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This Week in V-Carbon: When Your Best isn’t Good Enough

Try as they might, carbon offset suppliers and infrastructure providers will be ever-challenged by carbon controversies. So the market continues to band together to make Best Practice… well, better. In this issue (our biggest yet!) we bring you news of market efforts to preempt – or counterattack – assaults to the market’s claims to legitimacy.

NOTE: This article has been reprinted from Ecosystem Marketplace’s Voluntary Carbon newsletter. You can receive this summary of global news and views from the world of voluntary carbon automatically in your inbox by clicking here.

26 July 2011 | Try as they might, carbon offset suppliers and infrastructure providers will be ever-challenged by carbon controversies (after a while, they’re not even original anymore, are they?).

So the market continues to band together to make Best Practice… well, better. In this issue (our biggest yet!) we bring you news of market efforts to preempt – or counterattack – assaults to the market’s claims to legitimacy.
 
For example, a new forest-facing industry group recently launched to shore up the forest market foundations. The new International Forest Carbon Association will soon be seeking members among project developers and other stakeholders across the forest carbon supply chain – to fully launch IFCA in January 2012.

Meanwhile, the International Carbon Reduction and Offset Alliance (ICROA) is forging ahead with its effort to expand the market for its member retailers – most recently recognizing American Carbon Registry offsets as acceptable for use. UK buyers may also soon see a new “old” Quality Assurance Scheme (QAS) for carbon offsets, revived by suppliers after the QAS was dropped last month by the UK government.

What’s the thinking behind having so many industry associations on top of standards on top of advisory boards on top of best practice initiatives? So the market faces fewer articles like this and more news like this, perhaps. Or this.
 
Read all about the good, the bad and the battle of the “bests” in this issue of V-Carbon News. And if you like what you read, please help us keep it free by becoming a Supporting Subscriber!

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V-Carbon News

Voluntary Carbon

EU samples American Carbon cuisine

As offset quality alphabet soup goes, you can add ACR to ICROA, with a dash of IETA. Don’t toss out the QAS and keep the Best Practice competition at room temperature. This blog covers the latest in carbon offset quality assurance, with the International Carbon Reduction and Offset Alliance (ICROA) heating up its ties with North American project developers. Last week, the American Carbon Registry (ACR) and ICROA announced that carbon offsets adhering to the ACR standard are now recognized for use by ICROA members. ICROA members – all of them offset retailers – adhere to a Code of Best Practice, agreeing to only sell credits from a list of recognized standards. Now including ACR, that list takes a bite out of most of the top-grossing standards by market share.

Read the Ecosystem Marketplace article

Sierra Gorda’s dynamic duo

When Mexico’s Bosque Sustentable AC sold the first voluntary carbon credits from its Sierra Gorda Biosphere Reserve in 2006, the VCS didn’t yet exist, and the Climate, Community & Biodiversity Alliance (CCBA) hadn’t yet approved a single forestry project under its CCB Standards. Five years later, the pioneer project is staying ahead of the pack, this month wrapping up three years of validation to become the first Mexican forest carbon project recognized under the VCS. The project also earned “Gold” validation under the CCB Standards, which focuses on benefits beyond carbon such as job creation and habitat conservation. “Validation under these standards demonstrates the integrity of Sierra Gorda’s offsets and the overall value of the efforts to restore ecosystems, preserve biodiversity, alleviate poverty and sequester carbon in the Reserve,” said Timothy E. Wirth, president of the United Nations Foundation, which purchased the first tranche of offsets in 2006.

Read more at Ecosystem Marketplace

Best by association

With forest carbon projects capturing almost half of voluntary carbon market transactions in 2010, it was only a matter of time before the market minted a new members-only terrestrial carbon troupe. The International Forest Carbon Association is the brain child of several offset suppliers (like Terra Global Capital), information providers (like Carbon Positive) and project facilitators (like Macquarie Bank BioCarbon) aiming “to promote the interests of forest carbon project and program developers at local, sub-national, national and international levels, and instill ‘best practice’ professional, ecological, financial and ethical standards among public and private members across the sector.” Through September, the group will be widening its membership base and seeking approval as a non-taxable entity from US IRS.

Read the Carbon Positive article

RIP or rest assured?

Four offset suppliers in the UK have raised the dead – hoping to bring new life to the Quality Assurance Scheme for Carbon Offsetting (QAS) the Government put to rest last month. The original program’s four (and only) approved suppliers – Clear, Carbon Footprint, Carbon Retirement and Pure – have vowed to carry on without Government assistance. One of the reasons cited for putting an end to QAS was a low uptake among businesses – a claim the providers refute. “The disappointingly low take up of the Government scheme is likely to be linked to its lack of public exposure,” said John Buckley, Managing Director of Carbon Footprint. “That’s why we’ve committed to both continuing the standards set by the Government scheme and increasing the exposure and understanding of best practice.”

Visit the new QAS website (in development)
Read more from Carbon Retirement

Australia’s bush administration

No, we’re not talking about former PM Howard’s stint in office, but a public-private partnership of sorts to preserve 5000 square kilometres of Aussie outback for biodiversity – and carbon credits. The deal announced yesterday by Environment Minister Tony Burke saw bush outfitter/clothing company R.M. Williams purchase the property in conjunction with the federal government for US$13 million, to manage as a nature reserve and store up to 1.5 MtCO2e/year for the next 10-15 years. The resulting offset credits could be sold to the government through a US$250 million fund it will establish under its carbon tax package or to voluntary offset markets. Over the next year, R.M. Williams will work with technical experts to shore up an appropriate methodology for the reserve’s forestry activities.

Read the Sydney Morning Herald article

Mama, don’t let your babies grow up to be cowboys

Make ‘em be validated and verified and such. At least that’s the conclusion that several Peruvian indigenous community groups should draw after some unsavory encounters with unnamed, unscrupulous carbon cowboys taking root in their home turf. The Sydney Morning Herald follows one such accused project developer, David Nilsson, who last year travelled upstream to the isolated community of the “the cat people” to do some purportedly questionable deal-making through his own enterprise – Carbon Sustainable Resources Limited. Th deals in Peru and simultaneously in Papua New Guinea through another company Carbon Credit Corporation Ltd., are centered around REDD and – according to other suppliers in the regions – give offsets a bad name. ”What’s most important about this market is it is reputation-based,” says Carbon Conservation’s Dorjee Sun. “A big company does not want to sustain brand damage by associating with cowboy operators.”

Read SMH coverage of the Nilsson controversy
Read about Peruvian communities’ “call to caution” on REDD

“Start spreadin’ the news”

…The Empire State’s integrated energy company Entergy Corporation is leaving behind 34,812 tCO2e through its purchase of home-grown ACR-certified offsets from New York’s largest non-hazardous solid waste facility. Carbon credit advisory firm Environmental Capital LLC facilitated project development and registration for the facility, which is owned and operated by Seneca Meadows Inc. (SMI). They also brokered the transaction of credits, which were purchased through Entergy’s dedicated Environmental Initiatives Fund. The project collects gas with a high efficiency, negative pressure system which is constructed in an as-you-go design.

Read more from redOrbit
Read more about the project from ACR

Panasonic’s public display of offsetting

Panasonic has taken its Offset For Life scheme one step further, expanding the program to include its range of professional displays. Created originally for its projector range in November 2010, the carbon offset program allows customers to calculate and offset emissions caused by the operation of the devices over the duration of their use using product and country-specific data. The credits used in the scheme come from Gold Standard-certified projects recommended by offset supplier ClimateCare. The program is currently supporting three projects: a 49.5 MW wind farm project in Ningxia Province, Northern China; a 135 MW wind farm in Osmaniye Province, Turkey; and an efficient cookstove project in the towns of Accra and Kumasi, Ghana.

Read more from AV
Read more from Panasonic

Vietnow or never

As a country predicted to be one of the world’s most vulnerable to climate change, Vietnam is fighting back with several new REDD projects aimed at slashing deforestation. Hanoi-based Vietnam Carbon Exchange Limited (VCE) and its partner Australian Voluntary Credits Limited (VCL) have reportedly completed a site survey and are in the project design phase of a project in Bach Ma National Park – expected to sequester 0.36 MtCO2e and benefit 63,000 local inhabitants. VCE indicated that it is also conducting site surveys for projects in Xuan Son and Ba Be National Parks, and reportedly has already implemented a REDD project in northern Tam Dao National Park – expected to sequester up to 1.5 MtCO2. “The projects are aimed to develop ‘real’ REDD projects for vulnerable areas of forest protection and biodiversity in Vietnam’s national parks,” said a VCE representative.

Read the VietNamNet article

Putting the CO2 in H2O (or vice versa?)

Okay, so technically CO2+H2O = carbonic acid, but we’re not talking about the stuff that makes your drinks bubbly. This article covers the latest update on the work of Richard Sandor, market builder who brought you the Chicago Climate Exchange (CCX) – and who has shifted his gaze from greener pastures to bluer endeavors. Sandor, who last year sold Climate Exchange PLC, the London-listed operator of the CCX, is now using the Environmental Financial Products LLC venture he founded in 1998 to explore using financial markets to allocate scarce water supplies in parts of the US and Canada. “Water is going to be the commodity of the 21st century,” said Sandor, “Generally there are areas that are short of water, and they need to price it properly in order to conserve it.” Like carbon, market systems have already been applied to some aspects of water in the US – like banking programs for wetlands development projects.

Read the Wall Street Journal article

Is you is or is you ain’t?

Conflicting science is adding fuel to the contentious debate over land-based carbon accounting. A recent study published in Science found that wooded areas across the planet soak up a third of the fossil fuels released into the atmosphere each year – far more than previously expected. “These are “savings” worth billions of euros a year if that quantity had to be paid out by current mitigation (CO2 reduction) strategies or the price of carbon in the European market,” said co-author Josep Canadell. Flip to another study published in the journal Nature that recently concluded that the more CO2 a land ecosystem absorbs, the more it emits other potent GHGs like methane and nitrous oxide – suggesting that the capacity of these carbon sinks to slow climate change may have been seriously overestimated. So what’s it going to be?

Better sinks than once thought: France 24
More harm than good?: Conversation

Tag, you’re linked

The VCS is stepping up its efforts to link credits across programs, standards and markets with its new formal policy for tagging VCUs with additional certifications. The program has long had an informal policy governing linking – with dozens of projects already developed in accordance with additional standards like the CCB Standards and SOCIALCARBON – but it’s hoped this new development will make the process easier from the outset. Also announced earlier this month were the first updates to the VCS version 3 documents – focused on extending and streamlining dates for project validation – incorporated directly into the relevant documents. Finally, a new REDD methodology for avoiding unplanned deforestation – developed by Brazil’s Sustainable Amazonas Foundation (FAS) and the World Bank’s BioCarbon Fund – has been approved for use under the VCS program.

Read more about the methodology
Read the program documents
Read more about VCS linking

Africa’s kapital improvement plan

The Gold Standard has been commissioned by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) to research and develop tools to lower entry barriers and allow for the scaling-up of carbon market activities in under-represented regions (particularly Sub-Saharan Africa). As part of the program – and in an effort to ensure that topics of importance are considered and addressed in its new methodologies and revised rules – Gold Standard is currently holding online public consultations. Feedback on the Gold Standard Programme of Activities (PoA), Community-focused micro scale schemes (CFMS), Suppressed demand, and the Gold Standard DNA Programme is welcome until July 31, 2011. Current documentation is available on the Gold Standard website, with new guidance and rules on these areas expected to be available by September 2011.

Read more from the Gold Standard

JustGreen, JustClean…

…and now JustEnergy is the recipient of JustAbout 300,000 tCO2e in carbon offsets supplied by Quebec’s L2I Financial Solutions. Over a six-year delivery period, the offsets will originate from waste management facilities in Ontario. The press release asserts that the sale represents one of the biggest transactions ever in the Canadian voluntary carbon market. Just Energy will offer the offsets to its residential and commercial consumers through its range of green energy options including the JustGreen and JustClean Home Programs that enable customers to offset up to 100% of the emissions associated with their everyday energy use through both carbon offsets and renewable energy projects.

Read the press release

First in, first out

First Growth Funds – an Australian investment company specializing in forest carbon projects – announced last week that its secured lender, Noble Investments Superannuation Fund, had placed the company in administration. The company reportedly collapsed after failing to secure a deal for additional funds. The news came just days after the resignation of executive director Ian Clarkson. Listed on the Australian Stock Exchange since December 1986, the company had a deal through its wholly-owned subsidiary – First Growth Ventures – to provide project financing and development assistance to project developers operating in Indonesia, Asia and the South Pacific region. Just last month the company updated the market on 16 different carbon projects underway in Indonesia as a joint venture with Greencollar Group. And as if the term “collapse” isn’t harsh enough, how about “insider trading?” The Sydney Morning Herald muses on the relationship between a cancelled underwriting agreement and the Noble news.

Read more from the SMH: Peru Project
Read more from Climate Spectator: PNG venture
Read more from the SMH: insider trading?

Channel it into the Flux Capacitor, it just might work!

Ecosystem Marketplace aren’t the only ones going Back to the Future. It looks as though California also has carbon in its future – or carbon futures to be exact. The New York-based Green Exchange LLC confirmed last week in an email statement that in September it will list futures contracts for delivery in December in 2012, 2013 and 2014. The new contract “complements our existing range of environmental derivatives,” said Tom Lewis, chief executive officer of Green Exchange, “California will be the world’s second-largest carbon market and we intend to play a major role in its development.” Green Exchange – founded by a group of banks, brokers and trading companies including Goldman Sachs, Credit Suisse Energy, Morgan Stanley (MS), RNK Capital, Spectron Energy, Vitol Group and Tudor Investment Corp. – currently offers futures contracts for EU emissions allowances and UN carbon credits.

Read the Bloomberg article

Till it like it is

Many farmers in Australia are enthusiastic about the government’s Carbon Farming Initiative, a scheme designed to let farmers generate offsets by increasing the carbon content of their soils – but not so enthusiastic about the price they’ll get for their efforts. Some no-till farmers argue that the price of carbon needs to double in order to make entering the carbon market worthwhile. According to Matthew McNee of the WA No Till Farmers Association, 90 percent of that state’s broadacre farming is already no-till, and greater financial incentive is needed to compensate for the initial loss of output. “We’ve already optimized our practices,” said McNee, “so to accelerate that, and build lots more carbon, you can quite often go through a short term period of lower productivity.”

Read the ABC article

Stuck at the REDD light

With UN progress on REDD painfully slow, private investors continue to step up to the plate. This article explores the REDD sector’s voluntary market engagement and barriers to scale. For example, BNP Paribas is one of several financial institutions and investment funds that has entered the emerging market for REDD credits – last year providing US$50 million to Wildlife Works and acquiring the rights to buy as many as 1.25 million carbon credits over the next five years from its flagship project in the Kasigau corridor in Kenya. But so far trading remains limited to the voluntary carbon market, where deals represent just a fraction of the private sector’s investment potential, says Benoí®t Bosquet, a lead carbon finance specialist at the World Bank who coordinates the bank’s REDD fund. “This full range of opportunities is nowhere near fully understood,” said Bosquet.

Read the New York Times article

Reduce & Retire: The Latest on Carbon Neutral

Forest carbon project runway

“Modeling” forest carbon stocks has a whole new meaning, thanks to Wildlife Works’ new storefront that that allows users to harness the power of Facebook to purchase REDD carbon offsets and carbon neutral apparel. “F-commerce” leader Milyoni and REDD project developer Wildlife Works have launched a new retail model – Milyoni’s Conversational Commerce platform – allowing customers to offset their emissions for US$20/tCO2e and purchase carbon neutral apparel without ever leaving Facebook. “Offering our products within Facebook will exponentially expand our market,” said Mike Korchinsky, founder and CEO of Wildlife Works, “and more sales means more rural African job creation – the essence of Wildlife Works’ conservation strategy.” The platform will also allow Wildlife Works to engage and entertain fans, who can easily like, share and showcase their support for REDD.

Read the press release

Dave Matthews dodges caravan emissions

Dave Matthews Band is teaming up with UPS to boost the sustainability of its summer concert “Caravan” tour. The band (whose lead singer/namesake a few years ago publicly renounced marijuana smoking for its CO2 emissions!) enlisted UPS because of its three-pronged approach to emissions: devising the most efficient transport solution possible leveraging its multimodal network; measuring the carbon footprint of the moves, and then purchasing the necessary certified carbon CO2 offsets to mitigate the emissions. UPS uses a proprietary calculation methodology verified by SGS and certified by the CarbonNeutral Company, and targets carbon offsets from VCS and the Climate Action Reserve to purchase on behalf of its clients. Says Ron Rogowski, UPS vice president, sponsorship & events, “We will demonstrate to the live music industry that speed, efficiency and reliability need not be sacrificed in the name of sustainability.”

Read the press release
Read more from SmartPlanet

Carbon Neutral by any other name…
Ensuring the likelihood that there will eventually be a business/initiative called “Carbon Neutral” on every continent, standards-based organization CSA Standards introduces the latest neutral namesake – the CSA Registered Carbon Neutral™ Program, providing organizations and building owners with a transparent process by which to demonstrate their carbon neutrality. Based on the ISO 14064 standards, the Carbon Neutral™ Label signifies that an organization has voluntarily calculated its carbon footprint and offset its GHG emissions for a single calendar year. According to CSA Standards President Bonnie Rose, recognition under the program “will help provide additional credibility and confidence to an organization’s environmental marketing claims.” CSA will begin accepting entrants for program and related registry in August. To learn more about the CSA Registered Carbon Neutral™ Program, contact carbon-neutral@csa.ca or call 877-235-9791 extension 88396.

Read the press release

Climate North America

Cali offsets set off debate

As California’s Air Resources Board (ARB) prepares to release its rules for enforcing AB 32 – along with regulations for America’s first economy-wide cap-and-trade program – many questions are being raised about the use of offsets. There are disagreements between stakeholders of how many offsets should be allowed, how the state will verify GHG reductions and who is liable if an offset turns out to be fraudulent, is destroyed or is changed by the developer. On July 7 ARB released a “discussion draft” of 274 potential changes to the AB 32 regulations, which included some alterations to the offset program – but not enough to please everyone. Liability is a particularly thorny issue, which may make it difficult for many companies to use the system, said John Melby, managing director at the Green Exchange. Although offsets need to be legitimate, “the liability shouldn’t be to a party that has limited ability to manage that,” said Melby.

Read the New York Times article
Read the modified text HERE
Submit comments by August 9th HERE

Youse secret’s safe in Joisey

If RGGI goes down in New Jersey, it’s taking its secrets with it – US$105 million worth. A Mercer County Superior Court Judge recently dismissed a lawsuit aiming to force the Department of Environmental Protection to reveal the buyers of state-issued allowances sold at RGGI auctions – ruling that the confidentiality of auction bidders outweighs the public’s right to know about the transactions. Investigative reporter Mark Lagerkvist filed the suit under the Open Public Records Act last year. “This is a dark day for open government in New Jersey,” commented Lagerkvist, dismayed that the sales of 44 million state issued permits will remain confidential trade secrets “even though it impacts the electric bills of all New Jersey businesses and consumers.”

Read the Watchdog article

Measure thrice, cut once

Legislation approved by a US House panel earlier this month would see funding for the EPA cut, GHG regulations delayed and a ban on uranium mining near the Grand Canyon repealed – all in an effort to rein in “regulatory overreach.” The Republican-led House Appropriation Committee approved the fiscal 2012 spending bill on July 11th, sending it to the full House of Representatives. The bill would cut the EPA’s budget to $7.1 billion – 20 percent less than Obama’s request – and delay EPA rules limiting GHG emissions from industrial polluters for one year. Virginia Democratic Representative James Moran called the measure a “virtual dump truck” of provisions to protect polluters. “This bill is too short on needed funds and too long on anti-environmental riders,” Moran said.

Read the Bloomberg article

Kyoto & Beyond

Water you lookin’ at?
India’s first multi-million dollar public afforestation scheme in Himachal Pradesh – a project with a significant watershed component – has been registered for carbon trading under the UN Clean Development Mechanism, according to an official statement released last week. “The United Nations has registered the Rs.337 crore Mid-Himalayan Watershed Development Project for carbon trading scheme under the United Nations Framework Convention on Climate Change,” said the statement, quoting Chief Project Director R.K. Kapoor. The MHWP includes the Bio-Carbon Sub-Project – an afforestation initiative designed to bring additional value to the ongoing watershed interventions/activities while supporting livelihood enhancement.

Read the Economic Times article
Visit the project website

Flying free (sort of)

The European Commission has confirmed it is in discussions with Russia, China and the US over exempting their airlines from regulation under the EU ETS next year – but there’s a catch. The countries would still have to demonstrate they were taking equivalent measures to reduce GHG emissions from the aviation sector. Although Jos Delbeke, director-general of the Commission’s Climate Action directorate, has acknowledged the “heat” surrounding the inclusion of all non-EU airlines flying into or out of the bloc, he insisted that “implementation [of the legislation] is taking place as planned” – and the EU executive will not bow to pressure from the US and China. Delbeke indicated that the EU has raised the notion of “equivalent measures” allowing incoming flights from non-EU countries to be exempt based on the concept of “equal competition between airlines”.

Read the Carbon Finance article

Christmas in July

All EU national carbon registries are set to close for up to two weeks over Christmas as officials prepare to move accounts to a new central registry. The move comes as a result of last year’s cyber attacks, which prompted a major overhaul of security standards. The closure was confirmed in a statement released last week by the Commission, which indicated that the exact dates for the suspension would be announced no later than October. According to Matthew Gray, trading analyst at IDEAcarbon, the suspension should have little impact on market activity, as long as the dates are communicated and work to prepare for the migration does not overrun – and it should help to boost confidence in the market. “Having one registry is a positive move from both a security and a liquidity perspective,” he told BusinessGreen.

Read the BusinessGreen article

Global Policy Update

While the cat’s away…

…perhaps climate policy-makers should use the climate denier hiatus to push through GHG initiatives? News in the UK has been dominated recently by the News of the World phone hacking scandal. Although R

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