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This Week In V-Carbon: China-US Climate Deal Sets Stage For COP 20

Amber Orozco

The recent deal between China and the US on cutting greenhouse gas emissions could send a strong signal to the upcoming UNFCCC conference that is meant to pave the way for a new international climate agreement. In other news, Ecosystem Marketplace launched a series exploring clean cookstove efforts funded by carbon finance.

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

19 November 2014 | The world’s two largest emitters of greenhouse gases (GHG) reached a surprise deal to reduce their impact on climate change, which could send a strong signal ahead of the upcoming United Nations (UN) climate negotiations.

President Obama of the United States and President Xi Jinping of China each announced new emissions reduction targets during the Asia-Pacific Economic Cooperation meeting last week. The U.S. committed to cut GHG emissions 26-28% below 2005 levels by 2025. China pledged that its carbon dioxide (CO2) emissions will peak no later than 2030 and it will increase its proportion of non-fossil fuel energy generation to 20% by 2030.

While light on details, the deal is significant in setting the tone for the Conference of Parties (COP) in Lima this December and in Paris in 2015 since the two countries constitute 42% of worldwide GHG emissions. The world is looking to the COP in 2015 to establish a new international agreement that limits global GHG emissions to replace the Kyoto Protocol established in 1997. The U.S. was an important driver of cooperation among developed and developing countries during the Kyoto COP. However, the treaty was never adopted domestically based largely on objections that emerging economies, such as China, were not doing their share to curb future emissions.

Each country will submit their respective targets to the United Nations Framework Convention on Climate Change (UNFCCC) as an “Intended Nationally Determined Contribution” in early 2015. The targets could increase the role of domestic carbon markets in each country. The US has established emissions trading systems (ETS) in California and in the Northeast with the potential for more programs as the administration’s Clean Power Plan comes into force later this decade. China currently has seven provinces and cities with pilot ETSs and has plans for a national carbon market to be established in 2016.

In other news, Ecosystem Marketplace just launched a series exploring carbon finance related to cookstoves. The series comes on the heels of the recent launch of the Results Report 2013, the second effort by the Global Alliance for Clean Cookstoves and Ecosystem Marketplace to track activities in the improved stoves and fuels market.

The first piece, Cookstove Distribution Soars; Carbon Finance Now Top Funding Source, provides a closer look at exclusive data found in the report around cookstove carbon offsets. The report highlights carbon financing’s new status as the top funding source (up to 36% from 6% in last year’s report), along with a 5% increase in overall price per tonne of carbon dioxide equivalent (tCO2e).

The second in the series, Carbon, Cookstoves, and Kids, follows Richard Lawrence’s first-hand account of children suffering from smoke inhalation problems to his organization’s current efforts to scale up clean cookstove distribution through carbon finance to reach Honduras’ poorest and most rural households.

The most recent article, Carbon Conservation: From Giant Pandas to Swiss Grocer, goes halfway across the world to China, where the giant pandas remain at risk from encroaching human populations and deforestation. WWF teamed up with Swiss grocery chain Coop to finance the distribution of cookstoves that will use less firewood for fuel, thus decreasing panda habitat loss. Next up is the Dutch non-profit SNV’s efforts to create a clean cookstove market from scratch in rural Nepal and help the government meet its goal of clean cooking for all by 2017.

More news from the voluntary carbon marketplace is summarized below, so keep reading!

Ecosystem Marketplace invites you to join us for the State of the Forest Carbon Markets 2014 report launch event this Friday at the World Bank beginning at 4:00 PM. This year’s report is chock full of data-driven findings on pricing, standard use, and project types as well as new findings on project co-benefits, payments for emissions reductions at the jurisdictional level, and the climate risks that forest carbon offset buyers are facing.

Event details and the forthcoming report are available at http://www.forest-trends.org/fcm2014.php. Space is limited so please RSVP with full contact details to bmccarthy@ecosystemmarketplace.com before November 20th.

Can we count on your support in the final days to publish this year’s report? Please take a look at the sponsorship prospectus and contact Molly Peters-Stanley or Allie Goldstein with any interest.

 

The Editors

For comments or questions, please email: vcarbonnews@ecosystemmarketplace.com

 

V-Carbon News

VOLUNTARY CARBON

Like a duck to water
Chevrolet has purchased the first-ever verified carbon offsets from the avoided conversion of at-risk grasslands to cultivation. The purchase of 40,000 tCO2e was announced by Agriculture Secretary Tom Vilsack. The methodology was developed by Ducks Unlimited and the American Carbon Registry (ACR) with support from the U.S. Department of Agriculture. The deal was negotiated by The Climate Trust with Bonneville Environmental Foundation on behalf of Chevrolet and its Carbon Reduction Initiative. The project spans six counties within the Prairie Pothole Region of North Dakota. Prairie landscape is important for wildlife habitat, especially ducks, and for livestock grazing. In addition to GHG sequestration, grassland conservation provides ecosystem service benefits including water retention and flood control. Read more here
Third time is a charm
BM&FBOVESPA, a Brazilian stock exchange, has maintained its commitment to carbon neutrality for the third straight year by purchasing 4,859 tCO2e of offsets to meet its sustainability goals. The offsets were purchased through the UN’s Clean Development Mechanism from three Brazilian renewable energy projects: Celtins and Cemat grid connection of isolated systems, Garganta da Jararaca small hydroeletric power plant and the Termoelétrica Santa Adélia cogeneration project. Read more here
A model train company
Norfolk Southern, a U.S. railroad company, has received the first 10,000 offsets from its 3-year-old Trees and Trains initiative. The offsets, verified and registered by ACR, are generated through the company’s $5.6 million investment to reforest 10,000 acres in the Mississippi Delta. The project is expected to generate 1.1 million tonnes carbon dioxide equivalent (MtCO2e) of offsets through its 15-year cycle, about one fifth of Norfolk’s annual GHG emissions from its diesel-burning locomotives. This winter, developer GreenTrees will begin its fourth planting season as part of a 5-year collaboration with Norfolk to restore six million native cottonwood and hardwood trees. The railroad is GreenTrees’ largest corporate partner in its goal to reforest one million acres in the Mississippi Alluvial Valley. Read more here
Where the rubber meets the road
Kyomo Tyre has planted more than 12,500 native trees in Australia over the last three years in partnership with Greenfleet, a carbon offset provider. Kyomo Tyre’s program plants a tree for each of its environmentally-friendly Ecowing tires sold in Australia. The Ecowing tires are fuel efficient from low-rolling resistance and made using a non-petroleum based compound. Greenfleet has planted over 8.5 million native trees in more than 400 biodiverse forests around the country to offset carbon emissions since 1997. Read more here

COMPLIANCE CARBON

The long and short of it
South Korea’s emissions trading scheme will likely face a surplus of 53 million allowances between 2015-2017, but power producers are still projected to face a permit shortage, according to an analysis by Point Carbon. This could mean a carbon price that rises from $7.50/tCO2e to $30/tCO2e by 2017, which would make South Korea the most expensive carbon market in the world. But the producers could ensure a stable price for themselves if they purchase permits ahead of time to cover future needs. The scheme is set to launch January 1, 2015. Read more here
Steeling for change 
China’s National Development and Reform Commission just announced new emissions reductions goals for the steel and cement industries, which currently contribute to 20% of the country’s total emissions. Under the guideline’s 2020 goal, these emissions would stay at the same level as 2015 emissions. If the goal is realized, alongside other initiatives to reduce coal, Natural Resources Defense Council senior adviser Yang Fuqiang predicts the country will likely achieve peak carbon emissions before its 2030 projection. Read more here
A recipe for destruction
California regulators stuck to their guns by invalidating 88,955 ozone-depleting substances offsets generated from a destruction project by developer EOS Climate at the Clean Harbors Incineration Facility in El Dorado, Arkansas. Offsets from an Environmental Credit Corp project set for invalidation dodged a bullet when the regulators determined the offsets were not generated during the period the Arkansas destruction facility was allegedly out of compliance with a federal permit. The ARB moved forward with the invalidation despite public uproar from a diverse group of carbon market stakeholders, who painted a picture of the market chaos created by what they called a subjective and error-prone investigation by the regulators. Read more here
Expecting the expected
No surprise: emissions dropped 3.3% in 2013 among companies regulated by California’s cap-and-trade program, primarily from reductions of imported power. One power trader linked the decline to power outages at out-of-state plants, while another utility trader said that, “this is in line with what most people expected and presumably priced into the market. All regulated companies were required to surrender allowances or offsets covering 30% of their 2013 emissions by November 3, 2014. They all met this first partial compliance deadline another occurrence predicted by traders. Read more here
Hints of green amid the red
Though Republicans swept the majority of seats in the United States’ mid-term elections, the climate gained some small victories. Pennsylvania elected new governor Tom Wolf, who promised the state would join the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program for power plant emissions in the Northeast. Adding Pennsylvania would practically double RGGI’s current footprint and bring in a state with a more diverse energy mix. To the west, Oregon Democrats gained an extra seat that will allow them to move forward on coal traffic, carbon pricing and renewable energy measures that had previously stalled. But Washington state Republicans maintained a narrow edge that will complicate the environmental agenda of carbon price proponent Governor Jay Inslee. Read more on the West coast
Read more about Pennsylvania
Creating a GHG paper trail
Mexico’s Secretariat of Environment and Natural Resources just issued new GHG registry and reporting regulations. The regulations mark a next step for the country’s 2012 General Climate Change law, which aims to reduce GHG emissions 35% below a 2000 baseline by 2020. A wide range of industries must calculate their direct and indirect emissions under the new regulation, including the energy, transportation, agricultural, commercial and service sectors. Though the regulation lacks any reduction commitments, the reporting of emissions data could bring more scrutiny to emitters by the NGO community or Green Party. Read more here
To Phase 4 and Beyond!
The European Council released an initial “Conclusions” document following the announcement in late October of new 2030 GHG reduction commitments. The document’s language provides insights into the future direction of the European Union’s Emissions Trading System (EU ETS) Phase 4 and the EU’s position for the 2015 COP in Paris. Two key points include reaffirmation of the EU ETS as a primary tool in reducing GHG emissions beyond 2020 and the endorsement of a market stability reserve to fix its current oversupply problems. The conclusions aren’t binding, but represent unanimous political commitment at the highest level. The European Commission will now draft legislation based on the conclusions for the EU Parliament, with the first draft set to appear in early 2015. Read more here

CARBON FINANCE

Rolling in the green
The U.S. and Japan last week announced pledges to the Green Climate Fund (GCF) totaling $4.5 billion. The U.S.’s $3 billion and Japan’s $1.5 billion contributions add to established commitments to bring the GCF funding up to $7.5 billion. The UN has set a goal of a $10 billion initial investment for the GCF. Other new pledges are expected at this week’s first GCF donor conference in Berlin, Germany. The GCF’s climate financing will leverage private sector investment in low-carbon development and climate adaptation projects in poor countries affected by climate change. Read more here
Making a conservation impact
Over the last five years, $23 billion in funds have flowed into conservation impact investing, according to a new report from EKO Asset Management Partners and The Nature Conservancy’s NatureVest division. Conservation impact investment is intended to return a profit while also having a positive impact on natural resources and ecosystems. This class of investments encompasses projects such as watershed protection and habitat conservation, but excludes renewable energy or green buildings that conserve nature as a secondary effect. Nearly $21.5 billion of the funding came from development finance institutions such as the International Finance Corporation, with the remainder originating from the private sector. Read more here

SCIENCE & TECHNOLOGY

Back on the range
Generously spreading finished compost on rangelands globally could potentially sequester eight gigatons of atmospheric carbon, according to research from the University of California, Berkley. The researchers estimate a half inch layer of compost on 5% of California’s rangeland would remove 28 MtCO2e from the atmosphere, or about three tCO2e per hectare annually from a single application. Finished compost demonstrated a much higher carbon sequestration potential than raw manure because the carbon is in a more stable form. Tests showed 90% of the compost’s carbon still in the soil after four years and projected to stay there for the next 30 to 100 years. ACR approved protocols developed by the Environmental Defense Fund and Terra Global Capital to allow ranchers to earn offsets to sell in the voluntary carbon markets. Read more here

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ABOUT THE ECOSYSTEM MARKETPLACEEcosystem 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.Follow EcoMarketplace on Twitter

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