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This Week In V-Carbon: A Test Of Stamina

Between now and the "next big crescendo" in climate talks, a growing patchwork of government programs and market players trucks onward. Consolidation continues, with ERA acquiring Offsetters and CCC before issuing REDD+ credits big time from its DRC project. Jurisdictional REDD+ starts to find its feet, as Forest Carbon explores forest carbon opportunities at the provincial level in Laos.


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



Into the holiday season...

21 December 2012 | Before we survey the latest market news, Ecosystem Marketplace is surveying readers for their input on the “biggest” stories of 2012, and predictions for 2013 – to be published in our end-of-year special edition. Tell us here! We will randomly select several predictions for publication in the special edition, along with a link to your website and findings from the survey.


Negotiations moved slowly at the international level as the UNFCCC COP18 conference in Doha came to a close. Among the key decisions made, countries agreed to extend the Kyoto Protocol out to a second commitment period running 2013-2020, under which the Clean Development Mechanism and Joint Implementation mechanisms will continue to operate – albeit with revisions in store for both. In the background, the CDM registered its 5,000th project.

On the "hot air" issue, unused AAUs will be eligible for carry-over into the second commitment period, to be stored in a surplus reserve account with limits on their transfer.

 

Negotiators put together an outline describing a new market mechanism that could complement the Kyoto Protocol's existing mechanisms and have the capability of being rolled out to sectors – possibly REDD+ inclusive – whose credits could be used to satisfy pre-2020 Kyoto compliance obligations. The new market mechanism will be further fleshed out going into next year's COP in Warsaw, Poland. Meanwhile, issues regarding REDD finance and the rigor of verification for credits were tabled for further discussion in 2013.

 

For market players, the annual cliffhangers of the UNFCCC process are taking their toll through continued price and policy uncertainty.

 

"Doha was challenging. Because of the way countries are feeling about the global economy, they weren’t really prepared to take bold steps," said Dirk Forrister, CEO of IETA, on a post-Doha follow-up call. "The die was cast on that in Durban when they set up a negotiating plan to get the real answers in 2015, the big decision year."

 

Leading up to 2015, Forrister noted 2014 as "the next big crescendo in climate negotiations." UN Secretary-General Ban Ki-moon alluded to plans to convene a meeting of leaders in 2014 to elevate the climate agenda, and there was a reference in the final conference text whereby countries can improve their level of ambition in the Kyoto context by amending their commitments by April 2014.

 

Outside the UNFCCC process, nationally run or bilateral offset programmes are pushing onward while other market players consolidate, doing what they can to scale up mitigation efforts absent an international framework. These past two weeks, ERA Carbon Offsets Ltd took the voluntary carbon markets by storm – first with its finalized acquisition of Offsetters and Carbon Credit Corporation, and now with the certification and issuance of 2.5 MtCO2e in VERs from the Mai Ndombe REDD+ project in the Democratic Republic of the Congo. At the jurisdictional level, Forest Carbon is mapping and accounting for forest carbon across Khammouane Province in Laos, working to identify potential investment opportunities through the voluntary carbon market for project-level private sector and NGO REDD+ interventions.

 

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading! Note that we are still fundraising for the State of the Voluntary Carbon Markets 2013 report, slated for publication at Carbon Expo 2013 – if we are able to raise sufficient contributions to continue this research. Many thanks to The CarbonNeutral CompanyAmerican Carbon Registry and Forest Carbon Group for already coming aboard! This report – which is freely available thanks exclusively to sponsors’ support –remains a key benchmark for the market. To learn more about sponsoring next year’s report, click here for our prospectus and contact Molly Peters-Stanley for details.

 

—The Editors

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


V-Carbon News

Voluntary Carbon

Your forest, Mai Ndombe

ERA Carbon Offsets and Wildlife Works Carbon have just announced the validation, verification and issuance of 2.5 MtCO2e in VERs from the first REDD+ project in the Democratic Republic of the Congo (DRC). Dually VCS-CCB certified, the 299,645-ha Mai Ndombe REDD+ project will avoid around 5.6M tCO2e of emissions annually over 30 years. Located on a former logging concession in Bandundu Province, the project area is part of the world's second largest intact rainforest after the Amazon and part of the gigantic Ngiri-Tumba-Mai Ndombe wetland. It houses a community of about 50,000 Congolese villagers, to whom the project developers aim to deliver benefits in the form of jobs, schools, health clinics, improved food security, and organizational capacity building, all financed through carbon revenue.

  – Read press release
  – Read about the project

 
The start of a new ERA

A heavily anticipated deal – first announced back in September – finally closed last week, seeing ERA Carbon Offsets acquire both Offsetters Clean Technology and Carbon Credit Corporation. ERA also closed its private placements for total proceeds of $413,440, and appointed James Tansey – the existing CEO and co-founder of Offsetters – as ERA’s new president and CEO. Having already worked together for years, the three firms envision that their consolidation will provide them critical mass for revenue while granting them a broader range of expertise to deliver carbon offset projects to the North American carbon market.

  – Read press release
  – Read for background on merger

 
Laos gets jurisdictional lay of the land

Southeast Asia based Forest Carbon began a jurisdiction-wide forest carbon accounting and mapping project in Khammouane Province, Laos this month. Forest Carbon will identify potential investment opportunities through the voluntary carbon market for project-level private sector and NGO REDD+ interventions, based on a jurisdiction-wide REDD+ analysis that incorporates forest classification and carbon stratification. A final report is slated for mid-March, 2013. The project is being conducted in partnership with GIZ Laos through the Climate Protection through Avoided Deforestation (CliPAD) programme.

  – Read more

 
A new paradigm in the bamboo kingdom

Last month, China’s State Forestry Administration approved a new carbon accounting methodology for bamboo plantations that was developed by the International Network for Bamboo and Rattan (INBAR), the China Green Carbon Foundation and the Zhejiang Agriculture and Forestry University. Now that the methodology has been approved, companies in China can buy bamboo carbon offsets on the voluntary market through the China Green Carbon Foundation. The money they pay supports the planting of new bamboo forests domestically, which contribute to rural development in poor areas both for subsistence and as cash income. “More than 10 Chinese companies have already pre-ordered 8,155 tonnes of carbon credits,” says Yannick Kuehl, a climate change expert at INBAR who helped develop the technique. 

  – Read more

 
SF tempted to loosen up

The San Francisco Carbon Fund, first launched in 2007, could potentially be adapted into a broader “carbon and green community fund” going forward. Originally intended to allow local residents, businesses and government to mitigate their own pollution while supporting a local renewable energy economy, the fund has struggled to source carbon offsets in which to invest. At the start of this fiscal year in July 2012, the fund contained $260,026. Yet the fund has been used to finance only two projects — $30,000 for tree planting and $4,000 on a biodiesel filling station. Government officials say that verifying the amount of carbon offset from potential investments is cost-prohibitive, and suggest eliminating the program’s carbon offset requirement and dedicating the fund to a broader range of environmental projects.

  – Read more

 
USDA science with a side of markets

The Verified Carbon Standard recently approved The Earth Partners’ soil carbon methodology for use on agricultural offset projects. The methodology, while new to the carbon markets, is grounded on decades’ worth of USDA science – with the capacity to cover most ecosystems and land types. The science is there. The challenge, as always, is scaling up. An Ecosystem Marketplace article takes a deep dive into the methodology, the pilot project being rolled out across the Palouse and Columbia Plateau in the United States, and the potential to expand use of the methodology into California's markets and internationally across various landscapes.

  – Read Ecosystem Marketplace article
  – Read the methodology

 
Something to graze on over the holidays

 

Starting today, ACR opened its public commenting period on a new voluntary GHG offset methodology for grazing land and livestock management (GLLM). The methodology, developed by Winrock International, applies to beef and dairy production worldwide, focusing on five primary GHG sources, sinks and reservoirs affected by beef and dairy production – enteric methane, manure methane, nitrous oxide from fertilizer use, fossil fuel emissions, and biotic sequestration in above- and below-ground biomass and soils – and provides accounting modules for each of these. ACR is accepting comments until close of business, January 31.

 

  – Read about methodology

 
Brazil battles to control REDD

Contention rises over REDD+ in the Amazon, as Brazil’s Attorney General Office is suing project developer Celestial Green Ventures and the Awo Xo Hwara indigenous community over the unlicensed sale of $13M in carbon credits covering 260,000 ha of rainforest. While the Awo Xo Hwara have rights to permanent use of the land, the land is still owned by the state. Point Carbon says officials are using the state’s land claim to challenge the project, citing the need for oversight in this speculative market that currently lacks a legal framework. Brazil is struggling over the design of REDD+ rules on the international front as well, recently arguing with Norway in Doha over the rigor of emissions verification required (with further discussion to be tabled until June 2013).

  – Read about lawsuit
  – Read about Brazil-Norway debate

 
Lighthouses shine bright

In Doha, the UN Climate Change secretariat recognized public-private "lighthouse activities" in developing countries that either mitigate or help people adapt to climate change, while benefiting the urban poor. Three of the nine highlighted projects were Gold Standard certified, including an organic waste compost project in Nepal developed by BioComp Nepal and myclimate foundation, an artisan brick kiln project in Peru developed by Swisscontact and the myclimate foundation, as well as the Carbon for Water project in Kenya led by Vestergaard Frandsen, Manna Energy, and Climate Care. In other Gold Standard news, the standard's Designated National Authorities (DNA) programme – which helps new DNA partners build Gold Standard tools and principles of sustainable development into their screening and offset approval processes – recently added Rwanda and Egypt to its roster of participating countries.

  – Read full list of lighthouse activities
  – Read more from GS

 

Reduce & Retire: The Latest on Carbon Neutral

Yarra shifts into neutral

Yarra City Council recently became the first city council in Victoria, Australia to become carbon neutral under the Australian Government standard, and just the second city council in Australia to become certified under the National Carbon Offset Standard (NCOS), after Sydney. Mayor Jackie Fristacky stressed that the council had reduced its energy use by about 25% since 2000-01 in real terms –  involving energy efficiency and renewable energy measures – as well as invested in carbon offsets. The council’s progress is a small play in a broader movement, in which the Yarra Energy Foundation recently launched a project to start the City of Yarra’s journey to become completely carbon neutral by 2020.

  – Read more

 

Climate North America

Voluntary offset registries tapped as California gatekeepers

 

Last week, California’s Air Resources Board appointed the American Carbon Registry (ACR) and the Climate Action Reserve (CAR) as offset project registries for California's cap-and-trade scheme, which is scheduled to start on January 1. Alongside a team of 60 inspectors hired to vet offset projects, both registries will work with ARB to oversee the registration and issuance of offset credits that are developed using ARB’s compliance or early action offset protocols – four of which are currently formally recognized under the Climate Action Reserve. Evolution Markets' Lenny Hochschild praised ARB's decision to leverage the expertise of existing registries to help administer the offset program, stating he "expect[s] this model to increase efficiency of the program while maintaining offset integrity.”

 

  – Read more from Sacramento Bee
  – Read ACR press release
  – Read CAR press release

 
Pairing chardonnay with poutine

Last week, Quebec adopted a regulatory amendment that allows Quebec to link its upcoming GHG cap-and-trade scheme – slated for launch in Spring 2013 – with California’s cap-and-trade scheme under North America’s Western Climate Initiative (WCI) and other potential future schemes. Pending California Governor Jerry Brown's review, the linkage of the two programs will enable companies to use carbon permits issued as part of Quebec’s cap-and-trade program to comply with emission limits in California. The first joint auction of carbon allowances by the two states is scheduled to take place in August 2013. California carbon futures rose to an eight-week high after Quebec's announcement. 

 

  – Read about Quebec-Cali
  – Read about CCA price rise

 

Kyoto & Beyond

REDD inches through Doha gateway

 

Climate negotiators expected to leave Doha with a roadmap to global binding emission-reduction targets by 2015, but all they got was the “Doha Gateway” – what observers have described as "a bundle of winks and nods" that pushes back agreement on how to measure emission-reductions in forestry. Seasoned negotiators now say they’re growing weary of the UN process. An Ecosystem Marketplace article provides coverage of the state of REDD negotiations coming out of Doha, with the growing emphasis on the need to develop a more comprehensive landscape approach to finance.

 

  – Read Ecosystem Marketplace article

 
GMOs, OMG

 

The CDM Executive Board has just approved a new agricultural methodology that will allow farmers using genetically improved seeds to claim carbon offsets. Arcadia Biosciences Inc. – the California-based brains behind the methodology – says nitrogen-efficient seed allows farmers to maintain high crop yields while using less fertilizer. Eric Rey, president of Arcadia Biosciences, says the new methodology is “the first to recognize the huge opportunity for genetic improvements to mitigate climate change and create value at multiple levels.” Notwithstanding, induction of this new methodology on to the list of CDM-eligible offset project types could potentially add to the supply of offsets in a market that continues to suffer from glut.

 

  – Read more

 

Global Policy Update

New Zealand, the odd man out?

 

New Zealand may be excluded from using CER units starting in 2015 since the country renounced participation in the Kyoto Protocol’s second commitment period. However, exclusion from international Kyoto-compliant carbon markets would not have a palpable impact until 2015 onward, since New Zealand will still be in the true-up period for the Kyoto Protocol’s first commitment period through 2014. New Zealand’s Climate Change Minister Tim Groser says the country’s access to international Kyoto carbon markets will depend on its prospects for linking to other schemes going forward. In the meantime, New Zealand still suffers from depressed prices from the influx of international CER credits, despite a recent ban on industrial gas destruction and select large-scale hydropower projects.

 

  – Read about Kyoto market access
  – Read about continued NZ glut

 

Carbon Finance

Icing on the Big Board

 

Energy and commodity futures bourse IntercontinentalExchange (ICE) is young and hungry, reportedly in talks to buy NYSE Euronext, the owner of the world’s biggest stock market. The bid for NYSE Euronext, which has a market cap of $5.8 billion, could be announced as soon as this week. An ICE-NYSE Euronext deal would mark a breakthrough after more than $32 billion of exchange takeovers failed since October 2010. Last year, the US Justice Department blocked a joint hostile bid by ICE and Nasdaq OMX Group for the owner of the New York Stock Exchange due to antitrust concerns. Brian Barish of Cambiar Investors LLC says this deal would be easier on the antitrust front since ICE doesn't do equities. ICE’s market value has grown to $9.3 billion, with shares rising by 6.4% this year.

 

  – Read more

 
Reading the fine print

In this Ecosystem Marketplace piece, the REDD-related funding protocols and processes for the UN REDD Programme, along with the World Bank's Forest Carbon Partnership Facility and Forest Investment Program are outlined and discussed in detail to understand possible reasons why REDD pilot projects, such as Ghanaian businessman John Addaquay’s, are not receiving funding from multilateral entities. Such institutions are enabled to provide funds to build up governance structures that will eventually support pilot projects; however, they themselves were not created to provide direct financial support to pilot projects.

  – Read Ecosystem Marketplace article

 

Featured Jobs

Carbon Program Intern - Ecosystem Marketplace

Ecosystem Marketplace is seeking an unpaid part-time intern for our Carbon Program, with an ideal start time of January 2013 for a four- to six-month commitment. In return for this commitment, the intern will receive invaluable contacts and experience in liaising with international conservation NGOs, for profits and development multilaterals; executing survey research for an international market report; helping to plan/execute an international report launch event; and recommendations as merited. Candidates should be an upper-level undergrad or grad student, preferably able to commute to a Washington, DC office.

  – Read more about the position here

 
Two positions - Verified Carbon Standard

 

Based in Brazil, the Brazil Director will help build the foundation for a long-term VCS presence in Brazil, including building on the JNR initiative, expanding VCS's existing network of market stakeholders in Brazil, and engaging with policymakers. Candidates should have 10+ years' work experience, 3+ in carbon markets, with fluency in both Portuguese and English. Based in Washington, DC, the Program Officer will support the various stakeholders of the VCS Program, including project and methodology developers, validation/verification bodies and registries. Specific tasks will include managing proposed methodologies through the VCS approval process, and staying abreast of developments in the carbon market through market research and conference attendance.

 

 

 
Energy and Environmental Commodities Broker - Karbone

 

Based in New York, the broker will structure and execute bilateral contracts for all classes of energy and environmental commodities around North America (carbon credits and emissions permits among others), and establish and manage relationships with market participants. Candidates should have a relevant undergraduate and/or graduate degree and 2+ years’ experience in brokerage or other sales experience, ideally in related markets.

 

  – Read more about the position here

 
Carbon Advisor - Promethium Carbon

 

Promethium Carbon is looking for a Carbon Advisor, to be based out of Gauteng, South Africa. Candidates should have a technical university degree (engineering or BSc) with 2+ years' work experience - ideally in clean and renewable energy, the CDM or GHG emission reduction projects. Promethium also creates one training position per year for qualified professionals without work experience.

 

  – Read more about the position here

 
Senior Environmental Manager - MGM Innova

Based in Miami, Medellin or Mexico City, the manager will provide support for project work throughout Latin America, responsible for managing and developing emission reduction projects, low emission development strategies, emission baseline studies, sustainability planning, GHG inventories, NAMAs, carbon neutrality strategies, carbon lifecycle analysis, energy efficiency projects and water footprinting among others. Candidates should have an advanced grad degree (MSc at minimum) related to environmental sciences with 10+ years' experience in consulting or industry, and be proficient in English and Spanish.

  – Read more

 
Business Development Manager - Carbon Disclosure Project

 

Basd in Berlin, the manager will develop and execute a strategic plan to implement CDP requests and criteria into major corporate supply chains by engaging large corporations in the DACH region (Germany, Austria and Switzerland) as members of the CDP Supply Chain Program, where CDP helps manage and analyze the climate change and natural resource strategies of their suppliers. Candidates should be native German speakers with fluency in English, 5 years' experience in procurement and/or supply chain at large companies, and ideally 2+ years of direct responsibility for a procurement budget.

 

  – Read more about the position here

 
CDM Analyst - ecosur afrique

 

There are openings for two CDM Analysts, one in Kinshasa, DRC, and the other in Ebene, Mauritius. Each analyst would be responsible for identifying new CDM opportunities, assessing the eligibility and potential of projects under the CDM, elaborating PINs and PDDs, undertaking validation processes with DOEs, following up on projects through UNFCCC registration, and undertaking verification and monitoring processes. Candidates should have relevant experience in PDD drafting and be fluent in French/English.

 

  – Read more about the position here

 
 
 

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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 info@ecosystemmarketplace.com.

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