Tag: Special Interest Law Policy

June 9  2014 | Consultancy Carbon Partnership has finished designing and developing a new methodology for New Zealand forests – specifically, for its Rarakau project. While this first project covers only 1,000 hectares, it is part of a larger program that applies to indigenous forests nationally. Since these forests existed before 1990, they didn’t qualify for New Zealand’s compliance markets. Instead, Director Sean Weaver created his own methodology for the voluntary carbon markets.

However, the voluntary market presents its own challenges: buyers usually prefer the Verified Carbon Standard (VCS) for forestry projects. While elements of the methodology were created with VCS, the overall project has been verified under the lesser-known ISO14064-2 carbon standard – principally because Carbon Partnership and its funders could not afford the transaction costs of the VCS path. But both standards present complications and New Zealand project developers face other larger risks in developing current projects, Weaver explained.

Despite these hurdles, he hopes that the project’s strong biodiversity and conservation co-benefits will interest buyers – and he’s not afraid to look outside of the voluntary carbon markets to find them. Ecosystem Marketplace’s just released State of the Voluntary Carbon Markets 2014 executive summary highlights the growing trend (in New Zealand and elsewhere) of companies preferring and paying above-average prices for projects with strong co-benefits.

Kelley Hamrick: What stage are you at right now?

We’re just at the stage of commercializing the project. That’s also including a plan to try and find buyers who aren’t interested in carbon but are more interested in saving rainforests; for which, the bigger story is: what kind of forests are you protecting? Because, of course, there are buyers, even in the voluntary carbon market, who are more interested in a corporate social responsibility (CSR) claim than they are in offsetting carbon. It’s those kinds of people we need to try and connect with, for this particular project and program in New Zealand.

To read the rest of this Q&A, please visit the  Forest Carbon Portal  for free.

China’s sub-national pilot carbon trading programs have been proliferating across the country, and these programs have all carved out a role for carbon offsets and would allow them to be traded across borders. Now comes the arduous tasks of building a national registry to facilitate those transactions and of promoting liquidity to reduce volatility.

9 June 2014 | – China has in many ways become a beacon of hope for those who believe that carbon pricing can make a difference in forestalling catastrophic climate change. The country has quickly become the second largest player in the global carbon markets, after the granddaddy of trading schemes – the European Union’s Emissions Trading System (EU ETS). Despite implementing six pilot trading programs at lightning speed, however, China must contend with several obstacles before its carbon pricing agenda spreads across the country.

China was the talk of the Carbon Expo in Cologne, Germany last month because of the quick pace at which it implemented six sub-national pilot carbon trading programs in 2013 and early 2014. Taken as a whole, China’s carbon markets cover the equivalent of 1,115 million metric tonnes of carbon dioxide equivalent (MtCO2e), second only to the EU ETS’ 2,039 MtCO2e cap in 2013, the World Bank noted in its State and Trends of Carbon Pricing 2014 report.

“If you read the World Bank’s report, there are really a few bright spots for the carbon market and China is probably the brightest,” said Xueman Wang, Senior Carbon Finance Specialist and team leader for the World Bank’s Partnership for Market Readiness.

In November 2011, China announced its intention to implement the emissions trading pilots. The National Development and Reform Commission (NDRC) picked five cities (Beijing, Chongqing, Shanghai, Shenzhen and Tianjin) and two provinces (Guangdong and Hubei) to host the pilot trading programs.The first pilot program in Shenzhen was implemented in June 2013, with the other pilots quickly following suit, except for Chongqing, which is still in the allocation process, but close to launching.

“I was pleasantly surprised and ultimately impressed by the progress and achievement the Chinese pilots and the governments made within really just three years,” she said.

Moving too Fast?

Despite the rapid pace of implementation, these pilot programs have been challenged by a number of issues, namely a lack of liquidity that has instigated extreme price volatility. In Shenzhen, prices have fluctuated significantly, starting around 30 yuan per tonne and rising to 130 yuan in mid-October 2013 before falling back recently to trade at the 75 yuan tonne mark in small volumes.

The inactivity is being driven by the lack of a derivatives market, with no futures or options trading in China’s pilots, as well as the reluctance of companies to part with their allowances – until they know their full compliance obligations are covered – and participate in the market, said Jian Wei Lim, Director of Chinese Emissions Markets at consultancy ICIS.

The quick pace of implementation created challenges for the regulated entities because all the pilot programs applied retrospective liability, making these entities responsible for meeting compliance obligations before they had certainty about free allocation levels or price indicators, said Emily Spears, Emissions Strategy Lead for BP Singapore, which has compliance obligations in three out of the seven pilot programs.

“There’s no doubt that China is moving at lightning speed and their ambition and commitment to this task can only be congratulated,” she said. “But from my perspective I would be lying if I wasn’t saying that they are other elements that are key for these markets to actually operate correctly and function properly that are moving at painstaking slow levels. As a compliance participant, that presents a lot of challenges.”

Regulators need to have a better understanding of the role of liquidity providers and the benefits of foreign participation in ensuring the success of these markets, Spears said.

“Too often, it seems the benefits of liquidity and promoting sufficient price discovery and actually reducing price volatility are confused with speculation in this market,” she said.

Other elements of the pilot schemes have been established more effectively, such as the rules allowing for the use of offsets, she said. The offsets component is being managed by the NDRC, allowing the offsets to be fungible across all seven pilot schemes. However, Spears said what is still missing is the key infrastructure to allow these offsets to be transacted in the market, namely the national registry that is expected to become operational in the summer of 2014. It is becoming increasingly unlikely that offsets will be used during the first year of the pilot schemes, she said.

Offsets can generally be used for compliance in the pilot trading programs for up to 5-10% of obligations, said Wen Wang, Scientific Director, Climate Economics Professor, Paris-Dauphine University (Climate Economics Chair) and co-author of a recent paper Overview of Climate Change Policies and Development of Emissions Trading in China. The bulk of trading activity in the offset market is unlikely to be seen at least until 2016, the authors predicted.

However, offsets generated in China’s pilot trading programs have a unique advantage over allowances issued during the pilot phase because these allowances are unlikely to be carried over into any national scheme that may emerge. In contrast, offsets – because they are being developed under regulatory guidelines by the NDRC – will likely have a higher long-term value because they could transition into a national program, according to the paper.

The CDM Gives Birth in China

In June 2012, the rules for China’s project-based offset market were released, with the offsets named CCERs, short for China Certified Emissions Reductions (CCER). This is a reflection of the fact that the approval process closely resembles the United Nations’ Clean Development Mechanism (CDM) Certified Emission Reduction (CER) program, with the NDRC playing the role of the CDM Executive Board in overseeing the development of project methodologies and registrations and hosting a national registry.

China-based producers of CER offsets will have the chance to convert their CDM offsets into CCERs. The odds are that CCERs will only stem from existing CDM projects since the CDM market is already established in China and CER prices are hovering at rock bottom, justifying a switch from the CDM pipeline to the CCER framework before new projects are developed, according to the paper.

However, there are restrictions in the pilot programs on the use of offsets that could limit supply. Hubei, for example, requires all offsets to come from local projects, while Guangdong requires 70% local offset development and Beijing requires 50% local usage. Some of the pilots also ban certain types of projects such as hydropower, she said.

As of February 2014, about 70 projects were open for public comment as part of the project validation process, according to the paper. Most of these projects are wind, hydro and solar energy, with one project in Guangdong intending to request CCERs through carbon sequestration by afforestation.

All projects seeking CCER accreditation must use methodologies approved by the NDRC. As of February 2014, there are 177 approved methodologies – 173 stem directly from existing CDM methodologies, including the notoriously controversial HFC-23 and N2O adipic acid destruction methodologies that are now banned in the EU ETS. But even though these two project types can generate large volumes, they will probably not be issued CCERs despite being eligible for the pilot programs, according to the paper.

“Since China intends to gain leadership in climate change negotiations via its pilots it seems unlikely it will allow internationally controversial projects to receive CCERs,” the authors said in the paper. “Quite on the contrary, it may even favor projects with perceived higher environmental integrity such as renewable projects.”

The Role of Forests

The four new non-CDM methodologies target emissions reductions from forestry and land use. “I want to see more methodologies on the forest and agriculture sectors because much more attention is now on industry and the energy sector,” said Wen Wang. “I want to see more innovative methodologies to scale up mitigation.”

It will take time for projects using new methodologies to develop, particularly forestry projects that take time to materialize, the paper predicted. As for the other three land-use methodologies, they could be potentially large sources of offsets so such projects may not be issued offsets because of concerns that they could flood the market and drive prices down so low that they would annihilate any incentives for other projects to be developed, according to the paper.

Forestry offsets are allowed in Hubei’s trading program and are likely to be eligible in Chongqing. But the city may target emissions from the forestry sector in the future, an intriguing possibility although it is still hypothetical at this point, the paper noted.

Back to the Future

The attention to China’s compliance markets will only grow amid expectations that China will launch a national trading program in the 2016-2020 timeframe. In fact, market participants have already begun lobbying for next year’s Expo to feature two panel discussions on China’s carbon trading programs.

“I’ve seen this transformational policy change toward climate change” in China among political leaders, Xueman Wang said. “Just three years ago, the attitude and approach toward climate change was very different. Now, they say we care about climate change and we want to act in our own interest.”

Additional resources

3 June 2014 | – California’s cap-and-trade program is facing the first test of the controversial invalidation provisions featured in its carbon offsets program.

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

These ODS projects may have been conducted while the Arkansas facility was in violation of its operating permit issued under the Resource Conservation and Recovery Act. The 1976 legislation gave the US Environmental Protection Agency the authority to control hazardous waste from “cradle-to-grave” – including generation, transportation, treatment, storage and disposal – and established a framework for the management of non-hazardous solid wastes.

“We are doing a lot of investigation and research trying to help ARB get through this review,” said Jeff Cohen, Senior Vice-President of Science & Policy and Co-Founder of EOS Climate, which develops ODS projects at the Clean Harbors facility.

The regulators are not raising questions about the integrity of the offsets themselves as they believe that these offsets meet ARB’s criteria of being real, quantifiable and verifiable reductions. But the cap-and-trade regulations allow the ARB to review and invalidate any offsets if the projects are determined to be in violation of any local, state or national laws during the period under which the offsets were issued.

“We’re happy the ARB is being diligent about ensuring offsets have integrity,” Cohen said. “We support that and we understand its policy in wanting to review projects that might have some connection to a violation of a federal or state law. We think this is a case that illustrates the importance of having clearly defined criteria on what it means for a facility or a project activity to be in or out of compliance. The unit that is the subject of the review has nothing to do with the incineration or destruction activities. It’s completely peripheral.”

California’s cap-and-trade regulations include so-called buyers’ liability provisions that allow the regulators to invalidate offsets found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. These controversial rules are often blamed for a lack of liquidity in the California offset market.

“I don’t expect any credits to be invalidated as a result of this review, but in the meantime it is potentially two months of disrupted operations, which can damage confidence in how this program is being implemented,” Cohen said.

It is unclear exactly how many projects conducted at the Clean Harbors facility or offsets generated by these projects are affected by the review. The ARB and Clean Harbors have not yet responded to requests for comment.

None of the compliance offsets currently under review have been used for compliance in the cap-and-trade program. But until the review is complete, the ARB has blocked transfers of the offsets on its system and the Climate Action Reserve (CAR) has strongly advised parties not to engage in any transactions of offsets generated by projects that took place at the facility. Both CAR and the American Carbon Registry – organizations that develop methods (or “protocols”) to account for carbon mitigation – posted notices about the ARB review on their websites.

The review could have far-reaching implications beyond ODS projects, Cohen observed. For example, the ARB in April approved a new protocol that would generate compliance-grade carbon offsets from coal mine methane projects, which also have state and federal permitting compliance requirements.

Organizations holding the affected offsets have been notified and have 25 calendar days to provide information to the ARB, which then has 30 days from the day that all information is submitted to make a final determination on whether there was a violation and if it was meaningful enough to warrant invalidation of the offsets. If the offsets are found to be compliant, then they will once again be eligible for transfer in the ARB’s registry.

EOS, which has transacted about four million tonnes of offsets for California’s compliance market, is planning to submit information to the ARB and is hoping other affected parties will do the same in pursuit of a quick and definitive resolution, Cohen said.

A Risky Proposition

“It’s a very important development in the offset market and it very clearly demonstrates the ARB is taking its authority to invalidate offsets quite seriously and will use it when appropriate,” said Julian Richardson, CEO of Parhelion Underwriting, a specialty insurer focusing on the climate finance sector that has developed a policy to cover the invalidation risk. “In this instance, we don’t know the full details. Certainly the potential impact is that if all of these offsets are invalidated, that’s a very serious issue.”

Since the news broke, Parhelion has received inquiries about its insurance policy and is still able and willing to cover the invalidation risk for California-bound projects, except for the actual offsets that have been frozen, he said.

“We always knew what would trigger a review, but what concerns me is why this was not picked up previously by any of the verifiers of the projects,” Richardson said. “There’s clearly a gap in the verification process. It should have identified that Clean Harbors was in this process with the EPA.”

Private conservationists are managing over 26.5 million hectares of threatened forests worldwide in hopes of being paid to keep forest carbon emissions on lockdown. But these projects are in danger as insufficient demand for carbon offsets leaves them in financial limbo. One country – Indonesia – may have a solution, as the government contemplates voluntarily purchasing forestry offsets to catalyze domestic action.

26 February 2014 | JAKARTA | Southeast Asia has more than 27 million hectares of forested peatland, and peat releases devastating amounts of methane and carbon when drained or burned. Approximately 80% of the world’s peatland is in Indonesia, and much of it is slated to be converted to palm oil plantations, thanks to land-use concessions granted well before the decidedly green President Susilo Bambang Yudhoyono took office a decade ago.

At the same time, the Indonesian government is implementing a detailed strategy to harness finance from the carbon markets that will enable it to shift such concessions from forested areas to degraded lands. The country is also seeing a proliferation of smaller, private conservation efforts like the Rimba Raya “REDD” Project, which has rescued 47,000 hectares of forested peatland from imminent demise.

Until now, public and private conservation efforts have been running on a parallel track – in Indonesia and around the world – as governments struggle to deal with the complexities of developing national strategies to avoid or reduce emissions from deforestation and forest degradation (aka REDD). Those national strategies won’t deliver verified carbon emissions reductions for years, while private efforts are already doing so. Yet these private efforts face an uncertain future, as the UN’s failure to secure binding international emissions reduction targets means a shortage of demand for offsets from endangered forest protection.

It’s a quandary that governments have been reluctant to deal with, mostly because of the perceived complexity of uniting (and accounting for and financing) both public and private efforts under one roof.

But Agus Sari, who is developing a REDD+ Funding Instrument for Indonesia’s REDD+ Agency, says it’s not as complicated as many believe. Last year he proposed the creation of an interim financing mechanism called Financing REDD+ in Indonesia (FREDDI) that would act as a “fund of funds” administered by under the REDD+ Agency to support forest conservation.

In an interview with Ecosystem Marketplace he said those activities would include the purchase of REDD offsets voluntarily earned and certified to private carbon standards.

As the first country to create a high-level REDD+ Agency, Indonesia is seen as model of sorts for other governments looking to implement similar strategies. For that reason, Sari’s proposal could have global ramifications.

The REDD+ Agency

Headed by former Accenture executive Heru Prasetyo, Indonesia’s REDD+ Agency is charged with implementing the country’s National REDD+ Strategy, which is nothing less than a complete re-engineering of the country’s massive agricultural economy over the next five years.

Some of the Agency’s programs aim to leverage country-to-country REDD finance facilitated under the United Nations Framework Convention on Climate Change (UNFCCC) to persuade palm oil companies with rights to forested land to instead shift their activities to degraded land.

It’s a massive “land swap” that requires first sorting out hundreds of competing claims on various parcels of land, and then reorganizing Indonesia’s agricultural economy – from multinational agroforestry companies down to small-scale farmers – around more forest-friendly land-use plans.

The strategy lays out a detailed sequence of activities to “ready” its economy for such a transition – beginning with institutional efforts including necessary changes to laws and statutes, and the “One Map” initiative that is slated to wrap up this year that consolidates scores of conflicting land-use and tenure maps from various agencies and districts in one consolidated, consistent database.

The strategy is built on five “pillars” (see below). Sari says the private conservation financing initiative would fall under the third pillar – “strategic programs”.

REDD Readiness: Re-Engineering Indonesia’s Agricultural Economy

Source: Indonesian REDD+ Task Force, National REDD+ Strategy

The Proposal

Sari says the REDD Agency can act as an intermediary between domestic and international carbon markets.

“Here in Indonesia, we want to reduce our domestic emissions by 41% [below a business-as-usual scenario] by 2020, and in REDD terms that could mean about 1 billion tons of emission-reductions by 2020,” he says.

“We intend to fulfill part of our domestic targets through purchasing of emission-reduction performances from projects, because that not only helps us achieve our goals, but catalyzes the domestic market.”

The former head of Southeast Asia for EcoSecurities, Sari says the agency can also securitize domestic carbon offsets (or “carbon credits”) and package them for international sale.

“We would not only buy and sell like traditional dealers, but we could package them so that we buy insecure credits and we sell secure credits, and that increases the value quite considerably,” he says.

Liquidity, Security, Certainty

The government’s efforts would offer offset buyers a degree of certainty that they may not currently enjoy when purchasing offsets directly from private projects.

“If I buy from multiple projects in such a way that if one dies I have 200 others that survive, then any buyer will look at us as a secure intermediary.”

“Because of that,” Sari continues, “buyers will be willing to pay the higher price from us, which means we can buy at a higher price, and because we can buy at a higher price, we can enlarge our portfolio. Because we enlarge our portfolio, we are even more secure, and that means the buyer will be even more willing to buy at a higher price. That’s the virtuous cycle that we’re looking for.”

Sari can’t say when that cycle will begin, but he says the feedback on his proposal has been promising.
“Everyone I’ve presented this to likes it,” he says. “I’m optimistic.”

Additional resources

3 June 2014 | In the shadow of political uncertainty and Congressional inaction, US President Barack Obama has not been shy about his using his executive authority to support projects that reduce emissions from deforestation and forest degradation (REDD+). His administration has pledged $1 billion to REDD+ efforts in recognition of the fact that as much as 80% of greenhouse gas (GHG) emissions come from the land use sector in some developing countries.

The US Agency for International Development (USAID) kicked these efforts up a notch with last week’s announcement that it will offer a new-risk sharing loan guarantee to enable the Althelia Climate Fund to lend up to $133.8 million in commercial financing for forest conservation and sustainable land use projects in developing countries. The Althelia guarantee is the first of what the agency hopes will be similar transactions with other partners.

But the Obama administration, through USAID, had already invested time and resources in supporting REDD+ projects. The agency previously developed the BioREDD+ program in Colombia, which started in 2011 and will run through 2014. Through the program, $27.8 million will be invested in biodiversity, REDD, and climate change adaptation, with eight REDD+ projects totaling more than 700,000 hectares being developed in the Colombian Pacific Coast to be validated under the Verified Carbon Standard and the Climate, Community and Biodiversity Alliance.

These REDD+ projects have emission reduction potential of more than two million metric tonnes of carbon dioxide per year from avoided deforestation and degradation, as well as regeneration of forests, according to USAID. They also offer biodiversity benefits via protection of the Chocí³ Biogeographic Region – one of the world’s 10 “biodiversity hotspots.” The region is home to 9,000 species of vascular plants, 200 mammals, 600 birds, 100 reptiles, and 120 amphibians – many of which are endemic to Colombia – and the REDD+ investments will support the protection of species listed by the International Union for Conservation of Nature as endangered.

To read the rest of this story, please visit the Forest Carbon Portal for free.

NOTE: This piece originally appeared on the Huffington Post. You can view the original here.

27 June 2014 | If there’s one thing US President Barack Obama understands, it’s the danger of sticker shock.

“People don’t like gas prices going up,” he said on Wednesday. “They don’t like electricity prices going up.”

He was addressing the League of Conservation Voters, and he went on to warn that environmentalists who ignore those rising prices do so at their own peril:

“If we’re blithe about saying [climate change] is the defining issue of our time, but we don’t address people’s legitimate economic concerns, then even if they are concerned about climate change, they may not support efforts to do something about it.”

It’s a point well-taken, and one that’s addressed in one of the longest-running environmental successes in the country, which the President also defended on Wednesday: the Clean Water Act:

“We’ve got to dredge up that old tape of the Cuyahoga River on fire, and the Chicago River, and just remind people that this thing (the Clean Water Act) worked,” he said.

He could have added that “this thing worked” because it doesn’t just keep nasties out of our water. It also provides mechanisms that address exactly the concerns he warned about. Those mechanisms, paradoxically, let land developers disrupt environmentally significant swamps (or “wetlands”) that filter water and regulate floods.

That’s right.

This great success works in part because it lets bad things happen.

But there’s a catch: this degradation can only happen under very limited circumstances and only after a rigorous permitting process. More importantly, it can only happen if the developer compensates by either restoring, creating, or in some cases preserving an endangered wetland area of equal or greater environmental value than what is lost.

This ingenious mechanism, which dates back to the 1970s, has led to the creation of wetland mitigation banks, which are private conservation efforts that proactively restore degraded wetlands in the hope of selling credits to developers down the road. Because mitigation banks tend to be built on land adjacent to intact swamps, they often create more contiguous wetlands that deliver more ecosystem services than the isolated patches of degraded swamp that are destroyed.

This is one of the great unsung successes of the 1970s environmental boom, and it succeeds because it doesn’t let the perfect become the enemy of the good. Something similar is happening under the Endangered Species Act, which allows for development on habitat under very limited circumstances and only if habitat of equal or greater value is restored, created, or preserved.

These things work, and they work so well that the European Union is incorporating similar mechanisms into its environmental strategy.

Similar things worked on acid rain in the 1990s, when the state of California implemented its Regional Clean Air Incentives Market (RECLAIM), which put a cap on the amount of sulphur and nitrogen oxides (SOx and NOx) that industry can pump into the air, then it let the private sector identify the most efficient way of meeting that cap by trading allowances.

Then as now, right wingers went apoplectic – predicting everything from rolling blackouts and soaring energy costs to the end of the coal sector and a nationwide recession. Left wingers had the opposite fear; they believed industry would just “buy its way out” of its clean air obligations, and likened the permits to indulgences.

Both sides were wrong. The program has helped cut acid rain in half since its inception, and at a cost of just $3 billion per year, which is more than 85% lower than industry projections. More importantly, it saved local communities more than $122 billion per year in reduced health costs and cleaner lakes and rivers, according to a study by the Journal of Environmental Management. That’s $40 in savings for every $1 spent – although the EPA prefers the more conservative claim of $30 for every dollar spent.

Either way, the program worked, and it worked because it let government do what government does best, and it let the private sector do what the private sector does best. Specifically, it let government draw a clear and inviolable line above which emissions dare not rise, and it let the private sector find new and innovative ways of staying below that line, with a financial incentive for those who did the best job. All of these programs work because they promote responsible land stewardship in a way that is transparent, efficient, and effective – which is what people concerned about cost really want.

And that brings us to something else the president touched on: education. When he alluded to “that old tape of the Cuyahoga River on fire”, everyone above a certain age knew exactly what he was talking about. Back then, the general public was confronted with very tangible evidence of our environmental challenges. That’s why we were able to implement mechanisms that work.

Climate change isn’t as tangible as a burning river, but that hasn’t stopped 70% of the public from understands that it’s a threat. The challenge now is to make sure people understand just how serious and immediate that threat is so that they can make intelligent and informed decisions about how to proceed – perhaps by pointing out that food is a more fundamental need than even gas and electricity.

That’s because food is where rising temperatures are going to extract their highest toll. The US Climate Assessment made that point quite clearly a few months back, when it warned that that climate change is already disrupting global food supplies. That’s why 16 retired US admirals and generals recently took the unprecedented step of warning that climate change threatens our national security.

And it doesn’t stop with climate change. Our entire green infrastructure is at risk, but most people aren’t even aware that such a thing even exists. They don’t know that wetlands filter water and regulate flooding, or that mangroves protect our coasts and forests clean our air.

These are the functions that keep us alive, and they’re why conservation isn’t something we should do, like trimming the bushes, but rather it’s something we must do – like putting food on the table or shoring up the foundation. That’s literally what it’s about, because when you get down to it, our economy depends on our ecology, since everything we buy, sell, eat, and produce is derived from nature.

This is the reality we must ultimately acknowledge, because although higher energy costs aren’t a foregone conclusion in a carbon-constrained world, they are a distinct possibility. Environmental markets can reduce that likelihood, but they can’t eliminate them.

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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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].

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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.

13 May 2014 | Washington Governor Jay Inslee is known to be a man of action: climate action, that is. As a member of the US Congress, he was one of the major backers of a comprehensive climate bill that barely passed the House of Representatives in 2009. Now, as state governor, he may be one step closer to achieving something that he wasn’t able to at the federal level: putting a price on carbon.

On April 29, Inslee signed an executive order to address carbon pollution and take action on clean energy. The order establishes a Carbon Emissions Reductions Taskforce and addresses other clean energy issues including transportation, energy efficiency, out-of-state coal-fired electricity, clean technology research and development, and greening state government operations.

The taskforce will provide recommendations on the design and implementation of a cap on carbon emissions in the state and establishment of a market-based program to meet those limits. Its recommendations, due to be delivered before November 21, will inform legislation that Inslee plans to request for consideration during the 2015 legislative session.

Climate policy experts reacted positively to the news.

“Governor Inslee has recommitted fervently to passing climate legislation in Washington,” said Sean Penrith, Executive Director of The Climate Trust, a carbon offset program that supports the Oregon Carbon Dioxide Standard (which sets emissions benchmarks for new energy facilities and also allows the use of offsets for compliance) and also has projects in Washington. “He was voted in on climate issues and will stick to the commitment. I’m encouraged by his proposal.”

Following California’s Lead…

Many policy watchers expect the taskforce’s recommendations to emulate California’s cap-and-trade program. For example, the taskforce is explicitly directed to consider options to offset the cost of reducing emissions to consumers and businesses. Offsets are instruments that represent the reduction, avoidance or sequestration of one metric tonne of carbon dioxide equivalent that occurs outside of sectors that are required to participate in the program. California allows regulated entities to meet up to 8% of their compliance obligations with carbon offsets, which can be cheaper than carbon allowances offered for sale by the state.

If they want market linkage, Penrith said he would expect Washington to emulate the percentage of allowable offsets in California’s program.

Aligning aspects of its policy design with California would allow Washington’s program to potentially establish formal links. Linking emissions trading systems is seen as a way to lower overall compliance costs, minimize the leakage of emissions from one state to another, avoid unintended economic competition and allow for greater overall emissions reductions.

…But No Two States are the Same

However, Alan Durning, Executive Director of the Sightline Institute, a Northwest-focused sustainable policy think-tank, pointed out the design of the California system was constrained by some peculiarities of California law that will not apply in Washington.

“California has a super majority voting requirement for new taxes but not for fees, Washington does not have this provision,” he said.

The difference could have considerable influence on how potential revenues from the auctioning of carbon emission permits could be allocated, Durning said. While California’s revenue is required to be reinvested in programs that further reduce greenhouse gas emissions, Washington may choose to direct its revenues to the state’s general or capital funds. In a state with no income tax, the possibility of new revenues could set the stage for a coalition of influential supporters for planned legislation: infrastructure proponents and supporters of Kindergarten through 12^th grade public education. Both sectors have been largely underfunded in recent years with the state failing to pass infrastructure funding bills over the last two years and a State Supreme Court ruling that the state has not met its obligations under the state constitution to fully fund core basic education.

This Time It’s Different

In 2009, the Washington State Legislature voted against joining the Western Climate Initiative (WCI), which is a cross-border carbon trading program that, at its height, included seven US states and four Canadian provinces as members. Today, however, it only features British Columbia, California and Quebec pricing carbon. When Washington opted out in 2009, federal climate legislation sponsored by Henry Waxman and Ed Markey was making its way through Congress, and a federal solution seemed more likely. Some state legislators who supported action on climate voted against joining WCI in favor of a more uniform national system. But federal legislation collapsed in 2010, and Durning now says the pressure is back for state action.

Additional momentum for a 2015 bill comes from Washington’s neighbors to the north and south by way of the Pacific Coast Collaborative. Washington, British Columbia, Oregon and California signed the Pacific Coast Action Plan on Climate and Energy in October 2013, which commits them to coordinate on actions they take to address climate change. First in their agreement is to account for the cost of carbon emissions within their respective borders.

Politically, the outcome of a climate bill in 2015 will largely depend on the composition of the state Senate. There are several competitive seats in this year’s election. If there is Democratic control in the Senate, Inslee’s proposal will face an easier road to passage. If Republicans maintain control, then a climate bill may not have a chance. Inslee could try again in a second term if he wins re-election in 2016 or a ballot measure could be proposed that year.

The likelihood of a bill passing may “depend less on the intricacies of policy, but rather on the ability of the bill’s sponsors to leverage data which demonstrates that jobs won’t be lost, the impact on low income households, provides social equity, and a real effect on emission reductions,” Penrith said.

Ben McCarthy is a Research Assistant in Ecosystem Marketplace’s Carbon Program. He can be reached at [email protected].

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].

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

30 April 2014 | California has long been taking its cues from the voluntary carbon markets in developing the offset component of its cap-and-trade program. The US state has now welcomed another voluntary project type into its program, but market participants are lobbying for the addition of even more protocols to help thwart any potential offset shortages.

The California Air Resources Board (ARB) announced on Friday that it has approved a new protocol that would generate compliance-grade carbon offsets from coal mine methane projects. This project type joins forestry, urban forestry, livestock and ozone-depleting substances protocols also originally developed in the voluntary markets as being eligible to produce offsets for entities regulated by the cap-and-trade program. ARB staffers have previously estimated that the coal mine methane protocol could produce a potential domestic offset supply of 60 million tonnes of carbon dioxide (tCO2e) in emissions reductions.

The ARB sees emission reductions from carbon offset projects, including from agriculture and forestry projects, as a vital factor in achieving California’s ambitious greenhouse gas (GHG) reduction goals. In 2006, then-California Governor Arnold Schwarzenegger signed into law Assembly Bill 32 (AB 32) – a landmark piece of legislation that outlined the state’s efforts to mitigate climate change. The legislation featured targets for reducing California’s GHG emissions to 1990 levels by 2020 and 80% below 1990 levels by 2050. The cap-and-trade regulation is currently in place through 2020 but may be extended.

Market participants see opportunities for more land-based offsets – emissions reductions generated via agriculture and forestry projects – to be added to the system, including avoided grassland conversion, wetland restoration, composting, rangelands and rice cultivation projects. The ARB could add rice cultivation as a new compliance offset protocol in September, making it eligible to generate carbon offsets for the program starting on January 1, 2015.

But bringing more of these types of projects into the state’s regulated carbon market will not be an easy task, given the high costs involved, particularly the costs of monitoring and verifying these emissions reductions.

“There is a lot of potential for relatively low-cost reductions in the agriculture sector, but some of these opportunities we’re talking about can be fairly marginal at the going price of carbon offsets,” Derik Broekhoff, the Climate Action Reserve’s (CAR) Vice President of Policy, said at the Navigating the American Carbon World conference in San Francisco last month. The prices for California-bound offsets have generally hovered around $9 per tonne.

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.

—The Editors

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

Voluntary Carbon World Cup’s carbon neutral GOOOOAAAAL!!! Brazil’s Ministry of Environment has announced that it will accept certified emissions reductions (CERs) from Clean Development Mechanism (CDM) projects based in the country in exchange for publicity during the upcoming FIFA World Cup. Donations will be accepted until July 18 and participating companies will receive an official certificate of participation in the ‘Selo Sustentabilidade – Baixo Carbono’ program. Of the almost 150 existing Brazilian CDM projects with more than 90 million CERs issued, perhaps 14 million CERs could be eligible to offset the 2.7 million metric tonnes of emissions (MtCO2e) associated with the event’s stadium construction, local transportation, and fossil fuel electricity consumption. However, the Brazilians do not have any plans to buy offsets directly.– Read more from UN RIC – Read more from Reuters   Flying higher and greener A new start-up company called TripZero aims to tackle the stubborn problem of rising GHG emissions in the global travel business. Partnering with online travel agency Expedia, TripZero will earn commissions from hotel bookings made through its site, with a portion of these commissions paying for carbon offsets to cover transportation and hotel-related emissions. The carbon offsets will come from reforestation, renewable energy, and methane capture projects under the Verified Carbon Standard (VCS) and Green-e Climate Standard.– Read more here   Not going up in smoke Women are being sold clean-burning liquid petroleum gas (or propane) cookstoves to help reverse the deforestation and negative health impacts associated with wood and charcoal cooking in Northern Sudan. The Darfur Low Smoke Project was launched in 2007 by the Women’s Development Association Network, the international NGO Practical Action and Carbon Clear. To date, 6,000 stoves have been delivered resulting in a reduction of more than 36,000 tonnes of carbon dioxide emissions (tCO2e). The stoves are registered with the Gold Standard and the first offsets were recently sold to a United Kingdom-based insurance firm. The project hopes to save more than 300,000 tCO2e within the next decade and replant local community forests.– Read more here   Follow the green light Renewable Choice Energy has joined Green-e Climate, and can now provide certified carbon offsets to green building projects under the newest version of the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) guidelines for green power. This certification is awarded when a building provides at least 35% of its grid-connected electricity from renewable sources. CAR registered landfill gas projects in Georgia, South Carolina, and Texas will supply the offsets. Since 2003, Renewable Choice Energy has supplied green power and carbon offsets to more than 5,000 LEED projects worldwide.– Read more here   Hail from the Queen ClimateCare, a project developer based in the United Kingdom, was awarded a Queen’s Award for Enterprise in Sustainable Development on April 21, Queen Elizabeth II’s birthday. The Queen’s Awards for Enterprise are the most prestigious awards given to UK businesses for outstanding achievement in their field. ClimateCare’s projects include the LifeStraw Carbon For Water project in Western Kenya, Gyapa Stoves project in Ghana, and Kimbale rainforest restoration in the Congo Basin. To date, the company has assisted with reductions totaling more than 16.5 mtCO2e.– Read more here   Cleaning the friendly skies United Airlines has become the first US carrier to offer carbon offset redemption through its frequent flyer mileage program. Customers could previously calculate and offset their travel and cargo shipments only through additional monetary purchases. After booking on the airline’s website, customers can now exchange miles to offset their emissions through partner projects such as the Garcia River Forest Conservation project certified by CAR, Capricorn Ridge Wind Project in Texas certified by VCS, and Conservation International’s Alto Mayo Forest Carbon Project in Northern Peru certified by VCS. Between March 2012 and December 2013, a total of 7,370 tCO2e were purchased by customers through this program. United Airlines’ carbon offset program was designed in collaboration with Sustainable Travel International.– Read more here   Climate North America Keep on fallin’ The US Environmental Protection Agency (EPA) recently submitted its annual Inventory of US Greenhouse Gas Emissions and Sinks to the United Nations Framework Convention on Climate Change. In 2012, total emissions of the six main GHGs in the US were equivalent to 6,526 MtCO2e. This represents a 3.4% decrease from 2011 and a 10% decline from 2005 levels. The US has committed to a targeted 17% reduction from 2005 levels by 2020 and upcoming EPA rules for existing power plants due in June aim to help the country get there.– Read more here – Read the full report – Read more here from Ecosystem Marketplace   A carbon pie in the sky? After signing the Pacific Coast Action Plan in 2013, California, Oregon, Washington, and British Columbia have made progress in cooperating on climate issues but more work lies ahead. A non-partisan legislative agency is researching a carbon tax in Oregon with its final report due on November 15. Washington Governor Jay Inslee is an outspoken advocate of action on climate change and has made it a priority of his administration, but he faces challenges in the state legislature. Carbon pricing programs in these states could build on previously established voluntary offset programs such as the Climate Trust.– Read more at Ecosystem Marketplace   A taxing discussion In a recent editorial, the Citizens’ Climate Lobby (CCL) suggests that a price on GHG emissions would be beneficial for Wisconsin’s clean energy-oriented manufacturing and research and development sectors. The organization asserts that a revenue-neutral carbon tax on fossil fuel producers is the most effective means of achieving a carbon price. In such a model, revenues from the tax are returned to the public in order to offset higher prices for consumer consumption of fossil fuels. CCL points to a recent study of California that shows growth in that state’s economy under a carbon tax when all revenue is returned to the public.– Read more here   Kyoto & Beyond Earning their keep With activity in the CDM well off its 2012 peak, some are questioning the wisdom of continuing to support an administrative staff of close to 150 for the program. While the mechanism has reserves to finance operations at current levels almost until 2020, experts suggest that the surplus could be used to support the market through purchase of offsets or development of mechanisms earmarked for the anticipated post-2020 climate agreement. The CDM Executive Board has been working to make improvements in the system and promote the offsets outside the Kyoto Protocol to increase demand.– Read more here   Global Policy Update Peru doing the PES limbo Peruvians have spent the last six years developing a comprehensive legal framework for the sticky issue of payments for ecosystem services (PES). The current bill is one of the most advanced pieces of legislation of its type, but it’s been stuck in committee for five years, and its future is uncertain since a recently scheduled debate was scrapped. The bill provides a legal framework to support a diverse range of ecosystem services – including GHG emissions reductions, biodiversity conservation, the preservation of natural beauty, and investments in watershed services – where land stewards are compensated to practice sustainable land use.– Read more at Ecosystem Marketplace   Up, up, and away Trading volumes have soared as speculative players drive up prices in China’s newest regional pilot emissions trading system. In Hubei, 1.6 million allowances were traded in the first 12 days, versus 66,000 total allowances for China’s five other pilot markets in the same period. Prices have risen modestly from the initial set amount of 20 yuan to 25 yuan in mid-April. Speculators are encouraged by the performance of the Shenzhen pilot market last year, which spiked from 30 yuan to 130 yuan, albeit on small volumes. A key difference seems to be the absence of a capital threshold to trade in the Hubei system. Trading is expected to remain volatile until compliance entities report emissions and participate in the market in 2015.– Read more at Reuters   Is the party over? Revenues for China’s top sellers of CERs dropped to a tenth of 2012 values. China Longyuan Power Group Corp, Huaneng Renewables Corp and China Datang Corp Renewable Power reported combined revenue of $20 million in 2013, down from more than $150 million in 2012 and almost $300 million in 2011. This presents a challenge for carbon projects seeking funding that once steadily flowed from Europe. Many independent project developers will seek opportunities in China’s burgeoning emissions trading systems – almost 60 new projects are already trying to transition to domestic funding- but it is unclear if former CDM projects will be able to participate due to contract disputes.– Read more at Reuters   Carbon Finance Money is everything Thirty donor countries recently pledged $4.43 billion over the next four years for the Global Environment Facility (GEF) to support developing countries’ efforts in preventing degradation of the global environment. More than 140 countries will benefit from these funds for projects addressing climate change, deforestation, land degradation, extinction of species, toxic chemicals and waste, and threats to oceans and freshwater resources. Since 1991, the GEF has provided $12.5 billion in grants and leveraged $58 billion in co-financing for nearly 3,700 projects in more than 165 countries.– Read more here   Bank on Africa The African Development Bank has started a new climate change fund for the continent, the Africa Climate Change Fund (ACCF), with an initial investment of $6 million by Germany. The ACCF will begin by focusing its funds on climate finance readiness projects with the aim of securing larger amounts in the future from the United Nations’ Green Climate Fund (GCF). The ACCF is a lessons-learned response to the relatively small amount of funding that African countries received from the CDM. The GCF is scheduled to launch in May.– Read more here   Science & Technology China seeing green (grass) A new methodology just approved by the VCS could help farmers in China and other countries tap into the carbon markets to help them manage their grasslands more sustainably. The methodology, developed by the United Nations’ Food and Agricultural Organization, the Chinese Academy of Agriculture Science, the World Agroforestry Center and the Northwest Institute of Plateau Biology, could be particularly useful in mitigating the impact of China’s growing population on its carbon footprint. Projects under the methodology, which helps overcome the major hurdle of high measuring and monitoring costs, could also be recognized by the China Certified Emissions Reduction offset program.– Read more here   The grazing could always be greener The American Carbon Registry recently released a new methodology for avoided GHG emissions on grazed grasslands for public comment. Developed by Terra Global Capital with support from the Environmental Defense Fund, Silver Lab at the University of California Berkeley, and the Marin Carbon Project, the methodology provides an accounting framework for the carbon storage achieved by adding compost to fields – both by enhancing plant growth and by diverting organic waste that would otherwise decompose in landfills, releasing methane. If approved, it would generate offsets for the voluntary carbon market. The public comment period is open through May 14.– Read more here Director of Policy and Research – Climate Advisers Based in Washington, DC, the Director will lead major research and advocacy projects as well as liaise with policymakers and opinion leaders in the federal government, foundations, think tanks, environmental organizations, and corporations. The ideal candidate will have extensive practical experience with US and international climate and development policy making, including a network of climate and development contacts in Washington, DC. The candidate will also have an advanced degree in economics, public policy, international relations, or a related field, with a proven record of high-impact, policy-relevant reports, white papers, and memos on climate change and sustainable development that have changed the policy conversation.– Read more here   Sustainability Engagement Associate (Financials Sector) – CDP North America Based in New York, NY, the Associate will be responsible for engaging with corporate sustainability and investor relations professionals at a range of seniority levels to secure their annual response to CDP. The successful candidate will have superior interpersonal skills, including the ability to engage with resistant parties, and to pitch services. The candidate will also have at least two years of work experience (this can include internships), preferably in sustainability and/or with financials companies.– Read more here   Director, Supply Chain Integrity – Rainforest Alliance Based in New York, NY, the Director will be responsible for overseeing strategy, operations, and general management of Rainforest Alliance’s Supply Chain Integrity program through direct management of the traceability, trademarks, chain of custody, claims-based system, and related components. The ideal candidate will have a master’s degree or equivalent in professional experience; a minimum 10 years of experience; demonstrated experience in market-based conservation, change-management, certification and traceability.– Read more here   REDD+ Finance and Carbon Market Specialist – Terra Global Capital Preferably based in San Francisco, California, the Specialist will assist countries with ambitious REDD+ plans by building capacity within those countries to achieve long-term net emissions reductions from forests and land use and contribute to the evolving REDD+ framework. Eligible candidates must have five years of combined experience in private sector finance and REDD+, forest carbon, payment for environmental services, carbon markets (voluntary or regulatory), and/or natural resource project finance. Fluency in English and Advanced Spanish are required.– Read more here   Carbon Footprint Assessor – Carbon Trust Based in London, UK, the Assessor will work with the certification team to assess whether carbon footprints or other environmental claims comply with the requirements of the Carbon Trust’s proprietary standards and other certification rules or standards. Eligible candidates must have a relevant degree in environmental, economics, engineering, or other numerate discipline.– 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].

Additional resources

29 April 2014 | Naturally cautious after major litigation challenges, California regulators at the Air Resources Board (ARB) – the agency charged with overseeing the state’s regulated carbon market – have moved slowly in embracing new types of emissions reduction projects. But finally after years of lobbying from project developers, buyers and other stakeholders, the regulators have added a new project type to their roster of eligible offset protocols: mine methane capture.

The ARB announced on Friday that it has approved a new protocol that would generate compliance-grade carbon offsets from coal mine methane projects. ARB staffers have previously estimated that the protocol could produce a potential domestic offset supply of 60 million tonnes of carbon dioxide (tCO2e) in emissions reductions.

This project type joins forestry, urban forestry, livestock and ozone-depleting substances protocols originally developed in the voluntary markets as being eligible to produce offsets for entities regulated by the cap-and-trade program, with these project types allowed into the program in October 2011. The ARB sees emission reductions from carbon offset projects as a vital factor in achieving California’s ambitious goals to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020 and 80% below 1990 levels by 2050, set out in a landmark piece of legislation commonly known as AB 32.

The newly adopted protocol addresses the two primary sources of methane from active mining: methane released through ventilation shafts, and methane released from drainage systems. Emission reductions will be achieved through methane capture and use or destruction of methane from these sources. Reducing methane is critical because, over a 20-year span, it can warm the atmosphere more than 80 times as much as carbon dioxide, the ARB noted.

The coal mine methane protocol, consideration of which had been delayed several times due to requests that the ARB further examine the protocol, was approved on Friday as part of a package of amendments that will become effective on July 1.

Pros and Cons

Holy Cross Energy, a non-profit, member-owned electric cooperative utility in Colorado, specifically cited the global warming potential of methane in urging the ARB to adopt the protocol earlier this month.

“This protocol will encourage the generation of new and accurate data of methane emissions from mines,” said Delvan Worley, CEO of Holy Cross, said in comments to the ARB. “This could encourage more research and measurement of methane emissions from all sources.”

Oil major Chevron supported adoption of the protocol as a substantial step towards increasing the supply of offsets in California’s program, said former California State Senator Michael Rubio, who now heads California Government Affairs for Chevron.

“The mine methane capture protocol targets a sector that can contribute a significant US supply of greenhouse gas reductions that would otherwise not be controlled,” he said in comments submitted to the ARB.

The addition of a new project type is helpful from an offset supply standpoint, particularly because transportation and natural gas entities will start to be regulated under California’s cap-and-trade program in 2015, which will trigger a significant increase in offset demand, said Gary Gero, President of the Climate Action Reserve (CAR) – an offset registry that supports projects to reduce GHG emissions. But the potential 60 million tonnes cited by the ARB is a far cry from the 500,000 tonnes of coal mine methane offsets issued under CAR’s program to date that the organization expects to be recognized by the ARB.

“I’m not convinced by the numbers that ARB has indicated in terms of total supply,” Gero said. “We haven’t seen anything close to that as economically available. That may be the technical potential, but not the economic potential.”

Project developer Blue Source commended the ARB for its hard work in developing a protocol that will economically enable the destruction of waste mine methane previously vented to the atmosphere. “ARB has constructed a protocol that is scientifically sound, technically robust and practical in its workability and application, which should all result in measurable, real and permanent reductions in greenhouse gas emissions,” said CEO Eric Townsend in his public comments. But the ARB’s decision was not without controversy, as several observers objected based on the notion that adoption of the protocol would incentivize the development of major coal mining and natural gas extraction operations and lead to increased environmental degradation. General objections were also raised to the use of carbon offsets and trading mechanisms as a solution to address climate change. The ARB has previously been sued over the offset protocols allowed in the cap-and-trade program and although the ARB prevailed in court in January 2013, the ruling is under appeal.

Forest buyers now on the hook

Another key change approved as part of the package of amendments will shift the risk of invalidation for forestry offsets away from forest owners to regulated emitters that submit the offsets for compliance. The so-called buyers’ liability provisions featured in California’s cap-and-trade regulations allow the regulators to invalidate offsets that are found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. In the original rules, forest owners were found to be responsible for the invalidation risk. But once the amendments take effect, the buyers of forest carbon offsets will bear the risk, as do buyers of offsets from other types of projects eligible for the California program.

General support exists for the ARB’s efforts to ensure uniformity of the invalidation rules across all project types, according to stakeholders. But Chevron had previously expressed concerns about shifting the invalidation risk for forestry projects.

“To the extent that buyers’ liability is the enforcement tool that ARB has, I think it’s right and reasonable that that is applied consistently across all the protocols,” Gero said. “Forestry was originally treated differently, but I think (the ARB) came to realize that consistency with the other protocols was important.”

Additional resources

Katoomba XX kicks off on Earth Day in Lima, Peru, and just in time – new UN Food and Agricultural Organization data shows that emissions from agriculture, forestry and fisheries have nearly doubled over the past half century. At the ninth meeting of the Carbon Fund, efforts to reduce emissions from deforestation did, however, make some headway, with four nations’ REDD+ proposals approved. This unlocks a potential $50 million to $70 million in financing for each country.

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

 24 April 2014 | Forest Trends’ Katoomba events are known for bringing people who don’t always talk to each other – soy tycoons and environment ministers, for instance – together to discuss practical solutions to major ecosystem services problems. The twentieth event, which begins today in Lima, Peru, has this kind of ambitious agenda. The theme is alignment. Attendees will consider how climate change, forests, water and people are deeply intertwined, and how payment for ecosystem services (PES) strategies addressing these issues must align, too. Current events in Peru provide an interesting (albeit frustrating) backdrop: The country’s comprehensive PES law, in development for six years now, was finally slated to be formally debated before the National Congress last week – but that debate has been delayed yet again.  

Katoomba speakers will include Manuel Pulgar-Vidal, Peru’s Minister of Environment; Almir Surui, the Chief of the Paiter Surui people in Brazil; Rachel Kyte, World Bank Vice President and Special Envoy for Climate Change; Cesar Augusto Garcia, Director of Science and Technology at the Colombian Cattlemen Federation; and many more diverse actors from the public, private, and non-profit sectors. Discussions from the event will lead into the twentieth United Nations Framework Convention on Climate Change’s (UNFCCC) Conference of the Parties, to be held in Lima in December.
   

Conversations between conservationists and big agriculture, policymakers and business executives are especially urgent in light of new UN Food and Agricultural Organization (FAO) data that shows emissions from agriculture, forestry and fisheries have nearly doubled over the past half century and could increase another 30% by 2050. The largest source of agricultural greenhouse gas (GHG) emissions is livestock methane (from belches), followed by synthetic fertilizers, methane releases in rice paddies, and savannah-burning. Net GHG emissions due to land use change (mainly forests converting to other land uses) fell almost 10% between 2001 and 2010, but still averaged four billion tonnes of carbon dioxide equivalent (tCO2e) per year.
   

Efforts to reduce emissions from deforestation did, however, make some headway during the ninth meeting of the Carbon Fund held in Belgium from April 9 to 11. Launched in 2011 by the World Bank’s Forest Carbon Partnership Facility, the Carbon Fund is meant to provide performance-based payments to countries that make significant progress in Reducing Emissions from Deforestation and Degradation of forests (REDD). Four of those countries’ REDD+ proposals – Nepal’s, Ghana’s, Mexico’s, and the Democratic Republic of Congo’s (DRC) – were selected at the meeting, and may each receive between $50 million and $70 million in financing. Mexico’s National Forestry Commission has already signed an agreement to receive $3.8 million. Chile’s and the Republic of Congo’s proposals were not selected this time around, but they’ll have another chance in June when the Carbon Fund will consider five to seven more countries vying for their available $465 million.
   

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

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INTERNATIONAL POLICY A price tag beyond carbon? How should non-carbon benefits (NCBs) be incorporated into REDD? Seventeen countries weighed in by submitting comments on the UNFCCC’s methodological guidance document. The comments emphasize the strong link between NCBs such as improved forest governance and enhanced forest resilience and the REDD safeguards for communities and indigenous peoples. However, countries have different opinions as to whether NCBs should be incentivized with performance-based payments. The European Union commented: “The main incentive for countries to strive for NCBs are the NCBs themselves. Hence, there is no need for dedicated payments or price premiums for NCBs under the UNFCCC.” The Philippines, on the other hand, observed that: “REDD+ finance must incentivize other key outcomes…”   NATIONAL STRATEGY AND CAPACITY A crumbling façade Tree plantations in New Zealand removed 71.6 million tonnes of carbon from the atmosphere between 2008 and 2012, just over the country’s 70.7-million-tonne allowance, and enough to meet its Kyoto Protocol obligation. But net emissions in New Zealand are on the rise – some projections show by as much as 50% in the next 10 years – and maturing forests soon won’t be able to make up the difference. “From 2008 to 2012 the country’s 25% increase in carbon emissions was masked by carbon stored in forests planted in the 1990s,” said Forest Owners Association chief executive David Rhodes. “As these trees are harvested, forestry will move from being a carbon sink to being a carbon source.”   Practice makes perfect Cameroon has been pursuing REDD since 2008, but it wasn’t until last week that the government published a guide outlining good practices. The guide was developed in collaboration with World Wildlife Fund, the German development agency Deutsche Gesellschaft fí¼r Internationale Zusammenarbeit, and the Cameroon Centre for Environment and Development. It identifies steps for gaining indigenous and community consent for REDD projects, including providing full information about proposed activities and holding pressure-free negotiations.   Seeking dry land California is going to great pains to embrace agricultural and forestry carbon offsets in its cap-and-trade program, with the state’s Air Resources Board set to considering adding a rice cultivation project type in September. But market participants see opportunities for even more land-based project types to be added to the system, including avoided grassland conversion, wetland restoration, composting and rangelands. Bringing additional land-based offsets into the program is challenging due in large part to high monitoring and verification costs, but aggregation of project activities could help solve this problem.   PROJECT DEVELOPMENT Safe cooking, post-danger The Darfur Low Smoke Project was up against tough odds. It took two years for an auditor to agree to visit North Darfur to verify the 36,000 tonnes of emissions reductions achieved by the Gold Standard project, which has delivered 6,000 of its target 10,000 clean-burning liquid petroleum gas cookstoves to date. The project was launched in 2007 by the local Women’s Development Association Network, Practical Action, and Carbon Clear. Its first offsets were recently sold to a United Kingdom-based insurance firm. Carbon Clear created a micro-loan scheme to help women pay the upfront costs of the stoves, and repayment rates are now above 90% despite widespread poverty in the region. Women associated with the project have also established 42 community forests.   Yurok first to the finish The Yurok tribe in April became the first organization to earn forestry offsets under the compliance pathway featured in California’s cap-and-trade program. The Yurok Tribe/Forest Carbon Partners CKGG Improved Forest Management Project covers 8,000 acres in Humboldt County and was issued 836,619 offsets for potential sale to compliance buyers. “We have lost many of our old trees to deforestation, and numerous native plant and animal species, especially deer and elk, are struggling because of it,” said Thomas P. O’Rourke Sr., Chairman of the Yurok Tribe. “This forest carbon project enables the Tribe to help transition these acres back into a tribally managed natural forest system where wildlife and cultural resources like tanoak acorns, huckleberry, and hundreds of medicinal plants will thrive.”   Beyond Petroleum? The Hoopa Valley tribe of California is negotiating a potential multi-million-dollar deal with oil major BP to generate carbon offsets by preventing the chopping of old-growth timberlands in its 12-mile-square reservation, also in Humboldt County. A 2012 study by project developer Finite Carbon found that the forest could generate an impressive 250 offsets per acre for a value of $80 million to $120 million over 100 years. Some tribal members fear that carbon offset sales would damage their reputation by giving BP a ‘permit to pollute’ while others are excited about the large potential for job creation in the valley.   FINANCE AND ECONOMICS Conservation pays Code REDD, a nonprofit organization that calls on major private sector players to support and scale REDD+ projects, held a high-profile event in Bogotí¡, Colombia on April 9. The location was significant in that 80% of the world’s REDD offsets originated from projects in Latin America in 2012, according to Ecosystem Marketplace’s State of the Forest Carbon Markets 2013 report. Deforestation is now estimated to cost the global economy $2-5 trillion per year in lost ecosystem services such as carbon sequestration and water purification, according to a Code REDD press release. “Through our experience we have learned that conservation IS economic activity,” Chris Abrams, Director of Environment at the United States Agency for International Development, said at the event.   SCIENCE AND TECHNOLOGY The good dirt In an analysis synthesizing data from 92 forests in various climatic zones, researchers found that soil nutrients may play a larger role in forest carbon storage than previously understood. Forests growing in fertile soil were able to sequester about 30% of the carbon they acquire through photosynthesis, while forests rooted in nutrient-deficient soils retained only 6% of the available carbon, the study found. “When plants are in nutrient poor conditions, they send out more roots and produce chemicals that can help dissolve nutrients from the soil. This takes energy, though, and so the plants produce less biomass,” said Michael Obersteiner, one of the study’s authors.   Smoker’s lungs The “lungs of the Earth” won’t be able to breathe as well if they’re on fire. In fact, fires in the Amazon rainforest could turn the largest carbon sink in the world into a source of carbon emissions, according to a study published in the Proceedings of the National Academy of Sciences last week. While temperature increases and precipitation decreases have long been included in climate models, “it’s only in the past couple of decades that fire has even been recognized as a major disturbance,” said Jennifer Balch, who co-led the study. The problem is not specific to the Amazon. The Indonesian province of Riau made headlines last week for its burning peatlands.   HUMAN DIMENSION Hands off our rainforest On April 12, the civil society group Yasunidos delivered 54 boxes containing 756,291 signatures to the Ecuadorian capital. Its aim? To keep the 846 million barrels of crude oil beneath Yasuní­ National Park underground. Ecuadorian President Rafael Correa had sought $3.6 billion from the international community in exchange for keeping intact the biodiversity and carbon sequestration the Park provides but abandoned the plan in August when only a fraction of the money had been raised. However, the signatures are more than the 600,000 needed to bring the issue to a popular vote. First, though, 30 people will spend a month verifying the signatures, with another 30 observers from Yasunidos overseeing the process.   Don’t hate me because I use palm oil Major palm-oil user Proctor & Gamble, the maker of products such as Bounty paper towels and Pantene shampoo, announced a commitment to no deforestation in its supply chain, upping the ante from its previous promise to purchase only certified palm oil. The announcement came after a Greenpeace report claimed that Proctor and Gamble’s suppliers in Indonesia were causing deforestation and that less than 10% of its supply chain was actually certified. A Greenpeace exposé also led to paper packaging giant Asia Pulp and Paper (APP) to announce a zero deforestation policy a year ago.   Ready for their close-ups What do you do when thousands of scientists issue a dire warning for the planet (for the fifth time) and policymakers still drag their feet? Well, one new idea is to pull in celebrity ‘correspondents’ such as Jessica Alba, Matt Damon, and Arnold Schwarzenegger to report the story in a fresh way. The first episodes of Years of Living Dangerously aired on Showtime in April. Indiana Jones star and Conservation International board member Harrison Ford is the ‘face’ of the series on deforestation in Indonesia, which explains the REDD mechanism to a lay audience. “This series has a reach … which exceeds nearly every other public climate change communication project that has been done,” said co-producer Jeff Horowitz in an interview with Monagabay.com.   Just say no (to deforestation) We’ve heard of ‘leakage’ in relation to forest carbon projects, but new research by geographer Kendra McSweeney shows that it may also apply to the ‘war on drugs’ in Mexico, which has been causing narco-traffickers to ‘leak’ their operations south to Honduras, Guatemala, and Nicaragua. This has an unfortunate side effect for forests as the landing strips and roads associated with the drug trade lead to increased rates of deforestation. In Honduras, for instance, annual deforestation quadrupled between 2007 and 2011 in coincidence with a surge in cocaine trafficking. And this may lead to yet another unfortunate side effect: Those that get rich off the drug trade tend to invest their profits in cattle ranches and palm oil – more drivers of deforestation.   STANDARDS AND METHODOLOGY SMUD getting its feet wet The Sacramento Municipal Utility District (SMUD), one of the largest publicly-owned utilities in the United States, is joining forces with the American Carbon Registry (ACR) to develop a methodology to quantify and credit emissions reductions from restoration of California deltaic and coastal wetlands. The protocol would allow offsets from restoration projects to be sold on the voluntary carbon market and – they hope – would eventually make their way into California’s compliance market. The potential is huge: ACR estimates that between 7-26 million tonnes of emissions reductions could be achieved through wetlands restoration in California. But SMUD understands that protocol adoption is a long process, so wetlands offsets would likely not be included in California’s compliance regime until 2018, at the earliest.   Greening China’s grass A new methodology just approved by the Verified Carbon Standard could help farmers in China and other countries tap into the carbon markets to help them manage their grasslands more sustainably. The methodology, developed by the FAO, the Chinese Academy of Agriculture Science, the World Agroforestry Center and the Northwest Institute of Plateau Biology, could be particularly useful in mitigating the impact of China’s growing population on its carbon footprint. Projects under the methodology, which helps overcome the major hurdle of high measuring and monitoring costs, could also be recognized by the China Certified Emissions Reduction offset program.   The grazing could always be greener ACR recently released a new methodology for avoided GHG emissions on grazed grasslands for public comment. Developed by Terra Global Capital with support from the Environmental Defense Fund, Silver Lab at the University of California Berkeley, and the Marin Carbon Project, the methodology provides an accounting framework for the carbon storage achieved by adding compost to fields – both by enhancing plant growth and by diverting organic waste that would otherwise decompose in landfills, releasing methane. If approved, it would generate offsets for the voluntary carbon market. The public comment period is open through May 14.   PUBLICATIONS I’ll pay you unconditionally A new report by the Center for International Forestry Research (CIFOR), The challenge of establishing REDD+ on the ground, examined 23 subnational REDD+ initiatives in six countries – Brazil, Cameroon, Indonesia, Peru, Tanzania, and Vietnam. Among other findings, researchers stated that 18 of the 23 initiatives have or will implement conditional incentives, but only nine viewed them as the single most important thing that would reduce deforestation, calling into question whether performance-based payments – once considered the cornerstone of REDD – are as central as previously believed.   Burning up in sub-Sahara Africa Current climate models predict that average temperatures in Central Africa will be 1.4 degrees Celsius hotter in 2050 than today. But a recent study published in the Journal of Climate finds that deforestation in the Congo Basin could add another 0.7 degrees Celsius to that figure. “Once deforestation has occurred, the solar energy that rainforests would otherwise use to evaporate water accumulates near the Earth’s surface, causing the atmosphere to warm,” the authors explained.   JOBS Director of Governance Research – CIFOR Based in Bogor, Indonesia, the Director of Governance Research for the CIFOR will be responsible for the development, management, delivery and scientific quality of the organization’s governance research. The position requires managing a multidisciplinary research team, fostering partnerships, and representing CIFOR at key international forums. The successful candidate will have a PhD in a relevant discipline, extensive research management experience, and a proven fundraising record. – Read more about the position here   President – Microsol Based in Paris, France, Lima, Peru, or Mexico D.F., Mexico, Microsol’s President will lead teams over these three geographic locations and pursue Microsol’s work in the generation, certification and sale of high-social-impact carbon projects in Latin America. The successful candidate will have a master’s degree or equivalent and at least seven years of experience in a similar position; be able to ensure the firm’s financial health; possess strong leadership and negotiation skills; and speak French, English and Spanish. – Read more about the position here   Northwest Site Manager – Blue Ventures Conservation Based in Ambanja, Madagascar, the Northwest Site Manager will manage the field implementation of Blue Ventures Conservation’s community-based Verified Carbon Standard mangrove project in the Ambaro and Ambanja Bays of Northwest Madagascar. The manager will also help start up a fishery and aquaculture scheme, and help develop a sustainable mangrove timber harvesting approach. – Read more about the position here   Finance Associate / Business Manager – BioCarbon Group Based in New York, New York, the Finance Associate / Business Manager will provide key financial leadership to the BioCarbon Group, an international investor in land-based carbon projects, such as forests and cookstoves. The successful candidate will have three years of experience in investment banking, managing consulting, or financial services; an understanding of corporate financial statements; experience in environmental markets and carbon project development; and working experience in developing countries, particularly Africa/South America. – Read more about the position here   Communications Manager, Energy and Finance Program – Rainforest Action Network Based in San Francisco, California, the Communications Manager will shape the communications strategy for Rainforest Action Network’s Energy and Finance Program, which has pushed leading banks to pass policies that curb investments in companies that contribute to deforestation. The job involves writing op-eds, letters to the editor, talking points and other media materials; training staff and volunteers in media skills; and creating press lists and keeping the media contact database current. The successful candidate will have three years’ experience as a media liaison or journalist, with a strong public relations component. – Read more about the position here   Applied Forest Scientist – Climate Smart Land Network (CSLN) Based in Plymouth, Massachusetts, the Applied Forest Scientist will support the Manomet Center for Conservation Sciences’ CSLN, which is designed to help large-scale forest landowners integrate climate science into their forest management and planning. The position requires synthesizing existing science on climate change adaptation for forests; structuring monitoring protocols for regional threats; working with CSLN members to link this information to their planning, management, and monitoring processes; and documenting how CSLN members are responding to climate change. The successful candidate will have a master’s or PhD in forestry and strong analytic skills. – 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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