This Week In V-Carbon News…

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

26 June 2014 | The data came to life this week at Ecosystem Marketplace’s State of the Voluntary Carbon Market 2014 report presentation in Washington DC, where market participants gathered to discuss trends in voluntary carbon offsetting – and where we go from here.

Though market value fell to $379 million last year, down from $523 million in 2012, a close look at the findings shows that much of the drop is due to shifts in compliance markets that affect voluntary purchasing. An expert panel – including Christian Dannecker of South Pole Group, Brian McFarland of Carbonfund.org and Hans Wegner of the National Geographic Society – also found plenty of silver lining.

“The good thing for people like us is that competition is also causing the value and the quality of the offsets to go up,” Wegner, the Chief Sustainability Officer at National Geographic Society, said. Nat Geo has purchased offsets from a reforestation project in Panama as well as REDD (Reducing Emissions from Deforestation and Degradation of forests) projects in Brazil and Tanzania.

Dannecker told the audience that he was encouraged – or at least not discouraged – by the report findings, and optimistic for new business opportunities. “It’s a good time for new players to enter the market because it’s easier to do so given the low prices, he said.

To McFarland, the supply-demand dynamic for REDD projects, in which a record number of tonnes were transacted at lower average pricing, was unsurprising but nevertheless concerning, since the viability of these projects depends on increasing demand. It is encouraging to see forest carbon project issuing offsets on California’s compliance market, and acceptance of international REDD offsets into the program would be an important next step, he said.

Thanks to the many attendees who joined in person and virtually through the webstream, and a special thanks to Hunton & Williams for generously hosting. If you weren’t able to participate or just want to relive the moment, please view the presentation slides and live recording.

In all of the numbers, it’s easy to look past the contributions of each project and the individuals that are making emission reductions happen every day. The Delta Institute provided one example last week with the announcement of the first offset transaction in the Nitrogen Credit Program (NCP). Myron Ortner, owner of a 40-acre farm in Michigan, voluntarily reduced his nitrogen fertilizer usage to become the first recipient of offsets under a methodology developed in partnership with Michigan State University and the Electric Power Research Institute.

Offsets from the program are generated due to the reduction in nitrous oxide caused when excess agricultural fertilizer is broken down in the soil. According to the US Department of Agriculture, more than 74 million acres were planted to corn in the North Central Region last year, representing a significant reduction potential for NCP. The program was recognized for outstanding environmental achievements by American Carbon Registry in March 2014 with an Innovation Award.

Many more groundbreaking stories from the voluntary carbon marketplace are summarized below, so keep reading!

Smile, we’re on camera

You may have noticed the new video feature on Ecosystem Marketplace’s homepage, which so far has featured our “Voices from Cologne” series with interviews with some of the movers and shakers at last month’s Carbon Expo. In case you missed it: Ed Hanrahan, CEO of project developer ClimateCare, commented on corporate demand for carbon offsets, the World Bank’s Alex Kossoy discussed the proliferation of regional programs in China and the United States, and Rick Saines, head of North America Climate Change and Environmental Markets Practice at Baker & McKenzie, argued that a global agreement can provide guidance for individual countries, but domestic policy will ultimately drive action on climate change. More to come.

Every year, Ecosystem Marketplace relies wholly on offset market participants to financially support the State of research. In return, sponsors ($7.5k+) and supporters ($3k) benefit from the report’s growing exposure, early insight into our findings, and opportunities to engage directly with Ecosystem Marketplace in report-related outreach and events. Interested organizations should contact Molly Peters-Stanley.

—The Editors

For comments or questions, please email: [email protected]

Voluntary Carbon Score 331,000 for the home team As fíºtbol fans tune in for the World Cup, host country Brazil’s emissions have also been in the spotlight. The International Federation of Association Football (FIFA) will offset 331,000 tCO2e for the World Cup from four projects located in Brazil to cover carbon emissions associated with the travel and accommodation of all staff, officials, teams, volunteers and guests and emissions resulting from venues, stadiums, offices and TV production. The Purus Project, which contributes to the preservation of 36,000 hectares of pristine rain forest from deforestation, is among the projects chosen. Local project developer Mariama Vendramini of Biofí­lica told Ecosystem Marketplace that FIFA’s offsetting commitment represents one of several initiatives that has helped increase domestic interest in forestry offsets– Read the press release – Read more at Ecosystem Marketplace   Winds of change India is one of the top five wind markets in the world with more than 21,000 MW of installed capacity. And as India’s total wind power potential is estimated at about 80 GW, wind energy production in the country has room to grow and then some. These wind projects can sell carbon offsets or renewable energy certificates (RECs), but the markets for both offsets and RECs has been challenging, Dipjay Sanchania of CLP Wind Farms told Ecosystem Marketplace.– Read more at Ecosystem Marketplace   A method to the blackness? The Gold Standard is considering the development of a methodology to allow black carbon emission reductions to earn carbon offsets from appliances such as clean cookstoves. This expanded methodology would be incorporated into an existing methodology covering cookstoves. Challenges faced in establishing the methodology include measurement, quantification, and monitoring; establishing an absolute value for the global warming potential of black carbon; and accounting for the regional nature of black carbon impacts. The Gold Standard is seeking comments from stakeholders on its proposal by July 18.– Read more here   Climate North America Feelin’ blue The Forestland Group and Blue Source announced the issuance of 1.7 million forest carbon offsets for California’s cap-and-trade carbon market. The emissions reductions come from 220,000 acres stretching over seven counties in Michigan’s stunning Upper Peninsula, as part of the Blue Source Bishop Improved Forest Management project. It is the largest project issued offsets by California’s program to date. “We are excited to have completed a project of this scale which we believe provides important proof that commercial timberland operators practicing sustainable forestry can participate and thrive within the California market,” said Roger Williams, President of Blue Source. In a positive sign for the market, the development cycle for California-eligible forest carbon projects is shortening, Williams noted.– Read more here   Time to pull a 360 Democratic state lawmakers and environmentalists from New Jersey say that it is time for the state to act on climate change and rejoin the Regional Greenhouse Gas Initiative (RGGI). The lawmakers point out that New Jersey could likely meet the requirements for the US Environmental Protection Agency’s (EPA) recently proposed rule to limit greenhouse gas (GHG) emissions from power plants through RGGI. Governor Chris Christie pulled New Jersey out of the then 10-state cap-and-trade program in 2011. A state appeals court ruled in March that this move was illegal, but Christie’s administration announced in May it would propose repealing the relevant regulations. The EPA rule is scheduled to be finalized June 2015.– Read more here   Kyoto & Beyond A lost cause International certification firm SGS will no longer audit clean energy projects under the Clean Development Mechanism (CDM), and will surrender accreditation under the program. The company attempted to move its UK-based auditing business to India earlier this year to cut costs, but said those plans are no longer feasible. “SGS’ decision reflects the continuing contraction in the CDM market and its continuing concerns with the costs and risks associated with the CDM accreditation process,” the company said. The announcement comes after Norway-based DNV GL, which had been the largest CDM auditor, said in February it would cease validation and verification of CDM projects.– Read more at Reuters – Read more here   Global Policy Update Hey buddy, can you spare a permit? Shanghai’s first carbon permit auction is scheduled for June 30, when nearly 200 of the city’s largest emitters will need to have permits to cover their 2013 emissions. A shortage of permits on the market has made it difficult for large firms such as Shanghai Electric Power Corp. to comply, so the Shanghai Development and Reform Commission is putting 580,000 more up for sale in a one-off auction. The price floor for the auction will be announced June 27, but an official note indicated it will be no lower than 46 yuan ($7.41) per tonne. The Commission specified that permits at the auction should be used only for compliance, not trading. Shanghai’s is one of five carbon markets in Chinese cities.– Read more here   Lucky number 7? China launched its seventh and final planned pilot carbon market last week in the city of Chongqing along the Yangtze River. The municipal government issued a total of 125 million permits for free to cover the emissions of 242 companies in 2013, though the volume of permits will shrink by 4% per year. At the launch, 16 deals covering 145,000 tonnes were announced, with all permits priced at 30 to 31.5 yuan ($4.83 to $5.07) per tonne. Buyers, however, are not feeling squeezed by the regulation. “No one really needs to buy, and the permits are allocated in accordance with the emissions reported by the company itself so no one will have a shortage,” said one manager, speaking anonymously.– Read more here   The power of resolve The Board of the Consumer Goods Forum, a network of CEOs and senior management from about 400 companies representing combined sales of 2.5 trillion euros (US$3.4 trillion), last week called on the world’s government leaders to secure an ambitious and legally-binding climate change deal. The Board issued two climate change resolutions: one to phase out the powerful GHG hydrofluorocarbon from refrigeration installations by 2015 and another to help achieve zero net deforestation by 2020. The statement specifically called for market-based mechanisms, in particular the United Nations (UN) Reducing Emissions from Deforestation and forest Degradation (REDD+) mechanism, to achieve emissions reductions.– Read more at Digital Journal – Read the resolutions   Carbon Finance Deal or no deal The UN’s Green Climate Fund decided on its rules for raising and spending funds last month, including a 50-50 split between adaptation and mitigation projects. Commitments are expected in the coming months to capitalize the fund at $10 billion or more, but hurdles remain. The European Union can’t give any money until it gets a seat on the board, and the fund cannot be used for extreme events such as Typhoon Haiyan recovery, which fall under ‘loss and damage’ provisions in the UN negotiations. Seeing finance flow is key to an international climate agreement, according to developing countries. “No money, no fund, no deal in Paris,” said Tosi Mpanu-Mpanu, a senior negotiator from the Democratic Republic of Congo.– Read more here   Island ambition Indonesian President Susilo Bambang Yudhoyono committed $20 million to combat climate change and boost the “green economy” in Pacific Island states. The announcement was made during the Pacific Islands Development Forum in Fiji. Indonesia has a target to cut its emissions 26% by 2020, or up to 41% with international support. REDD+ is a major part of its strategy. Indonesia’s REDD+ boss Heru Prasetyo spoke about his efforts to move massive numbers of hectares of palm oil production to degraded lands to keep forests intact in an exclusive interview with Ecosystem Marketplace published last month.– Read more from Australia Network News – Read the interview with Pratseyo   Science & Technology Capturing the lead Graciela Chichilnisky, one of the masterminds behind the idea of an international carbon market and its inclusion in the UN Kyoto Protocol, is now CEO of Global Thermostat. The company is claiming what almost no one else has: that its carbon dioxide (CO2) capture technology is commercially viable and scalable. Its pilot plant in Menlo Park, California uses inputs of air and heat to remove CO2 from the atmosphere as electricity is produced. The captured CO2 could be quantified and sold as carbon offsets, used to produce materials such as cement and plastic, or fed to algae for ethanol production, among other applications. The technology is patent-pending in more than 100 countries.– Read more from Ecopreneurist – Read more about the technology   Mission possible US space research agency NASA (National Aeronautics and Space Administration) will launch the first CO2 monitoring satellite on July 1, from a California air base. It will orbit 438 miles above the Earth and its grading spectrometer will take daily CO2 measurements. “Data from this mission will help scientists reduce uncertainties in forecasts of how much carbon dioxide will be in the atmosphere and improve the accuracy of global climate change predictions,” said Michael Gunson, a scientist at NASA’s Jet Propulsion Laboratory. The $465 million satellite mission is named Orbiting Carbon Observatory-2, OCO-2 for short.– Read more here Air Pollution Specialist – California Air Resources Board Based in Sacramento, California, the Specialist will evaluate and develop tools for analysis and monitoring of the emissions trading program, incentives, voluntary actions, offsets and other approaches to further the goals of the California Global Warming Solutions Act of 2006 (AB 32). An ideal candidate will have demonstrated experience with environmental, energy, or commodities and derivatives markets.– Read more here   Director of the Biodiversity Programme – Institute for Sustainable Development and International Relations (IDDRI) Based in Paris, France, the Director will be in charge of designing, organizing and implementing a renewed intervention strategy and responsible for managing the biodiversity programme team. A successful candidate will have a PhD in a field related to biodiversity and ecosystem management as well as 10 years of professional experience in research and policy-oriented organizations. Fluency in English and French is required.– Read more here   Chief of Party – Chemonics Based in the Dominican Republic, the Chief of Party will provide technical direction and management for a US Agency for International Development (USAID) project addressing investment in climate change adaptation in urban and rural settings, municipal planning, disaster and risk mitigation, and water resource management. An ideal candidate will have prior USAID chief of party experience. Fluency in Spanish and English is required.– Read more here   Global Programmes Manager – The Gold Standard Based in the United Kingdom, the Global Programmes Manager will act as the central point for a range of the Foundation’s technical and project delivery activities. The staffer will be responsible for coordinating, managing and providing technical and administrative support for the Gold Standard’s Technical Advisory Committee. A successful candidate will have demonstrated experience in project management, technical experience and a passion for sustainable development, and demonstrated stakeholder management skills.– Read more here   Program Coordinator – Regional Greenhouse Gas Initiative Based in New York, New York, the Program Coordinator will provide administrative, project management and program coordination support across all program areas. An ideal candidate will have three or more years of experience as a program coordinator in GHG mitigation programs, energy regulation, energy policy, electricity markets or similar subject areas.– Read more here ABOUT THE ECOSYSTEM MARKETPLACE Ecosystem 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 [email protected].

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