Palm Oil, which covers 14% of palm oil worldwide, and the role of the consumer as the missing link, or perhaps the weak link, in demanding deforestation-free products.

Here in Washington D.C., we are continuing data collection for our State of the Voluntary Carbon Markets and State of the Forest Carbon Markets reports. If you either transacted carbon offsets on the voluntary market in 2013 or developed a forest or cookstove project, we would love to hear from you. Respondents can get the usual perks – including listing in our directory and inclusion of your project on the Forest Carbon Portal, if you wish. The survey will remain open until March 31.

Returning respondents may login to the survey HERE (http://survey.ecosystemmarketplace.com/carbon2014/)
And newbies can sign up HERE (http://survey.ecosystemmarketplace.com/carbon2014/users/users/add)

As always, feel free to contact Allie Goldstein at [email protected] or (+1) 202-446-1988(+1) 202-446-1988 with any questions about the survey.

—The Ecosystem Marketplace Team

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

INTERNATIONAL POLICY REDDy to play it safe? Do global efforts to pay developing countries to reduce greenhouse gas (GHG) emissions from deforestation (known as REDD) aid in the fight for community and indigenous rights, or impede it? About 100 people gathered in Washington D.C. last week for the Fifteenth Dialogue on Forests, Governance, hosted by the Rights and Resources Institute (RRI), to debate this question. Arvind Khare, Executive Director of RRI, warned against moving too quickly towards REDD if ‘safeguards’ for communities are weak and land tenure still contested. Charles Di Leva of the World Bank, on the other hand, said that the current safeguards give communities various opportunities to veto activities they don’t want to take place. “If we were to require title resolution as a prerequisite, we might be excluding communities who want to participate in REDD activities,” he said. NATIONAL STRATEGY AND CAPACITY Romance, ravioli…and carbon Their carbon market is little-known outside of Italy, but Italians transacted 144,515 tonnes of emissions reductions at a combined value of more than a million euros (almost 1.4 million US dollars) in 2012. Three public initiatives dominate demand, with a few companies, such as pasta producer Jolly Sgí¡mbaro, also offsetting emissions. The Nucleo Monitoraggio Carbonio, a stakeholder group of project developers, public administrations, brokers, and buyers, is now working on the Italian Forest Carbon Code, which will “raise the quality bar of the voluntary carbon market in Italy,” according to Lucio Brotto, who has been deeply involved in the process. Read the full interview with Brotto on the Forest Carbon Portal. West Sumatra on auto pilot West Sumatra is joining Indonesia’s REDD+ program as a pilot province, unlocking financing to support projects and initiatives in an effort to reduce the steady decline of forest cover in the region, which fell 19% over a 20-year period due to factors such as corruption and ineffective forest management. “West Sumatra has shown the same vision and commitment to reducing deforestation,” said Heru Prasetyo, head of the REDD+ Agency. “This is in line with Indonesia’s commitment to reduce greenhouse gas emissions up to 41% by 2020.” Zimbabwe going public? Although Zimbabwe loses about 50 million trees per year, the country has so far not been able to tap into carbon finance to support public REDD+ projects within its borders. Zimbabwe is now working on building the infrastructure and improving its readiness to implement REDD+ projects, including engaging in technical studies of the forests and establishing a REDD+ office within the commission to focus specifically on these issues. Meanwhile, the Carbon Green Africa REDD+ project in Kariba, a private REDD+ project, could generate an estimated $406 million over three decades if the offsets are sold at average prices. Field tripping A recent conference held in the Philippines focused on advancing REDD+ in the Asia-Pacific region. Stakeholders from several countries talked about avoiding unintended social and environmental risks related to REDD+, strengthening governance and achieving co-benefits for biodiversity conservation and improved livelihood. They also participated in a field trip to the ancestral domain of the Aeta Ambala tribe at Mount Santa Rita for a close-up view of a conservation agreement in action. The conference participants agreed to work together to share experiences and build the region’s capacity to participate in REDD+ initiatives. Russia keeps forest watch Russia is thinking about launching a domestic carbon market to reduce its GHG emissions, but such a market may not be ready by 2020, Oleg Shamanov, the Russian Federation’s climate negotiator, said on the sidelines of the international climate talks in Bonn, Germany. The country wants to limit emissions in 2020 to 75% of 1990 levels. Russia’s forests are the largest in the world but road-building, logging and wildfires have increasingly degraded them, so the Russian government has begun using data provided by Global Forest Watch Russia – a partnership between the World Resources Institute and Russian forest conservation groups – to combat these activities. PROJECT DEVELOPMENT Thinking big in Colombia International development company Chemonics International last week awarded ecoPartners, ClearSky, and Offsetters a second contract to develop project documents for Colombia’s BioREDD program. Under Phase Two, the team will be responsible for creating Project Design Documents for four additional REDD+ projects in Colombia, to be verified by both the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity Standard. The BioREDD+ program in Colombia will run from 2011 through 2014, during which $27.8 million will be invested in biodiversity, REDD, and climate change adaptation. In terms of REDD, the goals are to establish a total of eight financed REDD projects covering a million hectares, as well as a carbon baseline for the Pacific and Amazon regions. Grow rice, not methane The American Carbon Registry (ACR) last week unveiled the first reduced-methane rice project, which will avoid the emission of 6,700 tonnes of carbon dioxide (tCO2e) over 5,000 acres in California. The same day, ACR announced the expansion of its rice cultivation protocol beyond California to the Mid-South states, including the Mississippi River Delta where much of the rice in the United States is grown. Following the lead of voluntary standards, California is ever so slowly inching toward acceptance of the first agricultural-based offsets into its cap-and-trade program. Regulators also held a workshop last week on a protocol that would incentivize dry seeding or early drainage of rice fields, therefore reducing methane emissions. The protocol will go up for vote in September and could go into effect in January 2015. FINANCE AND ECONOMICS Hey, can you spare $30 billion dollars? Ecosystem services provided by tropical forests are estimated at around $6,120 per hectare per year, but total yearly forest loss still averaged 13 million hectares between 2000 and 2010. Investing $30 billion per year in REDD+ programs could accelerate the transition to a green economy and ensure that REDD+ becomes an important source of income for poor rural communities, according to a new report by the International Resource Panel and the UN REDD Programme. And it’s a drop in the bucket compared to the $480 billion paid in annual global fossil fuel subsidies. But because deforestation is driven by consumption patterns in virtually every sector of the economy, REDD+ must be integrated into all economic planning processes, the report argues. Cropping up together A new analysis by consulting firm Trucost compared the value per hectare of monoculture soybean and palm oil cultivation in Brazil to agroforestry – and the results are striking. Growing palm alongside other crops such as cocoa, passion fruit, pepper, and bananas yielded an average of $176,044 per hectare – three times higher than the per-hectare value of palm monocultures. For soybeans, agroforestry techniques yielded 11% more value per hectare ($488 versus $441). Corporate sponsors of the study included seed giant Monsanto and Brazilian beauty company Natura Cosméticos. The natural capital analysis took into account GHG emissions from fertilizer use; provisioning services such as food, timber, and water; and regulating services such as climate stability. SCIENCE AND TECHNOLOGY Till tree death do us part The Amazon’s carbon balance is a matter of life and death: living trees take carbon dioxide (CO2) out of the air as they grow, and dead trees put the GHG back into the air as they decompose. A new NASA-led study published in Nature Communications has confirmed that natural forests in the Amazon remove more CO2 from the atmosphere than they emit, reducing global warming. Lead author Fernando Espí­rito-Santo found that each year, dead Amazonian trees emit an estimated 1.9 billion tons (1.7 billion metric tons) of carbon into the atmosphere. Comparing that to various scenarios, carbon absorption by living trees always outweighed emissions from the dead ones. HUMAN DIMENSION Cleaner cow farts Colombia’s National Development Plan calls for reducing the country’s cattle land from 38 million to 28 million hectares while increasing the number of cattle. The policy – along with some international financing – has reigned in a new era of agroforestry in which ranchers are beginning to raise cattle alongside plantains, coffee, and valuable hardwoods. Though these silvopastoral systems cost between $1,000 and $2,000 to implement, most farmers see a return on investment within two years as cows begin to produce more milk and they rely less on expensive fertilizers. Agroforestry also has an interesting side-benefit for the climate. A study from the International Center for Tropical Agriculture found that cows eating forage from silvopastoral systems produced 20% less methane. Storm troopers Despite accounting for just 0.7% of tropical forest area, mangrove deforestation makes up as much as 10% of GHG emissions from deforestation globally. Delegates to the recent Restoring Coastal Livelihoods conference in Indonesia convened to try to reverse the damages of the “blue revolution” that has been converting mangroves to aquaculture ponds for shrimp production. The issue has become more urgent after Typhoon Haiyan, with a death toll north of 6,200 people in the Philippines, tragically demonstrated the dangers of destroying a coastal country’s natural storm protection. “I’m proposing for the Philippines…a minimum 100-meter solid green belt of mangroves and/or beach forests,” Jurgenne Primavera, a mangrove specialist, said. Fighting for our forests rights Indigenous and forest peoples have demanded that the international community respect their rights to the forests, lands, territories and natural resources, a demand expressed in the Palangka Raya Declaration on Deforestation and the Rights of Forest Peoples. The declaration – published after an international workshop held earlier this month in Central Kalimantan – includes a demand to halt the production, trade and consumption of commodities derived from deforestation, land grabs and other violations of the rights of forest peoples. It also demands an end to the invasion of forest peoples’ lands and forests by agribusiness, extractive industries, infrastructures, energy and green-economy projects that deny their fundamental rights. STANDARDS AND METHODOLOGY Hug a tree in the city The Climate Action Reserve (CAR) last week released a revised Urban Forestry Protocol after they received feedback that version 1.0 “presented significant hurdles to the successful implementation of urban forest offset projects.” Draft Version 2.0 thus shortened the crediting period, includes a buffer pool to insure against reversals, and introduces social and environmental co-benefits of urban forestry. CAR is holding a workshop in San Francisco on March 26 to solicit comments on the revisions (also available through a webinar), and the public comment period will be open through April 25. CAR is used on the voluntary carbon market, but the California Air Resources Board may consider CAR’s improvements for the state’s compliance Urban Forestry protocol. PUBLICATIONS Sharing the REDD wealth Until 2013, Brazil had been on a six-year winning streak in reversing deforestation, but the streak ended last year when deforestation rates surged 28%. The country is hoping to tap into REDD+ financing to help get back on the right track. And a recent report called Contributions to the National Strategy for Emissions Reduction from Deforestation and Forest Degradation (REDD+): A Proposal for Allocation Between States and the Union pitched a plan that would divide both revenues and responsibilities between the Brazilian states and the federal government, including an 80-20 split of REDD+ units in favor of the states. Learning the right lessons A recent paper entitled REDD+ as performance-based aid: General lessons and bilateral agreements of Norway reviewed the key challenges in designing and implementing performance-based aid and examined four bilateral REDD+ agreements Norway has with Tanzania, Brazil, Guyana and Indonesia. One of the main challenges is that donors are too eager to spend money. Payment should only be made if the results are achieved, but there is immense pressure for donors to spend allocated budgets because underspending is seen as a sign of poor planning and performance. And the lessons learned included being realistic about the challenges and not basing all REDD+ aid on performance. Errors of omission In November 2013, the US federal government pegged the social cost of carbon at $37/tCO2e in 2007 dollars for 2015, an increase from the $24/tCO2e estimate in 2010. But a new report called Omitted Damages: What’s Missing from the Social Cost of Carbon by EDF, the Institute for Policy Integrity at NYU School of Law and the Natural Resources Defense Council finds that estimate to be on the low side because of the omission of many climate impacts. “The public picks up the tab for the types of extreme weather events that come more frequently with a changing climate,” said Gernot Wagner, a Senior Economist at EDF. “But the government is not fully assessing climate risks in its decision-making.” JOBS REDDX Manager – Forest Trends Based in Washington, D.C., the REDDX Manager will organize and develop new partnerships, communication and fundraising strategies. The successful candidate will have a master’s degree, two to three years of experience managing international programs with multi-million and multi-year budgets, and knowledge of REDD+ finances and payments for ecosystem services (PES) mechanisms. French, Spanish and Portuguese language skills preferred. – Read more about the position here REDD+ Coordinator – VCS Based in Washington D.C., the REDD+ Coordinator will join VCS for one year, with the possibility of permanent employment; and will be responsible for coordinating Jurisdictional and Nested REDD+ pilot programs globally. Eligible candidates must have excellent knowledge of REDD+ voluntary and regulated carbon markets, and the implementation of REDD+ programs and/or projects, with a minimum of two years of work experience in the field. Proficiency in French or another language relevant to the Africa or Southeast Asia regions preferred. – Read more about the position here Senior Program Officer – VCS Based in Washington D.C., the Senior Program Officer for Agriculture, Forestry and Other Land Use (AFOLU) will be the key point of contact for project developers on AFOLU methodology, and promote the adoption of the standard. The successful candidate will have a minimum of four years of professional experience working in the land use sector, understanding of carbon market concepts (both voluntary and compliance), and willingness to travel, including internationally. – Read more about the position here Director, CGIAR Research Program on Forests, Trees, and Agroforestry (FTA) – CIFOR Based in Bogor, Indonesia, the Director will provide intellectual leadership in building a shared vision for the FTA research agenda; facilitate and oversee research outcomes; and manage work plans, budgets, and reporting. The successful candidate will have a PhD in a relevant discipline, at least 15 years of experience, an open and transparent leadership style, and excellent interpersonal and communication skills. – Read more about the position here Agroforestry Systems Scientist – World Agroforestry Centre Based in Yaounde, Cameroon, the Agroforestry Systems Scientist for the West and Central Africa region will provide scientific leadership in on-farm agroforestry research on smallholder farms in the humid tropics, with a focus on management systems for cocao, fruit, timber and coffee. The position requires a PhD in Agricultural Science and a minimum of five years work experience, at least four of which must be in developing countries. – 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].

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Two consumer product giants were met with support from environmental groups but were also pushed to make changes faster when they joined the wave of companies committing to deforestation-free palm oil with support from environmental groups.

This article was originally published on Mongabay.com. Click here to read the original.

25 March 2014 | On Monday General Mills and Colgate-Palmolive both announced palm oil policies that go beyond standards set by the Roundtable on Sustainable Palm Oil (RSPO), the industry’s main certification body. The policies include provisions to protect wildlife-rich rainforests and carbon-dense peatlands, while respecting the rights of local communities.

Environmentalists say greener palm oil is better for orangutans, whose habitat in Malaysia and Indonesia is being rapidly destroyed for oil palm plantation. Photos by Rhett A. Butler.

The policies are similar to commitments made in recent weeks by Kellogg’s, Mars, and Orkla, although both have shortcomings according to environmental campaigners. Greenpeace says that Colgate-Palmolive’s 2020 target for implementing its policy should be moved up to 2015, while the Union of Concerned Scientists (UCS) says General Mills policy should use the “industry standard” definition of High Carbon Stock forests when determining whether palm oil is free from deforestation.

Nonetheless both groups welcomed the commitments and urged more companies to establish similar deforestation free policies for palm oil in order to show growers there is indeed a market for greener palm oil.

“It’s really up to major brands to turn the tide on the palm oil industry,” said Sharon Smith of the Union of Concerned Scientists, which recently released a scorecard ranking American companies on their palm oil sourcing policies. “If companies start demanding palm oil that’s deforestation-free, peatlands-free and exploitation-free, palm oil producers will start providing a better product. This better oil will also reduce emissions. It’s a win-win for consumers and the environment.”

“Indonesia’s forests are precious to all of us: they are the earth’s lungs, people’s homes, and habitat to countless animals including the endangered Sumatran tiger. But if we don’t stop forest destruction all of this will disappear,” said True Blood actress Kristin Bauer, who recently joined Greenpeace’s campaign to push for more forest-friendly palm oil. “More brands need to step up and follow Colgate’s lead.”

Deforestation in Malaysian Borneo for oil palm plantations.

Greenpeace added that the commitments put more pressure on Proctor & Gamble (P&G), a Colgate-Palmolive competitor that is currently the focus of an aggressive campaign by the activist group.

“With pledges from Unilever, Nestlé, L’Oréal and now Colgate-Palmolive to clean up their supply chains, P&G is choosing to lag behind its competition,” said Areeba Hamid, forest campaigner at Greenpeace International, in a statement. “There’s a huge difference between Colgate’s detailed policy and P&G’s empty commitment to the Roundtable on Sustainable Palm Oil’s weak certification scheme. It’s time P&G joined Colgate, Unilever, L’Oréal and Mars in guaranteeing its products are free from forest destruction.”

Palm oil production is the largest direct driver of deforestation in Malaysia and Indonesia, whose forests are home to endangered orangutans, tigers, rhinos, and elephants.

Additional resources

18 March 2014 | Large consumer-facing companies such as those in the Consumer Goods Forum have committed to remove deforestation from their supply chains by 2020. Individual companies such as Unilever and Nestle also have ambitious targets for zero deforestation sourcing of raw materials.

This should be good news for forests and forest carbon because agriculture is the biggest driver of deforestation. If buyers demand deforestation-free agricultural commodities, then supply chains – including those of producers – will need to keep forests standing in order to sell their products. Right?

Well, yes. But there are real impediments to moving commodity production and supply chains overall from extensive, forest-clearing practices to sustainable, forest-conserving production and processing.

Obstacles to Sustainable, Forest-Conserving Production

First, while these companies are large and draw their supplies from around the world, they represent only a portion of buyers; so suppliers who deforest will very likely still have a market for their goods.

Second, price premiums and other financial incentives for sustainable production are often negligible if and when they exist. Indeed, after years of decline, deforestation in Brazil surged 28% last year – a failure that the Earth Innovation Institute largely attributes to farmers not yet receiving positive incentives for reducing deforestation.

Third, the barriers to producing sustainably are substantial and include higher costs of production – e.g., higher capital costs and/or recurring expenses – and the traditional financing barriers in the agricultural sector such as difficulties in accessing credit. In addition, the opportunity costs of leaving forests standing can be quite high.

So not only do we need commitments from buyers to source sustainably (important!) but we also need to overcome substantial barriers to sustainable production (also very important!).

REDD’s Role

REDD (Reduced Emissions from Deforestation and forest Degradation) finance was conceived as a way to help countries and people (e.g., farmers, forest landowners, etc.) reduce their deforestation by covering at least some of the opportunity costs of leaving forests standing. Many REDD and other forest conservation projects are underway around the globe, and together, voluntary forest carbon projects have conserved an area larger than all of the forests of the Democratic Republic of Congo, according to the most recent State of Forest Carbon Markets report. A few larger-scale agreements to achieve forest conservation have also been made, including a $25 million deal for REDD between the Brazilian state of Acre and the German development bank, KfW, as well as a ( $63 million performance-based payments program that Costa Rica will be able to access through the Forest Carbon Partnership Facility.

But the amount of capital deployed through REDD is just a small percentage of what is needed. Reducing Emissions from Deforestation and forest Degradation by 50 percent will require between $17 and $33 billion per year, according to “Climate Change: Financing Global Forests” (known as the “Eliasch Review”), but only $4.5 billion was deployed for REDD+ through 2012, according to the REDD+ Partnership Database, and the forest carbon markets’ value was estimated at USD 216 million in 2012, according to “State of the Forest Carbon Markets 2013”.

REDD finance has not yet reached a scale nearly large enough to pay for the opportunity costs of leaving forests standing around the world.

Agriculture’s Role

In contrast, financial flows to the agriculture sector are quite large: average annual investment by domestic private sector actors (i.e., farmers) into just a portion of low- and middle-income countries (76 countries) is $168 billion, according to a 2012 report from the UN’s Food and Agriculture Organization (FAO) entitled “Who invests in agriculture and how much?”. An earlier FAO report pegged government expenditures on agriculture in a subsection of these countries (54 countries) at $160 billion. These figures are much closer to the estimated $209 billion annual investment in agriculture that the United Nations Environment Program (UNEP) says is required to meet projected demand in 2050 and represents substantial pools of capital that can potentially be unlocked to support sustainable production and supply chains.

And the agriculture sector is already making some progress in reducing deforestation in supply chains. The global commodity roundtables and other certification schemes include standards and criteria that:

• Restrict new plantings in cleared primary forest or High Conservation Value (HCV) areas after 2005 (Example: Roundtable for Sustainable Palm Oil);
• Restrict new plantings in HVC areas after 2008 (Example: the Bonsucro Standard); and
• Set a deforestation cutoff date of 2009 (Example: Roundtable for Responsible Soy).

These standards also include guidelines on the application of best agricultural practices, social, financial, legal and transparency criteria for certification.

So far, 3.32% of sugar and 14% of palm oil worldwide are certified by Bonsucro and RSPO according to their respective web sites. Other important efforts include a commitment in 2009 by the four largest meatpackers in Brazil to eliminate deforestation from their supply chains, as well as the recent McDonald’s announcement in January that it will begin purchasing verified sustainable beef in 2016.

Opportunity for Integrated Finance

In our recent report “Bridging Financing Gaps for Low Emissions Rural Development through Integrated Finance Strategies“, we explore ways that agricultural finance can be realigned and integrated with REDD or climate finance to further incentivize and reward sustainable production, including a case study on Colombian agricultural finance.

This is a key moment in which agricultural sectors are increasingly motivated to enhance their security of supply, resiliency to climate change and productivity as they decrease business and/or reputational risks (including from negative environmental impacts like deforestation). In particular, there is great potential to tap large pools of public agricultural finance to support sustainable agricultural production that also conserves forests.

This finance can address the barriers to sustainable production and, if access to such finance is contingent upon preserving and/or increasing extant forests, it may also indirectly address the opportunity costs of standing forests.

Caveats

There is a large opportunity to channel finance towards sustainable, forest-conserving supply chains. However, important caveats must be understood.

First, it is important to acknowledge that forest conservation (including its critical biodiversity) may at times be in direct conflict with increased agricultural productivity. In these cases, conservation finance is needed to support such protection, conservation and restoration of forests or other ecosystems. Second, financing must be accompanied by technical assistance, demonstrations of desired practices and viable economic or financial models, and the strengthening of supply chains so investments in sustainable production have the desired productivity and emissions-reductions outcomes. Third, commodity markets – including domestic markets – must increase demand (and ideally, incentives) for deforestation-free products; otherwise, attractive financial products are very unlikely to have a large impact on sustainable production.

And finally, there will be continued investment into – and economic activity around – clearing forests or destroying other ecosystems (e.g., peat bogs) to plant crops and raise livestock. So complementary approaches to realigned finance are also very much needed, such as a national framework for REDD+ that includes regulation, strict forest protection, fire prevention and other mechanisms such as Payments for Ecosystem Services to farmers and/or government-to-government payments for performance for meeting national targets for REDD+ (which could provide funds to support all of these approaches).

It is through this holistic, multi-pronged approach that deforestation must be combatted. While not the only solution, integrated and aligned finance can greatly facilitate a transition to sustainable supply chains and rural development.

Sarah Lowery is Project Manager of Forest Trends’ Public Private Co-Finance Initiative. She can be reached at [email protected].

Ecosystem Marketplace’s State of the Forest Carbon Markets 2013 report tracked a miniscule number of forestry offsets transacted under the UK’s Woodland Carbon Code (WCC) program in 2012. That could change now that the WCC has started listing future offsets available for sale on the Markit Registry.

5 March 2014 | For the first time, potential buyers of carbon offsets generated by forestry projects under the UK’s Woodland Carbon Code (WCC) program can see future offsets available for sale, allowing them to make long-term offsetting plans.

The UK Forestry Commission launched the WCC in 2011 to spur local forestry projects that generate carbon offsets by growing trees to absorb carbon dioxide (CO2). Under the voluntary domestic program, companies can establish woodlands on their own land or buy the rights to the carbon sequestered in woodlands established by others.

Since April 2013, UK companies have been required to report their gross CO2 emissions. However, UK regulators allow companies to support projects under the WCC program and count the offsets against their annual emissions reporting requirements. The UK is only one of two national governments that allow voluntary carbon offsets to count against a mandatory emissions reporting requirement – the other being Japan.

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4 March 2014 | Mike Korchinsky goes way back with Christian del Valle and Sylvain Goupille, now the heads of the Althelia Climate Fund, back to their days on the carbon desk at BNP Paribas. Wildlife Works, a developer of reduced emissions from deforestation and degradation (REDD) projects that operates the Kasigau Corridor REDD+ projects, had an agreement with the French bank to provide development services for up to $50 million worth of projects.

When the two left BNP Paribas and launched the Althelia Climate Fund in 2011, Korchinsky continued to engage with del Valle and Goupille in the hopes of becoming the first developer to receive financing for a sustainable land use and conservation project from the new fund. Those conversations culminated in last month’s announcement that Althelia will make a $10 million investment in the Taita Hills project, which will cover most of the forest area in the Kenyan wilderness outside of Tsavo National Park, one of the largest national parks in the world, and home to elephants, rhinos, lions, leopards, and hippos.

Gloria Gonzalez: How is the project similar or different from your previous projects in Kenya?

Mike Korchinsky: The program will generate REDD+ carbon offsets from protection of the forest and savannah. The one difference between this project and our current Kasigau project is that Wildlife Works has developed an avoided conversion of grasslands system methodology in the last year and that allows us to look at a landscape in its entirety, not just at forests.

The other focus for Althelia is to really magnify the influence of alternative revenue streams in the development of the conservation program. They’re interested in more aggressively pursuing commercialization of agricultural intensification programs or sustainable charcoal programs in the area so that the program can benefit from parallel revenue streams to the carbon revenue stream. That’s always been part of Wildlife Works’ approach, but Althelia is interested in accelerating those activities with specific investments…

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Automaker Chevrolet’s announcement about a new carbon offset program aimed at US colleges and universities capped off a particularly busy week. The Verified Carbon Standard launched a new tool for estimating leakage in reduced emissions from REDD+ programs and the California Air Resources Board reaffirmed its commitment to considering international sector-based offsets such as REDD.

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

25 February 2014 | In 2013, automaker Chevrolet ditched its old advertising slogan in favor of a new tagline: “Find New Roads.” That motto could easily apply to Chevrolet’s efforts to find new ways to meet its emissions reduction commitments. The automaker, a major player in the voluntary carbon market, has unveiled an innovative program that could unlock a potentially significant new source of carbon offsets: US-based colleges and universities.

The company financed a new methodology under the Verified Carbon Standard (VCS) to quantify greenhouse gas (GHG) emissions reductions from clean energy and efficiency projects implemented by US-based higher education institutions. But Chevrolet has gone beyond just paying for the methodology by committing to buy at least 400,000 to 500,000 tonnes of offsets from the schools.

“We wanted to support innovative ways people are reducing carbon across America,” said David Tulauskas, director of sustainability for General Motors, Chevrolet’s parent company.

A major benefit of the commitment by Chevrolet is that schools constrained by tight operational budgets will have a critical financing source to tap in support of their clean energy and efficiency initiatives, said Robert Koester, professor of architecture and chair of the Ball State University Council on the Environment. Chevy has committed to buying thousands of tonnes of emissions reductions generated by Ball State over the next three years.

About 15% of the roughly 4,000 colleges and universities in the United States are engaged in an aggressive effort to reduce their carbon emissions. Chevrolet hopes other corporates committed to carbon reduction will tap into a built-in base of students already passionate about addressing the climate issue and follow its lead by purchasing voluntary offsets from these higher education institutions, Tulauskas said.

The announcement capped off a particularly busy week for the VCS, which also released a new tool that will allow reduced emissions from deforestation and degradation (REDD+) programs to estimate leakage emissions, a critical tool for the development of jurisdictional programs. In addition, a new VCS methodology to quantify net GHG emission reductions and removals resulting from projects to restore tidal wetlands just went out for public comment. See the Science & Technology section below for additional details.

Meanwhile, the path for inclusion of REDD projects in California’s cap-and-trade program has appeared very shaky of late due to growing political opposition. However, the California Air Resources Board (ARB), the agency charged with overseeing the program, reaffirmed its commitment to considering international sector-based offsets such as REDD in a proposed update to its scoping plan, the document governing its implementation of California’s Global Warming Solutions Act of 2006.

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading!

Here at Ecosystem Marketplace, we’ll soon launch data collection for our 2014 State of the Voluntary Carbon Markets report. Every year, we rely wholly on offset market participants to financially support this research. In return, sponsors ($7.5k+) and supporters ($3k) benefit from the report’s growing exposure, early insight into our findings, and opportunities to engage directly with Ecosystem Marketplace in report-related outreach and events. Interested organizations should contact Molly Peters-Stanley ([email protected])

Voluntary Carbon Inspiring people to care about the planet(‘s forests) The last installment of Ecosystem Marketplace’s “buyer series” explores why the National Geographic Society – perhaps best known for the stunning photos featured in its magazine – has been investing in forest carbon. Nat Geo purchases carbon offsets to neutralize discrete aspects of its operations: offsets from a reforestation project in Panama cover emissions from natural gas use in its buildings; offsets from an avoided deforestation (REDD) project in Brazil cover emissions from business travel; and offsets from another REDD project in the Yaeda Valley of Tanzania cover emissions from its adventure travel operations in the area. Read more in this Ecosystem Marketplace exclusive. – Read more from Ecosystem Marketplace here Thank you for your hospitality Hilton Worldwide is boosting its carbon offset program in Southeast Asia by investing in a biomass and two hydropower projects in Indonesia, Thailand and Vietnam. Combined, the three projects are expected to offset more than 900,000 tonnes of carbon dioxide equivalent (CO2e) per year. The hotel chain has previously invested in offsets from the Borneo rainforest rehabilitation project in Sabah, Malaysia, which prevents about 140,000 tonnes of CO2e per year In October 2012, Hilton began offsetting the emissions generated by meetings and events held at its properties, at no costs to its guests.   – Read more from the Hilton website – Read more from the Nation Windows into the forests Microsoft is at it again. The software giant – in partnership with UK’s The CarbonNeutral Company –reaffirmed its affection for forestry projects by agreeing to purchase offsets from the government of Madagascar’s REDD+ project in the Makira Natural Park. The transaction will finance long-term conservation of rainforest ecosystems, with half the proceeds supporting education, human health and other projects in the surrounding areas, according to park manager Wildlife Conservation Society. Last September, 710,588 tCO2e of carbon offsets were certified for sale from the project, which has been verified by the VCS and received gold-level validation from the Climate, Community and Biodiversity Alliance. – Read more from newswise – Read more from Microsoft – Read more from Ecosystem Market Place Singling out Singapore High-tech Singapore has been slow to embrace the voluntary carbon markets, but two in-country projects just sold their first offsets to fund massive upgrades to green LED light bulbs and improved cooling systems. “[Singapore] has a great track record in technology so energy efficiency is a good fit,” explains Grattan MacGiffin, a manager at Ecoinvest Services, about the Swiss-based company’s decision to obtain 8,469 Verified Carbon Units from both projects. Southeast Asia’s contribution to the world’s voluntary offset supply has been growing, but until now Singapore was noticeably absent. – Read more from Ecosystem Market Place Olympics falling short of carbon gold? The Sochi Winter Olympics have fulfilled a pledge to offset (some of) its carbon emissions, according to organizers who highlight the offsetting of emissions related to power consumption and transportation of some attendees to and from the games. But the Olympics can’t even medal in its own event, argue environmental experts who say the carbon neutral commitment fails to take into account emissions generated by the massive construction that was required to build the Olympic venues hosting the events. Meanwhile, a Russian crackdown on environmental protestors has raised concerns from human rights organizations. – Read more from the New York Times – Read more from rsport – Read more from Mashable Sudan wins gold The Gold Standard has issued the first offsets to a carbon project in Sudan, a country plagued by civil war. The Darfur Efficient Cookstoves Project, developed by Carbon Clear and NGO Practical Action, will deliver 10,000 energy efficient and clean-burning cookstoves to replace wood and charcoal fires and reduce carbon emissions while providing social, economic and health benefits. Given the reluctance of emissions auditors to send staff to the war-torn area, the Gold Standard created rules to allow objective observers from NGOs or United Nations (UN) staff already deployed in Sudan to help with monitoring and verification. “It is essential that carbon finance reaches poorer countries, regions and communities – and it must deliver both climate and development outcomes,” said Gold Standard CEO Adrian Rimmer. – Read more here Climate North America US Northeast takes it down a notch Carbon emissions in the nine Northeastern states participating in the Regional Greenhouse Gas Initiative (RGGI) declined for a third straight year. The RGGI region emitted about 86 million short tons of carbon in 2013, falling below the new cap of 91 million short tons set for 2014 by the RGGI states, amid mild temperatures and increasing use of natural gas, as well as expanded energy-efficiency programs that were financed in large part by revenues generated by RGGI’s allowance auctions. The first allowance auction under the new cap will be held on March 5. – Read more here EPA walking a fine line The Environmental Protection Agency (EPA) is trying to strike a delicate balance in crafting new regulations to curb carbon emissions from the 1,500 power plants in the US. The new rules must have sufficient environmental impact without risking soaring electricity bills and power blackouts, as well as legal challenges. But opponents of the upcoming rules aren’t waiting for the EPA to finish its work. Senator James Inhofe (R-Oklahoma) plans to introduce a bill that would allow states to opt-out of the regulations out of concern that the forced shutdown of coal-fired power plants could cause energy shortages. – Read more from the New York Times – Read more from the Hill – Read more from eNews Park Forest Kyoto & Beyond Back-loading fast track front-loads expert concerns The European Parliament agreed to fast-track a plan to bolster the EU Emissions Trading Scheme (EU ETS) by withholding 900 million permits from 2014-2016. The temporary fix has some experts concerned about market volatility and the impact of reintroducing the credits in 2020. The back-loading of permits may also cause temporary shortages for European manufacturers. Prices jumped 6.2% after the 6 February vote and closed at the highest level in more than a year on the ICE Futures Europe exchange, but retreated after an official cast doubt on the notion that the backloading could start in March. – Read more from Bloomberg Global Policy Update Iran drops hints of ETS in line with lifted sanctions Iran is the latest country to embrace the carbon markets, with its recent 5-year plan outlining Iran’s intentions to limit emissions, particularly from the energy sector. The country’s last report to the UN’s climate body in 2011 noted that sanctions had prevented the country from modernizing its fleet of power stations. Although the specific details of the planned market are still unknown, some industrial facilities will be allocated credits to cover a limited amount of their carbon emissions and would have to buy permits in the market to cover the rest, a nod to growing acknowledgement of the role of fossil fuels in global warming and the need to slash increasing demand for fuel within the country. Iran, a member of the Organization of the Petroleum Exporting Countries, is one of the world’s largest producers and exporters of crude oil. – Read more here No pain, lots of gain Australian Environment Minister Greg Hunt’s staffers may have been guilty of the ultimate Freudian slip when they sent out a press release claiming the government’s carbon tax is “still inflicting plenty of gain, with no environmental pain.” Hunt was appointed to his position in September 2013 by Prime Minister Tony Abbott, a steadfast opponent of the carbon tax. The minister’s staffers later claimed that the words pain and gain were inadvertently switched. Hunt, who refused to attend the UN climate negotiations in Poland last November, publicly denounced the tax, which added a lower-than-expected $4.1 billion to the government’s coffers in 2012-13. Supporters appear to have enough votes to prevent repeal until the new Senate takes control in July. – Read more from The Brisbane Times – Read more from UPI – Read more from The Sydney Morning Herald New Zealand on the wrong track A group of more than 60 Maori tribes plan to sue the New Zealand government for NZ$600 million for what they say are estimated losses for their forests caused by a pricing freefall in the country’s ETS. An influx of inexpensive carbon offsets from China and Russia put significant pressure on prices in the New Zealand ETS, which declined from NZ$20/t in 2010 to NZ$3.25/t as of 14 February. The tribes blame the government for failing to follow through with initial plans to restrict the use of foreign offsets in the program. – Read more from The South China Morning Post Costa Rica dreamin’? Costa Rica aims to be the first country to become carbon neutral by 2021, in large part by reducing its dependence on fossil fuels and increasing forest cover to offset unavoidable carbon emissions. However, some experts argue this is an unrealistic goal because the country will need more time to achieve neutrality and must integrate its climate policies with other public policies, particularly those aimed at the transport sector, which generates 42% of its carbon emissions. Reaching this goal will also depend on the level of priority given by the next president, who will be elected in April. Meanwhile, the country’s forest sector continues to advance implementation of its REDD+ jurisdictional program, as the first recipient of funds channeled through the World Bank’s Forest Carbon Partnership Facility. – Read more from the Independent European Daily Express Be careful what you wish for The EU ETS has been plagued by an economic crisis that led to lower-than-expected GHG emissions and a glut of allowances. But South Korea’s ETS, scheduled to launch on 1 January, 2015, could have the exact opposite problem. The South Korean government is sticking with a forecast for 2020 emissions that may be too low, according to an analysis by Thomson Reuters Point Carbon, and could cause carbon prices to skyrocket up to $93/tCO2. The country has set a target of reducing emissions by 20% below business-as-usual levels by 2020. – Read more from the Environmental Reader – Read more from Reuters Carbon Finance Risky business Investors have filed shareholder resolutions with 10 fossil fuel companies to force them to improve their assessments of carbon-related risks to their infrastructure and business operations, amid growing concern these companies are not preparing for the possible impact of carbon regulations. In February 2010, the US Securities & Exchange Commission (SEC) released guidance on how to report “material” regulatory, physical and indirect risks and opportunities related to climate change, but a recent Ceres report found that 41% of Standard & Poor’s 500 companies failed to address climate change in their 2013 filings. The investor coalition urged the SEC to focus on ensuring companies provide adequate disclosure of climate issues. – Read more from P&I – Read more from Ceres Science & Technology VCS springs a new leak… Last week, Naomi Swickard, VCS Agriculture, Forestry and Other Land Uses (AFOLU) Manager, alerted market participants to the standard’s release of a new Leakage Tool for Jurisdictional Nested REDD (JNR) programs implemented at the subnational scale. VCS highlights two modules that account for leakage –or the idea that deforestation avoided in one place might ‘leak’ to another – from the production of global commodities by applying an “Effective Area Approach” or a “Production Approach”. Jurisdictions can alternatively apply a simplified default approach. VCS will host two webinars on 27 February 2014 to present the tool and modules. – Read more …And rides a tidal wave Restore America’s Estuaries proposed a new VCS methodology for Tidal Wetland and Seagrass Restoration, which went up for public comment 11 February. Wetlands store more carbon than almost any other land type, and their draining and degradation – largely human-induced – releases large quantities of GHGs. Restoring tidal wetlands should slash these emissions, and this methodology is a new attempt to quantify and monetize them in order to incentivize restoration projects. VCS will hold a webinar about the methodology on 20 February, and the public comment period will end 13 March. – Read more here Burning the midnight oil The American Carbon Registry has approved a new methodology to generate carbon offsets by recycling transformer oil. The methodology quantifies emission reductions produced by diverting highly refined used transformer oil to a refining facility that processes the oil for re-use. Refiner Hydrodec plans to verify and issue its first offsets under the new methodology in the first half of 2014. The company’s oil product would represent about 60,000 tonnes of saved carbon emissions as offsets that can be sold on the voluntary carbon market. – Read more – Read more from Stock Market Wire Post-Doctoral Fellow – Targeting Climate-Smart Development Interventions Under Multiple Uncertainties, World Agroforestry Centre (ICRAF) Based in Nairobi, Kenya, the post-doctoral fellow will work for one year with the decision engagement and analytics team at ICRAF to develop methods for targeting interventions under uncertainty, and for projecting likely impacts of such interventions. The successful candidate will have a PhD in economics, decision analysis, business analysis, development or related field; excellent quantitative analysis skills; good understanding of Bayesian networks, Monte Carlo simulation and other approaches to modeling under uncertainty; advanced programming skills; proficiency in oral and written English; and track record of publication in peer-reviewed journals. – Read more here Post Doctoral Fellow – Mitigation Options & Poverty Reduction, ICRAF Based in Nairobi, Kenya, the post-doctoral fellow will lead the development and testing of tools and approaches to assess farming practices that contribute to both GHG reductions and farmers’ livelihoods. The successful candidate will have a PhD in agronomy, agro-ecology, environmental sciences or related field; expertise in modeling with programming skills, integrated assessments and GIS/database applications; proven experience working in an interdisciplinary, cross-cultural team; strong publication record in peer-reviewed journals; and proficiency in English. Working knowledge of French and/or Spanish, and field experience in the tropics preferred. – Read more here Analyst – ICIS Based in San Diego, California, the analyst will join ICIS to assist the Director of US Emissions Markets in product development, and will work closely with colleagues based in Europe and Asia to help to tailor product offerings to the evolving market needs. The ideal candidate will have a degree in public policy, economics, business, finance, or related field; experience in US energy markets and political analysis; knowledge of legislation and markets (California ARB, Western Climate Initiative, EPA, etc.); and programming/modeling skills. – Read more here Project Manager – Global Footprint Network Based in Orissa, India, the project manager will join Global Footprint Network for 18 months, and will lead the successful execution of the Sustainable Development Return on Investment project in a timely manner and under a budget. The ideal candidate will have at least four years of experience managing international development projects, expertise in metrics, and an advanced degree in a related field. Strong leadership skills and proven ability to inspire an international cross-cultural team are required. – Read more here Business Carbon Footprinting Intern, Carbon Footprinting, Planet First Based in London, England, the intern will join Planet First for three months, and will play a fundamental role in consultancy operations that offer solutions for business sustainability. He/she will help to deliver sustainability reporting including the measurement of carbon footprints and social performance for a wide range of organizations as they aim to achieve The Planet Mark, a sustainability certification. Eligible candidates will have a strong mathematical background, close attention to detail, high proficiency in Excel and Word, great communication skills, and a desire to learn more about environmental issues. – Read more here 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].

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