Ecosystem Marketplace, Marketplace eNewsletter

January 6, 2012

From the Editors

Special 2012 New Year Edition

Happy New Year to you and yours as Ecosystem Marketplace rings in 2012 with this special retrospective edition of V-Carbon News.

One year ago, our inaugural New Year edition took you back to the top stories of 2010 with predictions for the year ahead. With 2011 now in the rear-view, how many of those educated guesses rang true? A few, in fact – from the verification of the first VCS REDD credits to further regional fragmentation of climate efforts to a dominant focus on forests (particularly among Europeans).

2011 dawned with optimism for the progress made around REDD+ at the UNFCCC’s 16th Conference of Parties in Cancun (reader-ranked top story in last year’s issue) and only grew when Wildlife Works’ fast-moving Kenyan REDD project flew through the verification process – bringing the first VCS REDD credits to market in February.

One year later, given that in some ways negotiators backslid on Cancun outcomes at Durban’s COP17, readers ranked the resulting Durban Platform and other decisions as sixth on the list of “top stories” (below) – far behind news about California and Australia that demonstrates the continued shift to domestic markets for climate actions. (What do you think will be the “biggest” emerging market to watch in 2012?)

But regardless of the source of demand signals – be they regional, international or voluntary – forests towered over the voluntary carbon marketplace. Evidence of the active forest carbon market can be seen in Ecosystem Marketplace reports; project investments and implementations; and land use carbon funds such as the $25 million contribution from Macquarie Bank and Flora and Fauna or the EUR 200 million Althelia Ecosphere Fund from contributors Conservation International, Allianz, BNP Paribas and others.

Beyond the canopy, California regulators hit the ground running in 2011 after voters defeated the cap-and-trade-killing Proposition 23 ballot initiative. Despite providing market players with much-desired clarity around their offset program design, though, some Air Resources Board (ARB) decisions put a damper on expected transactions – especially its offset invalidation text.

As a result, some Cali players fared better than others based on the credit types they offered, with ozone depleting substance destruction and agricultural methane projects coming out on top – to trade fairly actively with a $1.5-3 price premium throughout the year. A few emerging methodologies also reportedly showed promise for a future nod from the ARB (see American Carbon Registry’s Conversion of Pneumatic Controllers).

But as readers know, pre-compliance plays are less than half of the story in the voluntary carbon marketplace, where “purely voluntary” corporate social responsibility transactions topped the charts in our 2011 State of reports – and in this issue’s reader poll.

Corporates from Chevy to Puma to Norfolk Southern publicly ponied up for carbon credits in 2011. Meanwhile, groups from Nexus-Carbon for Development members to the Gold Standard Foundation explored “suppressed demand” and other project approaches that could channel more carbon finance into Least Developed Country- and conflict zone-based projects at the top of some corporates’ CSR wish lists.

Significantly, too, developed country buyers weren’t the only ones making markets – Ecosystem Marketplace found several domestic markets on the rise in developing countries. In fact, readers this year ranked the launch of the Santiago Climate Exchange and Chilean VCS office as a top story. SCX is in the company of other emerging developing country exchanges – from China to Colombia to Africa to Brazil – that aim to take advantage of regional economies’ potential demand for carbon neutrality and green supply chains.

Readers cited these and other stories as the most important developments in the 2011 voluntary carbon market. What to watch in 2012? Our expert readers are keeping an eye out for news on climate smart agriculture and watching the horizon for a possible shift from "carbon plus co-benefits" to payments for non-carbon community and ecosystem services in their own right. Check out the ranking below and read some insightful predictions from a few movers, shakers – and V-Carbon News readers like you.

While you’re reading, know that you and thousands of other readers made this the best year yet for Ecosystem Marketplace and V-Carbon News readership. We look forward to again providing reliable and transparent information in the new year, thanks in part to those organizations that support our research.

Most recently, this includes EOS Climate, which joined over a dozen other donors to make our 2012 State of the Voluntary Carbon Markets report a possibility. We’re now 2 donors away (at the $3K level) from being able to publish again in 2012 – can we count on your support? Email Molly Peters-Stanley to inquire.

Best wishes for a lower carbon diet in 2012, from all of us here at Forest Trends' Ecosystem Marketplace!

Reader Retrospective 2010
A reader-ranked summary of the year’s top stories impacting the voluntary carbon market


10. Climate exchange plus one: Marketplaces for trading VERs sprang up or expanded outward throughout the year, but you ranked the launch of the Santiago Climate Exchange – and its work with the Verified Carbon Standard on a Latin American VCS office – as a top tale. Garnering a write-in or two was the late-2011 announcement of the BVRio environmental exchange founded by EcoSecurities pioneer Pedro Moura Costa.

9. Crossing the (Pacific) pond: Two stories were tied for the 9th slot in our poll, where readers couldn’t decide what was the bigger story – TerraPass’ multi-million dollar California pre-compliance offset agreement with Bank of America Merrill Lynch or the first transaction of VERs generated according to China’s Panda Standard AFOLU specifications.

8. Carbon courting: Mid-year, the International Carbon Reduction and Offset Alliance (ICROA ) and the International Emissions Trading Association (IETA) tied the knot – bringing ICROA’s voluntary markets advocacy and Code of Best Practice under the IETA roof. ICROA also recognized American Carbon Registry credits as acceptable for use by those member retailers adhering to its code.

7. CAR gears up: California regulators were the first in the world to recognize credits verified to a voluntary carbon standard as “compliance grade” – i.e. useable in the state’s looming cap-and-trade program. As of the end of 2011, four methodologies from the Climate Action Reserve were adapted by the Air Resources Board for compliance purposes, and recognized as eligible for early action crediting.

6. Carrying on with Kyoto: In an 11th hour (okay, 3AM) deal struck at the UNFCCC conference in Durban, South Africa, climate negotiators extended the (albeit shrunken) Kyoto Protocol to a second commitment period, agreed to pursue an international legally binding Kyoto successor and made headway on REDD+, minus hoped-for clarity around safeguards and market mechanisms.

5. Climbing the charts: According to our poll, one of the biggest stories was the growth of the voluntary carbon marketplace itself. In 2011, Ecosystem Marketplace's State of the Voluntary Carbon Markets and State of the Forest Carbon Market reports both described the voluntary carbon markets' expanding size and coverage of land-use emissions, transparency, geographic scope, standards use and other mechanisms.

4. Chevy runs deep: Deep into the market for carbon offsets, that is. Readers revered the US auto maker’s pledge to invest US$40 million in 8 MtCO2e credits from US carbon offset projects over the next several years. As of December 2011, Chevy had already identified and committed to 4.6 MtCO2e reductions, with the aid of Bonneville Environmental Foundation.

3. Crediting REDD: From the VCS methodologies that were the talk of our 2011 Special Edition came the world’s first VCS REDD credits – verified and transacted in February 2011. Methodology and project developer Wildlife Works carried the project from theory to practice in Kenya’s Kasigau Corridor.

2. Cleaning up their Energy Act: The Australian “Carbon Tax” (transitioning to a market-set price in 2015) cleared a series of legislative hurdles to pass both houses in early November. The scheme’s cap-and-trade regime will enable offsetting through the Carbon Farming Initiative that launched in December. CFI projects can qualify for voluntary or compliance purposes.

1. California, here we come…: …right back where the US started from as an early pioneer in emissions markets. 2011 saw the US state’s Air Resources Board man the nation’s only comprehensive ETS regulations through rough legal waters with a delayed 2013 start date for trading – but sailing into 2012 generally intact.


Carbon Crystal Ball 2012
What voluntary carbon market movers and shakers are saying about 2012


Eduard Merger, Project Developer and Market Analyst
UNIQUE Forestry and Land Use
"Last year saw the successful approval of new REDD+ methodologies and validation of voluntary REDD+ pilot projects. This year will experience further broadening of the voluntary land use carbon sector through methodological approval and validation of climate-smart agricultural and rangeland pilot projects that will deliver multiple food security benefits, climate change mitigation and adaptation. These may provide crucial lessons informing the international climate policy to eventually establish an agricultural work programme under the framework of the UNFCCC."

Frederik Vroom, Forest Carbon Analyst
Brinkman Earth Systems Ltd
"For the year 2012, I expect more prospective REDD+ projects, but of lower quality because of the loosely agreed guidelines on safeguards in Durban. For biomass-to-energy projects, I expect the opposite – many prospective projects will evaporate as real investments are finally placed in a lucky few. The learning curve has reached a point where investors know which projects deserve their money."

Michael Sahm, Director of Public Relations
Forest Carbon Group AG

"We observe that more companies that want to invest in carbon projects and purchase carbon credits prefer to communicate the bigger story and benefits these projects offer rather than the 'carbon,' 'carbon neutrality' and emissions reduction aspects. Conserving biodiversity, maintaining ecosystem services, promoting local development, and alleviating poverty are the issues companies want to be associated with. Carbon is the 'currency' to pay for this but is not so much the sales pitch and communications headline anymore."

Jeff Cohen & Saskia Feast
EOS Climate, Inc.
"AB 32 and the California Air Resources Board will withstand a roller coaster year of court and political challenges and emerge as a very real, respected market that will create a platform to link to regional systems in North America (WCI and perhaps RGGI) and around the world. Both compliance and voluntary markets will embrace transparent, rigorous, international ODS destruction projects."

Jonathan Shopley, Managing Director
The CarbonNeutral Company

"[I foresee a] re-defintion of the voluntary carbon market as domestic, pre-compliance, and fragmented national initiatives redraw the boundaries and modalities of voluntary offsetting; also the battle to drive up demand and prices to ensure that capital continues to flow into high quality reduction projects - particularly in less developed nations."

Nathan Dale, Founding Partner
Brokers Carbon

"We expect to see a lot of new and innovative carbon projects enter the voluntary market in 2012, particularly those based around energy efficiency, transport and the agricultural sector. In addition to this, we may also find that some project owners choose to sidestep the traditional carbon market (aka carbon credits) and go straight to the commercial benefits of going green through their voluntary action."

Jonathan Burnston, Environmental Markets Manager

Karbone

"Expect continued growth in areas with expected compliance demand drivers, and an uptick in forestry-related carbon development – with upward pressure on pricing – across the voluntary protocol spectrum."

Mateus Bonadiman, Partner / Director

Hdom Engenharia e Projetos Ambientais
"The market will see project implementations aiming at bi-lateral carbon markets."

Adrian Rimmer, Chief Executive Officer

The Gold Standard Foundation
"Despite the lack of clear direction for comprehensive intergovernmental co-operation from COP17 in Durban, the development of how new market mechanisms (POAs, NAMAs, bilateral offset agreements) can work effectively is likely to continue at pace, with a major focus on MRV. Similarly, in this context of uncertainty, voluntary market buyers are seeking credits that may be eligible in future compliance schemes. The flight to quality – offsets with stringent and transparent MRV for not only carbon but also for any claimed sustainable development and other environmental benefits – will continue. This is being driven both by pressure from the NGO community, and by corporates’ own need to match their company values with credibility and transparency around the carbon projects that they support."

Marion Santini, Communication Manager

Nexus-Carbon for Development
"In a fragmented and more competitive market, only the most responsible and serious actors will remain. They will play a major role in re-shaping the carbon markets towards more fairness, ethics and transparency, in favor of the most vulnerable people, the first victims of climate change. We believe that charismatic projects with strong co-benefits will stand out, even more so as 2012 is the international year of Sustainable Energy for All."

Shameela Ebrahim, Senior Strategist
Johannesburg Stock Exchange
“Corporate awareness and action to reduce carbon footprints is growing rapidly, and credible voluntary offsets will be crucial in supporting corporate efforts.”

Freddy Sharpe, Chief Executive Officer
Climate Friendly Pty Ltd
"In Australia, the passage of cap and trade legislation is already stimulating increased demand in compliance and voluntary markets, while the Carbon Farming Initiative has unleashed huge interest in domestic land-based offset projects. 2012 will see an explosion of demand for projects that address multiple national and regional issues. In Australia, this will mean land-based carbon capture that delivers increased food security (carbon sequestration driving agricultural productivity); engagement with rural, remote and indigenous communities (carbon businesses driving employment and long-term economic benefits); and, of course, action on climate change (carbon capture at immense scale). Very exciting!"

—The Editors

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


V-Carbon News

Voluntary Carbon

JANUARY JOB LISTINGS
Forest Trends: Associate Manager, Forest Trade and Finance Program

Forest Trends is seeking an Associate Manager to work with the Forest Trade and Finance Director, other Forest Trends staff and consultants to manage a multi-year program which will track the expenditures of REDD+ financing in developing countries.

~View listing HERE


Forest Trends: Project Manager, Environmental Finance
Forest Trends seeks a project manager to design large scale innovative public-private partnerships for sustainable natural infrastructure investing and climate friendly agricultural models.
~View listing HERE

Climate and Land Use Alliance (CLUA): Consultant
The Climate and Land Use Alliance has issued an RFP for its Global Climate and Land Use Team.
~View listing HERE

WWF (US): Communications Director, Forest and Climate Initiative
World Wildlife Fund (WWF), the world’s leading global conservation organization, seeks a Director of Communications, Forest Carbon Initiative (FCI) to develop and implement strategies and communications efforts to help advance the goals and objectives of the Forest Carbon Initiative (FCI).
~View listing HERE

The Nature Conservancy: Director of Climate Adaptation Policy
The Director of Climate Adaptation Policy will lead and manage policy activities as part of an integrated effort to further the climate adaptation agenda of the Conservancy.
~View listing HERE

First Climate AG: Multiple Openings
First Climate AG is seeking applicants for multiple roles ranging from internships to a Corporate Communications Manager
~View listing HERE

Rainforest Alliance: Director, TREES Program
The TREES Director will provide dynamic and creative leadership and coordination for strategic planning and implementation of all TREES activities worldwide, which currently includes 13 countries.

~View listing HERE

CDC Climat: Investment Manager
CDCClimat’s Investment Manager will be responsible for originating, structuring and executing investment opportunities in the primary CDM markets.

~View listing 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 info@ecosystemmarketplace.com.

Share This Newsletter

Know someone who might be interested in the Ecosystem Marketplace and this newsletter?
Help Keep V-Carbon Free!

Ecosystem Marketplace - a project of the 501(c)3 non-profit organization, Forest Trends – regularly delivers V-Carbon to in-boxes worldwide. But this priceless market insight requires manpower and brainpower to publish free of charge. For a suggested donation of $150/year, readers can continue to benefit from V-Carbon’s informed briefings – and your company will be listed as a Donor (with web link) for one year, reaching our 5,000+ readers worldwide
.

Donate Now!

SUPPORTING SUBSCRIBERS
- AgRefresh
- Brokers Carbon
- Carbon Trade Exchange
- CarbonVerde
- Degree Celsius
- Gold Standard Foundation
- Judson Berkey
- Lee International Carbon Trading Consultants
- NYSE Blue Environmental Management Account
- South Pole Carbon Asset Management Ltd
- Terra Firma Carbon LLC
- Verified Carbon Standard (VCS)
OUR SPONSORS
- Blue Moon Foundation
- Citigroup
- DFID
- Global Environment Facility
- Rockefeller Brothers Fund
- The David and Lucile Packard Foundation
- The Surdna Foundation
- UN Development Program
Home | About | eNewsletter | News | Opinion | People | Library | Directory | Events | Tools | MarketWatch

Copyright 2012, EcosystemMarketplace.com. All Rights Reserved.