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This Week In V-Carbon: California Discusses Mine Methane Offsets

The California Air Resources Board (ARB) was expected to vote on several draft amendments to carbon market regulations last week, including the proposed Mine Methane Capture (MMC) offset protocol, but put off a vote in the context of lively debate. The delay could shrink the volume of offsets available during the second compliance period of the state’s cape-and-trade program.

The California Air Resources Board (ARB) was expected to vote on several draft amendments to carbon market regulations last week, including the proposed Mine Methane Capture (MMC) offset protocol, but put off a vote in the context of lively debate. The delay could shrink the volume of offsets available during the second compliance period of the state’s cape-and-trade program.

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

30 October 2013 | In London on November 6th…


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This week in V-Carbon…

The California Air Resources Board (ARB) met last week but did not vote to approve the addition of the proposed Mine Methane Capture (MMC) offset protocol, as expected. Instead, the board voted on a resolution to provide staff with more guidance on proposed amendments to the state’s cap-and-trade regulation.

 

In the context of a potential shortage of available offsets, many stakeholders have their sights on the proposed MMC offset protocol that could produce a potential domestic offset supply of 60 million tonnes of carbon dioxide (tCO2e) in emissions reductions, according to an ARB presentation on Friday. The proposed methodology covers activities from three project types: active underground mines, abandoned underground mines, and active surface mines. Under the protocol, the methane that would otherwise be vented or drained to the atmosphere is either destroyed or captured to generate heat or electricity.

Public comment on the protocol was mixed. Groups that oppose its adoption are generally skeptical of offsets sourced from fossil fuel companies. In their submitted comments, nonprofit Food & Water Watch calls the protocol a “pay to pollute scheme” and claims that the protocol could “even cause an increase in coal production.”

Supporters of the protocol’s adoption say that offset revenue would not increase coal production but would rather incentivize the installation of methane capture technology, which is currently not required by law. Harold Buchanan, CEO of CE2 Carbon Capital, says that the reality is that fugitive methane emissions are unregulated, and coal mines have no incentive to invest in its capture without the MMC protocol.
 

In their comments to the ARB, Solvay Chemicals, which operates an underground trona mine in Wyoming, said that they are considering doubling the capacity of their mine methane capture treatment system, and that the ARB’s adoption (or not) of the MMC protocol will play a key role in that investment decision. Because capital for new projects will be “very tight” until the protocol is approved, the delay could significantly shrink the volume of offsets available from coal mine projects during the second compliance period, said one MMC project developer. The protocol does not preclude future regulation.

The ARB’s staff is now tasked with answering the questions raised by the latest guidance document, even as they continue to accept public comments. They will revisit the MMC protocol in the spring, along with the rice cultivation protocol, which was delayed last August. Read more about the draft amendments under consideration by the ARB below.
 

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V-Carbon News

Voluntary Carbon

Big plans for small projects

The Gold Standard Foundation this month registered its first project under the Programme of Activities approach for micro-scale projects (called mPoA for short), which allows emissions reduction projects of less than 10,000 tCO2 per year that share the same baseline and methodologies to join forces under a single Programme. The first mPoA is a cookstove project in southeastern Rwanda funded by Climate Corporation Australia and developed by co2balance that aims to distribute 1,600 Carbon Zero stoves to rural households. The development of the micro-scale approach, which is meant to reduce transaction costs and open up opportunities for otherwise too-small projects to access climate finance, was funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. The Gold Standard has more big (or should we say small?) plans in the works: 12 micro-scale Programmes in Asia, Africa, and Latin America are in their pipeline.

Read more


Offsetting hot air

Better World Club, the “nation’s only eco-friendly auto club” recently announced that it would offset “one of the nation’s most important sources of hot air: the U.S. Congress.” Based on a Department of Energy estimate of Congress’ emissions, the group says that the “Capitol Power Plant” emits more than 100,000 tCO2e per year, but the Better World Club can only afford to offset 100 tCO2e of the carbon pollution. “We’re not Warren Buffett, so we can’t offset all of it!” they write. The offset purchase will support emissions reductions at an industrial recycling facility in California. Better World Club, which provides roadside assistance and insurance, promotes less driving and investment in public transportation but encourages Americans to purchase carbon offsets to mitigate unavoidable emissions. They have a carbon calculator for drivers on their website.

Read more in CSR Wire
Read more about Better World Club


Shipping neutral

London-based Standard Chartered Bank last week renewed its contract with DHL GOGREEN to offset its shipping emissions for another three years, through 2016. In 2012, the bank offset 1,900 tCO2e through DHL to neutralize its emissions from shipments to 21 countries. The DHL GOGREEN program is opt-in for customers like Standard Chartered Bank that pay a modest surcharge to neutralize the carbon dioxide emissions of their shipments. The offsets support a portfolio of GOGREEN-approved projects, including ceramic water purifiers in Cambodia, reforestation in Uganda, wind energy in China and Nicaragua, and a biomass power plant in India. Last year, DHL customers sent 2.4 billion shipments through GOGREEN, neutralizing 180,000 tCO2e. In 2013, they’re on track to increase that number. The offsets all meet Certified Emissions Reduction (CER) or Verified Emissions Reduction (VER) Gold Standard requirements and are verified by Swiss-based Societe Generale de Surveillance, an independent United Nations (UN) auditor.

Read more about Standard Chartered Bank’s offsetting
Read more about DHL GOGREEN


Where sustainable harvest meets REDD

Yesterday, a 65,000-hectare portion of the Jari-Amapa forest in the Brazilian Amazon achieved third-party verification as a carbon offset project under the Verified Carbon Standard. The project, developed by Biofí­lica Environmental Investments, will leverage capital to deter the major drivers of deforestation in the area–including cattle ranching, expanding human settlement, and infrastructure projects–to avoid over 3 million tCO2 of emissions under the Reduced Emissions from Deforestation and forest Degradation (REDD) protocols. The Jari-Amapa forest, which covers 200,000 acres in total, is Forest Stewardship Council certified, and its harvesting operations by Brazilian forest products company Jari Forestral are carefully planned based on monitoring and inventory data. The forest is home to more than 150 threatened species.

Read more


Praying for carbon guidance

Last week, Finite Carbon registered 4,000 acres of the Shannondale Tree Farm with the Climate Action Reserve (CAR). The farm belongs to the Missouri Mid-South United Church of Christ and marks the first religious organization in the U.S. to complete a carbon offset for CAR. The project qualifies for more than 120,000 offsets and can supply early action offsets to California’s cap-and-trade program. “One of my personal hopes is that the churches will use this moment to inventory their own emissions of carbon through travel, heating and cooling, and plastic purchases, and to commit to reduce our church-wide carbon footprint.” said Rev. Dr. Davida Foy Crabtree, UCC Missouri Mid-South Acting Conference Minister.

Read more


Chugging along

Developer Finite Carbon and transportation company Norfolk Southern have registered the Brosnan Forest Improved Forest Management carbon project in South Carolina under CAR’s forest project protocol. The project has resulted in more than 282,000 compliance-eligible carbon offsets at initial registration and is being transitioned as an early action project for the California cap-and-trade program. Brosnan Forest stretches over 14,400 acres in South Carolina’s Lowcountry, almost half of which is longleaf pine forest, a threatened ecosystem that provides habitat for some of the last remaining populations of red-cockaded woodpeckers, an endangered species. Norfolk Southern’s subsidiary Railway Company operates 20,000 miles of track across 22 states and supports reforestation efforts along and around its route, focusing on restoration of longleaf pine and American chestnut forests.

Read more


A wasteland, transformed

In the wasteland of Deramandi, India outside of New Dehli, the grasslands and native flora that once flourished are beginning to make a comeback after a century of degradation from urbanization and open cast quartzite mining. The revegetation project launched in 2008 after the government handed the land over to the Eco-Task Force of the Indian Territorial Army, members of which did most of the planting. It was recently accepted under the UN’s Clean Development Mechanism as an urban forestry project–the only one of its kind in India. The project is expected to save 12,138 tCO2e per year, but the forest department says it is too early to say how much money the sale of the CERs will generate, which depends partly on whether they find a buyer in the compliance or voluntary markets.

Read more in Times of India


Climate North America

All talk, no action

The California ARB met last week to discuss several draft amendments to carbon market regulations. The proposed changes include adding liquefied natural gas production facilities and importers as regulated entities; clarifying what counts as ‘resource shuffling,’ a practice that is prohibited under the cap-and-trade regulation; and adopting MMC as a new offset protocol, among other amendments. The Board has received 101 public comments on these proposed amendments to the cap-and-trade regulation since September. Diverse stakeholders–from the Central Contra Costa Sanitary District to the Yurok Tribe to Southern California Edison Company to the Sierra Club–have voiced their views. The Board was expected to decide on the amendments last week, but delayed the vote in the context of lively debate.

View a presentation on the draft amendments
View submitted public comments


Power in numbers

The governors of California, Oregon, and Washington and the premier of British Columbia yesterday signed the Pacific Coast Action Plan on Climate and Energy. The four sub-national governments have agreed to coordinate their 2050 greenhouse gas (GHG) emissions targets and interim goals. California and British Columbia will maintain their respective cap-and-trade and carbon tax programs and their clean fuel standards, while Oregon and Washington are moving forward to implement similar policies. “We are the first generation to feel the sting of climate change and we are the last generation who can do something about it,” Governor Jay Inslee of Washington said of the agreement. Governor Jerry Brown of California called climate change the “world’s greatest existential challenge” and said that, though states can’t make much single-handed progress on climate change, linkages can be powerful. The group has a meeting scheduled with Chinese leaders in January. The four-state region has a population of 53 million people and a combined GDP of $2.8 trillion.

Read the press release
Read more in the StarTribune
Read more in Bloomberg Businessweek


REDDy…Olé!

CAR’s Board of Directors just adopted the organization’s Mexico Forest Protocol. The protocol marks several years of collaboration between California, Mexico and CAR and was created with special attention given to ejidos’ (local communities) involvement. The Mexican Forest Protocol uses a standardized approach for measuring avoided deforestation and enhanced carbon sequestration while enhancing Mexican environmental and social safeguards. It was designed for integration within evolving Mexican REDD+ policies and could play an important role if California seeks REDD offsets for its cap-and-trade program. The protocol will “spur innovation in Mexico… and support California’s ongoing efforts to reduce greenhouse gas emissions, while expanding business opportunities and job creation,” explains Senator Lou Correa (D-Santa Ana), chair of the Select Committee on California-Mexico Cooperation.

Read more from CAR


Three minutes of fame

The US Environmental Protection Agency (EPA) last week began an 11-city “listening tour” to gather input as they draft emissions rules for existing power plants. Each commenter will have three minutes to make a statement to agency representatives. One of the big questions on the table is whether the EPA will opt for a rate-based approach, which would set a standard for each power plant, or a mass-based approach, which would credit states for reducing pollution across a variety of sectors. Officials from the nine northeastern states in the Regional Greenhouse Gas Initiative (RGGI) and from California’s cap-and-trade program are expected to make the case for the mass-based approach they’ve already taken, arguing that their power plants are compliant with carbon regulation. The rules for existing plants, which will be finalized in June 2015, are the next regulatory step after the agency proposed regulations for new power plants in September.

Read more


Follow the leader

Kenneth Kimmell, Commissioner of the Massachusetts Department of Environmental Protection, was elected the new chair of RGGI Inc, the nonprofit organization overseeing the RGGI cap-and-trade program in the Northeast US, in mid-October. He will replace current chair Collin O’Mara in January. The nine RGGI states are expected to complete approvals of the planned overhaul of the program by January, which would allow RGGI to reduce its 2014 emissions cap by 45% and adopt a new offset category known as sequestration of carbon due to reforestation, improved forest management or avoided conversion. O’Mara also reiterated that the RGGI program would be an appropriate compliance mechanism for federal carbon regulations expected next year. In addition, the RGGI Inc board unanimously approved the proposed 2014 operating budget of about $2.3 million, slightly lower than the 2013 budget and a 10% decrease from the 2012 budget.

Read more about RGGI’s new Executive Committee
Read more about offsets and RGGI


Kyoto & Beyond

Shoot for the moon?

Thirteen European environment ministers who call themselves the “Green Growth Group” yesterday released a document that called on the European Union (EU) to adopt ambitious energy and climate goals and reform the EU Emissions Trading Scheme (ETS). Ed Davey, Britain’s energy and climate secretary, said that the US and China are “catching up” to the EU on renewable energy technology and urged the EU to push for a target of a 50% cut in emissions from the 1990 baseline by 2030. (The current basis for the EU ETS is a 20% cut from 1990 levels by 2020.) Connie Hadegaard, the European Commissioner for Climate Change, said that the executive body of the EU is analyzing the impact of slightly less ambitious targets for 2030, comparing scenarios of 35%, 40%, and 45% GHG reduction targets. The proposals will be discussed during the Brussels summit in March that is expected to clarify the EU’s position for the much-anticipated 2015 UN negotiations, when countries will lay the groundwork for binding emissions targets.

Read more


Merkel holds the yo-yo

All eyes are on Chancellor Angela Merkel of Germany, who earned reelection last month, as coalition negotiations between her Christian Democratic Union party and the Social Democratic Party are underway. Two weeks ago carbon permit prices spiked after Merkel mentioned her support of backloading–or delaying the sale of some EU ETS permits to tighten supply and bolster crashing prices–in a speech. Last week, the slow pace of the negotiations prompted prices to fall again by more than 10 percent, and some analysts don’t expect Germany’s Climate Change Committee to vote on backloading until 2014. Germany’s position is seen as key in breaking the current deadlock over what (if anything) to do about oversupply in the EU ETS.

Read more


Shutting it down

The GFI Group closed its carbon desk in London in October due to lethargic trading of EU permits. In the context of an allowance surplus, emissions allowances trading was down 79% last month compared to a year ago, with prices falling 23% in 2013. Permits for December are selling at 5.12 euros (US $7.01) per tCO2e. GFI’s European brokerage services will now be handled from their main offices in New York.

Read more


Global Policy Update

And the fossil award goes to…

New government modeling shows that New Zealand’s GHG emissions are set to rise nearly 50% by 2040, from their current level of about 60 million tCO2e to 90 million tCO2e. The models account for the fact that many of the trees planted in the 1990s are expected to be harvested in the coming decades. Current carbon prices on New Zealand’s ETS are too low to incentivize much tree planting: domestic permits trade at NZ $3.75 (US $3.15), but regulated entities can also purchase UN CERs for just 30 cents. Legislation to strengthen the ETS last year by disallowing international credits and by including the agricultural sector fell through. Kennedy Graham of the Greens party wrote on his blog that it is this kind of “policy incoherence” that often wins New Zealand the infamous fossil award, assigned daily at the international climate negotiations to the country that is obstructing action on climate change mitigation.

Read more in Business Spectator


East meets West

After signing an agreement to link their cap-and-trade program with Quebec’s earlier this month, California is forging ahead with another relationship–this time with China. The San Francisco-based Bay Area Council and the Chinese Chamber of Commerce for Imports and Exports for Machine and Electronics–a group that represents more than 10,000 manufacturers–have signed an agreement to promote technologies that slash emissions at oil refineries, power plants, wastewater treatment facilities, and the like. Members of the partnership will also push the expansion of carbon markets in China–there are currently seven pilot programs in the country–and they’re keeping the option open to connect the Californian and Chinese carbon markets.

Read more about the partnership
Read more about carbon markets in China


Australian carbon tax feeling the heat

As the world waits to see if Prime Minister-elect Tony Abbott will be able to make good on his campaign promise to send Australia’s carbon tax up in flames, the countryside itself is burning: 70 wildfires raged through the bush last week, devastating more than 25,000 hectares and approaching the outer suburbs of Sydney. Adam Bandt, the deputy leader of the Australian Greens party that currently hold the majority in the senate, tweeted this week that Abbott’s backward movement on climate change mitigation means “more bushfires for Australia.” 2013 is on track to be the hottest year on record for the country, and long periods of hot, dry weather increase the risk of wildfire. Industry groups remain strong supporters of the Prime Minister’s plan, and Chamber of Commerce and Industry chief Greg Evans said last week that scrapping the carbon tax would provide $1 billion in economic growth.

Read more about the bush fires
Read an editorial by Greens leader Adam Bandt
Read more about industry’s perspective


Carbon Finance

Banking CO2 in Costa Rica

Costa Rica, which aims to become the first carbon neutral country by 2021, has created a new financial institution, aptly called BANCO2, to handle carbon credit trading. The bank will deal with Costa Rica’s compensation units, called UCCs, as well as UN CERs, and some types of voluntary market credits. Fonafifo, the Costa Rican government’s forestry company, has made 1.2 million tCO2e worth of CCUs available through BANCO2, selling them at $5 each. And transport operator Reyna del Campo has agreed to pass on its rights over UCCs from an efficient vehicles project to the bank. BANCO2 plans to support greenhouse gas reducing projects: “If a company, for example, wants to switch its energy source for a cleaner one, we could support it. If a family wants to buy solar panels to reduce its energy consumption, we could support it,” Rene Castro, Costa Rica’s environment and energy minister, said.

Read more in the Costa Rican Times

Featured Jobs

Governance of Forests Initiative Project Manager/Senior Associate – World Resources Institute

Based in Washington DC, the Project Manager/Senior Associate for the World Resource Institute’s (WRI) Governance of Forests Initiative will provide project leadership towards the goal of strengthening land use laws and practices that reduce deforestation and increase communities’ rights to natural resources. The Project Manager will help develop country-level strategies for Brazil, Cameroon, and Indonesia, as well as global strategies through international institutions. The position requires an advanced degree in a relevant field and at least 5 years experience working on issues related to forest governance.

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Team Leader/Senior Consultant Natural Resource Management – Face the Future

Based in Holland, the Team Leader/Senior Consultant will develop and implement strategy for Face the Future’s Environmental Advisory unit and Project Development unit. The position requires building relationships with clients, accessing financing for payment for ecosystem services (PES) projects, representing Face the Future at conferences, and managing a team of experts. Candidates must have at least an MS and a minimum of 10 years of international experience in natural resources management and/or climate change.

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Based in Germany, the Project Officer for ICLEI Local Governments for Sustainability will coordinate small- or medium-sized projects on sustainable procurement and provide training and consultancy services. The ideal candidate will have a degree in a relevant field such as public procurement or environmental sciences, excellent project management skills, and knowledge of financing sustainable infrastructure projects. Fluency in English is required; another European language is a plus.

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EU Climate & Energy Policy Officer for South East Europe – Climate Action Network

Based in Brussels, Belgium, the EU Climate & Energy Policy Officer for South East Europe will support and coordinate with NGOs on their no coal campaign efforts. The position requires monitoring policy developments and creating advocacy briefs; developing network positions among NGOs; building relationships with EU institutions, think tanks, and media outlets; fundraising; and reporting on activities. The successful candidate will have 3 years of professional experience working with NGOs, preferably in a network environment.

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