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This Week In Forest Carbon News…

Early findings from our State of the Voluntary Carbon Markets 2014 report show that REDD projects more than doubled their transaction volumes from 2012 to 22.6 million tonnes of carbon dioxide equivalent, at a $94 million value. REDD also got a boost last week when US Secretary of State John Kerry announced that the US Agency for International Development (USAID) will guarantee the Althelia Climate Fund at $133.8 million.

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

 

3 June 2014 | Forest Trends’ Ecosystem Marketplace launched the Executive Summary of our State of the Voluntary Carbon Markets 2014 report last week to a full house at Carbon Expo in Cologne, Germany. In the context of a market in which some projects struggled to find buyers, projects that reduce emissions from deforestation and forest degradation (REDD) more than doubled their transaction volumes from 2012 to 22.6 million tonnes of carbon dioxide equivalent (tCO2e) in 2013 – enough to offset the annual emissions from energy production in a small country such as the Dominican Republic or Croatia.

The market value of REDD also increased by 35% in 2013, to $94 million, buoyed by a significant and historic transaction between the German development bank KfW (Kreditanstalt fí¼r Wiederaufbau) and Brazil’s Acre state. This growth came at an average price of $4.2/tCO2e, down from $7.4/tCO2e in 2012 – though less than a handful of REDD project developers sold REDD offsets at under $3/tCO2e.

“Some of the larger [REDD] projects are able to unload a significant quantity of offsets at a very low price to help with their cash flow issues,” explained Brian McFarland of Maryland-based CarbonFund.org, in an interview with Ecosystem Marketplace. McFarland noted that he’s hoping for a compliance signal from California or (longer-term) China or a forward market commitment by a multi-lateral agency like the United Nations’ REDD program or the World Bank’s Forest Carbon Partnership Facility.

Other REDD projects are holding their ground on price.

“We continue to believe that REDD+ projects really shouldn’t be looked at the same as other projects; they really do have a minimum threshold if you want to have a good REDD+ project that’s making the right kind of investment in communities,” said Mike Korchinsky, President of Wildlife Works, a leading REDD project developer in Africa. “There is a minimum cost and therefore there is a minimum price.”

In March, the Althelia Climate Fund made its long-awaited first investment in a REDD+ project, supporting Wildlife Work’s Kasigua Corridor project in Kenya’s Taita Hills to the tune of $10 million. And, just last week in Cologne, US Secretary of State John Kerry announced that the US Agency for International Development (USAID) will guarantee the Althelia Climate Fund at $133.8 million in order to de-risk forest conservation and sustainable agriculture projects.

Stephen Matzie, Investment Officer for the Development Credit Authority (DCA) at USAID, commented on the announcement: “REDD is a good place for us to work because there are some huge challenges, some of them just in terms of how little upfront financing there is to develop projects, the length of time it takes to develop projects that can be implemented and earn credits and prove sustainability over time and, of course, the challenges of being solely in the voluntary markets at this point,” he said.

Other forest carbon offsets, including those from afforestation/reforestation, improved forest management, and agro-forestry projects accounted for an additional 4.1 million in transactions and $37 million in value as these project types maintained above-average pricing, according to the State of data.

We hope that you’ll join us either in person or via webcast for the launch of the full State of the Voluntary Carbon Markets 2014 report on June 24 in Washington DC from 4:30-6:00 EDT. Details to follow.

More stories from the forest carbon marketplace 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 general@forestcarbonportal.com.


News

INTERNATIONAL POLICY

Vamos, Colombia

Kerry’s announcement about USAID’s guarantee for REDD projects made a splash at Carbon Expo, but agency officials made it clear that they’re not newbies when it comes to reducing deforestation projects. USAID has supported the BioREDD+ program in Colombia since 2011, through which $27.8 million will be invested in eight REDD+ projects covering more than 700,000 hectares along the Colombian Pacific Coast. The agency’s partial credit guarantees certainly make a difference, but multiple revenue streams and partners are what would really ensure the long-term financial security of the projects. Matzie of the DCA said that if project partners could ever convince a Colombian bank to participate in a transaction financing a local REDD+ project, it would be a “landmark event.”

NATIONAL STRATEGY AND CAPACITY

Looking for a $1 billion boost

The Democratic Republic of Congo (DRC) is seeking funding to protect nine million hectares of rainforest under the United Nation’s REDD+ mechanism. Project developer Wildlife Works is assisting the Congolese government in the design of the program. “The DRC accepts its responsibility to protect its forests for the benefit of humanity,” Bavon N’sa Mputu Elima, the DRC Minister of Environment said. “But as a developing country we require a partnership with industrialized nations to provide the financial support needed by the program.” The Congo Basin and surrounding regions are the second largest concentration of rainforest outside of the Amazon.

PROJECT DEVELOPMENT

Bamboo shoots, scores

EcoPlanet Bamboo last week completed verification of its 2014 vintage offsets under the Verified Carbon Standard (VCS) from its Nicaragua projects – marking the debut of bamboo offsets on the voluntary carbon market. In an interview with Ecosystem Marketplace, EcoPlanet Bamboo founder Troy Wiseman explained why the company pursued triple certification with VCS, the Community, Climate and Biodiversity (CCB) Standard, and the Forest Stewardship Council (FSC) – and how the upfront investment pays off in its bottom line. “We are currently negotiating an offer for this year’s vintage as we speak,” he said.

No place like home

The Conservation Fund’s Go Zero program last week announced that two US-based projects achieved gold level verification with the CCB Standard, which certifies climate, community and biodiversity benefits. The Marais des Cygnes River project south of Kansas City restored 775 acres of native oak and hickory, reinvigorating lost habitat for migratory birds. And the Red River National Wildlife Refuge project in Louisiana facilitated the planting of hundreds of thousands of cypress, oak and hickory trees across 1,180 riverside acres. The projects are expected to sequester 260,500 and 300,000 tCO2e, respectively.

Red light, green light

The CarbonFund.org’s Brian McFarland is “hesitantly optimistic” about REDD offsets after the roller coaster year that was 2013. The organization’s CarbonCo subsidiary Purus Project – the first REDD+ project in Acre, Brazil – issued carbon offsets in January, and McFarland hopes that, given oversupply on the voluntary carbon market, there may be a place for REDD in compliance programs. “It seems like it’s still on the radar for California, but they have some higher priorities they are working on now. China will definitely be a longer-term play,” he said. His interview with Ecosystem Marketplace is available in full here.

FINANCE AND ECONOMICS

More bang for the carbon buck

More than four million people die each year from strokes, cancer and cardiopulmonary diseases caused by indoor cooking, according to the World Health Organization. Clean cookstoves can save millions of lives around the world, and voluntary carbon markets have become a key source of finance. Government actors such as the Swedish Energy Agency are recognizing the added benefits beyond carbon offsets that clean cookstoves can provide and are willing to pay a premium price for those projects. In the State of the Voluntary Carbon Markets 2014, Ecosystem Marketplace found that the additional social, economic and environmental benefits of cookstove distribution projects resulted in one of the highest average prices paid for any offset type at $9.2 per tonne of carbon dioxide eliminated.

SCIENCE AND TECHNOLOGY

Feeling degraded

Carbon loss from tropical forests is being significantly underestimated, according to a recent report published in the journal Global Change Biology. Researchers say degradation in Brazil causes additional emissions equivalent to 40% of those from deforestation or about 54 billion tonnes in 2010. “It is mainly fires that escape from burning pasture, selective logging and edge effects,” said Erika Berenguer from Lancaster University. The new study attempts to overcome the limitations of satellite-based monitoring that only evaluates canopy cover by using on-the-ground assessments. Forest loss in the Amazon is said to account for 12% of human-induced greenhouse gases (GHG).

We’re melting!

Black carbon may be contributing to an increased rate of surface snow melt on Greenland’s ice sheet and thus more rapid ice thawing, according to a new study in the Proceedings of the National Academy of Sciences. Black carbon – fine particulate matter from burned fossil fuels and forest fires – absorbs the sun’s radiation more than white snow and raises surface temperature. The study examined climate data and cores of Greenland’s snowy layers during the country’s biggest recorded thaws, in 1889 and 2012. Those years saw both warm temperatures as well as heavy blankets of black carbon that combined to cause rare snow-surface melting on up to 97% of the ice sheet.

Vines choking out carbon

Not all plants are created equal when it comes to carbon storage. A study published this month in Ecology shows that a woody vine called lianas, which inhibits the growth of trees, results in a net loss of forest carbon sequestration. Lianas climb to the top of the canopy and shade out sunlight for the trees that support them. Scientists in Panama showed that lianas can reduce net forest biomass accumulation by almost 20%. Previous research has demonstrated that lianas are increasing in tropical forests around the globe. Their success may be due to decreased rainfall and lianas’ comparatively high drought tolerance.

HUMAN DIMENSION

Take the challenge, Pepsi!

PepsiCo – which includes the brands Lays, Tropicana and Quaker in addition to its namesake – has increased its commitment to avoid deforestation in its supply chain for 450,000 annual tonnes of palm oil to also avoid conversion of peatland to plantations. PepsiCo had previously pledged to only use palm oil certified under the Roundtable on Sustainable Palm Oil by 2016. However, some environmental organizations are pressuring PepsiCo to go further, pointing to P&G, Unilever and Nestle as having stronger safeguards. They cite the need for greater traceability and a full action plan for implementation of the policies.

STANDARDS AND METHODOLOGY

Plugging the leaks

Agriculture, forestry and other land use (AFOLU) projects present a significant opportunity to sequester GHG emissions. To ensure these projects are not displacing emissions elsewhere, VCS projects are required to quantify and deduct any leakage. In cooperation with the Leakage Working Group, VCS has developed an AFOLU Project Market Leakage Module. This ensures consistent accounting procedures for market leakage for both jurisdictional programs and any projects nested within the jurisdictional program. A public comment period on the proposed module will be open until June 28.

Tag, you’re social!

Emissions reductions are great, but reductions with added environmental, social and economic benefits are better. The VCS, 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 shown that offsets that can demonstrate additional co-benefits collect a price premium in the market.

PUBLICATIONS

Leading from ahead

MegaFlorestais, a group of leaders of public forest agencies worldwide, discusses challenges and shares experiences on critical issues affecting forests and forest peoples, including climate change, market transitions, forest tenure, poverty alleviation and public governance. Given that public forest agencies officially control some 75% of all forests worldwide, the outputs of this group can provide global insight into forest management in the immediate and longer-term future. This latest report focuses on driving change through transparency, tenure reform, citizen involvement and improved governance.

Not drinking the Kool Aid

Oxfam calls on the top 10 food and beverage companies to face up to the scale of GHG emissions produced through their supply chains, and address deforestation and unsustainable land-use practices. The anti-poverty coalition compares the public commitments that each company has made side-by-side on a number of agricultural and deforestation policies and argues these companies should better leverage their influence to call for urgent climate action from other industries and governments.

JOBS

Director – Center for International Forestry Research, CGIAR Program

Based in Jakarta, Indonesia, the Director of the CGIAR Research Program on Forests, Trees and Agroforestry: Livelihoods, Landscapes and Governance will lead the CGIAR research initiative, which brings together several hundred scientists from six programs, with a 2014 budget of $89 million. The successful candidate will have a PhD or advanced degree in a relevant discipline, proven expertise in leading collaborative research, and knowledge and experience of the CGIAR and its operations.

Read more about the position here

Senior Researcher, Commodities and Transparency – Global Canopy Programme (GCP)

Based in Oxford, United Kingdom, the Senior Researcher at GCP for Commodities and Transparency will pioneer research into how to reduce the impacts of major agricultural commodities on forests and create demand among producers and retailers to ‘green’ supply chains. GCP is looking for candidates with an advanced degree and deep knowledge of key forest risk commodity supply chains, as well as experience working with the sustainability/CSR/procurement sector – and availability for extensive international travel.

Read more about the position here

Senior Manager, Sustainable Forest Management – World Wildlife Fund (WWF) India

Based in New Delhi, India, the Senior Manager for Sustainable Forest Management will implement WWF India’s strategy for promoting responsible forest projects trade and credible forest certification, in particular FSC and Global Forest & Trade Network within India. The successful candidate will have 7-10 years experience of working on forest conservation and forestry industry issues, an advanced degree in forestry or a related field, and a strong technical background of the Indian forestry sector.

Read more about the position here

Carbon Projects Officer – CO2balance

Based in Taunton, United Kingdom, the Carbon Projects Officer will conduct and assist with the research, development, documentation and coordination of Gold Standard, VCS and Clean Development Mechanism projects. The position requires conducting feasibility studies for potential project activities, liaising with stakeholders, completing project documentation, and keeping up-to-date with developments in the carbon management industry. CO2balance has developed several micro-scale clean cookstove projects across Africa that reduce the need for fuelwood.

Read more about the position here

Methodologies Manager – Verified Carbon Standard (VCS)

Based in Washington, DC, the Methodologies Manager will supervise the management of VCS methodologies, interacting with a wide range of stakeholders on many technical and operational aspects of the VCS. The successful candidate will have a minimum of six years of professional experience, preferably within the context of GHG inventories or carbon markets and detailed knowledge of methodological topics, including project boundaries, baselines, additionality, leakage, non-permanence and monitoring.

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 info@ecosystemmarketplace.com.

 

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