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From the Editors

General Motors bought a whopping eight million of them over the past five years. Delta Air Lines purchased one million of them in 2014 from landfill gas, avoided deforestation, and clean cookstoves projects. And in the same year, the South Africa headquartered-bank Barclays Africa bought 880,000 of them from projects in Kenya, India, Indonesia, and China. We’re talking about offsets, of course – each representing one tonne of emissions avoided or carbon sequestered somewhere in the world.

At least 314 major companies include offsets in their efforts to mitigate climate change, according to Ecosystem Marketplace’s newest report, Buying In: Taking Stock of the Role of Offsets in Corporate Carbon Strategies, released today and available for download here. The report looks at public climate reporting by nearly 2,000 companies to CDP (formerly the Carbon Disclosure Project) and finds that about one in six companies (17%) either purchased or originated offsets in 2014, the most recent year for which data is available. Most companies (248) purchased offsets either voluntarily or to meet compliance obligations while another 79 companies – including Novartis, L’Oréal, and others – developed their own carbon projects (13 companies were both buyers and originators).

Rather than buying their way out of the problem, the data shows that the 314 companies engaged in offsetting are actually buying their way in to climate responsibility, spending a collective $42 billion on emissions reductions activities in 2014. This surpassed the combined investment of the proportionally larger 1,522 companies who did not engage in offsetting ($41 billion). Offset buyers are also more likely to have an absolute emissions reductions target in place, meaning they aim to cut emissions by a certain percentage under a baseline year. Sixty-five percent of voluntary buyers and 58% of compliance buyers had absolute targets, compared to 44% of companies that didn’t purchase offsets.

An absolute climate target may more readily lend itself to offsetting, since these internal targets essentially create a “cap” – a specific number of emissions that a company is aiming for in the target year. Many offsetting companies – including BNP Paribas, Credit Agricole, Danone, Kering, Toyota, and others – have also signed onto the “Science Based Targets” initiative as they aim to align their corporate emissions reductions goals with a (maximum) 2-degrees Celsius temperature rise pathway.

The report also finds that internal carbon pricing may be connected to carbon offsetting: almost five times as many offset buyers used an internal price on carbon to drive investment in emissions reductions. Major offset buyers including Barclays, Disney, Microsoft, and Swiss Re use their internal carbon price as a real fee that they charge their business divisions, thus raising a pot of money that can be reinvested – in emissions-cutting activities such as energy efficiency, cleaner vehicles, or offsets. Of the 120 companies that disclosed the specifics on their internal carbon price to CDP, the median was $18/tonne, making the average price for offsets on the voluntary carbon market ($3.3/tonne) a very cost-effective way to reduce climate risk in comparison.

The report is chock-full of examples and case studies on the who, why, and how of carbon offsetting, so be sure to download it here. You may also join us on Tuesday, August 2 at 11 a.m. EST for a free webinar discussing the report findings, co-hosted by the International Emissions Trading Association (IETA). Register here.

This report would not have been possible without the generosity and commitment of our SponsorInfinite Earth and our institutional supporters, the MacArthur Foundation and Good Energies.Thank you. For information on how to support future Ecosystem Marketplace work, see our Sponsorship Prospectus.

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HERE's THE DEAL

 

Sit, roll over, find poachers

Watch out poachers! Canine detectives Lego and Bar just flew into Zambia to patrol the Lower Zambezi National Park, home to elephants, lions, antelopes, and other endangered wildlife. The two dogs will form the newly created Dog Detection Unit, funded by USAID and implemented by BioCarbon Partners and Conservation Lower Zambezi. A 13-week old puppy named Fury has also been selected from a local village to learn tracking and detection. The new unit will help ensure illegal poaching and deforestation doesn’t occur inside the BioCarbon Partners’ Lower Zambezi REDD+ (Reducing Emissions from Deforestation and Degradation of forests) project, which recently sold a “significant” but undisclosed number of offsets to end-user BP Target Neutral in conjunction with BioCarbon Group and First Climate.

- Read more from BioCarbon Partners about the new canines and sale to BP Target Neutral

Clear skies and clean sailing

As sailors concluded their 1,000+ nautical mile race from South Carolina to Oregon last month, the regattas sailed into port with a clean wake. Since the Atlantic Cup race first began in 2011, all subsequent years have been made carbon neutral by directly reducing emissions through composting and using a biodiesel fuel mix pre-sail – and then offsetting the remaining unavoidable emissions. This year, the Atlantic Cup plans to purchase offsets through the Florida-based retailer We Are Neutral, which offers a portfolio of US-based offset projects, including afforestation and energy efficiency retrofits. In years past, the race has purchased a small number of tonnes from Nexus’ water purifier project in Cambodia (21 tonnes of carbon dioxide equivalent, or tCO2e) and Green Mountain Energy’s wind projects (30 tCO2e).

- Read more from The Portland Press Herald

Putting a lid on emissions

Last month, Norwegian packaging company Elopak became carbon neutral after purchasing offsets from Impact Carbon’s improved cookstove project in Uganda and from Infinite Earth’s Rimba Raya REDD+ project in Indonesia. According to Kristian Hall, Director of Environment at Elopak, the company purchased 38,000 tCO2e to cover emissions from its corporate activities, and also plans to offset an equivalent amount of emissions in order to cover the lifecycle emissions of its beverage cartons up to the point of customer purchase. Elopak also joined the RE100 campaign late last year, committing to source 100% renewable energy starting in 2016.

- Read more from Dairy Reporter here

PROJECT DEVELOPMENT

Switching to Colorado plates

The Colorado Carbon Fund (CCF), which in 2008 became the first voluntary, state-based program to help individuals and businesses offset their emissions, now has a new home. The Colorado Energy Office initially chose Oregon-based offset developer The Climate Trust (TCT) to run CCF based on the organization’s technical expertise – but the Fund’s future became uncertain when TCT shifted its focus last year. Recently, Colorado-based Natural Capitalism Solutions (NCS) stepped in to manage CCF from closer to home. They plan to grow CCF “beyond offsets” to include additional climate benefits, said Peter Krahenbuhl, NCS’s Director of Strategic Partnerships and Consulting. More than 1,000 individuals and 74 businesses have offset 39,000 tCO2e through CCF to date.

- Read more from Ecosystem Marketplace

POLICY WATCH

Still in?

As the British voted to Brexit, Britain’s future relationship with the European Union Emissions Trading System (EU ETS) was thrown into turmoil. The two major questions on carbon market analysts’ minds are: (1) How will the EU ETS reform progress now that one of its major proponents has left the EU? and (2) Will the UK remain in the ETS post-2020? In regards to the first question, carbon market proponents worry about the fact that British MEP Ian Duncan – a key proponent of early implementation of EU ETS reforms– announced his resignation following Brexit. For the second question, analysts think it is likely that the UK will remain in the EU ETS despite Brexit.

- Read more from Reuters

CARBON FINANCE

Trading up

Last week, Kenya’s Energy and Petroleum Ministry announced its support for a proposed carbon offset trading platform hosted by the Nairobi Securities Exchange (NSE). NSE first floated the idea of an exchange earlier this year and still sees opportunity for carbon offset sellers to trade through the platform. “The formal trading platform within the exchange will be an easier way for companies to sell their credits to foreign buyers other than through signing emission reduction purchase agreements,” said NSE Chairman Samuel Kimani. So far, most of the major Clean Development Mechanism-approved projects in Kenya have sold offsets through one-on-one contracts with approved Kyoto Protocol buyers including KenGen, Mumias Sugar, East Africa Portland Cement, and Kenya Power.

- Read more from The Standard Digital

HUMAN DIMENSION

Avoiding a relapse

Blood diamonds, conflict timber, land disputes… According to the United Nations Environment Program (UNEP), natural resources have played a role in around 40% of conflicts since the end of the Cold War. “More than half of peace agreements fail within five years, often because belligerents get money from the exploitation of natural resources, like logging, that they can use to fuel the resumption of civil war,” explained researcher Art Blundell. He credits the restructuring of Liberia’s forest sector with helping keeping the country’s peace agreement alive – and sees an opportunity for avoided deforestation initiatives to make their way into future peace agreements. Recent analysis by Ecosystem Marketplace’s publisher Forest Trends breaks down the potential for REDD+ in post-conflict situations.

- Read more from Ecosystem Marketplace

NEW RESEARCH

 

REDD+ on trial

A new working paper published by the National Bureau of Economic Research found that payments for ecosystem services (PES) performed as promised. The study tracked 60 villages in western Uganda that received $28 per hectare of forest not cut down alongside another 61 villages that received no compensation. Deforestation rates varied respectively: forest cover decreased 7-10% in villages that did not receive payments, compared to 2-5% in villages that did. Lead research Seema Jayachandran, an economist at Northwestern University, described the study as “an important proof of concept that this did have a big impact” She said that her team’s study was likely the first to evaluate the effectiveness of PES using a randomized trial.  

- Read coverage of the study in The Washington Post

 

 

Job Postings

Senior Sourcing Manager – First Climate

Based in Bad Vilbel, Germany, the Senior Sourcing Manager will be responsible of the sourcing of green energy certificates and carbon offset projects. Tasks include the strategic development of First Climate’s green energy and carbon offset sourcing as well as the management and extension of the network of project owners, developers, and other offset suppliers. The ideal candidate has worked in the green electricity and/or carbon offsetting world for at least five years and has a relevant academic background. Fluency in English is required.

Read more about the position here

Carbon Project Officer – CO2balance

Based in Taunton, UK, the Carbon Projects Officer will assist CO2Balance’s Projects Team with the coordination and implementation of community-based Gold Standard, Verified Carbon Standard and Clean Development Mechanism projects in Sub Saharan Africa. The position involves assistance in greenhouse gas audits and other consultancy tasks as well as overseas travel. The successful candidate will have excellent communication skills, good attention to detail, and a strong business mindset. A post graduate qualification in Environmental Management or Sustainable Development is desirable.

Read more about the position here

Project Manager: Forests and Restoration – Pacific Forest Trust

Preferably based in San Francisco, California, the Project Manager will oversee the forest management component of Pacific Forest Trust managed properties, promoting restoration. The Project Manager will be responsible for ensuring quality and timely completion of all project aspects to meet ecological, harvest, and budget goals. The ideal candidate will enjoy travelling – up to 25% of their time will be spent doing on-site fieldwork. The position requires a master’s degree or equivalent experience in silviculture or forest ecology and more than 10 years of experience in ecological resource restoration, management, and/or forestry.

Read more about the position here

Associate Outreach Coordinator – 3Degrees

Based in Richmond, Virginia, the Associate Outreach Coordinator will lead outreach efforts for 3Degrees in the Richmond area. The primary responsibility of this position is to hire, mentor, train, and manage a team of part-time Outreach Associates with the aim of engaging the community in 3Degrees’ renewable energy program. The successful candidate is enthusiastic, professional, and detail-oriented and has a minimum of two years of experience working in an outreach or community organizing role. A flexible approach to work is required as evening and weekend work may be necessary.

Read more about the position here

Forestry Consultant (UN-REDD) – Food and Agriculture Organization (FAO)

Based in Jakarta, Indonesia, the short-term national forestry consultant (5 months) will support the planning and implementation of activities to improve Indonesia’s National Forest Monitoring Systems (NFMS). The consultant will conduct a national study using the FAO Collect Earth tool and organize a training workshop. The position requires a degree in forestry, the environment, or another relevant field and five years of professional experience relating to forestry. Fluency in English and Bahasa Indonesian is required.

Read more about the position here

 

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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. 

ABOUT FOREST TRENDS

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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