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This Week In V-Carbon: Canada Fights ODS With Carbon Credits

A Canadian developer becomes the first to receive carbon credits for ozone depleting substances while three new forest carbon projects have been registered under the VCS-one of which is in the Brazilian Amazon. Meanwhile, Australia’s Carbon Trade Exchange extended its reach to the US with a new exchange in Texas.

A Canadian developer becomes the first to receive carbon credits for ozone depleting substances while three new forest carbon projects have been registered under the VCS-one of which is in the Brazilian Amazon. Meanwhile, Australia’s Carbon Trade Exchange extended its reach to the US with a new exchange in Texas.



This article originally appeared in the V-Carbon newsletter. Click here to view the original.

 

26 June 2012 |The Spanish version of the Executive Summary for our  2012 State of the Voluntary Carbon Markets Report  is now out! It can be downloaded here  along with the full report in English.

 

Coming out of Rio+20, leading companies like Allianz, PPR, Eneco, Entega, and Nedbank made voluntary  pledges  to support high-quality projects under the Code REDD campaign, which is being spearheaded by project developer Wildlife Works. Ecosystem Marketplace covered the campaign launch  here.

 

In the US,  a new player emerged last Thursday when the voluntary Texas Climate & Carbon Exchange (TCCX)  opened its doors  in partnership with the Australia-based Carbon Trade Exchange (CTX). New York  and  New Hampshire  continue their membership in the Regional Greenhouse Gas Initiative (RGGI) despite challenges, while California’s ARB has emerged from one  lawsuit  only to fall under a new  EPA complaint.  

 

Up north, Canada is exploring a number of new avenues. Quebec developer Blue Source Canada has become the first company to receive carbon credits for  destroying ozone-deleting substances (ODS)  from old fridges, generating units it hopes will gain acceptance under the emerging Western Climate Initiative (WCI) market. The Coastal First Nations are embarking on a massive new project in  BC’s Great Bear Rainforest  – the first to  follow the BC Forest Carbon Offset Protocol, which the province is seeking acceptance for under VCS.  Innovation is also gracing BC’s compliance markets, with new bio-coal and ERC  offset types being incubated by the Pacific Carbon Trust.  

 

Three new forest carbon projects have recently registered under the Verified Carbon Standard (VCS) – two in Louisiana river basins  spearheaded by The Nature Conservancy, and  one in the Brazilian Amazon  developed by 33 Forest Capital and Cikel.  Also in Brazil, Bunge and Florestal Santa Maria are partnering on a REDD project in  Mato Grosso, working in alignment with VCS.

 

Forests continue to gain a foothold in the carbon offset toolkit, as voluntary market methodologies and reporting systems become increasingly comprehensive – whether through expansion, as in the case of the Gold Standard rolling out a new  land use and forestry program  in response to stakeholder lobbying – or through consolidation, as seen with The Forest Footprint Disclosure Project  uniting with the Carbon Disclosure Project  to create the largest linkage of data on natural capital to date.

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V-Carbon News

Voluntary Carbon

Howdy, partner

The voluntary Texas Climate & Carbon Exchange opened last Thursday through a partnership with the Australia-based Carbon Trade Exchange. TCCX will provide offset brokerage services for member cities and companies – in particular marketing itself to wind and solar companies operating in Texas – with lower membership fees than featured on exchanges in countries with greenhouse gas regulations. CTX will provide the electronic trading platform technology and infrastructure.  Carbon credits traded are not limited to Texas-based projects, and TCCX clients will also be able to trade on CTX. While TCCX opened with one client – the City of Beppu, Japan – it doesn’t yet have any customers who want to sell carbon credits.

   – Read more from Dallas Morning News
   – Read more from Environmental Leader

 

Blue Source bets on ODS odds

 

Project developer Blue Source Canada, in partnership with Refrigerant Management Canada, has become the first company to receive carbon credits for destroying emissions of ODS in old refrigerators, units the developer hopes can be used in Quebec’s emerging carbon market. The Canadian Standards Association has issued 170,000 credits to the project, which could be expanded to produce 850,000 credits per year. Yvan Champagne, president of Blue Source Canada, said only minor changes need to be made to California’s offset rules for the project to be usable in the state’s carbon market next year. If California accepts the project, Quebec’s businesses could also use the credits for compliance, given the WCI market linkage.

 

   – Read more

 

Nissan turns new Leaf

Nissan has launched the Nissan Zero Emission Fund, which will receive carbon credits from participating Leaf electric vehicle owners and sell them to the Green Investment Promotion Organization, set up by the Japanese government to promote investment in low-carbon growth. Because the Leaf emits no carbon dioxide, owners are calculated to earn carbon credits equivalent to the 0.9 tCO2 generated annually by a gasoline-powered vehicle. For the first year of the program, Nissan expects the fund to invest some ¥18 million ($0.23 million) of credit sale proceeds in forest conservation in Japan’s Yamanashi Prefecture, alongside installation of quick charging facilities.

   – Read more

 

TNC brings Delta and other change to sweet Louisiana

Delta passengers can now offset emissions via the Tensas River Basin Forest Carbon Project in Franklin Parish, Louisiana – one of two projects recently registered with VCS. The other – the Bayou Bartholomew Project in Morehouse Parish – gets most of its funding from Recreational Equipment, Inc. (REI). The Nature Conservancy spearheaded both projects, which were designed with the help of TerraCarbon and validated by Rainforest Alliance under VCS. The projects are registered on the Markit Environmental Registry and VCS Project Database, but won’t begin issuing credits once the trees have grown. The 164.5-ha Tensas River Basin project is estimated to remove up to 83,700 tCO2 over 70 years, while the 60-ha Bayou Bartholomew project is estimated to remove up to 34,037 tCO2 over 64 years.

   – Read EM coverage

 

Bunge jumping and Cikeling into the Amazon

Bunge Environmental Markets is partnering with Florestal Santa Maria to develop a REDD project, preserving 70,000 ha of privately owned Amazon forest in Mato Grosso, Brazil. The 30-year project will begin in the second half of 2012,  and is expected to avoid about 1 MtCO2 annually for a total of  30 MtCO2 in carbon credits. In addition to contributing technical expertise and ensuring alignment with VCS, Bunge has committed to buying carbon credits generated in the first years of project operation.

 

 

Further north, partners 33 Forest Capital and CKBV Florestal (part of Grupo Cikel) has been awarded registration under VCS for a landmark Amazon REDD project in Para. The project, validated by VCS and the Rainforest Alliance, is expected to receive 9.4 MtCO2 in carbon credits over the next 10 years. The project leverages sustainable logging practices certified by the Forest Stewardship Council to avoid the deforestation of 27.4 thousand ha of rainforest.

 

   – Read on Mato Grosso project
   – Read on Para project

 

A deep dive into Great Bear carbon

Starting this year, the Gitga’at and seven neighboring First Nations (together the Coastal First Nations) plan to harvest 1 MtCO2e of carbon offsets in a 50/50 profit-sharing deal with BC’s government over the next century, based on improved forest management covering 5.4 million ha of BC’s Great Bear Rainforest. Coastal First Nations policy analyst Gary Wouters says the Pacific Carbon Trust has agreed “in principle” to buy the offsets in order to cover emissions from BC public service. The project is the first to follow the BC Forest Carbon Offset Protocol, which the province is seeking acceptance for under VCS. BC policymakers hope to see BC-grown forest carbon offsets qualify for use in the Western Climate Initiative next year. ForestEthics Solution’s Valerie Langer estimates the first tranche of offsets will earn close to $3 million.

   – Read more

 

Code REDD’s big haul

 

Code REDD launched last week in Rio+20. Five major corporations – Insurance giant Allianz, French retail conglomerate PPR, energy companies Eneco and Entega, and South African bank Nedbank – pledged to buy millions of dollars in emission reduction credits generated by VCS/CCB-certified REDD+ projects. Forest carbon credit providers include BioCarbon Pty Ltd. (Ecuador), ERA (DR Congo), Forest Carbon Offsets (Belize), The Surui Project (Brazil), Wildlife Alliance (Cambodia), Wildlife Conservation Society (Madagascar), and Wildlife Works (Kenya). By publicly announcing the intent to purchase a large number of credits, Code REDD aims to push other companies to voluntarily commit to offset their carbon emissions with forest carbon credits while steering them away from dodgy REDD+ projects.

 

   – Read more

 

NativeEnergy taps into rewards space

To encourage individuals to reduce their carbon emissions, Vermont-based offset provider NativeEnergy has partnered with New York-based Recyclebank. By buying carbon offsets, NativeEnergy customers earn Recyclebank Points redeemable for rewards like discounts at local and national businesses. Recyclebank members can also trade in points for a 20%-off coupon on NativeEnergy carbon offsets, which will help fund two wind turbines on family farms in northern Iowa, whose clean energy will offset about 92,000 MtCO2 over the next eight years. NativeEnergy joins other Recyclebank partners like Barnes & Noble, MillionTreesNYC, and eBay.

   – Read more

 

Technologic

Scan it, buy it, use – offset it. Get-neutral is a six-month-old startup with a mobile phone app that allows users to view carbon footprint information by scanning product barcodes and to offset their carbon emissions. Get-neutral is seeking €1.5 million ($1.9 million) in funding by the end of this year to boost its operations in Germany, Switzerland, Austria, and Luxembourg, and up to 6 million euros in a further round of funding next year. With 25,000 users since its release, Get-neutral will focus its expansion initially in the UK, France, and Scandinavia. The app generates money from advertising, with revenue partially going toward solar cook-stoves in Nepal and tree-planting in Mozambique.

   – Read more

 

Jurisdictional REDD+ working group

 

VCS seeks qualified experts to serve in a working group that will develop new tools for addressing risks associated with non-permanence and leakage in the integrated, jurisdiction-wide crediting of REDD+ activities. VCS last month released for public comment draft Jurisdictional and Nested REDD+ (JNR) requirements, which set out the first global framework for the accounting and crediting of REDD+ activities across multiple levels. The working group will build on the draft requirements. Interested individuals should submit a CV and short outline of their credentials to secretariat@v-c-s.org by July 11.

 

   – Read more

 

Forest standard, gold edition

After focusing only on renewable energy and energy efficiency projects in its first decade, The Gold Standard (GS) is expanding its project scope into land use and forestry. The new land use and forestry segment will provide for carbon accounting, safeguards and MRV for co-benefits, combinations of activities, scale, longevity and recognition of the value of non-carbon attributes. GS is seeking funding to develop its new focus, while assessing potential pilot projects and partners. Beyond the forest, GS has also established a new Cities Programme, researching how renewable energy and energy efficiency technologies can be deployed to support city and regional level initiatives, with a pilot underway to finance improved informal housing in Delhi.

   – Read more

 

Voluntary reporting 2.0

The Forest Footprint Disclosure Project (FFDP) is joining hands with the Carbon Disclosure Project (CDP), producing the world’s most holistic disclosure system for data on natural capital. Launched by the Global Canopy Programme in 2009 as a mirror to CDP, the FFDP asks firms for information on their deforestation-driving use of commodities like soy and timber. While CDP will begin managing FFDP operations in February 2013 with integration to be complete the following year, GCP will still act as the project’s key advisor on forests and forest risk commodities. Bringing forests, which are critically linked to climate and water security, into the CDP system will enable companies and investors to rely on one source of primary data for interrelated issues, said CDP CEO Paul Simpson.

   – Read more

 

Climate North America

New York State of mind

 

A New York state court has dismissed a Tea Party-backed lawsuit that tried to block the state from participating in RGGI. State Attorney General Eric Schneiderman, who represented New York in the case, argued that they had failed to establish that they had suffered a distinct injury from the state’s participation in RGGI, and had taken too long to file their suit.

 

On to a game of limbo, New York State lawmakers are discussing plans to lower the state’s RGGI emissions cap. The bill would boost the price of credits, with 40% of added state revenue from emissions auctions earmarked for communities “adversely impacted by the loss of property tax revenues” or a payment in lieu of taxes agreement “due to the closing of a major electric generating facility.” Under the draft bill, the “Clean Energy and Economic Revitalization Act of 2012” would pair emission cuts with financial incentives for solar energy.

 

   – Read on the dismissed lawsuit
   – Read on lowering the cap

 

New Hampshire hangs on

New Hampshire will retain its membership in RGGI, but with halved energy efficiency funding generated through the program. The bill, okayed by Governor John Lynch over the weekend, states that New Hampshire will not withdraw from the program unless two other New England states – or a New England state with 10% of the energy load of the participating New England states – decide to leave first. The bill now diverts RGGI revenue from the state Public Utilities Commission to utility-run energy efficiency programs and returns some money that would have been used for energy efficiency to ratepayers as rebates. Corey Lewandowski of Americans for Prosperity, said he “absolutely” expects the Legislature to revisit the issue next year, with legislation that would mandate immediate repeal.

   – Read more from Concord Monitor
   – Read more from Seacoast Online

 

Complaint after case after case

 

Last Tuesday, a state appeals court upheld California’s cap-and-trade plan, rejecting environmental groups’ claims that the rules are too weak and could worsen certain types of air pollution. The Air Resources Board (ARB) gave adequate reasons for rejecting alternatives like binding limits on emissions and a tax on carbon-based fuels, said the First District Court of Appeal in San Francisco in the 3-0 ruling. He said the board can make future improvements based on “further research and experience.”

 

The same groups that filed the lawsuit have filed an EPA complaint. Lawyer Brent Newell said the groups he represents support AB32 but want to see the benefits realized in low-income communities that suffer disproportionately from pollution-caused illnesses. Stanley Young, ARB spokesman, said AB32’s goal was to reduce statewide emissions, not localized smog, which is governed by other regulations. The EPA’s office of civil rights has 20 days to decide whether to accept the complaint.

 

   – Read on closed lawsuit
   – Read on EPA complaint

 

A market for carbon dioxide herself

The term carbon markets typically refers to a system where companies buy credits to compensate for carbon emissions. But what about a carbon market in which the gas is bought and sold like a commodity to encourage carbon capture? Oil firms currently buy carbon dioxide for a process known as enhanced oil recovery, in which carbon dioxide is pumped into the ground to force out extra oil. But naturally occurring carbon is in decline, and there is more demand than can be met. In response, the Department of Energy is gauging the potential to develop a commercial carbon market that could play a role in boosting domestic oil production and curbing emissions.  

   – Read more

 

Kyoto & Beyond

EU ETS on the operating table

EU ETS permit oversupply may  continue until 2024  without deeper emission cuts and permanently removed excess permits, according to the Oko Institut for Greenpeace and WWF. Three EU lawmakers have urged the European Commission to  withhold at least 1.4 billion permits. The removal would apply from 2013 and is at least 17% more than the range proposed by the European Commission (EC) in a draft report, in which the EC presented three scenarios to temporarily curb oversupply – withholding 400 million, 900 million, or 1.2 billion permits. Barclays suspects regulators will propose temporarily removing 700 million permits as a compromise, in which case the price of permits may rise to about €12 next year, compared with €15 if 1.2 billion were removed. Meanwhile, coal-reliant Poland  is still blocking  deeper emissions cuts.

 

 

The good, the bad, and the ugly

Starring ICAO, the EU, and the airlines. “It’s building into one of those Mexican stand-offs you get in B-movie westerns” was a metaphor used to depict the growing tension between the global airline industry and the EU. The head of ICAO said last Monday he expects to have a draft proposal on aviation emission measures by March 2013, rather than at the end of 2012 as stated before. The ICAO council will meet this week and may start narrowing down the four options on the table: mandatory offsetting from airlines, mandatory offsetting with some revenue-generating mechanism, and two cap-and-trade systems. Under one, all aviation emissions could be traded. Under the other, only increases or decreases from a baseline could be traded.

   – Read more

 

Global Policy Update

Restoring rangelands under the CFI

In anticipation of the launch of Australia’s carbon market next month, Perth-based Outback Ecology is developing a rangelands restoration methodology, to be  submitted to government by the end of this month.  Approving the methodology under the CFI would give landholders the chance to make money from projects which improve native vegetation.  To date there are five methodologies approved by the government’s Domestic Offsets Integrity Committee, but none have been legislated. “It’s a bit of an issue at the moment that the CFI will be commencing in July and we don’t actually have methodologies in place that can be used to create credits,” said Outback Ecology’s principal adviser Mark Alchin.

   – Read more

 

Easing the Brazilian investment bottleneck

A patchwork of regional legislation and complex land ownership rules have kept Brazil from reining in investments and cashing in on its carbon market, despite the country’s potential to produce 58% of global REDD credits according to the World Bank. Key Associados’ Marco Antonio Fujihara said existing REDD funding comes from donations, and the number of projects will fall unless new private-sector buyers can be found. To get things moving, the Brazilian government announced last week a new round of meetings between officials from states with existing REDD legislation. “We have some 19 state-level legislations on climate and REDD and we will have to find a way to harmonize these rules under a national strategy,” said Brazilian Climate Change Secretary Carlos Klink.

   – Read more

 

Double-counting relief on double fronts

Rio de Janeiro has been grappling with decisions about when to sell credits and when to use them for its self-imposed limits, said the World Bank’s Lorraine Sugar. Rio has established its own Low Carbon City Development Program, even as Brazil considers its own options for a national carbon market.  A three-page summary of negotiations by UN envoys from a meeting last month in Bonn mentions the term “double counting” seven times.  So it may potentially ease climate negotiations to know that  officials from Rio de Janeiro and China recently said they wouldn’t use emission reduction credits that have been exported when accounting for new domestic greenhouse gas targets.

   – Read more

 

Crown corporation incubates bio-coal and ERC offsets

 

Innovation has not only been gracing BC’s voluntary markets, but also its compliance market, with new bio-coal and ERC offset types being incubated by BC’s Pacific Carbon Trust (PCT).  Mantra Venture Group Ltd announced last week that its Mantra Energy Alternatives Ltd. subsidiary is working with PCT to assess the potential for Mantra’s electro-reduction of carbon dioxide (ERC) process – a form of carbon capture and recycling – to generate carbon offsets, which could help the technology move towards full commercialization.

 

PCT has also issued an RFP, offering to buy carbon offsets from fuel-switching projects where emissions-intensive fuels like coal are replaced by bio-coal. Traditional coal users can save on the carbon tax applied to coal and generate revenue from offsets through fuel-switching. This will in turn make the price of bio-coal on par with that of coal and help bio-coal producers secure financing to move toward commercialization.

 

   – Read on bio-coal offsets
   – Read on ERC offsets

 

VAT’s up, missing trader

Three members of a UK gang seeking to steal from the public purse in a value-added tax (VAT) fraud involving carbon permits were sentenced last week to a total of 35 years in jail, the UK government said.  Confiscation proceeds are underway, and UK law has been changed to prevent further carbon permit VAT fraud.  The gang set up a chain of bogus companies in order to trade fraudulently in EU emissions allowances, stealing around ₤38 million ($60 million) through a “complex missing-trader fraud” in a six-month period starting in January 2009. Europe lost about €5 billion ($6.3 billion) in revenue for the 18 months ending 2009 due to the fraud, according to Europol. Buyers included BP, Royal Dutch Shell, Deutsche Bank, and Morgan Stanley.

   – Read more

 

State of carbon taxes

 

The carbon tax has become one of the most politically divisive tax reforms for governments around the world. A new UN ESCAP report recommends that developing Asia-Pacific countries introduce a $10/tCO2 tax on major emitters. In a China Daily cover story, author Karl Wilson suspects many governments will wait and see what impact Australia’s carbon tax has before making any firm decision. When Australia’s tax goes into effect next month, 294 (halved from the original 500) of the country’s biggest emitters will be required to pay $23/tCO2 ($22.60), much higher than Europe’s $8.70 to $12.60/tCO2e range.

 

Back to North America, carbon levies in both Alberta and British Columbia will soon be up for review, with little political will to raise either. The Tyee compares the two neighbors and where they both fall short. In 2007 Alberta set its tax at $15/tCO2, which its own government says is too low to drive significant emission reductions. The government has not indicated when it will ever be raised. BC’s carbon tax started out at $10/tCO2 in 2008, and rose by $5 annually until 2012, when it was capped at $30, pending comprehensive review.  A 2010 analysis by IHS-CERA concluded that the cost of releasing carbon would need to reach at least $50/tCO2 before capture and storage became economic.

 

   – Read on Asia & Australia from China Daily
   – Read on Canada from The Tyee

 

Featured Jobs

Director of Sustainable Finance – World Wildlife Fund

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   – Read more about the position here

 

Public Policy Analyst, International Program – Amazon Environmental Research Institute

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