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This Week in V-Carbon: Governments Trying on the Voluntary Carbon Hat


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.



23 January 2012 | As developed and emerging economies alike are moving to take on CO2 targets, this issue of V-Carbon News reports on a few government players that are getting their feet wet in the voluntary carbon markets first.
 
Just today, Thailand’s Greenhouse Gas Management Organization announced that it has established a mechanism for “tagging” VCS credits with the agency’s Crown Standard for domestic projects - a tool previously developed for use in the UN’s Clean Development Mechanism.
 
Drilling down to the subnational level, the State of Louisiana recently released its Comprehensive Master Plan for a Sustainable Coast - that weighs carbon credits as a viable option for funding the state’s much-needed wetlands restoration efforts. On another U.S. coast, California’s Napa County Planning Commission released a long-term emissions reduction plan that includes a mechanism for offsetting local winery development.
 
As programs like these emerge to promote private sector contributions to domestic carbon projects, will they eventually move to using some common project standards? Are domestic governments the most effective partners to bring scale to the voluntary marketplace? You tell us in this issue’s reader poll.
 
Governments aren’t the only ones looking to carbon finance to sustain domestic conservation efforts. After the successful sale of credits from its massive Canadian Darkwoods forest project - to the tune of $5.1 million in 2011 - The Nature Conservancy Canada says it may also rely more heavily on the carbon markets to address its current financial uncertainty.
 
In other news, project developer Wildlife Works and the carbon community last week mourned the first murder of a project employee, after elephant poachers opened fired on two unarmed conservation rangers who were patrolling the Kasigau Corridor project area in Kenya.
 
These and other stories from the voluntary carbon marketplace are summarized below, so keep reading! And if you value what you read in this news brief, consider supporting Ecosystem Marketplace’s Carbon Program as a Supporting Subscriber.

Readers’ contributions help us keep the lights on and continue to deliver voluntary carbon market news and insights to your inbox biweekly and free of charge. For a suggested US$150/year donation, you or your company can be listed as a V-Carbon News Supporting Subscriber (with weblink) for one year (~24 issues).

Reach out to inboxes worldwide and make your contribution HERE (select "Support for Voluntary Carbon News Briefs" in the drop-down menu). You will receive an email from the V-Carbon News team confirming your sponsorship listing and weblink information.
 
—The Editors

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


 

V-Carbon News

Voluntary Carbon

VCS newly crowned with Thai standard

 

In the latest move by a national government entity to engage with the voluntary carbon market, Thailand’s Greenhouse Gas Management Organization today announced that it has established a mechanism for “tagging” VCS credits with the agency’s Crown Standard for domestic projects. The Crown Standard was intended to designate Thai-originated CDM credits that provide additional domestic social and environmental benefits. Says VCS CEO David Antonioli. “This is a straightforward way for VCS projects to demonstrate they are meeting additional standards set out in their local context.” Up to now, VCS has allowed project developers to additionally tag VCUs with certification under the Climate, Community and Biodiversity Standards and Social Carbon Standard.

 

Read more from VCS


The results are in: China’s big New Year

 

We asked V-Carbon readers which emerging market for voluntary carbon could be the big story in 2012. You chose China as the marketplace to watch in the new year (30 percent of readers), with Brazil and Turkey tied for second. Of course, developed county markets remain at the forefront of sellers’ 2012 expectations. “The USA and Europe will keep being the most attractive market for offsets, specially those from REDD and REDD+,” came the response from Andra Brasil Florestal, “and not only because of carbon, but also looking into international competition for agriculture commodities.”

 

Next up, let’s talk about sub-national government-led voluntary offset programs. See the Oklahoma Carbon Program, the Colorado Carbon Fund, Italy’s CARBOMARK, and this issue’s news about Louisiana’s and Napa County’s CO2 intentions. Are states and regions effective partners in driving voluntary climate action? Why or why not? Tell us in this reader survey, and stay tuned for an upcoming report from Ecosystem Marketplace exploring the presence and of government-led voluntary carbon programs.

 

 

 


Wildlife Works mourns death of project ranger
The Wildlife Works Kasigua Corridor projects has been one of the biggest success stories of REDD so far, as the first project to earn credits from the Verified Carbon Standard. Sadly, we have to attach an addendum to the success story, as two Wildlife Works rangers were attacked by elephant poachers, with one receiving a fatal gunshot wound and the other sustaining extensive damage to his shoulder. Wildlife Work’s Founder and CEO, Mike Korchinsky, spoke from the funeral of Abdullahi Mohammed, expressing his condolences to the family, and pointing to “an escalation in violence caused by the increasing demand for ivory in the far eastern markets, especially China,” as a cause of the first death of a ranger in the 15 years Wildlife Works has been active in the area.

Read more


Writing the rule that will rebuild the bayou - with carbon

 

By now it’s well understood that many of the losses from Hurricane Katrina – of lives, homes and infrastructure – could have been prevented with greater attention to New Orleans’ aging infrastructure and emergency management. But what about shoring up the “disappearing coastline” itself – where now-degraded wetlands were once the region’s first line of defense against storm surge and flooding? Enter the American Carbon Registry’s (ACR) proposed methodology for the Restoration of Degraded Deltaic Wetlands of the Mississippi Delta, written by Tierra Resources and contributors, and released Wednesday for public comment. Assuming it passes technical muster, the methodology could guide the United States’ first approaches to coastal wetlands restoration. The methodology development was supported by Entergy, which is in the process of writing its next 5-year environmental goals - which may include further project support.

 

Read more from Ecosystem Marketplace


Louisiana blue carbon coasts along

 

The above news from American Carbon Registry isn’t the only carbon news born in the bayou. The State of Louisiana itself released its Comprehensive Master Plan for a Sustainable Coast - that includes carbon offsets as a possible funding source for coastal restoration. Louisiana is no stranger to the concept of carbon finance. After several years of research into environmental markets, the report includes carbon sequestration in its Wetlands Predictive Modeling Group and cites carbon and nutrient credits among possible funding sources - alongside the Deepwater Horizon Clean Water Act Penalties and various state and federal funds. According to the report, “The projects in the draft plan will provide 97 per cent of the current carbon levels and realize 91% of the potential for the coastal landscape to uptake nitrogen.”

 

See Louisiana's master plan (PDF)


Don’t just wine about, do something

 

Napa County residents could soon become connoisseurs of another variety - prepping their palettes for CO2 reductions with a plan that requires developers that cut down trees to plant vineyards to offset their CO2 impacts. More specifically, the county envisions a bank in which vineyard and commercial developers could pay in and fund local projects or programs that reduce emissions. The Planning Commission’s proposal has already received blow back from some environmental groups. Earth Defense for the Environment Now manager Chris Malan says, “If you’re losing a forest, you should replace it with a forest.” The plan will go before the Board of Supervisors for a vote in late March.

 

Read more


In retiring EUAs, three isn't a crowd

Three UK carbon firms – Sandbag, Carbon Retirement and Palmetto Climate – have announced a decision to team up to consolidate their EUA Allowance retirement services. Their aim is to improve consultancy, offsetting and campaigning activity – and of course move more EUAs towards retirement. Under the new arrangement, Sandbag will cover research work and focus more on environmental campaigning, while Carbon Retirement and Palmetto Climate will handle carbon retirement services. More than two billion EUAs are currently in circulation, meaning the new partnership will have their work cut out for them. They may be aided by a vote by the EU parliament on a "withholding" measure that would set aside and potentially retire a large amount of EUAs, hopefully resuscitating the weakened market.

Read more about the partnership


Darwin’s dissent: Inpex CSR plan criticized

Needs more offsets! That’s the message from environmentalists looking at Japanese firm Inpex’s latest CSR plan to address impacts from projects like the $33 billion Icthys project. In the next five years, the project will include construction of a liquefied natural gas plant on the fringe of Darwin Harbour - and is expected to generate 280 MtCO2e over 40 years. When the deal was announced on Friday, Inpex chairman Naoki Kuroda repeated a promise to spend more than $90 million on a social responsibility package, including $37 million on a carbon offset scheme. Critics say this amount will help offset 16.5 per cent of the emissions over 20 years, but that Inpex can afford to spend up to $90 million a year.

Read more


NZX completes sale of carbon registry to Markit

 

NZX, the domestic stock exchange operator in New Zealand, has sold off the last of its stake in the TZ1 carbon registry to the UK financial information services provider Markit Group. Markit operates the Markit Environmental Registry which in 2010 tracked the largest volume of transacted carbon credits in the voluntary market. NZX was originally issued shares in Markit under a 2009 deal in which Markit bought the registry. The sale netted NZ$33.7 million for NZX, a figure NZ$19.9 million lower than originally announced in 2009, due to TZ1 earnings falling short of expectations over the deal’s two and a half year lifetime.

 

Read about the sale


AU: Climate is friendly for domestic projects

Carbon offset suppliers to Australia’s compliance carbon offset program - the Carbon Farming Initiative - say the country’s looming carbon tax is slow to kick start action on climate change. But Climate Friendly CEO Freddy Sharpe say the climate is better for voluntary action in the country, where offset suppliers are now able to source credits from the country’s domestic actions. Buyers in developed countries like the US and Australia have traditionally looked to credits domestically, as opposed to the kinds of international credits that the Aussie market has been relegated to since AU took on a Kyoto commitment. “"At the moment we have to source most of our credits in Asia and South America, but if there's a scheme of carbon trading in Australia, we can look to our own backyard, which is always important in environmental terms," Sharp says.

Read more from the Australian


No more shopping in the dark

It’s true that consumers often are in the dark when it comes to the carbon neutral credentials of their everyday purchases. Not for long - SGS Consumer Testing Services is touting its new service as the first international carbon labeling program, which will show that a product’s carbon credentials have been verified by an independent organization. In addition to measuring and validating carbon claims of manufacturers, SGS will also advise those manufacturers on strategies to help them achieve “SGS Carbon Reduction and SGS Carbon Neutral” marks. A widely adopted global carbon labelling and verification program has been somewhat elusive, but others have attempted the complex task. The Carbon Trust became a certifier of the Product Life Cycle standard developed by the World Resources Institute and the World Business Council for Sustainable Development, late last year.

Read the press release
Read more from Environmental Leader


TNC needs some TLC from funders

After raising $5.1 million from the sale of credits from the massive Canadian Darkwoods forest project, The Nature Conservancy Canada may rely more heavily on the carbon markets to address its current financial uncertainty. About two-thirds of the credits were sold to the Pacific Carbon Trust, a provincial Crown agency in British Columbia, and the remainder were sold offshore. “This could become really big in the future," said TNC board member Bill Freedman. The program previously received federal funds for its Natural Areas Conservation Program, which is soon winding up. Freedman says TNC is currently speaking to the federal government about maintaining support for that program or one like it.

Read more


NewEquity for OneEnergy

OneEnergy Renewables has obtained $1.3 million in private equity funding, according to a new filing with the SEC. One Energy Renewable produces both renewable energy credits (RECs) and carbon offsets through their renewable energy projects such as solar, wind, and biogas projects. OneEnergy’s RECs and carbon offsets are third-party tracked and verified by the Climate Action Reserve. OneEnergy Renewables is actively developing projects in seven states, including Oregon, New Mexico, Ohio, New Jersey, Idaho, California, and Maryland.

Read more about the equity funding


A hiccup in AU dairy farmers’ plans

Dairy farmers are being encouraged to add more vegetable oil to cattle feed, because a diet higher in oil can reduce methane emissions from cow burping during the summertime. According to Dairy Australia, a reduction in cow burping could reduce methane emissions by as much as 14 percent. The cow burping methodology is now in the process of being developed and submitted to the Carbon Farming Initiative, after which dairy farmers could gain up to $700 in carbon credits from the Federal Government. In addition to the carbon credits earned, another main benefit to adding oil to cows’ diets is that of increased milk production. Since its inception, the Carbon Farming Intuitive has been the source of a number of amusing - and hopefully effective - proposed methodologies, including culling camels to reduce methane emissions from feral animal flatulence.

Read about the methodology


Can we reschedule? How does your October look?

The International Emission Trading Association’s (IETA) annual Carbon Forum North America, which is usually held in March, has been moved to October.The annual event, which will still be located in Washington D.C, focuses on developments in the North American carbon market. An IETA update said that the event was moved “In order to better align with an exciting political and market schedule this Fall,” referring largely to the first round of auctions in California, which are scheduled to take place in August.

Read more at the Carbon Forum web site


Reduce & Retire: The Latest on Carbon Neutral

Crédit Agricole S.A. chooses REDD

For its fourth year purchasing offsets, Crédit Agricole S.A. has chosen the Kaigau Corridor REDD+ project in Kenya to compensate for its 2,655 tonnes of CO2 emissions. As the first REDD+ project to have its carbon credits validated by VCS, the Kaigau Corridor programme will provide the company 2,655 VERs to offset emissions from its operations in the Greater Paris area. Crédit Agricole S.A. purchased its credits through the CarbonNeutral Company after company employees voted to select the project from among several others.

Read more


Climate North America

Shut it down, boys

 

The London-based Barclays Bank has closed its US emissions trading desk in New York. Kedin Kilgore, the former head of US Emissions Trading at Barclays, explaines, “... current economic conditions and the uncertain regulatory environment make highly specialized, bespoke businesses like emissions very difficult for banks to maintain." The closure of the US trading desk removes one of the primary traders of California carbon allowances (CCAs) out of that emerging market. One broker active that nascent market didn’t see the desk closure “unwinding positions” in California, while another was more pessimistic, saying, "Clearly, if they though California was going to be a liquid, viable program anytime soon they wouldn't be shutting down." Back in London, project developer Camco sold its UK advisory business to Baxi Partnership to focus on its core business of clean energy project development and carbon.

 

Read about the Barclays closure
Read about Camco's sale


Camco off to the races

 

Anticipation of AB 32, the California carbon trading scheme set to begin in 2013, is already driving up demand for carbon credits. As evidence, Camco international, the clean energy and GHG reduction project developer, last week reported a 27 percent increase in the number of California carbon credits issued in the second half of last year, as California buyers begin preparing for compliance. Camco has increased its carbon credits under management to accommodate for increasing demand. Camco’s California credits under management increased from 281,061 to 356,061 between July 2011 and January 2012.

 

Read more from Reuters


California and Quebec working on joint carbon auction

 

California and Quebec have announced that they will host a joint auction for CO2 allowances, as Quebec moves to link its cap-and-trade program to California’s program before the first auction, which is set to take place in August. Both states are members of the Western Climate Initiative (WCI), which saw its numbers shrink when 6 US states withdrew, leaving California and 4 Canadian provinces, including Quebec. It is unclear if or when the remaining Canadian provinces will link up to California and Quebec, creating the kind of regional trading program the WCI envisions.

 

Read more from Platts


Kyoto & Beyond

The numbers are in...
Earlier this month, market participants got their first glimpse of the global carbon markets’ 2011 performance, when Thomson Reuters Point Carbon analysts released their first round of findings on last year’s marketplace. According to Reuters, the value of the global carbon market was up 4 percent over 2010, aided by a surge in trading activity associated with the low global price of carbon. While benchmark prices collapsed, traded volume was up 17 percent. "The growth in value was relatively smaller than the volume growth due to lower prices," the report said, noting the average weighted EUA price in 2011 was more than a euro below the price in 2010, due to economic concerns and a glut in permit supply. No word yet on voluntary carbon market numbers, though the article notes that additional findings are forthcoming.

Read more from Reuters


A UN Roundup: carbon offsets hit record low amidst fears
Uncertainty around the Eurozone crisis and the long-term validity of credits issued by industrial gas projects led CER prices to hit a record low this week. The potential EU ban in March 2013 of these “grey” credits, which increasingly dominate the CER market, has analysts predicting that prices of CERs will not pick up until after this period. Compounding fears for falling prices was the EIB’s EUA sale programme, which will sell 300 million EUAs for new entrants to the ETS - but sales in its first month were below expectations. The EIB claims that its sales process cut volume on days with low liquidity to avoid driving prices down further, but the bank has drawn criticism for a lack of transparency.
 
The outlook remains bleak— European prices dropped 52 percent in the past year, and forecasts predict that CER prices will fall by 36% while EUAs would be down 28 percent from its previous estimate. This has inspired calls to withhold supply in the 2013-2020 trading period of the EU ETS, but lawmakers resisted this proposition, claiming that the move would bring about a net supply deficit after 2017. One hint of optimism is that the oversupply is fully priced in and compliance buying over the next few months should hold the market up in the meantime.
 
The EU ETS is also moving ahead with auctions for its next phase with the opening of a new platform for allowances for airlines and post-2012 permits for manufacturers and power plants. The EU ETS has expanded this year to include the aviation industry, which will buy a part of the allocations at the auctions.

Read about "grey credit" fears
Read about the EIB supply cut
Read about the new platform


Some airlines embrace CO2 trade, buy permits

 

In reaction to the EU Emissions Trading System’s recent inclusion of international aviation, many non-EU airlines are speaking against the ETS, while several big airlines are readying for compliance by making plans to emission allowances at bargain prices. Airlines Lufthansa and Ryanair expect to pass the costs of offsetting on to customers. “Carbon trading eventually will become as routine for airlines as hedging fuels and currencies …” said the chief executive of Virgin Atlantic.

 

Read more from Reuters
Read more about Ryanair's plans


Global Policy Update

World Bank Scheme: Countries target CO2 markets by year-end

A World Bank official remarked Friday that several countries across the globe could be launching pilot carbon market schemes by the end of the year, as part of the Partnership for Market Readiness - a World Bank programme funded by developing countries to help less-developed countries cut their emissions. So far, fifteen countries have applied for this funding, including Chile, Turkey, Mexico, and China. Nine countries have already received $350,000 in preparation funding, and could receive $3-$10 million before the end of the year for implementation. Donor countries contributing to the fund are Denmark, Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the UK and the US.

Read more from the World Bank (PDF)


China calls for country’s first caps on CO2 emissions

The Chinese government, acknowledging its need to address its carbon emissions, has called for seven provinces and cities to set emissions caps - a move that some believe is the first step toward establishing carbon trading markets in China, and eventually a national program. Currently, at the national level, China has set set future limits on carbon intensity, which is measured as the amount of greenhouse gases emitted per unit of GDP. China has not yet made plans to set a national cap on greenhouse gas emissions, citing the need to grow its economy. Its current five-year intensity cap plan requires the country to reduce the carbon dioxide emitted per unit of GDP by 17 percent by 2015.

Read more from New Scientist

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