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This Week In V-Carbon: Your Guide To COP 20

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

The 20th meeting of the United Nations Framework Convention on Climate Change (UNFCCC) is underway in Lima, Peru and Ecosystem Marketplace is on hand to cover it. This year, the process has been turned on its head as countries transitioned from trying to negotiate a top-down agreement to building a bottom-up framework based on “Intended Nationally Determined Contributions,” or INDCs.

3 December 2014 | Will climate change render the world merely increasingly unpleasant or uninhabitable? That depends in part on the outcome of the 20th meeting of the United Nations Framework Convention on Climate Change (UNFCCC) in Lima, Peru, which started on Monday. Though a recent World Bank and Potsdam Institute report finds that we’re already locked into 1.5 degrees Celsius of global warming, there is still a chance to keep temperature rise under 2 degrees scientists’ best guess at the “tipping point” between a livable climate and a too-hostile one.
Since last year, the UNFCCC process has been turned on its head as countries transitioned from trying to negotiate a top-down agreement to building a bottom-up framework based on “Intended Nationally Determined Contributions,” or INDCs. Ecosystem Marketplace Editor Steve Zwick’s recent guide to the 20th Conference of the Parties (COP 20) offers an annotated reading list for understanding the “alphabet soup” of the negotiations.

The role of market-based mechanisms to reduce global emissions remains uncertain, though a United Kingdom official called such a market “the most important part of any international agreement.” Last year’s negotiations did solidify a “Rulebook” for Reducing Emissions from Deforestation and degradation of Forests (REDD), and countries are beginning to design systems that could eventually allow for large-scale finance to flow from polluters to tropical forest countries as payments for verified emissions reductions.

 

Ecosystem Marketplace’s State of the Forest Carbon Markets 2014 report, released on November 21, found that demand for forest carbon offsets grew 17% in 2013 as companies and governments invested $192 million in forest conservation and protection. More than 80% of offsets transacted from REDD projects, and the majority of those were sourced from Latin America, with Brazil and Peru alone supplying more than half of forest carbon offsets globally.

 

Certain developments such as a $40-million agreement between the Brazilian state of Acre and the German development bank KfW to deliver eight million tonnes of emissions reductions over four years indicate that payments for performance for REDD could scale up to the jurisdictional and eventually national level. The New York Declaration on Forests signed by governments and corporations in September included another $1 billion in financial pledges with the goal of halving deforestation by 2020 and ending it by 2030.

 

We’ll be in Lima following these developments closely, so check EcosystemMarketplace.com throughout the week, and follow us on Twitter (@EcoMarketplace) for breaking news.

 

COP 20 in Lima will cap off what has been a busy year for climate change news. What do YOU think were the biggest stories of 2014? Tell us here. While you’re putting your own spin on the news of the year, let us know what direction you think we’re headed in 2015. We’ll review our readers’ top 10 for the year gone by and predictions for the year ahead in a special New Year’s edition of V-Carbon.

 

The Editors

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

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V-Carbon News

VOLUNTARY CARBON

Real reductions in the enchanted forest

The community of San Juan Lachao has launched the first pilot project under the Climate Action Reserve’s (CAR) Mexico forest protocol, first approved in October 2013. The project will improve forest management across 25,000 hectares, provide 30 direct jobs (and 150 indirect jobs) to the Chatina indigenous community, and generate 20,000 offsets per year. Developed with the assistance of environmental nonprofit Pronatura, Walt Disney is providing financial assistance to get the pilot off the ground. “We developed it to be adaptable to Mexico’s REDD+ program as a nested project in the future,” said John Nickerson, CAR’s Director of Forestry. Disney’s internal carbon tax has generated more than $48 million for carbon offset and other projects.

Read more here

Computing the cost of carbon

Microsoft has achieved its goal set in July 2012 of becoming a carbon neutral company. As part of its commitment, the company set a voluntary fee on carbon of $6 per tonne across its 14 business divisions. The funds generated have been used to offset more than 600,000 tonnes of carbon dioxide equivalent (tCO2e). The company’s offset purchases have included the Kasigau Corridor REDD project in Kenya and the Oddar Meanchey forest protection project in Cambodia.

Read more here

Offsets and then some

Carbon offset reduction projects are increasingly becoming important for more than just their impacts on climate change. “The more co-benefits a project can offer, the better story you can tell around the carbon reductions,” says Jochen Gassner, of First Climate, a Frankfurt, Germany-based carbon offset and water services provider. That sentiment was borne out by Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, which found that co-benefit projects such as REDD+, clean cookstoves and water filtration accounted for two-thirds of the voluntary offset market. Examples of co-benefits beyond carbon sequestration include watershed protection, biodiversity gains and reduced health risks. REDD+ projects are seen as particularly attractive to offset buyers due to the social and economic co-benefits to local communities.

Read more here

COMPLIANCE CARBON

Laying out the unwelcome mat

Guangdong pilot carbon market is moving to ban offsets generated from projects such as hydropower, waste heat utilization and any power or heat generation project using fossil fuels, according to draft regulations. China national regulator allows developers to use China Certified Emission Reductions to offset 5-10% of the total obligations of companies covered by the trading system. But local authorities determine what offsets can be traded and none of the 6.5 million offsets the national regulator approved this week would be eligible in Guangdong. There still a chance for those project types in other pilots as offsets used in the pilot markets are expected to be eligible for a national program. Su Wei, Chinas chief climate negotiator, said those rules could be unveiled by the end of this year.

Read more from RTCC here
Read more from Reuters here

Sitting on the border

The Canadian province of Ontario has not ruled out joining the Western Climate Initiative (WCI) cap-and-trade system for carbon emissions. “We are just beginning our conversations and our discussions, a partnership with industries,” Ontario’s Environment and Climate Change Minister Glen Murray said. Ontario was once a full member of the 7-US state, 4-Canadian province coalition that once formed the WCI, but California and Quebec are the only two WCI trading partners at this time. They held their first linked auction in late November after a nearly week-long postponement caused by technical problems with the auction platform.

Read more from Sun News Network here
Read more from the Sacromento Bee here

Oh, how the mighty have fallen

New Zealand Carbon Farming is suing Mighty River Power for $34.7 million over carbon offsets the energy company contracted to buy to offset carbon emissions from electricity generation. The case is based on a methodology change governing the generation of forest offsets under New Zealand’s Emissions Trading Scheme. Mighty River Power is resisting the claim because it could be forced to buy significantly more forest carbon offsets than expected, which would double the value of its 15-year contract with New Zealand Carbon Farming.

Read more here

CARBON FINANCE

The pot of gold keeps getting brighter

The Green Climate Fund has received $9.7 billion in pledges from developed countries, just short of an initial $10 billion fundraising target. The fund aims to help developing countries adapt to and mitigate the impacts of climate change. Developed nations have vowed that developing countries would receive $100 billion per year for such initiatives by 2020. The United States and Japan are the biggest contributors to the fund to date, followed by the United Kingdom, Germany and France. Hela Cheikhrouhou, the fund’s executive director, said the money would be spent equally on climate change adaptation and mitigation.

Read more from BCC here
Read more from the Green Climate Fund here

First come, first serve

State-owned power generator Huaneng set up China’s first carbon fund, valued at 30 million yuan ($4.9 million), which will focus on trading carbon permits in the pilot emissions trading system in Hubei province. The Hubei market is the most liquid of China’s seven pilot schemes, with daily trading averaging around 40,000 permits since trading began in February. The generator’s local subsidiary also obtained a 300 million yuan loan from the China Construction Bank by using carbon permits as collateral, the second time permits have been used for that purpose in China. The Hubei program caps carbon dioxide emissions from about 140 power generators and manufacturers.

Read more from Reuters here
Read more from the Himalayan Times here

STANDARDS & METHODOLOGIES

Double trouble no more

The Verified Carbon Standard (VCS) and Climate, Community & Biodiversity Standards (CCB) have traditionally worked in tandem. Ecosystem Marketplace’s State of the Forest Carbon Markets 2014 report found that 85% of all VCS projects were also developed using CCB guidelines, in recognition of the importance of verifying additional social, economic and biodiversity co-benefits. That collaboration now goes a step further, with VCS managing day-to-day activities of the CCB. While project developers shouldn’t expect to see any changes now, future projects will be able to gain dual accreditation at once. VCS CEO David Antonioli expects that the alliance will streamline the process and make it less expensive to use both methodologies over time.

Read more from Ecosystem Marketplace here
Read more from VCS here

Come one, come all!

The American Carbon Registry (ACR) opened a public comment period to gain feedback on two proposals. The first is an update to its ACR Standard the organization is finalizing the version 4.0 changes to be effective starting on January 1. The comments can include anything from requirements and/or specifications regarding the quantification, monitoring, reporting, verification of projects and more. The second proposal open to discussion is a modification to ACR’s 2012 Restoration of Degraded Deltaic Wetlands of the Mississippi Delta modular methodology. The modification would add tree and soil carbon sequestration reduction and organic matter decomposition emissions, reflecting the newest scientific understandings of wetland emissions dynamics. Interested parties should send comments to ACR@winrock.org by December 22.

Read more here

SCIENCE & TECHNOLOGY

The deforestation is in the details

Though Indonesia created a National REDD+ Agency late last year, the country faced a host of forestry data problems, including conflicting data sets and poor access and data management, before it could move on to actually creating a REDD+ program. This will soon change, though, as Indonesia just announced it is ready to submit a deforestation baseline to the forest reference emissions level, a global benchmark required for any countries to measure their progress with REDD+. A team of experts from across government and international organizations determined that country’s deforestation rate benchmark is 671,420 hectares per year. The government will submit its results during the COP in Lima.

Read more here

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