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This Week in V-Carbon: The Best Offense is a Good Defense

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.



3 February 2012 | While our North American readers are preparing for this weekend’s touch downs, this issue tracks some shake ups in the world of voluntary carbon markets.
 
The last two weeks have seen a good deal of flux in the carbon market playbook. UK-based Carbon Retirement was taken over by environmental finance and trading firm Palmetto Climate and carbon policy researchers Sandbag, which will now run interference for Carbon Retirement’s business of voluntarily retiring compliance market allowances. 
 
Also on the EU front, Carbon Desk made a pass at pulling itself out of administration, cutting costs by requiring that its brokers work solely on commission. Meanwhile, CDC Climat announced that it will phase out its VCS registry services by December 22, 2012 – registry users will have to transfer their VCS CDC Climat registry accounts to either Markit Environmental Registry or NYSE Blue VCS registry.  
 
U.K.-based grocery chain Tesco decided to cease their carbon labeling program that aimed to give consumers information on the carbon impact of the company’s 70,000 items, beginning in 2007. They will, however, continue to partner with the Carbon Trust, which provided the labeling service.
 
National governments are also stirring things up early in the year. China has been gradually unveiling more details on its plan to pilot emissions trading schemes in around the country, including the emissions-belching Guangdong, which will tackle an ambitious 19.5 percent reduction target by 2015. However, details are still hazy, and the exact form of the ETS is unclear.
 
The U.S. government’s international aid organization, USAID, is integrating a strategy to address climate change into its broader goals of aiding the development of partner countries. Part of the five year Climate Change and Development Strategy is devoted to the development of “new markets for clean technology and expansion of the green economy.” 
 
The Verified Carbon Standard released a round of updates for its Version 3 Program Documents. The update includes new requirements for the timing of emissions for different AFOLU carbon pools, as well as new requirements for developing standardized methods, and clarification of double counting rules.
 
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

I’ve got a VERy good price for you

In light of the plummeting prices of CERs and EUAs, Point Carbon takes a look at how the price of credits in non-compliance markets are holding up. Gold Standard VERs were fetching around EU$5.50, while credits from the more “charismatic” projects under that standard and others could bring in US$7-12. Point Carbon asserts that corporates in North America, like Chevrolet and GM, were helping to pick up the slack of reduced voluntary market activity in Europe, taking on over 5 million credits between them. Compare the prices from the voluntary market to those from CDM projects, which dipped down to just above EU$4 – but don’t put too much stock in this kind of comparison. It’s important to keep in mind that the trading volume in the EU ETS, which makes up the majority of CER trades, is much, much larger and liquid than the total voluntary market, and serves a very different purpose. Analysts also say not to expect too many cast-off CERs to find a home in the voluntary market, where buyers still prefer the multiplicity of VER options over compliance carbon.

Read the article from Point Carbon (PDF)


Disaster-driven demand in Japan

Companies trying to help areas of Japan rebuild following the tragic earthquake last year have been increasingly using their money to purchase carbon credits produced by domestic forestry projects in these hard-hit areas under Japan’s voluntary J-VER program. The Kamaishi regional forest cooperative in Kamaishi City, for example, reports that since the earthquake, they have sold about nine times the amount of credits they sold previously. Established in 2008, the Japan Verified Emission Reduction (J-VER) program enables project developers, including prefecture governments, to sell credits from forestry projects. As of now, 180 projects have been certified by J-VER, and the total amount of credits is the equivalent of about 157,000 tons.

Read more


And then there were two

CDC Climat, the France-based provider of carbon investment services, research and project developer, will phase out its VCS registry services by the end of 2012. The company cited an organization-wide re-prioritization of efforts toward project development - in their words, “projects and businesses that contribute directly to reducing greenhouse gas emissions” – and with a particular focus on projects closer to home. CDC Climat was one of three VCS administrators, along with Markit and NYSE Blue, who will see CDC Climat’s clients transfer assets to one of the two.

Read the announcement from VCS


Updates all around

The Verified Carbon Standard has released updates to its Version 3 Program Documents. The update includes expanded requirements on the timing of emissions after land-use change or disturbances for AFOLU methodologies, a clarification and update to their “double counting” rules, and updated regulatory surplus rules to distinguish between Annex I and non-Annex I countries. There was also the release of requirements for developing “standardized methods” - tools and methods that streamline the process of establishing baselines and additionality. They do this by allowing projects to reference pre-defined criteria for baselines and additionality, letting them automatically qualify as additional. Standardized methods reportedly reduce costs and improve the efficiency project development. In light of the program updates, VCS is conducting a review of methodologies to make sure they align with the updates.

Read about the program updates
Read the double counting rules (PDF)
Get up to scratch on "standardized methods"


Year of the cap-and-trade pilot program

Guangdon, China, looks to be the site of the country’s largest pilot emission trading schemes. The southeastern province emits around 465 million tons of CO2, more than France’s 397 million tons. With the ambitious target of reducing emissions by 19.5 percent by 2015, it is possible that Guangdong will rely in large part on emissions trading to achieve the target, but no one will know for sure until the release of the province’s implementation plans this year. The Asian Development Bank will be devoting funds and helping to design a platform for Tianjin’s cap-and-trade program, another of China’s 7 pilot sites, that could begin operation by 2013. And in light of the country’s emission targets announced in the 12th Five Year Plan and other voluntary commitments, the country may hold on to domestically generated emission credits, potentially helping to tighten the supply of CERs in Europe. However, it’s possible that the move to use its own credits to meet commitments will draw double counting accusations that would anger the international community.

Read about Gunagdong's pilot program
Read about the ADB's role
Read about China's post-2015 CDM plans


Brokers don't quit their Desk job...

...but some brokers at Carbon Desk are at least taking a step back, as the UK broker of carbon credits has eliminated all its full-time broker positions as they attempt to lift themselves out of administration. Instead, brokers wishing to stay with Carbon Desk will be working on commission only for the time being. Slumping credit prices in the European market have led to a slew of problems for the brokerage over the past 6 months, including the closure of their Geneva office, being placed into administration, having its shares suspended from a UK stock exchange, and being suspended from emissions exchange ICE Futures Europe earlier in the month. Daniel Edelman, CarbonDesk's co-founder and director of new business development, said they have proposed a date at the end of February to bring the brokerage out of administration.

Read more
Read about Carbon Desk's previous woes


Sorry ma’am, we no longer carry carbon labeling

Price, calories, carb…oh. If you were a carbon-conscious customer of Tesco, there will be no more checking of carbon labels for you. The supermarket announced that it will cease placing carbon labels on their products, a big turn around since the company’s chief executive pledged in 2007 to do so for all its 70,000 products. The burden of time required and a lack of similar efforts by other supermarkets were blamed for the decision. The Carbon Trust, who provided the labeling service, were disappointed with the decision, noting that products with the label had annual sales valued at $3 billion pounds. Still, Tesco maintains that they want to provide carbon information on their products, and will continue to work with Carbon Trust to do so. Other companies, like PepsiCo, continue to practice carbon labeling as a way of helping customers and businesses understand and cut their emissions.

Read more


Carbon neutral love letter

 

Swiss Post, Switzerland’s postal service, has just announced the results of a vote on which offset project should be funded by the publicly owned company. The funds for the project come from the “pro clima” surcharge, which allows individuals and businesses to make a a voluntary payment that offsets the emissions that result from the sorting and transportation of mail. Now, with all the “pro clima” funds from 2011 collected, Swiss Post asked the people which of three projects should be funded: a Wind Power Project in Turkey, and efficient cooking stove project in Ghana, or a household scale bio-degester project in Cambodia. The Turkish wind energy project won out by a hair over the cookstove project, while the bio-digester project received few votes. Swiss Post also funded a project that produces biogas on Swiss farms.

 

 

Read more about the vote and the winner


Farmers have a bigger role to play

 

CDC Climat has released a new report detailing emission reductions enabled by agricultural projects to date, finding that agricultural projects have reduced emissions by 14 MtCO2e in 2010, or 7% of the reductions generated by all carbon offset projects across all sectors for that year. Although current initiatives focus mainly on bio-energy, livestock waste management, and soil carbon sequestration, there are many more mitigation technologies available to the agricultural sector. So why aren't those technologies being used? The diffuse nature of agricultural emissions and the relatively high cost of the abatement measures are holding up the adoption of new technologies. However, the introduction of multi-farm aggregators and program of activities approaches in the CDM could help overcome those cost-related obstacles.

 

Access the report


The Carbon Retirement shake up

In an email sent to Carbon Retirement stakeholders and colleagues, Jane Burston, co-founder of Climate Retirement, state that “Carbon Retirement has been taken over by a combination of Palmetto Climate and Sandbag”. Although Carbon Retirement will continue to exist, its main functions will be outsourced, with Palmetto handling the retirement of EUAs and Sandbag continuing carbon market research. Burston is headed to the National Physical Laboratory, where she will establish the Centre for Carbon Measurement, which will provide the measurement services to underpin the UK’s carbon tax, trading and accounting policies, among other projects. However, she will join the board of Sandbag and act as an advisor to Palmetto Climate.

Read more


Reduce & Retire: The Latest on Carbon Neutral

Carbon neutral ambassador

The Chilean Ministry of Foreign Affairs this week announced that it will launch its Zero Carbon initiative, which will measure the carbon footprint of its embassies around the world and offset them though the Santiago Climate Exchange (SCX). The initiative will also involve a partnership with SCX to achieve carbon neutral certification for five Chilean representations, including the EU, UN, and Consulate of California. Sergio Toro, First Secretary of the Chilean Mission for the UN, stated that the Chilean government was prompted to pursue the initiative after ExpoShanghai, which featured the widely acknowledged CO2-neutral Chilean Pavilion.

Read more


Carbon Offsetting 101

Utah State University has initiated a program that will allow faculty and staff to offset their university-related travel. Participants will have the opportunity to voluntarily contribute $10 to the fund by deterring part of their travel reimbursement. The Carbon Offset Travel Fund will not purchase international or even domestic carbon credits, but will be used to reduce emissions from the University’s groundskeeping operations – by replacing gasoline-powered lawnmowers with electric ones, for example. Utah was a partner in the Western Climate Initiative until late 2011, but has since withdrawn.

Read more


Chevy’s Carbon neutral plans run deep

Chevrolet is moving toward meeting its multi-year commitment to reduce CO2 emissions with the aid of US-based Element Markets LLC. The automotive company recently announced that it will fund Basin Electric Power Cooperative’s clean energy projects across northern US states, which in turn will generate carbon credits that Chevrolet can use to offset its emissions. Chevrolet is keen on projects that would generate emissions reductions measured and verified under a third-party standard, for now choosing the Verified Carbon Standard. Offsets will be passed on to the Bonneville Environmental Foundation, which will then retire them for Chevrolet. Basin’s wind and waste heat recovery projects span from Montana to Minnesota and the Dakotas, a few of which are profiled in Chevy's "Carbon Stories" web video series.

Read more


Climate North America

PG&E puts its feelers out in California’s market

Pacific Gas & Electric (PG&E) has issued a request for eligible California compliance instruments –including GHG allowances and offsets – as part of its long-term procurement plan. The announcement this week caused the price of California Carbon Allowances (CCAs) to rise. The plan puts a preference on 2013 and 2014 vintage CCAs, accepting those that have yet to be issued, and calling for a minimum of 25,000 metric tonnes and a minimum $5,000 offer deposit. Agricultural methane and ozone depleting substance destruction projects as well as US-based forestry and urban forestry projects developed under California's compliance protocol or the Climate Action Reserve's protocols will be considered. While many in the market welcomed the signal from PG&E, others were more skeptical, suggesting that the utility is using the solicitation to gauge the market and potential availability of allowances and offsets, and noting that the credit requirements and the cost of the offer deposit could make it difficult for offset developers to participate.

Read more
Read the details of the solicitation from PG&E


USAID’s Five Year Climate Strategy

Though USAID frequently incorporates climate change adaptation and mitigation into its development assistance programs, the release of its “2012 Climate Change and Development Strategy” marks the first time the agency has given climate change adaptation a central role in its global development efforts. The strategy, which will guide USAID projects from 2012 through 2016, calls for low-emission development and investment in climate change adaptation through increased local and private investment in clean technology and sustainable landscape use, including the promotion of REDD+.

Read more about USAID's strategy


RGGI’s still got it

A new report from Environment Northeast, a non-profit that operates in the northeastern North America, paints the Regional Greenhouse Gas Initiative (RGGI) in 2011 as a success. The report says the RGGI region It lowered emissions by 34 percent below the RGGI cap, and increased non-fossil fuel energy production by 6,800 gigawatt hours. How’d they do it? More than $440 million raised from RGGI auctions of emissions credits were directed toward clean energy and energy efficiency investments, in addition to other regional measures. RGGI, having reached its first comprehensive review checkpoint and met their goal, will cut the number of allowances that electric power companies are able to buy. The move, which will eliminate 72% of the unsold carbon allowances, is aimed at addressing the market’s problem of oversupply.

Read more about RGGIs 2011 successes
Access the Environmental Northeast report


Kyoto & Beyond

World Bank in it to win it

With the stalemate at Durban around potential market-based financing mechanisms, the Bank anticipates a strong presence in the coming years to finance carbon projects through its existing funds— its ten climate funds and five post-2012 carbon initiatives. But instead of doling out grants for project implementation, the Bank will channel these funds towards buying the carbon credits produced by projects once they have been third party verified. The Bank isn’t immune from the effect of low prices and a sluggish demand in the current market. However, Joelle Chassard, the head of the Carbon Finance Unit at the Bank, remains optimistic in light of the portfolio of projects that the market has sustained, which she foresees the Bank supporting.

Read more from Reuters


Get going while the going is good

CDM project developers in South Africa face the prospect of being excluded from the European market if they are unable to finalize their applications for registration before the end of the first quarter of 2012. South Africa currently has 21 registered CDM projects and a project pipeline involving almost 270 potential projects. Adam Simcock, CEO of Carbon Check and the only independent auditor accredited by the UNFCCC, told potential developers and consultants at a Green Power Conference that they must submit project by May or risk missing the EU’s December 31 cut-off. In the EU ETS’ third phase, beginning in 2013, only CDM credits from “least developed countries” will be eligible.

Read more


One man's trash...

Landfills in Ghana and Nigeria have caught the attention of one of Europe’s biggest power and heat producers, Vattenfall Energy. The producer’s trading unit, Vattenfall Energy Trading, has signed an emissions reduction purchase agreement (ERPA) to purchase carbon credits from up to nine of Blue Sphere’s landfill projects until 2020 - potentially totaling more than $15 million over that period, according to Blue Sphere. The ERPA includes the developer’s first landfill site, located in Kumasi, Ghana, and is in the process of adding another landfill site in Takoradi. The company is hoping that four of its new sites in both countries will commence landfill gas extraction projects that will produce renewable energy under the CDM.

Read the press release


Carbon Finance

A very good year for Green Exchange

Green Exchange LLC, which operates a trading exchange for environmental derivatives, handled 451.8 MtCO2e in 2011 - up from 104.5 MtCO2e in 2010. Data showed that EU-allowance futures comprised 83 percent of the 2011 total, alongside other credit contract types, like California Carbon Allowances and Climate Action Reserve contracts. GreenX counts ICE Futures Europe, which handled 5.4 billion tons of EU carbon futures last year, as its main competitor. Although trading was slow at the beginning of the January, GreenX reports that it has been picking up as the year progresses.

Read more from Bloomberg

Featured Jobs

Postdoctoral Research Fellow – IEMP/UNEP

Be one of four postdoctoral research fellows with the International Ecosystem Management Partnership/UNEP to be based in African and Asia-Pacific. Candidates will be involved with Ecosystem Service Valuation and Ecosystem Management in developing countries.

Read more about the position here


Regional Technical Coordinator - AECOM

The Bangkok-based Regional Technical Coordinator will be responsible for working with developing country governments and funding organizations to coordinate program activities. Experience in project preparation with multilateral development banks, especially the ADB and World Bank, is desired.

Read more about the position here


Executive Assistant to CEO – First Climate

This job might be ideal if you are educated in business administration, finance and/or corporate law in Germany, have already worked a corporate business environment in a similar role, are proficient in both German and English, and are an excellent communicator skilled in the art of diplomacy with an ability to achieve quick results.

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Director General – CIFOR

CIFOR seeks a Director General in Bogor, Indonesia who will have a leadership role overseeing, amongst others, the following areas: overall management; resource development; external relations; fiduciary; and the Board of Trustees.

Read more about the position here


Associate, Climate Policy Practice – Climate Advisors

 

The Associate will be involved mostly with policy work like writing high-impact policy briefs, but with a portion of his/her time spent assisting the CEO. 1-2 years of practical experience in climate policy is strongly preferred.

 

Read more about the position here


Mitigation, Data and Analysis Programme - UNFCCC

 

Under the Greenhouse Gas (GHG) Inventories Unit, the successful candidate will coordinate technical reviews of national GHG inventories by international expert review teams under the Convention and the Kyoto Protocol and conduct analyses and technical work, amongst others. Stint is for a year and half with the possibility for extension.

 

Read more about the position here


Junior Researcher, Environmental Governance in Indonesia - University of Bremen, Germany

 

Contribute to the research project SPICE (Science for the Protection of Indonesian Coastal Marine Ecosystems), under the sub-project Upstream-downstream linkages and new instruments in coastal and watershed governance. Researcher should be willing to spend several months in Indonesia.

 

Read more about the position here


Fellow, Climate and Energy Program - World Resources Institute

 

Another opportunity for a fellowship with one of the world’s leading environmental think tanks. The successful candidate, who must be a citizen of a developing country, will support the Measurement and Performance Tracking (MAPT) project in helping developing countries meet their low-carbon development goals.

 

Find the position here




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