This Week In V-Carbon: Taking Stock of California’s Progress

In the two years since the implementation of California’s carbon market, the state’s Gross Domestic Product grew 2% while emissions in capped sectors dropped 3.8%. Across the pond, China has taken note. The nation is working closely with the Golden State through a number of partnerships-perhaps the most prominent being between the Air Resources Board and its Chinese counterpart known as the National Development and Reform Commission (NDRC).

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

 

13 March 2015 | All eyes have been on the West Coast of the United States, with the recent completion of California’s second joint auction with trading partner Québec and the launch of two reports about the state’s cap-and-trade program.

The latest auction sold out its 73.6 million allowances, at an average $12.2 per allowance, for more than $1 billion total. However, another aspect of the cap-and-trade program – carbon offsets – have so far been underutilized. Under California’s AB 32, the state law mandating greenhouse gas (GHG) emissions reductions, regulated companies may purchase up to 8% of their compliance obligations through offsets. As of last November, companies turned in only 1.7 million offsets out of a theoretical 11.6 million that could have been purchased.

Sales from the allowances will be reinvested in alternative energy sources, public transportation and other carbon-lowering activities through the state’s Greenhouse Gas Reduction Fund. Additionally, 25% of the fund’s money will be spent on reducing pollution in disadvantaged communities that are disproportionately affected by bad air quality.

 

Aside from the lackluster offsetting, a recent assessment of California’s carbon market regarded the system as a tentative success. In the two years since implementation, the state’s Gross Domestic Product grew 2% while emissions in capped sectors dropped 3.8%.

 

Across the (other) pond, China has taken note. According to the recent Asia Society report, A Vital Partnership, China is working closely with the Golden State through a number of partnerships. Perhaps the most prominent exists between the California Air Resources Board (ARB) and its Chinese counterpart known as the National Development and Reform Commission (NDRC).

 

Before signing the agreement, California Governor Jerry Brown said: “I see the partnership between China, between provinces in China, and the state of California as a catalyst and as a lever to change policies in the United States and ultimately change policies throughout the world.”

 

Additional pilot projects have occurred at Chinese jurisdictional or province levels with U.S. civil society organizations like The Energy Foundation and The Environmental Defense Fund (EDF). EDF’s Mobile Source Emissions Trading System Integration project is a five-year project launched last year with the Shenzhen Low Carbon Development Foundation that will focus on reducing air pollution from “mobile” transportation sources such as cars and buses. Currently, such sources account for nearly 30% of the city’s total emissions.

 

Read more about those projects here.

 

Ecosystem Marketplace is closely tracking these and other developments in California in preparation for our brand-new North America carbon markets report. But this latest report is still missing a vital ingredient – your support! The North America and State of the Voluntary Carbon Market reports are contingent on receiving sufficient support.

 

To sponsor one of these exciting Ecosystem Marketplace products, contact Gloria Gonzalez.

 

Sponsors benefit from exposure – logo placement on reports that are downloaded tens of thousands of times and shout-outs in this news brief – as well as further insight into our findings through tailored briefings. And that’s not to mention influence: Ecosystem Marketplace’s reports have been cited in the development of emerging carbon pricing programs from South Africa to South Korea, and supporting our research is a good opportunity to influence these discussions.

More news from the voluntary carbon marketplace is summarized below, so keep reading!

—The Editors

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Announcements

Supply Change project launch

Forest Trends and Host Sustainable Brands will launch a new project called Supply Change during a webinar on March 25. The project, resulting from a partnership by the CDP, World Wildlife Fund and Ecosystem Marketplace, will provide up-to-the-minute accounting of corporate actions on deforestation relative to public pledges via the new Supply-Change.Org website. An inaugural report, Commodities, Corporations, and Commitments that Count, will also profile nearly 250 companies with more than 300 specific commitments to sustainable production or use of major forest-risk commodities (palm oil, soy, timber & pulp, cattle).

 

Register here to attend the live web-launch of Supply Change hosted by Sustainable Brands

 

Voluntary Carbon

Ascending to new (environmental) heights

Asendia, the joint venture between European shippers La Poste and Swiss Post, has invested in a carbon offsets project in India to compensate for the carbon emissions it cannot reduce. The project in question has a combined 113 wind turbines across three Indian states that generate 470,000 megawatt-hours of renewable electricity, which equates to more than more than 41,000 tons equivalent of carbon dioxide emissions in offsets. The project was verified under a Verified Carbon Standard methodology.

Read more here

 

Super Animals are ready to save the world

Taronga Conservation Society Australia and Woolworths have teamed up to offset their Super Animals Wildlife Collectibles album and card series. The Urisino Ecosystem Regeneration Project, Australia’s first carbon project to focus on regenerating degraded land, will offset the carbon emissions from the paper manufacture of the collectible cards by saving 4,761 tonnes of carbon. Taronga Zoo Executive Director Cameron Kerr said: “The collectables campaign have been one of the most successful education initiatives, bringing Australian and international wildlife to hundreds of thousands of primary students… This offset program is the next important step in our commitment to the environment in support of wildlife.”

Read more here

 

The straw that broke the carbon’s back

LifeStraw, a water filtration device developed in 2005 by Mikkel Vestergaard, has been widely distributed throughout Kenya as an alternative to the traditional methods of purifying water by boiling dirty water over a fire. Working with the Gold Standard Foundation, Vestergaard determined emissions avoided per LifeStraw and sold carbon offsets to large corporations to fund the distribution of the straws. Despite local support, experts have questioned the data for calculating the emissions reductions and overall efficacy of the filters. In addition to external criticism, the original funding model has been economically challenged by the drop in price for carbon offsets from $30 per metric ton (tCO2e) in 2008 to $6/tCO2e in 2013.

Read more here

 

30 shades of green

The World Wide Fund for Nature’s Project Luki works with external and local stakeholders to reduce deforestation and degradation in the Mayombe forest, located in the southwestern Democratic Republic of Congo (DRC). At the midpoint of the project, 165 hectares of 400 planned hectares of Acacia auriculiformis plantations have been developed, natural regeneration of 3,000 hectares of grazing savannah have been accomplished, and 30 pilot farms have been installed. The project aims to bring the DRC into the carbon market by sequestering the maximum amount of carbon, and to demonstrate community-based development.

Read more here

 

Last lemurs standing

Offsets from the Wildlife Conservation Society’s Makira Natural Park project in Madagascar are now up for sale through the Stand for Trees campaign, which allows individuals to purchase offsets from avoided deforestation projects. The 1,438-square-mile park is home to more than 20 species of lemur. Half of the revenue from offset sales goes to local communities to support initiatives such as ecotourism, improved rice cultivation, and sustainable vanilla and clove production. The project joins 10 other REDD (reducing emissions from deforestation and forest degradation) projects that are part of the Stand for Trees campaign, with two more coming soon.

Read more here

 

Winning the race from the middle

Developer Green Assets has completed the first avoided conversion compliance offset project in the United States. The company’s Middleton Place project has been issued more than 250,000 offsets by the California Air Resources Board, allowing the offsets to be used for compliance with the state’s cap-and-trade program. The offsets would have a total value of more than $2 million based on current prices if sold at once, said Colby Hollifield, Middleton’s woodlands manager. The project conserves more than 3,700 acres of southern coastal habitat near Charleston, South Carolina.

Read more here

 

Compliance Carbon

Trading places

Korean trading firms Korea Carbon, Ecoeye and other companies are cancelling their Certified Emission Reductions (CERs) to register their projects in Korea’s emissions trading system. There is little value for the 91 South Korean-based projects registered on the Clean Development Mechanism (CDM) as CER prices have dropped 98% from four years ago. Conversely, the new Korean compliance market lacks supply and has currently bid permits at 10,100 won ($8.96 USD) – a sharp cry from the below $1 prices on the CDM. To make the switch, a project must secure government approval before gaining the equivalent number of Korean Credit Units.

Read more here

 

The market is cleaner… in China

Dutch-based project developer China Carbon announced it wants to move nearly a third of its projects out of the CDM and into Chinese markets. Of the company’s 64 projects, 20 will likely be switched to produce China Certified Emissions Reductions (CCERs). Jelena Stankovic, senior project manager at the company, explained that price is the main driver for this switch. The new Chinese pilot emissions trading systems (ETS) average $1.28 per tonne, while CDM offsets sold on the compliance exchange ICE Futures Europe average only $0.44 per tonne.

Read more here

 

Agreeing to disagree

As European Union countries, including Germany, Britain and France, have handed out around 500 million carbon permits to 2015 emitters, those same countries have debated the date to withdraw excess carbon allowances from the market. The Market Stability Reserve, an initiative to temporarily reduce the market supply of carbon allowances, was agreed upon last month by a European Parliament committee. Despite this initial consensus by the committee, political disagreement remains as countries argue over the timeframe. Some countries are pushing for a 2017 start while others such as coal-reliant Poland are calling for 2021. A senior European Commission official said he believes an agreement will be reached by late June.

Read more from Reuters India here
Read more from Reuters Africa here

 

Burning out of (carbon) control

As the Australian compliance market effectively ended in February, carbon project developers are now entering an uncertain future – and an uncertain market. Indigenous Land Corporation (ILC), one of the Northern Territory’s longest running carbon farming projects, will soon begin its controlled burning 2015 program to reduce the frequency of late-season wildfires. Through the compliance market, the project sold some of its offsets for $500,000 Australian dollars. Now, ILC is exploring its options by looking into the voluntary carbon market and awaiting more details about the government’s Emissions Reduction Fund (ERF). The first ERF auction, which still hasn’t disclosed the benchmark price, will open on April 15.

Read more here

 

We’ll always have Paris

Last week, Switzerland took the lead in carbon commitments as the first country to officially submit its post-2020 climate action plan. These plans, known officially as Intended Nationally Determined Contributions (INDCs), are instrumental to progress in this year’s climate negotiations held in Paris. In an analysis of the plan, the World Resources Institute (WRI) says the Swiss proposal is clear and comprehensive, but also said the country may be relying too heavily on international offsets instead of domestic reductions. Yesterday, the European Union followed up with its own INDC submission. Despite its inclusion in the draft version, the final submission left out land use.

Read more from Ecosystem Marketplace here
Read more from Ecosystem Marketplace here

Finance Manager, The Gold Standard Foundation

Based in Geneva, Switzerland, the Finance Manager will be responsible for financial management, specific pieces of financial analyses to support management. Successful candidates will have experience designing and implementing financial processes, a deep interest in financial modelling, and a passion for sustainable development. A bachelor’s degree in business, finance or accounting with a minimum of four years of experience is required, and a second language (French) is preferred.

Read more about the position here

 

Pathway to Paris Climate Adaptation Associate, World Resources Institute

Based in Washington, D.C., the Associate will be responsible for policy-relevant research, analysis and writing on adaptation-related elements of the United Nations Framework Convention on Climate Change and lead technical assistance and capacity development activities for developing country governments. Successful candidates will have five to seven years of professional work experience related to climate change, development, or international climate policy. A degree in environmental studies, international relations, economics or similar field is necessary, and a master’s or PhD is preferred.

Read more about the position here

 

Senior Consultant Climate Finance, Energy research Centre of the Netherlands (ECN)

Based in The Netherlands, the Senior Consultant will support developing country governments in policy development such as INDCs, Low-Carbon Development Strategies, and National Appropriate Mitigation Actions, and funding proposals to multilateral agencies. The successful candidate will have at least 10 years of experience in climate or development finance, an advanced degree in economics, international development/relations, governance and institutional analysis, environmental economics, or a related field is desired.

Read more about the position here

 

Program Intern, Regional Greenhouse Gas Initiative (RGGI) Incorporated

Based in New York, New York, the Intern will support tracking energy sector and RGGI compliance developments, performing research on GHG emissions reduction programs policy mechanisms, and supporting implementation of offsets protocols. The internship is scheduled from June to August 2015 and features a commitment of 15-20 hours per week.

Read more about the position here

 

Communications Officer, The World Bank

Based in Washington, D.C., the Communications Officer will help conceptualize, develop and deliver communications for the Forest and Landscapes Green Team at the World Bank. A master’s in communications, international relations, public affairs, journalism, marketing, information management or other related disciplines, with a minimum of five years of experience is required.

Read more about the position here

 

Carbon Finance Methodology Specialist, The World Bank

Based in Washington, D.C., the Carbon Finance Methodology Specialist will assist the implementation of large-scale REDD+ programs, focusing primarily on methodological aspects associated with measuring, reporting and verification of results of emission reduction programs. An advanced degree in environmental science, natural resource management/forestry, geography, environmental policy or environmental economics, and at least five years of experience in relevant sectors is desirable.

Read more about the position 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.

 

Additional resources

US Gulf Coast Prime For Wetlands Restoration: Study

This article was originally published on the AnthropoZine. Click here to read the original.

12 March 2015 | Since the 1930s, Louisiana has lost an area of wetlands equivalent to the size of Delaware, and it continues to lose a football field of wetlands every hour. If current loss rates continue, by the year 2040 more than one million acres of wetlands will be gone – and the carbon stored in these ecosystems will be released into the atmosphere.

But what if there is another way? While a large degree of wetland loss in the Gulf of Mexico is inevitable due to the dual forces of land subsidence and sea level rise, project developer Tierra Resources and utility Entergy are optimistic that wetland restoration is possible in some areas. Tierra Resources estimated that Louisiana has the potential to produce 1.8 million carbon offsets per year, or almost 92 million offsets over 50 years, according to the Louisiana Blue Carbon study.

Louisiana landscape at sunset ” />

Louisiana landscape at sunset.

Wetland restoration in Louisiana could be worth between $540 million and $1.6 billion dollars over the next five decades. The study uses $4.4 per tonne as its lowest estimated price – based on the average historical price of a voluntary carbon offset developed under the American Carbon Registry (ACR). The study featured $10.8 per tonne as the high price – based on the higher value of offsets sold into compliance markets such as California’s cap-and-trade system.

Ultimately, the hope is that wetland projects will become eligible for the California market so that the Louisiana-based offsets can be traded there, said Brent Dorsey, director of environmental programs at Entergy. But the Golden State requires a 100- year project lifespan for land-based projects, compared to ACR’s 40-year timeframe, so additional hurdles remain, observed Sarah Mack, President and CEO of Tierra Resources.

Carbon Opportunities

Entergy has advocated and supported market-based solutions to environmental risks since 1998, when it became involved in the initial development of the Regional Greenhouse Gas Initiative, the carbon trading program of nine Northeastern states, some of them home to Entergy facilities.

Using its Environmental Initiatives Fund, Entergy financed Tierra Resources’ study of wetland restoration techniques and development of a new blue carbon accounting methodology under ACR. The Louisiana Blue Carbon project was a partnership between Entergy energy, Tierra Resources, and the Climate Trust. The goal was to develop opportunities for financially viable wetland offset projects in Louisiana.

The methodology that was developed focuses on four million acres of wetlands in the coastal zone of Louisiana, with a small amount of coast in Mississippi and Texas. They focused on scalable restoration methods that show commercialization potential as wetland offset projects to determine the carbon impact of incorporating prevented wetland loss in carbon accounting, determine the state’s offset potential, and what the financial estimates are of the blue carbon.

Tierra Resources reviewed restoration techniques featured in the “Louisiana’s Comprehensive Master Plan for a Sustainable Coast ” and researched additional restoration techniques, wetland assimilation and mangrove planting. The company then evaluated the commercial wetland offset potential for long-term enhancement of wetlands, scalability, and cost effectiveness. The Master Plan used a 50-year projection for the future of wetlands in Louisiana, which was also employed by Tierra Resources as the basis for its analysis to determine annual offsets and value, as well as long-term potential.

The study evaluated different types of wetland restoration, including mangrove planting, wetland assimilation – the introduction of treated municipal effluent into impounded and degraded wetlands to provide freshwater and nutrients for restoration purposes, and river diversion – use of new channels and/or structures to divert sediment and freshwater from the Mississippi and Atchafalaya Rivers into adjacent basins. The latter two techniques offer opportunities to stack carbon offsets with other mechanisms such as water quality credits, if those markets develop. Wetland assimilation offers the greatest net offset yield per acre: about seven tons of carbon for forested wetlands.

However, for land in Louisiana, mangrove planting (two tons per acre) and river diversions (3.8 tons per acre) are the most feasible options.

The challenges facing wetland restoration as a viable mechanism for carbon sequestration include the high costs of wetland restoration, which may surpass the value of carbon finance in projects, which necessitates partnering projects with more traditional funding pathways.

Mack outlined some of the policy options available to encourage wetland restoration including: “allowing the use of federal funds alongside carbon finance; environmental credit stacking, eligible types of conservation easements, rules and processes for project aggregation, and crediting period length for wetland restoration. Additionally, establishing funding pools to allow wetland project development to scale up and meet future carbon demands in the compliance market would benefit future wetland restoration projects.”

Money, money, money

In 2010, Entergy sponsored a study that found the cost-benefit ratio for wetland restoration is three to one, meaning for every three dollars invested in wetland restoration a dollar is gained in risk avoidance. Using this study as a baseline, Entergy partnered with Tierra Resources to explore additional benefits, such as hunting, fishing, water filtration, and other ecosystem services that could be gained by restoring wetlands, as well as carbon sequestration benefits.

The total potential benefit of just restoring coastal wetlands in Louisiana was determined to be between $400 and $1 billion. If prevented wetland loss, that is the prevention of wetlands from reverting to, or turning into, open water, is included in the carbon accounting, an additional $140 million to almost $630 million may be earned by Louisiana wetlands.

The case for preventing wetland loss is not just environmental, according to large oil and gas corporations such as ConocoPhillips and Shell currently involved in blue carbon projects. Dorsey highlighted an additional risk associated with wetland loss: “Existing wetland owners, if the wetlands convert to open water, they lose all title to that property including the mineral rights. That is some of the economic push for some of these folks to be involved with blue carbon.”

What motivates companies?

Entergy serves Louisiana, among other southern Gulf Coast states, as an energy generator and transmitter and is vulnerable to adverse weather events that may strike the area as Hurricane Katrina did in 2005, he said.

“Entergy is wed to their service area, we don’t have the luxury of pulling up poles and power plants and moving, we are a real member of our service area,” he said. “Looking at this from a risk-management perspective, a storm could wipe out transmission and distribution facilities and have significant economic impacts to our customers.”

 

California Moves With Chinese Provinces On Climate

The United States and China made headlines last year with their Climate Pact, but significant collaboration had already occurred at the subnational levels. Both California and several of China’s provinces launched emissions trading systems (ETS) in 2013, and they have been working together ever since. Now, a new report highlights the latest accomplishments and partnerships.

This article was originally posted on The AnthropoZine. Click here to read the original.

March 10, 2015 | When China and the United States announced their Climate Pact to great fanfare last November, the bilateral pledge’s talk of “contributions” shifted the conversation from shared commitments to “common but differentiated responsibilities”: the idea that historical economic differences leads to different responsibilities to tackle climate change today.

Yet, for all its talk of differences, both countries already shared a commitment in the form of subnational emissions trading schemes (ETS).

The California – China Memorandum of Understanding (MOU) was the first formal agreement on climate change issues between a US state and China. The MOU was signed back in 2013, when both the state of California and several Chinese provinces launched their ETS.

Since then, there has been a steady stream of officials and experts crossing the pond to share their experiences and form new collaborations. A new report called A Vital Partnership, launched last week by the Asia Society, examines the latest collaborations and partnerships between the two.

The Lure of California

With an economy that outweighs most countries, it’s no surprise that California’s 2006 Global Warming Solutions Act (AB 32) has attracted attention outside its borders. Its subsequent success has only heighted that interest: since its inception in 2013, Californian capped sectors have lowered emissions by 3.8% while the state has maintained economic and job growth that has outpaced the national average.

As China looks to ramp up its seven pilot ETSs into a consolidated national system, the country hopes to replicate California’s economic and environmental prosperity. This has led to a number of agreements and partnerships across a range of actors.

The report tracked fourteen various partnerships currently in effect, with participants drawn across a host of organizations including civil society (research organizations, foundations and NGOs), businesses, government and public utilities.

Four such agreements focus directly on the emissions trading systems, while the rest address such topics as air pollution control, zero emissions vehicles and low carbon technologies.

Though its difficult to make sweeping generalizations about these various partnerships, the report does note that: “What California and its counterparts in China have come to understand is that mutual benefits can flow from such partnerships, not only in the quest for climate change solutions, but also in catalyzing increased trade and investment in clean technology.”

Bridging the Public/Private Divide

Perhaps the most prominent partnership exists between the California Air Resources Board (ARB) and the Chinese equivalent called the National Development and Reform Commission (NDRC).

Before signing the agreement, California Governor Jerry Brown said, “I see the partnership between China, between provinces in China, and the state of California as a catalyst and as a lever to change policies in the United States and ultimately change policies throughout the world.”

Formalized on September 13, 2013, the MOU lays out cooperation between the two agencies on key issues, including: mitigating carbon emissions, strengthening performance standards to control greenhouse gas emissions, designing and implementing carbon emissions trading systems, sharing information on policies and programs to strengthen low-carbon development, and researching clean and efficient energy technologies.

ARB has since hosted five Chinese delegations and four webinars, the latest of which also included officials from the US Environmental Protection Agency (EPA).

US-based civil society organizations have also helped China get their pilot ETS programs off the ground.

Within civil society, The Energy Foundation has been engaged since 2011 with several of the pilot ETS jurisdictions to get them off the ground. Though the organization collaborated with NDRC, it primarily worked with equivalent local entities (such as the Guangzhou Energy Research Institute and Tsinghua University) to help these Chinese civil society organizations draft the initial ETS regulations and establish harmonized monitoring, reporting and verification rules across the pilots. Now, the organization is supporting Guangdong, Shenzhen and Beijing to carry out qualitative and quantitative evaluations of their pilot ETSs and impacts on emissions, the environment and economy through March 2015.

As that project wraps up, the Environmental Defense Fund’s (EDF) Mobile Source ETS Integration project will be getting off the ground. The five-year project, launched last year between EDF and the Shenzhen Low Carbon Development Foundation will focus on reducing air pollution from “mobile” transportation sources like cars and buses.

Currently, such sources account for nearly 30% of the city’s total emissions and have been increasing at a rate of 15% each year. The research seeks to reduce air pollution from transport through carbon emissions trading and seek to test the feasibly of expanding emissions trading systems to mobile sources. It will start with public transport, but hopes to expand to include private vehicles, freight, railway and marine transport over the course of the 5-year project.

“This partnership will tackle one of the world’s most vexing greenhouse gas emissions challenges – controlling pollution from transportation, an especially fast growing source in China,” said Dan Dudek, EDF’s Vice President and Head of the China Program. “China is the world’s largest auto market, so solving the global climate challenge not only requires China manage its greenhouse gas emissions, it requires China address pollution from mobile sources. China’s experiences could provide valuable lessons for the U.S. in reducing emissions from its transport sector.”

The partnership stems from US Department of State’s EcoPartnership program, which promotes cooperation between local governments and organizations in the U.S. and China in climate and energy issues relating to the U.S – China Ten Year Framework on Energy and Environment Cooperation or Climate Change Working Group. New 2015 applications are currently accepted through March 20.

Additional resources

Opinion: Yes, The US EPA Can And Should Allow Offsets Under The Clean Power Plan

16 March 2015 | The US Environmental Protection Agency’s (EPA) proposed Clean Power Plan, the agency’s attempt to regulate existing sources of greenhouse gases (GHGs) in the electricity-generating sector under its Clean Air Act authority, may be the most controversial rule proposed by the agency. Weighing in at around 670 pages (with a 750-page technical support document,) it is certainly one of the most complex regulations ever attempted by the agency.

It should also be interpreted as offering the states maximum flexibility in how states handle their emission reductions, as we can see by zeroing in on just two sections of the Clean Air Act: Section 110 and Section 111.

Section 110 governs the State Implementation Plans (SIPs), which are the way in which ambient levels of criteria pollutants (like ozone), are to be enforced. Section 110 allows states to meet these goals in any way they wish as long as they do not interfere with another state’s compliance. Section 111, on the other hand, purportedly deals with reductions from source categories (such as electricity generating units).

Here, we’ll be looking at just two sub-sections of Section 111: Section 111 (b), which deals with new or recently upgraded sources of pollution; and Section 111 (d), which deals with older or existing sources of pollution not regulated by states under Section 110 (or as a hazardous air pollutant) . Since greenhouse gases are the only pollutants that exist in this category, and they have yet to be regulated, section 111(d) is as yet untested. The Clean Power Plan is the EPA’s attempt to do so.

Section 111(d) says the EPA may establish guidelines for how states meet reductions required, and it also says that the procedure governing approval of these state systems should be a “procedure similar to that provided by section 7410[Section 110].”

And guess what? Section 110 clearly leaves room for offsetting, as well as any measure that would reach the target required.

How Does the Clean Power Plan Work?

The Clean Power Plan sets individual targets for GHG emissions rates for each state through a formula the EPA developed, examining how various GHG reduction strategies could be implemented given each state’s own unique circumstances. In determining the state’s targets, the EPA critically made a decision that the Best System of Emissions Reduction (BSER) referenced by the Clean Air Act authority under its Section 111(d) provisions could include reductions in GHG emissions from end-user efficiency gains, electricity dispatch decisions, and new non- or low-carbon sources.

Because these reductions would not technically be from a regulated plant itself, they are characterized as “beyond the fenceline” reductions. It is this decision that is responsible for much of the rule’s complexity as well as the ability of the EPA to propose a more aggressive reduction target than could be achieved by changes at the electricity generating plant itself. This approach, the EPA says, allows the states maximum flexibility in meeting ion targets.

Unfortunately, the EPA has shied away from allowing states maximum flexibility for reductions by refusing to endorse (at this time) the use of GHG offsets, (such as biological offsets or reductions from other unregulated sources) even though the use of offsets is generally recognized as a more efficient way to reach tighter GHG reductions targets.

Lying at the heart of this decision, according to the EPA, is “legal uncertainty.” Because of the controversy in the United States surrounding any regulation of GHGs, the regulations are being, and will continue to be, challenged in court. One of these challenges suggests that in setting up the guidelines for the states, that the EPA (and presumably the states) cannot do any “outside of the fenceline” regulation, asserting that this differs from prior regulation of electricity generating units under other pollutants.

In response, the EPA correctly reasons that its authority under section 111(d) is different from its authority to regulate criteria pollutants under 111(b), and that the BSER can include the “outside the fenceline” reductions suggested, as well as emissions trading between sources. I believe the agency is absolutely correct in this interpretation, but this reasoning would suggest that offsets would also be legally allowed under Section 111(d).

To see why, we have to return to the relationship between Sections 110 and 111(d) that I alluded to at the start – namely, that Section 111(d) specifies that the Best System of Emissions Reduction adopted by a state be modeled on Section 110, which governs the State Implementation Plans . While the EPA has not had cause to consider the full meaning and implications of this statutory phrase before, I believe that it means that 111(d) provides that the “system” of emissions reduction can be anything that meets the target required by the EPA. Section 110 allows the states such autonomy in constructing how they will meet the ambient air quality standards for criteria pollutants. In Union Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518, 49 L/Ed/ 2d 474 (1976), the Supreme Court upheld the EPA’s position that if a state proposes a strategy that is effective in meeting the ambient air quality standards, the EPA must approve that SIP. This follows statutory language in Section 110(a) and also supports the cooperative federalism at the heart of the Clean Air Act.

Though the EPA seems to distinguish between the reductions itproposes in the Clean Power Plan rulemaking and the use of offsets, if “outside the fenceline” reductions are allowed at all if the states so choose, which I believe they are because of the reference to Section 110, then they can be allowed in other arenas such as offsetting.

What it boils down to is this: Unless the EPA is willing to grant the same sort of flexibility to the states under Section 111(d) that it does under section 110, it reads the reference to section 110 out of the statute, which was not the intent of the drafters.

The EPA seems to be afraid that the use of offsets might be a step too far, and other commentators have suggested that the agency’s power under Section 111(d) becomes more precarious the further it moves from the fenceline. But the applicable law suggests otherwise. While the EPA may be trying to paint a smaller target for legal challenge or simply avoid the politics of proposing something that looks very much like a cap-and-trade system, these distinctions are not based on the law. As such, the EPA should clarify that the states could choose to keep or utilize verifiable offset emissions reductions and be compliant with the Clean Power Plan.

Because some of the states, such as California and the Northeastern states participating in the Regional Greenhouse Gas Initiative already have carbon trading programs allowing for GHG reductions from sources such as verified GHG offsets or other industries (such as the petroleum industry), this clarification would allow these states to keep or utilize such reductions and be compliant with the BSER rulemaking. Additionally, clarifying the allowance of verified offsets and reductions from other industrial sectors (if proposed by a state or states) would facilitate the creation of a GHG trading market, which the agency has correctly determined would allow for more reductions at lower costs.

Victor B. Flatt is the Taft Distinguished Professor of Environmental Law at UNC Chapel Hill School of Law.

This Week In Forest Carbon News…

This article was originally posted in the Forest Carbon newsletter. Click here to read the original.

 

3 June 2014 | Forest Trends’ Ecosystem Marketplace launched the Executive Summary of our State of the Voluntary Carbon Markets 2014 report last week to a full house at Carbon Expo in Cologne, Germany. In the context of a market in which some projects struggled to find buyers, projects that reduce emissions from deforestation and forest degradation (REDD) more than doubled their transaction volumes from 2012 to 22.6 million tonnes of carbon dioxide equivalent (tCO2e) in 2013 – enough to offset the annual emissions from energy production in a small country such as the Dominican Republic or Croatia.

The market value of REDD also increased by 35% in 2013, to $94 million, buoyed by a significant and historic transaction between the German development bank KfW (Kreditanstalt fí¼r Wiederaufbau) and Brazil’s Acre state. This growth came at an average price of $4.2/tCO2e, down from $7.4/tCO2e in 2012 – though less than a handful of REDD project developers sold REDD offsets at under $3/tCO2e.

“Some of the larger [REDD] projects are able to unload a significant quantity of offsets at a very low price to help with their cash flow issues,” explained Brian McFarland of Maryland-based CarbonFund.org, in an interview with Ecosystem Marketplace. McFarland noted that he’s hoping for a compliance signal from California or (longer-term) China or a forward market commitment by a multi-lateral agency like the United Nations’ REDD program or the World Bank’s Forest Carbon Partnership Facility.

Other REDD projects are holding their ground on price.

“We continue to believe that REDD+ projects really shouldn’t be looked at the same as other projects; they really do have a minimum threshold if you want to have a good REDD+ project that’s making the right kind of investment in communities,” said Mike Korchinsky, President of Wildlife Works, a leading REDD project developer in Africa. “There is a minimum cost and therefore there is a minimum price.”

In March, the Althelia Climate Fund made its long-awaited first investment in a REDD+ project, supporting Wildlife Work’s Kasigua Corridor project in Kenya’s Taita Hills to the tune of $10 million. And, just last week in Cologne, US Secretary of State John Kerry announced that the US Agency for International Development (USAID) will guarantee the Althelia Climate Fund at $133.8 million in order to de-risk forest conservation and sustainable agriculture projects.

Stephen Matzie, Investment Officer for the Development Credit Authority (DCA) at USAID, commented on the announcement: “REDD is a good place for us to work because there are some huge challenges, some of them just in terms of how little upfront financing there is to develop projects, the length of time it takes to develop projects that can be implemented and earn credits and prove sustainability over time and, of course, the challenges of being solely in the voluntary markets at this point,” he said.

Other forest carbon offsets, including those from afforestation/reforestation, improved forest management, and agro-forestry projects accounted for an additional 4.1 million in transactions and $37 million in value as these project types maintained above-average pricing, according to the State of data.

We hope that you’ll join us either in person or via webcast for the launch of the full State of the Voluntary Carbon Markets 2014 report on June 24 in Washington DC from 4:30-6:00 EDT. Details to follow.

More stories from the forest carbon marketplace are summarized below, so keep reading!

—The Ecosystem Marketplace Team

 

If you have comments or would like to submit news stories, write to us at general@forestcarbonportal.com.


News

INTERNATIONAL POLICY

Vamos, Colombia

Kerry’s announcement about USAID’s guarantee for REDD projects made a splash at Carbon Expo, but agency officials made it clear that they’re not newbies when it comes to reducing deforestation projects. USAID has supported the BioREDD+ program in Colombia since 2011, through which $27.8 million will be invested in eight REDD+ projects covering more than 700,000 hectares along the Colombian Pacific Coast. The agency’s partial credit guarantees certainly make a difference, but multiple revenue streams and partners are what would really ensure the long-term financial security of the projects. Matzie of the DCA said that if project partners could ever convince a Colombian bank to participate in a transaction financing a local REDD+ project, it would be a “landmark event.”

NATIONAL STRATEGY AND CAPACITY

Looking for a $1 billion boost

The Democratic Republic of Congo (DRC) is seeking funding to protect nine million hectares of rainforest under the United Nation’s REDD+ mechanism. Project developer Wildlife Works is assisting the Congolese government in the design of the program. “The DRC accepts its responsibility to protect its forests for the benefit of humanity,” Bavon N’sa Mputu Elima, the DRC Minister of Environment said. “But as a developing country we require a partnership with industrialized nations to provide the financial support needed by the program.” The Congo Basin and surrounding regions are the second largest concentration of rainforest outside of the Amazon.

PROJECT DEVELOPMENT

Bamboo shoots, scores

EcoPlanet Bamboo last week completed verification of its 2014 vintage offsets under the Verified Carbon Standard (VCS) from its Nicaragua projects – marking the debut of bamboo offsets on the voluntary carbon market. In an interview with Ecosystem Marketplace, EcoPlanet Bamboo founder Troy Wiseman explained why the company pursued triple certification with VCS, the Community, Climate and Biodiversity (CCB) Standard, and the Forest Stewardship Council (FSC) – and how the upfront investment pays off in its bottom line. “We are currently negotiating an offer for this year’s vintage as we speak,” he said.

No place like home

The Conservation Fund’s Go Zero program last week announced that two US-based projects achieved gold level verification with the CCB Standard, which certifies climate, community and biodiversity benefits. The Marais des Cygnes River project south of Kansas City restored 775 acres of native oak and hickory, reinvigorating lost habitat for migratory birds. And the Red River National Wildlife Refuge project in Louisiana facilitated the planting of hundreds of thousands of cypress, oak and hickory trees across 1,180 riverside acres. The projects are expected to sequester 260,500 and 300,000 tCO2e, respectively.

Red light, green light

The CarbonFund.org’s Brian McFarland is “hesitantly optimistic” about REDD offsets after the roller coaster year that was 2013. The organization’s CarbonCo subsidiary Purus Project – the first REDD+ project in Acre, Brazil – issued carbon offsets in January, and McFarland hopes that, given oversupply on the voluntary carbon market, there may be a place for REDD in compliance programs. “It seems like it’s still on the radar for California, but they have some higher priorities they are working on now. China will definitely be a longer-term play,” he said. His interview with Ecosystem Marketplace is available in full here.

FINANCE AND ECONOMICS

More bang for the carbon buck

More than four million people die each year from strokes, cancer and cardiopulmonary diseases caused by indoor cooking, according to the World Health Organization. Clean cookstoves can save millions of lives around the world, and voluntary carbon markets have become a key source of finance. Government actors such as the Swedish Energy Agency are recognizing the added benefits beyond carbon offsets that clean cookstoves can provide and are willing to pay a premium price for those projects. In the State of the Voluntary Carbon Markets 2014, Ecosystem Marketplace found that the additional social, economic and environmental benefits of cookstove distribution projects resulted in one of the highest average prices paid for any offset type at $9.2 per tonne of carbon dioxide eliminated.

SCIENCE AND TECHNOLOGY

Feeling degraded

Carbon loss from tropical forests is being significantly underestimated, according to a recent report published in the journal Global Change Biology. Researchers say degradation in Brazil causes additional emissions equivalent to 40% of those from deforestation or about 54 billion tonnes in 2010. “It is mainly fires that escape from burning pasture, selective logging and edge effects,” said Erika Berenguer from Lancaster University. The new study attempts to overcome the limitations of satellite-based monitoring that only evaluates canopy cover by using on-the-ground assessments. Forest loss in the Amazon is said to account for 12% of human-induced greenhouse gases (GHG).

We’re melting!

Black carbon may be contributing to an increased rate of surface snow melt on Greenland’s ice sheet and thus more rapid ice thawing, according to a new study in the Proceedings of the National Academy of Sciences. Black carbon – fine particulate matter from burned fossil fuels and forest fires – absorbs the sun’s radiation more than white snow and raises surface temperature. The study examined climate data and cores of Greenland’s snowy layers during the country’s biggest recorded thaws, in 1889 and 2012. Those years saw both warm temperatures as well as heavy blankets of black carbon that combined to cause rare snow-surface melting on up to 97% of the ice sheet.

Vines choking out carbon

Not all plants are created equal when it comes to carbon storage. A study published this month in Ecology shows that a woody vine called lianas, which inhibits the growth of trees, results in a net loss of forest carbon sequestration. Lianas climb to the top of the canopy and shade out sunlight for the trees that support them. Scientists in Panama showed that lianas can reduce net forest biomass accumulation by almost 20%. Previous research has demonstrated that lianas are increasing in tropical forests around the globe. Their success may be due to decreased rainfall and lianas’ comparatively high drought tolerance.

HUMAN DIMENSION

Take the challenge, Pepsi!

PepsiCo – which includes the brands Lays, Tropicana and Quaker in addition to its namesake – has increased its commitment to avoid deforestation in its supply chain for 450,000 annual tonnes of palm oil to also avoid conversion of peatland to plantations. PepsiCo had previously pledged to only use palm oil certified under the Roundtable on Sustainable Palm Oil by 2016. However, some environmental organizations are pressuring PepsiCo to go further, pointing to P&G, Unilever and Nestle as having stronger safeguards. They cite the need for greater traceability and a full action plan for implementation of the policies.

STANDARDS AND METHODOLOGY

Plugging the leaks

Agriculture, forestry and other land use (AFOLU) projects present a significant opportunity to sequester GHG emissions. To ensure these projects are not displacing emissions elsewhere, VCS projects are required to quantify and deduct any leakage. In cooperation with the Leakage Working Group, VCS has developed an AFOLU Project Market Leakage Module. This ensures consistent accounting procedures for market leakage for both jurisdictional programs and any projects nested within the jurisdictional program. A public comment period on the proposed module will be open until June 28.

Tag, you’re social!

Emissions reductions are great, but reductions with added environmental, social and economic benefits are better. The VCS, a leading voluntary offset standard, and SOCIALCARBON, a certification standard for contributions to sustainable development, have partnered to make going the extra mile easier. The two organizations have released new templates that will allow developers and auditors to validate or verify projects simultaneously to both standards, while only having to complete one set of documents. The resulting offset is a Verified Carbon Unit with a SOCIALCARBON tag. Other standards have shown that offsets that can demonstrate additional co-benefits collect a price premium in the market.

PUBLICATIONS

Leading from ahead

MegaFlorestais, a group of leaders of public forest agencies worldwide, discusses challenges and shares experiences on critical issues affecting forests and forest peoples, including climate change, market transitions, forest tenure, poverty alleviation and public governance. Given that public forest agencies officially control some 75% of all forests worldwide, the outputs of this group can provide global insight into forest management in the immediate and longer-term future. This latest report focuses on driving change through transparency, tenure reform, citizen involvement and improved governance.

Not drinking the Kool Aid

Oxfam calls on the top 10 food and beverage companies to face up to the scale of GHG emissions produced through their supply chains, and address deforestation and unsustainable land-use practices. The anti-poverty coalition compares the public commitments that each company has made side-by-side on a number of agricultural and deforestation policies and argues these companies should better leverage their influence to call for urgent climate action from other industries and governments.

JOBS

Director – Center for International Forestry Research, CGIAR Program

Based in Jakarta, Indonesia, the Director of the CGIAR Research Program on Forests, Trees and Agroforestry: Livelihoods, Landscapes and Governance will lead the CGIAR research initiative, which brings together several hundred scientists from six programs, with a 2014 budget of $89 million. The successful candidate will have a PhD or advanced degree in a relevant discipline, proven expertise in leading collaborative research, and knowledge and experience of the CGIAR and its operations.

Read more about the position here

Senior Researcher, Commodities and Transparency – Global Canopy Programme (GCP)

Based in Oxford, United Kingdom, the Senior Researcher at GCP for Commodities and Transparency will pioneer research into how to reduce the impacts of major agricultural commodities on forests and create demand among producers and retailers to ‘green’ supply chains. GCP is looking for candidates with an advanced degree and deep knowledge of key forest risk commodity supply chains, as well as experience working with the sustainability/CSR/procurement sector – and availability for extensive international travel.

Read more about the position here

Senior Manager, Sustainable Forest Management – World Wildlife Fund (WWF) India

Based in New Delhi, India, the Senior Manager for Sustainable Forest Management will implement WWF India’s strategy for promoting responsible forest projects trade and credible forest certification, in particular FSC and Global Forest & Trade Network within India. The successful candidate will have 7-10 years experience of working on forest conservation and forestry industry issues, an advanced degree in forestry or a related field, and a strong technical background of the Indian forestry sector.

Read more about the position here

Carbon Projects Officer – CO2balance

Based in Taunton, United Kingdom, the Carbon Projects Officer will conduct and assist with the research, development, documentation and coordination of Gold Standard, VCS and Clean Development Mechanism projects. The position requires conducting feasibility studies for potential project activities, liaising with stakeholders, completing project documentation, and keeping up-to-date with developments in the carbon management industry. CO2balance has developed several micro-scale clean cookstove projects across Africa that reduce the need for fuelwood.

Read more about the position here

Methodologies Manager – Verified Carbon Standard (VCS)

Based in Washington, DC, the Methodologies Manager will supervise the management of VCS methodologies, interacting with a wide range of stakeholders on many technical and operational aspects of the VCS. The successful candidate will have a minimum of six years of professional experience, preferably within the context of GHG inventories or carbon markets and detailed knowledge of methodological topics, including project boundaries, baselines, additionality, leakage, non-permanence and monitoring.

Read more about the position here

ABOUT THE FOREST CARBON PORTAL

The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.

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.

 

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California Offset Market Slow to Ramp Up

26 February 2015 | There is some truth to the insider joke that the cap-and-trade aspect of California’s climate policy gets 90% of the attention but provides 20% of the benefit.

Aside from setting up cap and trade, California’s Global Warming Solutions Act (AB 32) also required a third of California’s energy come from renewable sources by 2020 and mandates steep increases in vehicle efficiency. However, the market-based aspect of the program seems to dominate headlines, though speakers at a side event at this week’s Climate Leadership Conference in Washington, D.C. believe the attention may be warranted.

“Command-and-control programs will contribute about 80% and cap and trade will play the backstop and make up an estimated 20% [of emissions reductions], said Brad Neff, a senior energy policy manager at PG&E, the utility that provides most Californians with their electricity.

“But of course, if the economy grows faster than expected or if these programs don’t perform as expected, the cap-and-trade market, that price on carbon, will have to absorb more of those reductions.

As of 2015, California’s climate cap more than doubled in size as distributors of transportation fuels and natural gas were folded under compliance, joining the power and industrial sectors.

Economic Growth and Emissions Growth Divorce

Launching a state-wide climate change policy on the tail of a staggering economic recession was perhaps a risky move or, as a recent assessment of California’s carbon market puts it, a “grand experiment. But two years into the implementation of carbon pricing in the state, the numbers show that the “decoupling of economic and emissions growth has been tentatively successful. While Gross Domestic Product in California grew 2% and the state added almost half a million jobs in 2013, the emissions of capped sectors dropped 3.8%.

The sale of allowances the transferrable permits to pollute that constitute the “tradingaspect of cap and trade has also raised significant funds for the state, with $902 million budgeted for re-investment through mid-2015, according to the Environmental Defense Fund’s (EDF) benchmarking report. The money will be spent on carbon-lowering investments such as high-speed rail, weatherization, solar installation, wetland restorations, and urban forests.

California law requires that 25% of the money going into the state’s Greenhouse Gas Reduction Fund be spent on reducing pollution in disadvantaged communities that are disproportionately affected by bad air quality.

“Pollution is problem number one, two, and three in Californian communities, said Tim O’Connor, Director of the California Climate Initiative at EDF.“We lead the nation with the top five most polluted cities, mostly in the Central Valley and Los Angeles.

Offsetting’s Full Potential?

In addition to creating a pool of money for re-investment, cap and trade also serves as a cost-containment mechanism for compliance entities and one they have taken full advantage of so far. Allowances have sold out at every quarterly auction to date, staying on average 15 cents above the floor price, which in 2014 was $11.34 per tonne.

The results from this month’s auction the second joint auction for California with its trading partner Quebec show that all 73.6 million allowances available sold at $12.2 per allowance, above the $12.1 reserve price. The vast majority of allowances 93.5% were purchased by compliance entities. Additionally, all 10.4 million 2018 vintage allowances available sold at the $12.1 reserve price.

However, another aspect of the cap-and-trade program carbon offsets have so far been underutilized. Under AB 32, compliance entities may purchase offsets to meet up to 8% of their emissions reduction requirement.

With about 145 million tonnes falling under the cap in the first compliance period (2013-2014), companies could have theoretically purchased 11.6 million tonnes of offsets to comply with regulation.But only 1.7 million offsets were turned in last November, when companies had to “true-up” their emissions for 2013, Neff said.

California’s Air Resources Board (ARB) has issued 17.9 million compliance-grade offsets to date, with the first forestry issuances occurring in the second half of 2013. The state has adopted five offset protocols that focus on sectors not capped by regulation forestry, urban forestry, livestock methane, destruction of ozone depleting substances and mine methane that otherwise leak into the atmosphere.

“[Offsets] also allow you to reduce more emissions more quickly,” said Gary Gero, President of the Climate Action Reserve, which establishes standards for and issues carbon offsets. “They specifically and importantly allow you to get emissions reductions outside of the regulated sectors.”

Though there were not enough compliance offsets available to allow companies to utilize the 8% maximum in the first compliance period, demand not supply was the limiting factor.

The Limiting Factors

Since compliance entities won’t have to balance their 2014 emissions books until November of this year, it’s possible that additional offsets will be surrendered then, Gero said.

“But there are a couple of other things at play here,” he said. “One is that California cap and trade is probably like most cap-and-trade systems anywhere, which is it’s probably over-allocated in the early years, quite honestly. And when you’re over-allocated there just isn’t that demand pressure for offsets. I think that will grow over time as the cap tightens.”

Offsetting may also be limited by compliance entities, learning curves, with most companies focusing on getting a handle on the allowance auctions before delving into offsetting, O’Connor added.

“On the offset side, there is still a little bit of mystery about it,” he said.“It’s only really the very well-trained, well-versed, and probably well-consulted companies that have the capacity to really go out there and procure offsets.”

Investor-owned utilities such as PG&E also face additional rules around their offset purchases, requiring that the seller take on the risk of offset invalidation. The California ARB may invalidate an offset up to eight years after it is issued if they uncover problems such as double counting or environmental non-compliance. They exercised that authority last November when they invalidated 88,955 offsets produced by an Arkansas facility destroying ozone-depleting substances. The offsets themselves were soundly verified, but the facility was out of compliance with its operating permit at the time.

Though the invalidation represented less than 1% of the total offsets on the market, market activity decreased substantially during ARB’s five-month investigation of the Arkansas facility, according to the EDF report.

Despite the challenges, many emitters do see offsetting as a less expensive way to meet compliance obligations, so “there’s an economic reason why they’re going to try to work through those transactional costs,” Gero said.

With the addition of fuel distribution sectors in the second compliance period, the emissions cap jumped to 394.5 million tonnes in 2015, creating a theoretical demand for 31.5 million offsets ifcompliance entities were to offset the full 8% of their emissions allowed in 2015.

PG&E is one company that plans to take advantage of the offsetting provision, which Neff sees as a way to simultaneously reduce emissions at lower cost and invest in landscapes that serve as carbon sinks.

“PG&E has issued a couple of offset RFOs and we are very interested in spurring the offset market for its general benefits, although there are some struggles and it’s a bit burdensome right now, Neff said. “Unfortunately, not all companies with compliance obligations feel that same urge.

Study Sees $1.6 Billion For Blue Carbon In Louisiana Wetlands

23 February 2015 | A two-year assessment of the potential to develop blue carbon projects on Louisiana’s coast estimates  that carbon finance revenue can provide up to $1.6 billion in critical funding to assist with wetland restoration over the next 50 years. The study, supported by Entergy Corporation through their Environmental Initiatives Fund, and prepared in partnership by New Orleans-based Tierra Resources and Portland-based nonprofit The Climate Trust, examines existing wetland restoration techniques river diversions, hydrologic restoration, wetland assimilation, and mangrove identifying areas for future scientific investigation to support carbon offset programs.

Findings from the report will be shared by Tierra Resources and the American Carbon Registry at a free national webinar, scheduled for March 5, 2015, at 1 p.m. Central Standard Time.

Initial study findings showed that restoration in Louisiana has the potential to produce over 1.8 million offsets per year; almost 92 million offsets over 50 years. This is the equivalent of taking approximately 350 thousand cars off the road each year or 20 million cars off the road over 50 years.  Wetland restoration techniques identified in this study could potentially generate $400 million to $1 billion in offset revenue depending on the dollar value of the carbon offset with the potential for almost $630 million more by including prevented wetland loss in the carbon accounting.

Entergy’s commitment to the study stems from the company’s mission to create sustainable value for all its stakeholders. Wetlands play a crucial role in storm protection for many Entergy communities, helping preserve industries, businesses, homes, and livelihoods along with Entergy’s own facilities and assets.

“Entergy was pleased to be able to sponsor this important work and help unlock the huge potential for wetland carbon credits in Louisiana,” said Chuck Barlow, vice president for environmental strategy & policy for Entergy Corporation. “By capitalizing on the economic benefits offered through carbon credits, more of Louisiana’s wetlands can be restored and preserved. Eventually, this work in Louisiana can be expanded to address other critical wetland areas throughout the nation and the world, making this study a first step, with the potential for major global impact.”

Of the restoration techniques studied, forested wetlands that receive treated municipal effluent, referred to as wetland assimilation systems, have the highest net offset yield per acre. However, it was concluded that river diversions and mangrove plantings have the potential to generate the largest volume of offsets in Louisiana due to the huge amount of acreage upon which these restoration techniques can be implemented. Additionally, carbon offsets from wetland assimilation systems and river diversions show potential to be stacked with water quality credits should these markets evolve in Louisiana.

The primary barrier to wetland carbon commercialization that was identified through this study is the high cost of wetland restoration. Carbon finance will likely lead to new public-private partnerships that leverage carbon funds with government restoration dollars to stimulate investment into wetland projects.

“The results of this study demonstrate that carbon finance has substantial potential to generate important revenue to support wetland restoration,” said lead author Dr. Sarah Mack, President and CEO of Tierra Resources. “Furthermore, this study points to Louisiana as an innovator of creative financing strategies for wetland restoration, and as creating new investment opportunities that will yield substantial economic and environmental benefits.”

The American Carbon Registry, a leading voluntary and California compliance Cap-and-Trade Offset Project Registry, in 2012 approved a methodology developed by Tierra Resources, which quantifies the greenhouse gas emission reductions and carbon sequestration associated with restoring degraded deltaic wetlands in the Mississippi Delta. This methodology allows landowners and project developers to document, quantify, and seek verification for the GHG benefit of their wetland restoration projects, ultimately leading to certified offset credits that can be sold as carbon credits in the voluntary market.

“Carbon markets provide economic incentives for reducing carbon emissions, as well as an important and innovative approach to finance environmental restoration and conservation,” said Dick Kempka, vice president of business development for The Climate Trust. “The opportunity to engage in this emerging sector and help provide a path for wetlands restoration to enter the carbon markets has been an exciting journey.”

The restoration of the Mississippi River Delta and the storage of blue carbon (the carbon captured by coastal ecosystems) is of national significance. The economic health of much of the United States depends on sustaining the navigation, flood control, energy production, and seafood resources of this valuable deltaic river system. Each of those functions is currently at severe risk due to a coastal wetland loss rate of approximately one football field an hour.

“Wetland restoration provides a wealth of benefits including storm surge reduction, habitat preservation, carbon sequestration and recreation; as well as job creation, and economic development that are vital to Louisiana’s sustainability and resilience,” states Michael Hecht, President & CEO of Greater New Orleans, Inc. “By innovating creative financing solutions for coastal restoration, local companies like Tierra Resources are contributing to the growing hub of Emerging Environmental expertise that can be found in Greater New Orleans.”

REDD Is In The New Climate Text, But Will It Be An INDC?

17 February 2015 Climate-change negotiators meeting in Geneva last week agreed on a draft negotiating text, but it was a massive thing more than 80 pages full of options and “bracketed” text that will mostly be chipped away between now and the time negotiators meet in Paris.

Work and negotiations on the text will continue at the Climate Change Conference in Bonn in June and at two further formal sessions later in the year in Bonn (31 August to 4 September and 19 to 23 October).

For the month of March, the focus will be within countries, as they submit their Intended Nationally-Determined Contributions (INDCs) to the UN Framework Convention on Climate Change(UNFCCC), but it’s unclear whether international payments for REDD will be recognized as an INDC, setting the stage for a chaotic few months where proposed INDCs are contingent on text still under negotiation.



“There remain deep and long-standing divisions on key issues among them, which countries are more obligated than others to take action to reduce emissions; how and by how much to ramp up climate finance; and how to give greater priority to action on adaptation and loss and damage,” said Alden Meyer, director of strategy and policy for the Union of Concerned Scientists. “These divisions nearly derailed the negotiations last December in Lima; they must be addressed in an open and constructive manner if we are to get the ambitious and comprehensive agreement we need in Paris.”

REDD in the Text

“REDD is going to be a pillar of mitigation,” said Gus Silva-Chavez, who runs the Forest Trends REDDX Initiative. “REDD is in there in multiple places as multiple options. There’s a lot of support for it.”

But Paragraph 23 of the text, which deals most explicitly with land-use issues, has a total of six options a victim of the proposal proliferation that took hold at talks in Geneva as countries took full advantage of their last chance to put options on the table.

“There’s one option which would be REDD is a voluntary mechanism, and countries will get paid for that, but any REDD reductions will not be able to be used to meet anyone’s compliance obligations,” said Silva-Chavez. “There is another option that is clearly the REDD mechanism will work as a developed country will be able to use REDD credits for compliance and markets will be allowed.”

Of the six options, he says, Option 2 is the strongest.

“If that ends up being the mechanism that they establish, then you have an incentive for the private sector and large emitting companies to invest in REDD, and/or for REDD countries to keep doing REDD,” he says. “But if we have something that says REDD shall not be used for meeting compliance obligations, then we’re back where we were ten years ago, and that hasn’t worked.”

Option 4 is Brazil’s approach, and Option 6 is Bolivia’s non-market approach.

“I were to predict what is going to happen on REDD this year, the final negotiation in Paris is going to come down to REDD will be a market mechanism,” he says. “It’s just going to be how much of an INDC can you meet from REDD. That’s going to be the REDD deal between REDD countries and everybody else.”

Here is the full text of Paragraph 23:

Paragraph 23

[Option 1: In meeting their commitments [/ contributions / actions] , Parties may make use of market mechanisms [and actions][, including] [in the land-use sector] in accordance with [X] [the provisions on transparency of action and support as contained in section J, in particular in order to ensure environmental integrity and avoid double counting][accounting rules developed by the governing body] [in accordance with rules and provisions adopted by the governing body of this Protocol in order to ensure environmental integrity] [by ensuring that:

  • Transfers of mitigation outcomes or units between Parties can be used to meet their contributions/commitments/actions under the new agreement
  • Units emanating from UNFCCC-approved mechanisms, including REDD-plus mechanisms will be transferrable and can be used to meet contributions/commitments/actions of Parties under the new agreement
  • Mitigation outcomes and units emanating from mechanisms outside the UNFCCC can be used to meet contributions/commitments/actions of Parties under the new agreement provided that they meet conformity requirements established by the COP].
  1. [The use of market mechanisms is to:

    a.Mobilize the widest range of potential investments for [adaptation and] mitigation;

    b. Create incentives for early action;

    c. Incentivize and coordinate effective mitigation [and adaptation] actions [including those with co-benefits in adaptation] from the broadest range of actors, including the private sector, to support the implementation of this agreement;

    d. Ensure consistency with individual commitments / contributions;

    e. [Be in accordance with the provisions on transparent accounting as contained in section J (Transparency of action and support), in particular to avoid double counting.]]

    f. [Contribute to the sustainable development of the host country]

    g. [Generate resources through a levy to enhance climate-resilient investment in developing countries] h. [Supplement domestic action].

23.2 [The use of market mechanisms shall be supplementary to domestic action] [and a cap will apply to ensure that mitigation commitments are the main domestic actions] [Domestic action shall account for the majority of the emission reductions required to fulfil each Party’s commitment.]

23.3 [A centrally governed market mechanism shall be created under the Convention that builds on the existing market mechanisms.].

23.4 [The governing body of this Protocol shall ensure that a share of the proceeds from the use of market mechanisms is used to assist developing country Parties that are particularly vulnerable to climate change to meet the costs of adaptation.]

23.5 [The use of actions in the land-use sector is to:

a. Accommodate national circumstances and proper incentives so as to facilitate actions and stakeholder cooperation;

b. Encourage to build on existing accounting approaches, methodologies, guidance and guidelines for anthropogenic emissions and removals, where available.]

23.6 [The governing body shall develop accounting rules for the use of market mechanisms and the land-use sector with regard to mitigation contributions of all Parties, including how to avoid double counting.]

Option 2:

23. [Parties may claim mitigation outcomes achieved in other Parties towards their commitment subject to specific rules and requirements designed to ensure that the environmental integrity and the integrity of commitments are maintained and that double counting is avoided.

23.1 The UNFCCC certification and use of mitigation outcomes by countries on a voluntary basis should be subject to specific rules and requirements designed to provide for a scaling-up of effort and entailing a net contribution to global mitigation efforts and contributing to sustainable development.

23.2 Those rules and requirements will be defined by 2016, and include eligibility and participation requirements.] ADP 2-8 – agenda item 3 17

Option 3:

23. [In accounting for progress towards meeting their commitments / contributions, including their use of market mechanisms and of the land sector, Parties shall apply the following accounting principles:

23.1 General principles

a. Net changes in emissions of greenhouse gases by sources and removals by sinks recognized towards commitments / contributions should be real, additional, permanent, and verifiable.

b. Parties are encouraged to include all major sources of anthropogenic emissions and removals in their commitment / contribution, as defined by IPCC key categories.

c. For key categories of emissions and removals that are not included in commitments / contributions, Parties are encouraged to include an explanation for their exclusion, and to strive to include these over time.

d. Consistent methodologies should be used for the estimation and reporting of mitigation actions and outcomes over time.

e. To ensure consistency, Parties should use the same baselines, accounting methodologies and approaches throughout the commitment/ contribution/ contribution time frame, including in the base year or other reference point and commitment period, except where technical corrections are required to maintain methodological consistency.

f. Projected reference levels and other dynamic baselines should be subject to technical assessment prior to the commencement of the commitment/ contribution period, to encourage their transparency, completeness, consistency, accuracy and comparability.

g. Parties should avoid double counting of mitigation actions in tracking progress towards their commitments/ contributions by ensuring mitigation outcomes cannot be used more than once.

h. Parties shall use the metric specified by the IPCC in its latest Assessment report and adopted by the COP, unless otherwise decided by the COP.
23.2 Land sector principles

a. Both emissions and removals should be accounted for in assessing progress towards the commitment/ contribution.

b. Once a source, sink, or activity is accounted for, it should not subsequently be excluded from accounting without an explanation for why it has been excluded.

c. Definitions of forest, land use and activities should be used consistently over time.

d. Parties may apply the principles and methodologies of existing approaches under the Convention and its Kyoto Protocol to recognizing mitigation outcomes in the land sector, consistent with IPCC guidance where applicable.

e. Parties may exclude emissions and removals resulting from natural disturbances, consistent with the most recent IPCC guidance.

f. Parties should strive to exclude from accounting non-anthropogenic emissions and removals.
23.3 Markets accounting principles

a. Parties shall ensure that units are not counted or claimed more than once.]

Option 4:

23. [An Economic Mechanism is hereby defined.

23.1. The purpose of the economic mechanism shall be to facilitate the fulfillment of NDCs by Parties with quantified economy-wide absolute targets in the mitigation component and to incentivize developing country Parties to take on such targets over time. 23.2. The Economic Mechanism shall be comprised of:

a. an Emissions Trading System (ETS); and

b. an enhanced Clean Development Mechanism (CDM+).
23.3. Under the ETS, Parties with quantified economy-wide absolute targets in the mitigation component of their NDC may participate, on a voluntary basis, in the ETS for the purpose of fulfilling their respective NDC. Any such trading shall be supplemental to domestic actions for the purpose of meeting their targets.

23.4. Under CDM+:

a. Parties with quantified economy-wide absolute targets in the mitigation component of their NDC may, on a voluntary basis, use the certified emission reductions accruing from such project activities for the purpose of fulfilling their respective NDC. Any such accruing shall be supplemental to domestic actions for the purpose of meeting their targets;

b. Developing countries Parties will benefit from project activities resulting in certified emission reductions on a voluntary basis.
23.5. The economic mechanism shall be subject to the authority and guidance of the Conference of the Parties.

23.6. The CDM+ shall be supervised by an executive board.

23.7. The Conference of the Parties shall define the relevant principles, modalities, procedures and guidelines, in particular for verification, reporting and accountability of the economic mechanism.

23.8. All Parties should actively promote the voluntary cancellation of certified emissions reductions, including by subnational entities and the private sector, with a view to fostering their engagement with mitigation actions and further enhancing the environmental integrity of the mechanism. Parties that put forward a financial pledge or target in their NDC would be entitled to use the amount of certified emissions reductions cancelled on their behalf to comply with their financial targets and pledges, but not their mitigation obligations.]

Option 5:

23. 1 [Parties, when cooperating to achieve their mitigation commitments, shall ensure that cooperative arrangements deliver real, permanent, additional and verified internationally transferable mitigation outcomes in an environmentally integral way, avoid double counting of effort and achieve a net decrease and/or avoidance of emissions;

23.2 The governing body shall develop and adopt standards for implementing paragraph. [23.1] and processes for ensuring that these standards are met;

23. 3 The governing body shall create and strengthen synergies between cooperative arrangements and mechanisms established or to be established under the Convention, its related legal instruments and other relevant institutions;

23.4. Parties agree to account in line with the standards adopted by the governing body the internationally transferable mitigation outcomes that they use towards their commitments/contributions.]

Option 6:

23. [No provisions on market mechanisms and actions in land use sector.]

23 bis. [In meeting the 2 °C objective, Parties agree on the need for global sectoral emission reduction targets for international aviation and maritime transport and on the need for all Parties to work through the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) to develop global policy frameworks to achieve these targets].

Moving Forward

In addition to the official meetings, ministerial-level meetings throughout the year will include climate change on their agendas and contribute to convergence on the key political choices. These include the Major Economies Forum; the Petersburg Climate Dialogue and the African Ministerial Conference of the Environment with the upcoming G7 and G20 meetings affording further political engagement on climate change and the Paris agreement.

“These opportunities will help to ensure that countries have opportunities to work with each other at several political levels what is needed now is vertical integration so that the views of heads of state, through ministers and to negotiators reflects a seamless and consistent view of ambition, common ground and ultimately success in December,” said UNFCCC Executive Secretary Christina Figueres.

This Week In V-Carbon: Punxsutawney Phil Predicts EM’s Survey Launch

13 February 2015 | Crowds bundled up last week to see the United States’ most famous diviner: Punxsutawney Phil, the groundhog tasked with predicting the onset of spring. Legend has it that this weather-hog can tell if there will be an early spring depending on whether Phil sees his own shadow. Unfortunately, it looks like we’ll be in for another six weeks of cold weather, according to Phil’s prediction.
Though he didn’t know it (…or did he?), Phil also forecast the new timeline of Ecosystem Marketplace’s annual carbon markets survey. Unlike previous years, we are condensing our survey timeframe through March 4, 2015 to provide a greater range of reports throughout the year.

The shorter data collection period will allow us to produce more reports, including a new report specially focused on exploring the North American carbon markets. Contingent on receiving sufficient data, we’ll break down North American demand for carbon offsets in 2014 according to price, project type, voluntary versus compliance, and by state or province. We’ll also look forward to project how future policy developments such as the expansion of California’s program to include new sectors will affect demand. And of course, Ecosystem Marketplace plans to publish its annual State of the Voluntary Carbon Markets report.
And as Ecosystem Marketplace looks towards our 10th birthday in 2015, we’re launching “Gen A”  our code name for the next generation of our initiative. Since 2010, our specialized web portals EcosystemMarketplace.com, ForestCarbonPortal.com, and reddx.forest-trends.org (tracking expenditures to avoid deforestation) have been viewed by over 1 million unique users. Gen A will bring it all together. We imagine a new, GIS-based decision support tool that overlays our data on forests, cookstoves, biodiversity and water markets in a way that will allow project developers and funders to query investable opportunities.

 

But this critical, thought-provoking work will only be possible with the financial support of our loyal and eager audiences. Sponsors benefit from exposure logo placement on reports that are downloaded tens of thousands of times and shout-outs in this news brief as well as further insight into our findings through tailored briefings. And that’s not to mention influence: Ecosystem Marketplace’s reports have been cited in the development of emerging carbon pricing programs from South Africa to South Korea, and supporting our research is a good opportunity to influence these discussions. To sponsor one of these exciting Ecosystem Marketplace products, contact Gloria Gonzalez.

 

More news from the voluntary carbon marketplace is summarized below, so keep reading!

 

The Editors

 

Supporting Subscribers request

 

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).

 

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V-Carbon News

ANNOUNCEMENTS

GreenBiz Forum 10% Discount

GreenBiz Forum (Feb. 17-19 in Phoenix, AZ) brings together an unprecedented partnership between GreenBiz Group, The Sustainability Consortium and Arizona State University to give attendees an unparalleled in-depth look at the key challenges and opportunities facing sustainable business today. Framed by GreenBiz’s State of Green Business report, the high-wattage stage presentations, workshops and networking opportunities make GreenBiz Forum an unforgettable event. Save 10% with our discount code GBF15EM here.

Climate Leadership Conference 20% Discount

The Climate Leadership Conference will be held in Washington, D.C. from February 23rd to 25th. The conference convenes leaders from diverse sectors to explore market transformation and share energy and climate solutions. On the agenda are: a roundtable on transparency in carbon accounting hosted by The Climate Registry; a discussion of California cap and trade hosted by the Environmental Defense Fund; a breakout session on best practices in corporate carbon reduction strategies; and much more. Want 20% off your registration? Use discount code CLC-Ecosystem-20% when you register here.

VOLUNTARY CARBON

I’d rather stand

Code REDD just launched a new initiative, “Stand for Trees,” that aims to target a different buyer: individuals. While REDD projects have traditionally focused on corporate buyers such as Disney and Microsoft, the new site will utilize social media and crowd-funding to tell the stories of individual REDD projects and their charismatic co-benefits. Individuals can buy as little as half a tonne, or $10 an offset, and project developers benefit from higher payouts than they might receive on the wholesale market. For now, the site only lists dual-certified Verified Carbon Standard (VCS) and Climate, Community, and Biodiversity Alliance offsets.

Read more from Ecosystem Marketplace here

Separating disbanding from disinterest

In an opinion piece, Pungky Widiaryanto of Indonesia’s State Ministry of National Development Planning argues that Indonesia’s recent disbanding of the country’s REDD+ Agency may lead to more effective implementation. The REDD+ Agency was formed with the expectation that it would reach across ministries to consolidate funding and coordinate efforts to move REDD (Reduced Emissions from Deforestation and forest Degradation) progress along. In practice, it received unclear authority and little recognition from other government ministries. President Jokowi’s move to integrate this ad hoc agency followed his decisions to merge the Environment and Forestry Ministries into one.

Read more from Ecosystem Marketplace here

COMPLIANCE CARBON

No one party here

With no centralized rules, China’s pilot emissions trading schemes have resulted in a variety of offset regulations and prices. This became most apparent with the launch of the nation’s carbon offset registry in January, which allowed Chinese Certified Emissions Reductions (CCERs) to be transferred across the seven pilots for the first time. The only two markets with final offset rules, Beijing and Shanghai, have banned CCERs generated prior to 2013 (essentially 99.5% of all issued), and spot deliveries in China’s capital were as high as 25-30 yuan. Forward contracts in most other pilots ranged from 5-20 yuan. But the pilots do all have one thing in common: China just issued standardized guidelines for measuring and reporting of greenhouse gas emissions by major industrials.

Read more from Reuters here
Read more from Reuters here

Getting an A for effort

A three-year research project just concluded that South Africa is ready for carbon trading. The project, led by climate advisory firm Prometheum Carbon in cooperation with the Johannesburg Stock Exchange (JSE), examined the suitability of existing financing mechanisms for the proposed market. In late 2014, the JSE demonstrated how its existing commodities registry could be used for carbon, with several South African companies including Nedbank and Sanlam, the Backsberg Wine Estate and the Cape Town Marathon purchasing offsets from the Climate Neutral Group and others. While this was only a pilot trade, South Africa plans to launch its carbon tax (with option for offsets) by 2016.

Read more here

The UK understands the cloud

Skyscrape Cloud Services, a company that provides cloud services to the United Kingdom’s (UK) public sector, has teamed up with The CarbonNeutral Company to offset its client’s emissions. The initiative stems from the 2011 Government’s Greening Information and Communications Technology (ICT) Strategy, which set out goals to reduce environmental impact and increase sustainability for ICT programs by 2015. Skyscrape customers will now receive a carbon offset certificate each month that can be used to demonstrate they are meeting their government commitments to reduce greenhouse gas emissions by 25%. The carbon offsets are validated by both the VCS and the Clean Development Mechanism.

Read more here

Golden opportunities in the golden state

Offset demand is continuing to grow in 2015 in California’s cap-and-trade program despite the Air Resources Board’s (ARB) invalidation of nearly 89,000 offsets last year, according to brokers. However, the controversial invalidation measure served as a sharp reminder for buyers that the ARB can rescind non-compliant offsets for up to eight years after issuance. One exception is the “golden” California carbon offsets, which have protection against invalidation, and traders have reported seeing more activity with those offsets. Demand for offsets is expected to rise throughout the year, as California has begun including fuel and natural gas suppliers in its program.

Read more here

Farming on the edge

Farmers Edge, a big-data farm management company, will put its data to sustainable use with its new multi-million dollar deal with Alberta-based coal and gas operator Capital Power. By integrating its new Nitrous Oxide Emissions Reductions Protocols into its on-farm data collection tools, the company will be able to track nitrous oxide emissions reductions. Any reductions will be sold to Capital Power as offsets, which the coal company can use under Alberta’s Greenhouse Gas Reduction Program. The program allows regulated entities that do not meet mandatory emissions reduction targets to pay $15 per tonne or buy offsets to meet their compliance obligations. Alberta officials are currently deciding the fate of the program, but increasing the $15 levy does not appear to be in the cards.

Read more from Winnipeg Free Press here
Read more from Bloomberg here

CARBON FINANCE

If it walks like a duck…it could be an offset

The United States Department of Agriculture is again calling for carbon offset project proposals through its Conservation Innovation Grant (CIG) program. Since its establishment in 2004, CIG has funded nearly 900 projects with over $206 million, including part of theDucks Unlimited’s Avoided Grassland Conversion methodology. This year, the program has up to $20 million available for grants, with approximately half of the money earmarked for projects that engage farmers or ranchers specifically. Pre-proposals are accepted through February 24.

Read more here

In forests we trust

The city of Astoria, Oregon agreed to partner with The Climate Trust to reduce its timber harvest. The Climate Trust, a non-profit designed to help Oregon power plants meet the state’s carbon dioxide (CO2) emissions reductions law, will sell the resulting carbon offsets to those utilities. In return, the city is set to receive an estimated $358,750 in carbon offsets this year and $130,000 annually thereafter. The monetary difference stems from reducing based on the city’s existing inventory versus the following years’ growth.

Read more here

SCIENCE & TECHNOLOGY

Tracking hot air

NASA scientists have revealed a new prototype sounder designed to measure methane. The instrument was inspired by the Soundar Lidar, which collects around-the-clock CO2 measurements. The lead scientist, Haris Riris, helped with the carbon instrument and now set his sights on a similar instrument for the more potent greenhouse gas: methane. Though the NASA team is still testing, it hopes the instrument will eventually be flown on missions such as NASA’s Active Sensing of CO2 Emissions over Nights, Days and Seasons (ASCENDS). While some satellites can currently track methane, none provide 24-hour coverage at all latitudes.

Read more here

Featured Jobs

International Climate Policy Specialist – Green Climate Fund (GCF)

Based in Incheon City, Korea, the Specialist will lead efforts for GCF engagement with multilateral climate processes and international climate finance bodies, as well as assist in the preparation, development and follow up of the meetings of the GCF Board. Successful candidates should have an advanced university degree in environmental policy, international relations or a related field, and at least seven years of relevant experience in international climate negotiations and/or climate finance processes.

Read more about the position here.

Head of Communications – New Climate Economy

Based in Washington, D.C., the Head of Communications will devise and implement a detailed global communications plan for the publication and dissemination of the New Climate Economy’s report(s), as well as lead the creation of and edit any public-facing content. Successful candidates will have at least five years of relevant experience, preferably in the economic and/or climate area.

Read more about the position here.

Carbon Credit Finance Fellow – Potential Energy

Based in Oakland, California, the Fellow will work with cookstove project developer Potential Energy to seek out a contract for the company’s accreditation process, identify funds for completion of the process, and negotiate terms/identify potential buyers of carbon offsets. Successful candidates should have a degree in finance or economics and previous professional experience. The position is unpaid and part time, for 3-6 months.

Read more about the position here.

Communication and Marketing Intern – Carbon Credit Capital

Based in New York City, the Intern will manage social media and develop creative communications strategies for Carbon Credit Capital, a boutique carbon offset management company. Successful candidates will have a demonstrated interest in climate change, corporate social responsibility and sustainability and social media. Graphic design skills are highly preferred.

Read more about the position here.

REDD+ Expert – European Forest Institute

Based in Kuala Lumpur, Malaysia, the REDD+ Expert will manage and provide technical assistance to activities supported by the European Union’s REDD Facility in Indonesia, Laos and Vietnam. Successful candidates should have a master’s degree in forestry or related disciplines and at least five years of relevant experience, including managing cooperation projects and funds in Asia. Solid understanding of REDD+ and Forest Law Enforcement, Governance and Trade required.

Read more about the position here

Study Sees $1.6 Billion For Blue Carbon In Louisiana Wetlands

23 February 2015 | A two-year assessment of the potential to develop blue carbon projects on Louisiana’s coast estimates  that carbon finance revenue can provide up to $1.6 billion in critical funding to assist with wetland restoration over the next 50 years. The study, supported by Entergy Corporation through their Environmental Initiatives Fund, and prepared in partnership by New Orleans-based Tierra Resources and Portland-based nonprofit The Climate Trust, examines existing wetland restoration techniques—river diversions, hydrologic restoration, wetland assimilation, and mangrove plantings—identifying areas for future scientific investigation to support carbon offset programs.

Findings from the report will be shared by Tierra Resources and the American Carbon Registry at a free national webinar, scheduled for March 5, 2015, at 1 p.m. Central Standard Time.

Initial study findings showed that restoration in Louisiana has the potential to produce over 1.8 million offsets per year; almost 92 million offsets over 50 years. This is the equivalent of taking approximately 350 thousand cars off the road each year or 20 million cars off the road over 50 years.  Wetland restoration techniques identified in this study could potentially generate $400 million to $1 billion in offset revenue depending on the dollar value of the carbon offset—with the potential for almost $630 million more by including prevented wetland loss in the carbon accounting.

Entergy’s commitment to the study stems from the company’s mission to create sustainable value for all its stakeholders. Wetlands play a crucial role in storm protection for many Entergy communities, helping preserve industries, businesses, homes, and livelihoods along with Entergy’s own facilities and assets.

“Entergy was pleased to be able to sponsor this important work and help unlock the huge potential for wetland carbon credits in Louisiana,” said Chuck Barlow, vice president for environmental strategy & policy for Entergy Corporation. “By capitalizing on the economic benefits offered through carbon credits, more of Louisiana’s wetlands can be restored and preserved. Eventually, this work in Louisiana can be expanded to address other critical wetland areas throughout the nation and the world, making this study a first step, with the potential for major global impact.”

Of the restoration techniques studied, forested wetlands that receive treated municipal effluent, referred to as wetland assimilation systems, have the highest net offset yield per acre. However, it was concluded that river diversions and mangrove plantings have the potential to generate the largest volume of offsets in Louisiana due to the huge amount of acreage upon which these restoration techniques can be implemented. Additionally, carbon offsets from wetland assimilation systems and river diversions show potential to be stacked with water quality credits should these markets evolve in Louisiana.

The primary barrier to wetland carbon commercialization that was identified through this study is the high cost of wetland restoration. Carbon finance will likely lead to new public-private partnerships that leverage carbon funds with government restoration dollars to stimulate investment into wetland projects.

“The results of this study demonstrate that carbon finance has substantial potential to generate important revenue to support wetland restoration,” said lead author Dr. Sarah Mack, President and CEO of Tierra Resources. “Furthermore, this study points to Louisiana as an innovator of creative financing strategies for wetland restoration, and as creating new investment opportunities that will yield substantial economic and environmental benefits.”

The American Carbon Registry, a leading voluntary and California compliance Cap-and-Trade Offset Project Registry, in 2012 approved a methodology developed by Tierra Resources, which quantifies the greenhouse gas emission reductions and carbon sequestration associated with restoring degraded deltaic wetlands in the Mississippi Delta. This methodology allows landowners and project developers to document, quantify, and seek verification for the GHG benefit of their wetland restoration projects, ultimately leading to certified offset credits that can be sold as carbon credits in the voluntary market.

“Carbon markets provide economic incentives for reducing carbon emissions, as well as an important and innovative approach to finance environmental restoration and conservation,” said Dick Kempka, vice president of business development for The Climate Trust. “The opportunity to engage in this emerging sector and help provide a path for wetlands restoration to enter the carbon markets has been an exciting journey.”

The restoration of the Mississippi River Delta and the storage of blue carbon (the carbon captured by coastal ecosystems) is of national significance. The economic health of much of the United States depends on sustaining the navigation, flood control, energy production, and seafood resources of this valuable deltaic river system. Each of those functions is currently at severe risk due to a coastal wetland loss rate of approximately one football field an hour.

“Wetland restoration provides a wealth of benefits including storm surge reduction, habitat preservation, carbon sequestration and recreation; as well as job creation, and economic development that are vital to Louisiana’s sustainability and resilience,” states Michael Hecht, President & CEO of Greater New Orleans, Inc. “By innovating creative financing solutions for coastal restoration, local companies like Tierra Resources are contributing to the growing hub of Emerging Environmental expertise that can be found in Greater New Orleans.”

Ontario Inches Towards Carbon Pricing, Explores Ag And Forestry Offsets

12 February 2014 | Ontario officials have been hinting for weeks that they would be putting forth an ambitious climate plan that will include a carbon pricing program. Today, regulators released a discussion paper that seeks advice on the type of program to be implemented, but makes clear that carbon pricing will be coming to the Canadian province in some format.

Ontario has a long-term target of reducing greenhouse gas (GHG) emissions by 80% from 1990 levels by 2050 and is currently working with British Columbia, California and Québec to establish new interim targets. While the province emits less than 1% of total global emissions, it is one of the largest per capita GHG emitters in the world, the paper noted. The transportation sector is the largest emitter in the Ontario, followed by industrials such as cement and chemical manufacturers.

This spring, the province will confirm the market mechanism or mechanisms that will be used to price carbon in the jurisdiction. In the meantime, stakeholders have 45 days to offer their opinions on the best mechanisms for achieving its emissions reduction goals, according to the paper released by Ontario’s Ministry of the Environment and Climate Change.

“It is clear that carbon pricing is a climate-critical policy that will be driving emissions reductions across the Ontario economy,” the paper stated.

Provincial officials are seeking comments on the type of carbon pricing program, with the paper highlighting four approaches: cap and trade, baseline and credit, a carbon tax, and regulations and performance standards.

The paper also observed that some of Ontario’s closest neighbors and key competitors have launched carbon pricing programs, including the province of Québec, which has linked its cap-and-trade programs with California through the Western Climate Initiative (WCI). Ten companies in Ontario are already covered by Québec’s cap-and-trade program, which recently expanded to include transportation and heating fuels.

Aside from seeking advice on setting a carbon price, regulators are also asking for comments on the role that the agriculture and forestry sectors can play in reducing emissions and/or providing carbon sinks or offsets.

That’s High Praise

Ontario’s announcement was highly praised by the International Emissions Trading Association (IETA).

“In the absence of strong national leadership, climate policy in North America is increasingly being driven by action at the subnational level, including Ontario’s neighbor Québec,” says IETA President and CEO Dirk Forrister. “We welcome Ontario’s move to put a price on carbon and look forward to engaging the government on the advantages that cap and trade brings to reaching climate targets, while driving clean investment and innovation.”

Ontario isn’t the only North America jurisdiction currently considering adopting a carbon pricing program. In late 2014, Washington State Governor Jay Inslee released a proposal for a cap-and-trade program that would cover an estimated 130 facilities and fuel distributors operating in the state that emit more than 25,000 metric tons of GHG emissions per year.

“With Washington State also looking at connecting to the trading pool, the addition of Ontario would further drive down costs and increase compliance flexibility for businesses across these jurisdictions,” said Katie Sullivan, IETA’s Director of North America.

Ontario and Washington State were both previously members of the WCI, which now only features California and Québec and British Columbia pricing carbon, although British Columbia implemented a carbon tax. Ontario has also been an observer to the Regional Greenhouse Gas Initiative, the carbon trading program for nine states in the US northeast covering the power sector.

Colorado Shrinks The Risk Of Wildfire With Investments In Watershed Services

21 January 2015 | Water flowing from Colorado watersheds are critical to many US states. Snowmelt sliding down the Rocky Mountains feeds rivers like the Colorado and Arkansas that supplies western states with a water source. But the catastrophic wildfire that has been tearing through the southwestern state in an increasingly more violent way puts the headwaters of these waterways in jeopardy.

The late 1990s and early 2000s saw two fires that together burned 150,000 acres of forestland and dumped 40 years’ worth of sediment into the Strontia Springs Reservoir. Strontia Springs is a key source of water. It helps supply the 1.3 million customers of Denver Water, a water provider, with clean water. The cleanup effort from those fires cost Denver $26 million on water quality, restoration, reclamation and sediment drainage beginning in 1996 after the first fire-Buffalo Creek Fire.

Fire suppression has made wildfire intensity that much worse. But fire isn’t the only threat Colorado’s watersheds are facing. Bark beetle and flooding plus a changing climate all pose a risk to Colorado’s forests and the water that runs through them.

Because of these threats-among others-various Colorado water providers have paid over $13 million in watershed investments and forged partnerships to identify and address problems plaguing the state’s forest ecosystems. These activities were highlighted last month during a webinar that showcased findings from Ecosystem Marketplace’s latest State of Watershed Investments report.

‘Prevent another Strontia Springs’ become a rallying cry for Colorado residents pressing for proactive forest and watershed management.

“It was a wake-up call for Denver that they needed to be in the watershed business, not just the water storage and delivery business,” says Heidi Huber-Stearns, a PhD candidate in the Department of Forest and Rangeland Stewardship at Colorado State University and also the presenter on Colorado during last month’s webinar.

The upstream watersheds of important waterways like the Colorado and Arkansas rivers fall primarily on land controlled by federal agencies like the Forest Service and the National Park Service. So in 2010 Denver Water partnered with the US Forest Service to address key challenges that included reducing wildfire and minimizing current erosion and reservoir sedimentation. To date, the Colorado water provider has paid the Forest Service $11 million to address these issues through forest thinning or fuel treatments, prescribed burning and erosion control.

Denver’s program is famous and has received national and international attention as a model to be adopted in other states and regions struggling with similar issues. It, along with more wildfire damage, influenced four other such partnerships to occur in Colorado. Aurora Water’s collaboration with the US Forest Service was the first in 2011. Aurora Water is a major water provider in the Colorado Front Range.

And after the record-setting High Park and Waldo Canyon Fires in 2012, water provider Northern Water, initiated the Colorado-Big Thompson Project together with the Bureau of Reclamation, US Forest Service and the Colorado Forest Service. The project restores forest and watershed health while also maintaining the hydropower facilities located in the Big Thompson reservoir.

The Waldo Canyon Fire was a deciding factor for another water company as well. After dealing with the aftermath of that fire along with another harrowing blaze the following year- the Black Forest Fire, which topped the Waldo Canyon Fire as the most destructive fire in Colorado history-the Colorado Springs Utilities partnered with the US Forest Service in 2013 following a similar model. Also in 2013, the Pueblo Board of Water Works forged a partnership with the same federal agency over wildfire risk and forest and watershed health.

Combined, investments in these programs led to some 21,000 acres of land undergoing fuel treatments to reduce the risk of catastrophic wildfire. These programs are relatively new, however, and how they will play out remains an open question.

But Huber-Stearns says they have made a lot of progress already. “The collaboration, planning and work that’s been done on the ground so far have really been invaluable in addressing current risks that we face as well as what we anticipate we’ll face with the changing climate.”

Colorado Shrinks The Risk Of Wildfire With Investments In Watershed Services

1 January 2015 | Water flowing from Colorado watersheds are critical to many US states. Snowmelt sliding down the Rocky Mountains feeds rivers like the Colorado and Arkansas that supplies western states with a water source. But the catastrophic wildfire that has been tearing through the southwestern state in an increasingly more violent way puts the headwaters of these waterways in jeopardy.

The late 1990s and early 2000s saw two fires that together burned 150,000 acres of forestland and dumped 40 years’ worth of sediment into the Strontia Springs Reservoir. Strontia Springs is a key source of water. It helps supply the 1.3 million customers of Denver Water, a water provider, with clean water. The cleanup effort from those fires cost Denver $26 million on water quality, restoration, reclamation and sediment drainage beginning in 1996 after the first fire-Buffalo Creek Fire.

Fire suppression has made wildfire intensity that much worse. But fire isn’t the only threat Colorado’s watersheds are facing. Bark beetle and flooding plus a changing climate all pose a risk to Colorado’s forests and the water that runs through them.

Because of these threats-among others-various Colorado water providers have paid over $13 million in watershed investments and forged partnerships to identify and address problems plaguing the state’s forest ecosystems. These activities were highlighted last month during a webinar that showcased findings from Ecosystem Marketplace’s latest State of Watershed Investments report.

‘Prevent another Strontia Springs’ became a rallying cry for Colorado residents pressing for proactive forest and watershed management.

“It was a wake-up call for Denver that they needed to be in the watershed business, not just the water storage and delivery business,” says Heidi Huber-Stearns, a PhD candidate in the Department of Forest and Rangeland Stewardship at Colorado State University and also the presenter on Colorado during last month’s webinar.

The upstream watersheds of important waterways like the Colorado and Arkansas rivers fall primarily on land controlled by federal agencies like the Forest Service and the National Park Service. So in 2010 Denver Water partnered with the US Forest Service to address key challenges that included reducing wildfire and minimizing current erosion and reservoir sedimentation. To date, the Colorado water provider has paid the Forest Service $11 million to address these issues through forest thinning or fuel treatments, prescribed burning and erosion control.

Denver’s program is famous and has received national and international attention as a model to be adopted in other states and regions struggling with similar issues. It, along with more wildfire damage, influenced four other such partnerships to occur in Colorado. Aurora Water’s collaboration with the US Forest Service was the first in 2011. Aurora Water is a major water provider in the Colorado Front Range.

And after the record-setting High Park and Waldo Canyon Fires in 2012, water provider Northern Water, initiated the Colorado-Big Thompson Project together with the Bureau of Reclamation, US Forest Service and the Colorado Forest Service. The project restores forest and watershed health while also maintaining the hydropower facilities located in the Big Thompson reservoir.

The Waldo Canyon Fire was a deciding factor for another water company as well. After dealing with the aftermath of that fire along with another harrowing blaze the following year- the Black Forest Fire, which topped the Waldo Canyon Fire as the most destructive fire in Colorado history-the Colorado Springs Utilities partnered with the US Forest Service in 2013 following a similar model. Also in 2013, the Pueblo Board of Water Works forged a partnership with the same federal agency over wildfire risk and forest and watershed health.

Combined, investments in these programs led to some 21,000 acres of land undergoing fuel treatments to reduce the risk of catastrophic wildfire. These programs are relatively new, however, and how they will play out remains an open question.

But Huber-Stearns says they have made a lot of progress already. “The collaboration, planning and work that’s been done on the ground so far have really been invaluable in addressing current risks that we face as well as what we anticipate we’ll face with the changing climate.”

California Regulators Bump Rice Offsets, Forestry Updates To 2015

23 December 2014 | The California Air Resources Board (ARB) delayed the potential adoption of a new rice cultivation protocol the first crop-based methodology considered by the ARB as well as proposed updates to the forestry protocol to 2015 amid controversy about the planned revisions.

The rice cultivation protocol promotes eligible practices that reduce methane emissions from rice cultivation, such as switching from wet seeding to dry seeding and early drainage in preparation for the harvest in California. The ARB projects potential offset supply under the new protocol in the range of 500,000 and 3,000,000 tonnes of greenhouse gas reductions through 2020 the scheduled end date for California’s cap-and-trade program.

Board consideration of the rice cultivation protocol has been delayed several times due to questions raised by stakeholders about the environmental integrity of the offsets, namely the potentially destructive impact on the habitat of bird populations. But the updated protocol incorporated safeguards against negative impacts on migratory birds such as the exclusion of offsets from rice cultivation within the Butte Sink Wildlife Management Area a critical habitat and bans a particular project activity even though the practice could generate additional offset supply.

Robert Parkhurst, Director of Agriculture Greenhouse Gas Markets for the Environmental Defense Fund, praised several elements of the proposed protocol, including the ability of farmers to cooperate and aggregate their emissions reductions into a single project and the ability to perform risk-based and randomized verification since verification is typically responsible for 50% of the total project development cost.

“I think the protocol is in really good shape as it is,” he said.

The Rice is Still Simmering

In the days leading up to the hearing, several stakeholders urged the ARB not to proceed with the rice cultivation protocol without making substantial revisions. Leslie Durschinger, Founder and Managing Director of project developer Terra Global Capital, encouraged the ARB to include a stronger and clearer consolidation option. While the protocol was moving in the right direction in allowing consolidation of projects and related reports, the system as proposed did not support the level of consolidation necessary to make the rice protocol economically viable for growers to adopt, she said.

In March, the American Carbon Registry listed the first rice project, which aggregates rice growers over a 5,000-acre area in California’s Sutter, Colusa and Glenn Counties to reduce the equivalent of 6,700 tonnes of carbon dioxide emissions.

The American Farmland Trust (AFT) identified issues related to the calculation of emission reductions of rice cultivation projects that could reduce the amount of reductions credited to the grower, perhaps unnecessarily, said James Daukas, Vice-President, Programs.

However, the evaluation and the eventual approval of the rice cultivation protocol is critical for future consideration of nutrient management, wetlands and grassland protocols that stakeholders would like the ARB to adopt to expand potential offset supply, Parkhurst said – a sentiment echoed by others.

“The rice protocol has set the stage for a lot of additional protocols from agriculture,” he said.

In the Land of the Midnight Sun

Stakeholders speaking at the board hearing expressed widespread support for the inclusion of forestry projects located in Alaska in California’s program. Currently, forestry projects providing offsets to California’s program are required to be based in the lower 48 US states.

The ARB did not allow Alaska-based projects when considering early- action methodologies and programs in 2011 because of the absence of data from the Forest Inventory and Analysis Program of the U.S. Forest Service. Now having access to such data, the ARB staff has proposed allowing Alaska-based forestry projects into the program. But more revisions must occur before the proposal becomes official such as revising the approach for establishing baselines for improved forest management projects on public lands.

Removing the ban on Alaska-based offset projects from the cap-and-trade program would give the native populations in the state an alternative to timber harvest and reward sustainable forest management, said Sheri Buretta, Chairman of the Board Chugach Alaska Corporation.

“Alaska forest carbon offset projects could generate millions of offsets while achieving social, environmental and economic benefits to our Alaska native populations,” she said. “The data was not available when the program first started and now it is.”

A Chilling Effect

Foresters and forest carbon project developers, however, objected to several proposed technical updates to the forestry protocol, including planned changes to standards for even-aged management of forest stocks.

The proposal would have a “chilling effect” on the participation of even-aged-managed forests because it would create a substantially larger and longer-term buffer that is inconsistent with the requirements of the California Forest Practice Act, argued Gary Rynearson, a professional Forester with Green Diamond Resource Company, which owns and manages forest lands in Washington and California.

“These excessive buffers go far beyond prescriptions recommended,” said Roger Williams, President of Blue Source, which has registered 44% of the forest carbon offsets issued by the ARB to date. “Our proposed solution is to maintain the existing protocol language. The existing language was carefully developed over a 5-year period by a diverse group of expert stakeholders and should not be abandoned.”

Buyers’ Liability Still a Thorny Issue

The buyers’ liability provisions were a major topic of conversation following the ARB’s decision to invoke the invalidation provisionsfeatured in the state’s cap-and-trade program for the first time in November. The ARB invalidated 88,955 offsets for ozone-depleting substances, but limited the invalidation to one particular carbon offset project by developer EOS Climate generated at the Clean Harbors facility in Arkansas.

Thursday’s hearing marked the first time when stakeholders were able to voice their concerns about the final invalidation directly to board officials in a public hearing and they were not shy about raising their objections. A consistent theme revolved around the fact that the ARB invalidated the offsets for an alleged violation unrelated to the actual generation of the offsets, which represented real, quantified and verified emissions reductions by the ARB’s own admission, and the need for the ARB to provide specific guidance about the circumstances that would trigger a violation.

Adam Smith, ½Program Manager of Climate and Air Policy at Southern California Edison, said the lack of clarity in the invalidation rules creates problems for developers, registries and entities regulated under the cap-and-trade program.

The International Emissions Trading Association (IETA) recommended modifications to clarify that only activities in the offset project area could potentially trigger invalidation and that only a confirmed formal violation notice should trigger an invalidation investigation.

“It remains unclear what exactly constitutes a violation,” said Josh Strauss, Director of Forest Carbon Projects for project developer Blue Source, speaking on behalf of IETA. “IETA believes it is extremely important to ensure that violations unrelated to actual offset project activities are not grounds for invalidation.”

IETA also suggested a modification that specifies that only offsets generated during the period of an actual violation could be subject to invalidation rather than all offsets generated during the entire reporting period.

ARB board members appeared receptive on the need to offer guidance on the type of violations that would rise to the level of offset invalidation even as they acknowledged the difficulty in providing such guidance.

“I think that’s going to be a thorny issue, but it’s something that needs to be worked on,” said ARB board member Judy Mitchell.

“It’s not an easy job and it’s a slippery slope, but what’s going to be in front of Mr. (ARB Executive Officer Richard) Corey is a whole slew of possible invalidations,” said ARB board member Sandra Berg.

Washington State To Pursue Cap-and-Trade Program

22 December 2014 | Washington state will jump back on board the cap-and-trade bandwagon, if Governor Jay Inslee gets his way.

As a member of the US Congress, Inslee was one of the major backers of a comprehensive climate bill that barely passed the House of Representatives in 2009 and his desire to put a price on carbon in his state was no secret. In April 2014, he signed an executive order to address carbon pollution and take action on clean energy, and it was widely expected that the taskforce established by the order would recommend some type of carbon pricing program. That expectation became reality on Wednesday when Inslee released a proposal for a cap-and-trade program.

The Evergreen State’s proposed program would cover an estimated 130 facilities and fuel distributors operating in the state that emit more than 25,000 metric tons of greenhouse gas (GHG) emissions per year. The transportation sector is by far the largest contributor to the state’s GHG emissions at 46%. The proposed program would exclude the agriculture (6% of GHG emissions) and waste management (4% of GHG emissions) sectors and all emissions from biofuels and biomass.

In 2008, Washington’s state legislature adopted targets to reduce state-wide GHG emissions to 50% below 1990 levels by 2050, or 44 million metric tons. In 2009, however, the legislature voted against joining the Western Climate Initiative (WCI) the cross-border carbon trading program that, at its height, included seven US states and four Canadian provinces as members. Today, the WCI only features British Columbia, California and Quebec pricing carbon the latter two officially linking their cap-and-trade programs this year.

Following California’s example

Many policy watchers expected Washington’s program to closely emulate California’s cap-and-trade program. Those expectations turned into reality as many of the proposed provisions of Washington’s program match California’s program exactly, which could smooth the path for a potential linkage between the states. For example, the plan would allow the use of offsets to cover up to 8% of a regulated entity’s annual emissions.

“This is a very strong proposal from one of the strongest climate champions out there, said Derek Walker, Associate Vice President of the US Climate and Energy Program of Environmental Defense Fund (EDF). “This cap-and-trade proposal puts a price on pollution in Washington for the first time, and borrows many of the elements that have proven successful in California and elsewhere while tailoring the program design and the investment recommendations to address pressing needs and priorities of Washingtonians. Governor Inslee has laid out a sensible, forward-looking proposal that opens the door to collaboration with other states that have or are developing carbon markets, offering the prospect of even more impact at a lower cost.

The Washington proposal would also make offset buyers liable for the integrity of the offsets, following the lead of California’scontroversial buyers’ liability provisions. The state plans to use the lessons learned by other programs in California, the Northeast states and Europe to protect against any potential market manipulation in its cap-and-trade program, said Kristin Eberhard, Senior Researcher on climate change and energy issues for the Sightline Institute, a Northwest-focused sustainable policy think-tank.

“Europe learned the hard way that a poorly designed offsets program can open the door for scurrilous companies to manipulate regulators, so Washington will have tight controls on offsets: they must be approved projects, no more than 8% of emissions, independently verified, and purchasers of offsets are liable for their integrity,she said.

But the Washington proposal differs from California and the Regional Greenhouse Gas Initiative (RGGI) carbon trading program in the Northeast in several key ways, Eberhard observed. The proposal calls for 100% auctions, meaning no free giveaways to polluters, she said. California allocates some allowances for free to regulated entities and the RGGI program falls shy of 100% auctioning.

The RGGI program also only covers the power sector, accounting for 22% of the emissions of the participating states while California’s program covered 45% of emissions during the first two years, although it will ramp up to 85% of the state’s economy next year when transportation fuels and other sectors are phased into the program. Inslee’s plan starts with 85% coverage from the beginning of the program.

Next steps

With allowance prices likely starting at about $12 per tonne of carbon dioxide equivalent, the plan estimates that regulated entities will pay $947 million in state fiscal year 2017 (the program starts July 1, 2016). About $780 million would be invested in education and transportation programs, according to the proposal.

Inslee must still contend with a Republican-led state Senate where some legislators and industry associates are gearing up to oppose the proposal. Washington’s next legislative session is scheduled to begin on January 12, 2015.

“The oil companies and their political allies are going to start beating the drum and repeating gas tax, Eberhard said. “It happened in British Columbia. It happened in California. They’ll do the same thing again in Washington.

Virginia’s Nutrient Trading Program Aims To Clean Up The Chesapeake Bay

16 December 2014 | In the US, there is an increasing number of programs that use a credit trading system to stem the flow of nutrient pollution flowing into waterways. The Pacific Northwest continues to assess possible approaches and in the Midwest, the Electric Power Research Institute is spearheading a program in the Ohio River Basin.

Now this market-based approach, called nutrient or water quality trading, has officially reached the Chesapeake Bay, a watershed so heavily polluted by nitrogen and phosphorous nutrients that President Barack Obama issued an executive order to restore water quality in the Bay in 2009.

Restoring water-quality is the intention of Virginia’s nutrient trading program. The initiative was recognized today by the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA) and the Council on Environmental Quality (CEQ) among other stakeholders. It was not only recognized for its potential to help the Chesapeake Bay but also for its ability to serve as a model for other watersheds dealing with similar problems.

“The Chesapeake Bay faces numerous challenges, and the Commonwealth of Virginia is responding with innovative thinking and collaboration across sectors, said Mike Boots, who leads the White House Council on Environmental Quality. “Not only do creative approaches like these provide new markets for private investors and generate new revenue for farmers, they also bolster the strength of our natural resources, improving their resilience to threats posed by a changing climate and other stressors.

Virginia’s Department of Environmental Quality initiated this innovative program Boots is referring to. It created a supply and demand market for land conservation projects that help to minimize water quality impacts in the Bay. The agency’s stormwater program requires that road project developers reduce the phosphorus runoff pollution their development causes. They are able to do this through purchasing phosphorous credits from state-certified credit banks. The credits project developers purchase is generated from farmers operating in the Bay watershed that have permanently reduced their nutrient pollution through more sustainable land practices.

It’s a cost-effective approach. Purchasing the credits cost Virginia’s Department of Transportation-the agency developing and, in turn, impacting water quality-is half the cost of traditional infrastructure like underground filters and detention ponds. Also, implementing the sustainable agricultural activities comes from private investors so the program relies less on public funds. And because farmers sell their nutrient reduction credits to credit banks, the program opens up a new revenue stream for them as well.

Aside from the monetary advantages, the Bay’s ecosystem benefits from a more natural approach. Overall land preservation that includes restoring wildlife habitat and stream buffers are positive byproducts of the trading approach.

“Virginia’s nutrient trading program is a strong example of how to create economic opportunity and new income for rural America while protecting and improving local waterways and the Chesapeake Bay, said EPA Administrator Gina McCarthy. “The program is a win for the environment and our economy and we encourage states to look at Virginia as a model and a resource as they adopt similar programs.

Federal support for nutrient trading, and environmental markets as a whole, is likely to increase in the coming year. The USDA and the EPA have a web-based water quality trading roadmap tool in the works that’s slated to come out in early 2015. Also in 2015, the agencies will sponsor a national conference on trading with the intention to move forward with the approach.

This Week In Biodiversity: Congress Enters The Sage-Grouse Battle

23 December 2014 | Greetings! This month, the sage-grouse wars raged on, with Congress – never one to pass on a fight – getting involved.The spending bill passed by the US Congress last week included the following provision:
Sage-Grouse Sec. 122. None of the funds made available by this or any other Act may be used by the Secretary of the Interior to write or issue pursuant to section 4 of the Endangered Species Act of 1973 (16 U.S.C. 1533) –

 

(1) A proposed rule for greater sage-grouse (Centrocercus urophasianus)
(2) A proposed rule for the Columbia basin distinct population segment of greater sage-grouse;
(3) A final rule for the bi-state distinct population segment of greater sage-grouse; or
(4) A final rule for Gunnison sage-grouse (Centrocercus minimus) 
While mainstream conservationists balk at this Congressional rider, some say it gives the conservation community time to demonstrate that voluntary incentives can work, such as Habitat Exchanges in Colorado and Nevada.

 

Interior Spokeswoman Jessica Kershaw told Ecosystem Marketplace that while they weren’t happy about the Congressional intrusion, the bill doesn’t stop the US Fish and Wildlife Service (USFWS) from continuing to collect data and conduct analysis around a final decision, nor does it have implications for local and state plans or partnerships.

 

So will it be conflict or collaboration? We’re starting to get whiplash. Counties in Oregon recently hammered out a new multi-county Candidate Conservation Agreement with Assurances with USFWS. Meanwhile the Nevada Association of Counties, miners, and ranchers are suing the federal government over the 2011 agreement USFWS made with conservation groups that blocked the agency from considering “warranted but not precluded” when deciding whether to list a number of candidate species, including the greater sage-grouse. And the Center for Biological Diversity is suing the USFWS for listing the Gunnison sage-grouse bird as ‘threatened’ versus ‘endangered’ based on voluntary conservation actions.

 

This month we also have a number of terrific Opinion pieces from Bobby Cochran (on why nature matters for human health), William Coleman (on the “Farmer Brown” problem – or how mitigation prices can help EPA fix its penalty fees), and Carlos Ferreira (on why we need to make the offsets case to consumers). We’d love to hear what you think.

 

Happy holidays – and see you in 2015!

—The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at mitmail@ecosystemmarketplace.com.

EM Exclusives

Budget Deal Leaves Sage Grouse In Limbo. Can Private Conservation Do The Trick?

The US government may have averted another shutdown with the passage of the Congressional spending bill last week. But a short paragraph nestled within the 1,603 page document was a provision to withhold funding for the Department of Interior to decide on the sage grouse’s endangered status.

 

Grouse habitats have declined significantly through the years, to the point where the Department of Interior (DOI) must decide whether or not to list the species as endangered by September 2015.

 

Over at the Interior Department, Spokeswoman Jessica Kershaw had harsh words for the uninvited Congressional intrusion, but said that, in the long term, it will make little difference to the department’s conservation work regarding the sage grouse.

 

And while mainstream conservationists balk at this Congressional rider, some practitioners cautiously view this as an opportunity to change the impeding conflict over the sage-grouse.

– Keep reading at Ecosystem Marketplace.

When COPs Converge: The Biodiversity And Climate Link

Biodiversity and climate are intertwined in the physical realm though separate in the policy world. But during the ongoing climate COP in Lima, a diverse group of scientists and policymakers presented a declaration assessing current knowledge on connections between biodiversity vulnerabilities and climate change with the objective of increased integrated activity on the inter-linked issues.

 

“Biodiversity is affected by climate change and in turn affects the carbon balance of ecosystems,” says Holm Tiessen, the Executive Director of the Inter-American Institute for Global Change Research (IAI), a research organization that spearheaded the creation of this declaration presented to COP 20 President, Manuel Pulgar Vidal. The declaration called for integrative research on biodiversity and climate change noting connections between the two issues.

– Learn more.

Opinion: Confirming What We Already Know: Human Health Is Linked To Nature

Chronic conditions kill, disable, and ruin the quality of life of millions of Americans. Indeed, more than one-third of U.S. adults are now obese, incurring $148 billion in medical costs annually and contributing to 18% of U.S. adult deaths in recent years. Our healthcare costs are the highest per capita in the world. And that amount keeps increasing.

 

But consider an alternative. Consider a forest trail. Consider a fresh breeze. Consider the robust body of evidence linking human health to nature.

 

On both the quantitative and qualitative levels, we increasingly understand how more time outdoors improves our well-being. And this is spurring health professionals across the country to recognize something our ancestors accepted as fact. To that end, 30 leading health officials, academics and nature-focused nonprofits have issued theWingspread Declaration on Health and Nature.

– Keep reading here.

Opinion: Solving The Farmer Brown Problem: How The Cost Of Mitigation Credits Can Help The EPA Reach Right Penalty Price

Last month, the U.S. EPA (Environmental Protection Agency) announced its intention to levy penalties in the case of a California central valley almond farmer who seems to have knowingly bulldozed 33 acres of rare vernal pool habitat in an effort to expand his orchard operations.

 

My guess is that farmer Edward Brown is crying about the EPA action…all the way to the bank.

 

If we run the numbers according to current market prices for vernal pool credits, we can see that Farmer Brown has won the day. The EPA penalties will cost him $1.2 million in round numbers. If he had done as the Corps directed and bought 33 mitigation credits priced at $200-300,000 each, he would have spent $7-$10 million. By violating the law, destroying the habitat and subjecting himself to EPA justice, Brown has saved something like $7 million.

– Read it at Ecosystem Marketplace.

Opinion: Biodiversity Offsets As Corporate Responsibility: Opportunity Or Paradox?

A visit to the SpeciesBanking website confirms what specialists have known for some time: that the practice of offsetting impacts to biodiversity is widespread. And while national, regional and local practices vary widely, one point is clear: offsetting is an increasingly important mechanism for conservation as more and more companies use them to mitigate their biodiversity impacts.

 

However, few firms are choosing to offset as a way to manage their image and show consumers that they are environmentally-responsible companies. Biodiversity offsets has the potential to implement high quality conservation in the face of encroaching development. But, unless it’s under attack, the concept remains almost unheard of among consumers. This is a big problem, according to a researcher on the subject who says growth and regulatory support depends on public opinion. And this unawareness at the consumer level could be impacting the sector’s ability to expand.

– Read the opinion piece here.

Mitigation News

Voluntary Conservation Continues to Ruffle Feathers

At the bare minimum, farmers and ranchers in the US West hope that Candidate Conservation Agreements with Assurances (CCAAs) will exclude them from USFWS restrictions and regulations should the bird be listed under the Endangered Species Act. But contention over these measures, which allow landowners to perform land-use activities beneficial to a species in exchange for exclusion from future regulations, continues.

 

The Center for Biological Diversity is suing the USFWS for listing the Gunnison sage-grouse bird as ‘threatened’ versus ‘endangered’ based on voluntary conservation actions. Meanwhile environmental organizations argue the CCAAs perform only minimal conservation and aren’t sufficient in ensuring a viable healthy species population.

– Get the full story from the Capital Press.

Adjustments to Florida Mitigation Bank Causes a Big Stir

Disagreement surrounds the development of a parcel of land in Florida’s Volusia and Brevard counties. The Sierra Club is taking legal action against a regional water management agency that approved an investment company’s development agenda on an area deemed as part of a massive mitigation bank. The investment bank says their permit allows for them to remove acreage from the bank and that the removed part wasn’t an active area of the bank. Regardless, the Sierra Club says the development is harmful to the bank and the regional agency doesn’t have the authority to release conservation easements.

– Keep reading.

Environmental Funds Look to Play Ball with the Extractive Industry

At last month’s World Parks Congress, participants took a closer look at environmental funds specifically looking at how they could engage earlier and more often with extractive industries. The benefits of a stronger relationship between the two are sizable. Industries like mining and oil could channel some of their revenue into these funds to benefit wildlife in areas surrounding their operations. In turn, a closer relationship with the funds could also perhaps help these industries lessen their impact on local biodiversity.

– Read more at Forbes.

ICMM Passes their Biodiversity Midterms, But Get Some Homework

A new report prepared for the International Council for Mining and Metals (ICMM) found that ICMM members have greater focus and more specific commitments on biodiversity conservation than their non-ICMM peers. The Biodiversity Performance Review was commissioned by ICMM and the International Union on the Conservation of Nature (IUCN). It includes recommendations for further engagement including developing a business case for biodiversity offsets, working with NGOs to align definitions of high biodiversity value areas, and minimum requirements for risk and impact assessments.

– Learn more.
– Get a copy of the report.

Mitigation Roundup

 

Rethinking Deforestation and Water Connections

Surprising new research out of Australia found that deforestation doesn’t always have a negative impact on wetlands and in some cases, can result in an increase in biodiversity and water flow. Analyzing data from a pool of 245,000 global wetlands, report authors found that forests act like biological pumps and transport water into the atmosphere reducing the amount available for wetlands, rivers and groundwater. The authors say this study is a key tool when making decisions related to reforestation, wetlands and water quality.

&nndash; Learn more here.

A Good Report Card for Myanmar’s Nature Reserve

Myanmar’s Taninthayi Nature Reserve Project got a favorable review from the nation’s Forest Department and the environmental organization, Wildlife Conservation Society. The project, which engages private companies in funding the creation and management of a protected area, is a public-private partnership and unique to Myanmar. It helps companies manage their development impacts on biodiversity in sensitive ecosystems although the project doesn’t meet biodiversity offsetting standards. If proven successful, the model could spread and be used in other parts of the country.

– Learn more from the Biodiversity Consultancy.

I Do Not Think That Word Means What You Think it Means

Market-based conservation is viewed as having great potential for alleviating big environmental challenges like deforestation but the diverseness of the term is creating such confusion, it’s stalling progress on the policy front. A study analyzing data related to market-based instruments (MBIs) found that many peer-reviewed articles on MBIs had little to do with actual markets. Several payments for ecosystem services projects act more like subsidies-with a government as a payment provider-than market mechanisms. Distinct definitions and stricter use of the term should result in greater clarity on the issue, but report authors note the difficulty in categorizing MBIs as many of them are multidimensional.

– Learn more at the CIFOR blog.

Thinking Green Means Managing Green

Recent studies have found simply labeling an area as protected doesn’t ensure a positive outcome. Proper management is required. Last month during the World Parks Congress, the International Union for Conservation of Nature (IUCN) highlighted the importance of good governance by unveiling its Green List, a compilation of 23 of the world’s best managed protected areas that result in favorable ecosystems for biodiversity. The Green List and initiatives like it encourages the type of international cooperation that is necessary for achieving global biodiversity targets.

– Keep reading.

JOB LISTINGS

 

Program Manager

The Nature Conservancy – Washington DC, USA

The Program Manager directs and manages all aspects of key science-based programs that are essential to developing thought leadership in select TNC science staff, to building community between staff scientists and the broader science community, and to support scientific development and leadership within The Nature Conservancy on key conservation and conservation science issues. S/he serves as principal contact for these key programs and, through her/his program leadership, helps establish the Conservancy as a major scientific thought leadership organization.

 

The Program Manager defines priorities and long-term strategies for TNC’s science thought-leadership training and post-doctoral programs, with an eye to increasing the diversity of scientists in thought leadership positions. S/he creates a culture of innovation, adaptive learning, risk-taking and cohort supportiveness within these programs. S/he initiates and develops key partnerships with mentors and public and private organizations that spur participants within these programs and across the programs as a whole to maximum impact. S/he directs and manages the programs’ ongoing activities, specifically:

 

  • Developing curricula for early- and mid-career science staff that increases the rigor, impact and effectiveness of their scientific research, improves their communication skills, promotes their ability to lead conservation through new ideas to better practices and more effective partnerships, and raises their profile in the external science community.
  • Developing curricula for post-doctoral scholars that improves ability to conduct cutting-edge science that is useful for conservation, increases understanding of academic and NGO cultures, improves communication effectiveness in multiple media forms, and builds community among young conservation scientists and the broader conservation science and practice communities.
  • Coordinates communications trainings and curricula with The Conservancy’s Science Communications Department
  • Growing a network of university partners that establishes The Conservancy’s science staff and post-doctoral fellows as top notch colleagues, and improves opportunity creation for university partners to inform Conservancy practice on the ground
  • Organizing and running workshops and conferences for the key programs that provide opportunities for participants to build community with each other and to benefit from interactions with program mentors.
  • Bringing a fresh lens and inspiring creativity to all activities.
  • Creating and identifying opportunities to use the programs to create a more inclusive and diverse conservation community.

– Learn more here.

EVENTS

 

2015 National Mitigation & Ecosystem Banking Conference

The 2015 National Mitigation & Ecosystem Banking Conference, scheduled for May 5-8, 2015, in Orlando, Florida is the only national conference that brings together key players in this industry, and offers quality hands-on sessions and training as well as important regulatory updates. Proven to be “the” place to gain insights, explore new markets and learn from sessions, the 2015 Conference will continue its focus on educational content – both advanced and basic sessions as well as moderated exchanges and a variety of mini workshops that help to connect bankers, regulators, users and others involved in this industry. Pre and post- event workshops include Primer 101, Stream Banking, Long-Term Stewardship, Financing & Valuation and more. Hear perspectives from bankers, regulators and users, get updated on regulations, legislation and legal challenges, participate in field trips and benefit from the many opportunities to network! With a high attendance this past year, we anticipate a record attendance in Orlando and encourage you to make plans to submit to present, attend, even sponsor or exhibit! Orlando FL, USA. 5-8 May 2015.

– Learn more here.

California Regulators Bump Rice Offsets, Forestry Updates To 2015

23 December 2014 | The California Air Resources Board (ARB) delayed the potential adoption of a new rice cultivation protocol – the first crop-based methodology considered by the ARB – as well as proposed updates to the forestry protocol to 2015 amid controversy about the planned revisions.

The rice cultivation protocol promotes eligible practices that reduce methane emissions from rice cultivation, such as switching from wet seeding to dry seeding and early drainage in preparation for the harvest in California. The ARB projects potential offset supply under the new protocol in the range of 500,000 and 3,000,000 tonnes of greenhouse gas reductions through 2020 – the scheduled end date for California’s cap-and-trade program.

Board consideration of the rice cultivation protocol has been delayed several times due to questions raised by stakeholders about the environmental integrity of the offsets, namely the potentially destructive impact on the habitat of bird populations. But the updated protocol incorporated safeguards against negative impacts on migratory birds such as the exclusion of offsets from rice cultivation within the Butte Sink Wildlife Management Area – a critical habitat – and bans a particular project activity even though the practice could generate additional offset supply.

Robert Parkhurst, Director of Agriculture Greenhouse Gas Markets for the Environmental Defense Fund, praised several elements of the proposed protocol, including the ability of farmers to cooperate and aggregate their emissions reductions into a single project and the ability to perform risk-based and randomized verification since verification is typically responsible for 50% of the total project development cost.

“I think the protocol is in really good shape as it is,” he said.

The Rice is Still Simmering

In the days leading up to the hearing, several stakeholders urged the ARB not to proceed with the rice cultivation protocol without making substantial revisions. Leslie Durschinger, Founder and Managing Director of project developer Terra Global Capital, encouraged the ARB to include a stronger and clearer consolidation option. While the protocol was moving in the right direction in allowing consolidation of projects and related reports, the system as proposed did not support the level of consolidation necessary to make the rice protocol economically viable for growers to adopt, she said.

In March, the American Carbon Registry listed the first rice project, which aggregates rice growers over a 5,000-acre area in California’s Sutter, Colusa and Glenn Counties to reduce the equivalent of 6,700 tonnes of carbon dioxide emissions.

The American Farmland Trust (AFT) identified issues related to the calculation of emission reductions of rice cultivation projects that could reduce the amount of reductions credited to the grower, perhaps unnecessarily, said James Daukas, Vice-President, Programs.

However, the evaluation and the eventual approval of the rice cultivation protocol is critical for future consideration of nutrient management, wetlands and grassland protocols that stakeholders would like the ARB to adopt to expand potential offset supply, Parkhurst said – a sentiment echoed by others.

“The rice protocol has set the stage for a lot of additional protocols from agriculture,” he said.

In the Land of the Midnight Sun

Stakeholders speaking at the board hearing expressed widespread support for the inclusion of forestry projects located in Alaska in California’s program. Currently, forestry projects providing offsets to California’s program are required to be based in the lower 48 US states.

The ARB did not allow Alaska-based projects when considering early- action methodologies and programs in 2011 because of the absence of data from the Forest Inventory and Analysis Program of the U.S. Forest Service. Now having access to such data, the ARB staff has proposed allowing Alaska-based forestry projects into the program. But more revisions must occur before the proposal becomes official such as revising the approach for establishing baselines for improved forest management projects on public lands.

Removing the ban on Alaska-based offset projects from the cap-and-trade program would give the native populations in the state an alternative to timber harvest and reward sustainable forest management, said Sheri Buretta, Chairman of the Board Chugach Alaska Corporation.

“Alaska forest carbon offset projects could generate millions of offsets while achieving social, environmental and economic benefits to our Alaska native populations,” she said. “The data was not available when the program first started and now it is.”

A Chilling Effect

Foresters and forest carbon project developers, however, objected to several proposed technical updates to the forestry protocol, including planned changes to standards for even-aged management of forest stocks.

The proposal would have a “chilling effect” on the participation of even-aged-managed forests because it would create a substantially larger and longer-term buffer that is inconsistent with the requirements of the California Forest Practice Act, argued Gary Rynearson, a professional Forester with Green Diamond Resource Company, which owns and manages forest lands in Washington and California.

“These excessive buffers go far beyond prescriptions recommended,” said Roger Williams, President of Blue Source, which has registered 44% of the forest carbon offsets issued by the ARB to date. “Our proposed solution is to maintain the existing protocol language. The existing language was carefully developed over a 5-year period by a diverse group of expert stakeholders and should not be abandoned.”

Buyers’ Liability Still a Thorny Issue

The buyers’ liability provisions were a major topic of conversation following the ARB’s decision to invoke the invalidation provisions featured in the state’s cap-and-trade program for the first time in November. The ARB invalidated 88,955 offsets for ozone-depleting substances, but limited the invalidation to one particular carbon offset project by developer EOS Climate generated at the Clean Harbors facility in Arkansas.

Thursday’s hearing marked the first time when stakeholders were able to voice their concerns about the final invalidation directly to board officials in a public hearing and they were not shy about raising their objections. A consistent theme revolved around the fact that the ARB invalidated the offsets for an alleged violation unrelated to the actual generation of the offsets, which represented real, quantified and verified emissions reductions by the ARB’s own admission, and the need for the ARB to provide specific guidance about the circumstances that would trigger a violation.

Adam Smith, ‎Program Manager of Climate and Air Policy at Southern California Edison, said the lack of clarity in the invalidation rules creates problems for developers, registries and entities regulated under the cap-and-trade program.

The International Emissions Trading Association (IETA) recommended modifications to clarify that only activities in the offset project area could potentially trigger invalidation and that only a confirmed formal violation notice should trigger an invalidation investigation.

“It remains unclear what exactly constitutes a violation,” said Josh Strauss, Director of Forest Carbon Projects for project developer Blue Source, speaking on behalf of IETA. “IETA believes it is extremely important to ensure that violations unrelated to actual offset project activities are not grounds for invalidation.”

IETA also suggested a modification that specifies that only offsets generated during the period of an actual violation could be subject to invalidation rather than all offsets generated during the entire reporting period.

ARB board members appeared receptive on the need to offer guidance on the type of violations that would rise to the level of offset invalidation even as they acknowledged the difficulty in providing such guidance.

“I think that’s going to be a thorny issue, but it’s something that needs to be worked on,” said ARB board member Judy Mitchell.

“It’s not an easy job and it’s a slippery slope, but what’s going to be in front of Mr. (ARB Executive Officer Richard) Corey is a whole slew of possible invalidations,” said ARB board member Sandra Berg.

Forest, Ag Project Developers See Opportunity, Concern In California ODS Offset Invalidation

18 November 2014 | California regulators shook the North American carbon markets to their core with their plans to invoke the invalidation provisions featured in the state’s carbon offset program for the first time. While the affected producers of ozone-depleting substances (ODS) offsets and their allies loudly lobbied the regulators to change their minds, developers of forest and livestock carbon offsets quietly mulled what the decision means for them.

 

The ODS invalidation “could be the most important topic affecting California offsets right now, said Kevin Townsend, Chief Commercial Officer of Blue Source, which develops forestry and other types of carbon offset projects. “This is immensely important for all California offset types, including forestry.

Keep reading (for free!) at the Forest Carbon Portal.

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Despite Market Outcry, California Voids Some Carbon Offsets

14 November, 2014 | California regulators rejected pleas from carbon market stakeholders to abandon their effort to invalidate ozone-depleting substances (ODS) offsets generated at an Arkansas facility, but limited the invalidation to one particular carbon offset project.

The California Air Resources Board (ARB) the agency tasked with overseeing the state’s cap-and-trade program and its offset component in May began reviewing offsets issued for ODS destruction events at the Clean Harbors Incineration Facility in El Dorado, Arkansas. These substances, which include foam-blowing agents and refrigerants, are much more potent than carbon dioxide in terms of their global warming potential, so the ARB adopted a process to count the greenhouse gas (GHG) emission reductions associated with destroying these materials in the United States and allow these reductions to be used for compliance in its program.

In October, the ARB issued a preliminary plan to invoke the so-called buyers liability provisions that allow the regulators to invalidate offsets found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. The ARB ruled the offsets generated by two ODS projects one developed by Environmental Credit Corp (ECC) and the other by EOS Climate should be invalidated because the Arkansas facility was out of compliance with its operating permit issued under the Resource Conservation and Recovery Act (RCRA). Of the 231,154 offsets the ARB is seeking to invalidate, 142,199 were generated by ECC’s offset project and 88,955 from the EOS Climate project.

On Friday, the ARB decided to proceed with the invalidation of the offsets generated by the EOS Climate project. But the regulators backed away from plans to invalidate the offsets generated by the ECC project because the ARB ultimately concluded that the destruction activities related to that project occurred outside of the timeframe when the Clean Harbors facility was purportedly out of compliance with its RCRA permit. ECC and EOS Climate could not be reached for immediate comment.

“It’s not good news, but I don’t think it’s market-destroying news either, said Peter Weisberg, Program Manager, The Climate Trust.

The ARB’s final determination clears the vast majority of the 4.3 million compliance offsets it was investigating to be returned to the accounts from which they were removed on May 29 when the investigation was launched.

 

A Shocking Turn of Events

While expressing support for the regulators efforts to protect the environmental integrity of the program, in the weeks following the preliminary determination, stakeholders painted a picture of the market chaos created by what they called a subjective and error-prone investigation.

For example, the ARB’s seizure of the 4.3 million offsets before determining the validity of the offsets was called “improper and unlawful by Nicholas van Aelstyn, a lawyer representing ECC, a comment echoed by many other stakeholders in more measured terms. He also alleged serious errors by the ARB, including the fact that the ODS destruction related to the ECC project occurred several hours after the alleged RCRA violation was resolved, meaning the offsets should not have been subject to invalidation at all.

The preliminary decision was shocking to market participants for many reasons, not the least of which was that ARB seemingly had the discretion based on the language in the regulation to decide not to invalidate the offsets because the alleged violation was unrelated to generation of the offsets. By the ARB’s own admission, the offsets generated during the time when the facility was allegedly in non-compliance with its RCRA operating permit met the ARB’s criteria of representing real, quantified and verified emissions reductions. Market stakeholders lobbied the ARB not to invalidate the offsets given that their environmental integrity was not in question.

The preliminary decision was also surprising because ODS had been the top choice for compliance offsets for some time as buyers were reassured by the accuracy of the emissions reductions created by these projects a critical consideration when California regulators retained the right to force buyers to replace invalidated offsets. But the preliminary determination demonstrated the inherent risk associated with developing ODS projects when there are only seven commercially available destruction facilities, according to some developers.

Responding to complaints about a lack of clarity and transparency in its preliminary determination, the ARB laid out its argument for invalidation in the final determination. The ARB cited the language of the ODS protocol, which states that offset projects are ineligible to receive ARB or registry offset credits for GHG reductions that occur as the result of collection or destruction activities that are not in compliance with regulatory requirements. The regulatory compliance requirement extends to the operation of destruction facilities where the ODS is destroyed. All destruction facilities must meet all applicable regulatory requirements during the time the ODS destruction occurs, according to the language of the protocol.

The cap-and-trade regulation and the ODS protocol are complementary regulatory documents that “must be read in harmony with each other according to the ARB’s final determination. The regulators interpreted these provisions to require that both the project activities associated with the destruction of ODS as well as other activities at the facility in question must be in “accordance with all local, state, or national environmental and health and safety regulations. ARB interpreted this provision to be applicable to all requirements that have a bearing on the integrity of the generated offsets; and environmental and health and safety requirements associated with the collection, recovery, storage, transportation, mixing, and destruction, including the disposal of the associated post-destruction waste products.

 

The Fallout

The invalidation rules are often blamed for a lack of transactions in the California offset market and there is a general consensus that the ARB’s decision could only further dampen what little liquidity currently exists.

The investigation disrupted commercial processes in the offset market because of its length and lack of clarity, remarked Mark Krausse, Senior Director for State Agency Relations for Pacific Gas & Electric, during the public comment period. The ARB’s investigation took more than four months and was characterized by a lack of transparency, according to several stakeholders.

And the ARB’s approach raises questions about potential scenarios under which forestry or livestock offsets other project types eligible for California’s cap-and-trade program could be invalidated, Weisberg said.

“There’s so much uncertainty in these markets, he said. “It’s very difficult to convince investors that it’s worthy investing.

The ARB should consider alternatives to buyers liability such as a buffer account to cover these types of losses, Krausse, Weisberg and other stakeholders suggested. Quebec the Canadian province partnering with California on carbon trading via the Western Climate Initiative established a buffer pool that sets aside 4% of offsets to cover reversals or invalidations.

In discussions with Oregon and Washington, which are both considering options to comply with upcoming federal carbon regulations, Weisberg has encouraged them to follow Quebec’s model or the approach of voluntary standards in ensuring offset integrity rather than California’s approach. However, he also noted that there are potential solutions to the risk created by California’s buyers liability provisions, including insurance policies designed specifically to cover the invalidation risk.

“It’s definitely an unfortunate risk, he said. But “we still think this is a risk that can be managed.

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Gloria Gonzalez is a Senior Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at ggonzalez@ecosystemmarketplace.com.

Beneath The Surface: The Ambitious Carbon-Capture Water Plan Embedded In The U.S.-China Climate Announcement

This post first appeared on The AnthropoZine. You can view the original here.

17 November 2014 | Last week, the United States and China, the world’s leading polluters, announced plans to limit their greenhouse gas emissions and strengthen cooperation on issues related to climate change and clean energy. While the announcement centered on the nations pledges on carbon dioxide (CO2) emissions targets (a reduction of 26-28% of 2005 levels by 2025 for the United States, and a goal for China’s emissions to reverse their upward course by 2030), a White House fact sheet offered a more detailed glimpse at additional actions.

The document announces a renewed commitment to the U.S.-China Clean Energy Research Center, established by a 2009 agreement between President Obama and China’s then-president Hu Jintao. It also includes a cooperative effort to phase out hydrofluorocarbons, a “Climate-Smart/Low-Carbon city-planning initiative, and an effort to encourage trade in “green goods.

Perhaps most interesting, deep in the fact sheet’s second page, is the document’s description of “a major carbon capture and storage project in China that supports a long term, detailed assessment of full-scale sequestration in a suitable, secure underground geologic reservoir. As it goes on, the plan announces a “new frontier in CO2 management, with “a carbon capture, use, and sequestration (CCUS) project that will capture and store CO2 while producing fresh water, thus demonstrating power generation as a net producer of water instead of a water consumer. According to the fact sheet: “This CCUS project with Enhanced Water Recovery will eventually inject about 1 million tons of CO2 and create approximately 1.4 million cubic meters of freshwater per year.

The description is loaded with promise yet bogged down with technical language. So how will it all work?

Carbon capture and storage projects aim to collect CO2 from industrial emissions and store it someplace generally underground or underwater where it won’t be released into the atmosphere. Some such projects aim not only to keep CO2 from entering the atmosphere, but also to produce something useful or marketable in the process. In the example discussed here last month, a Canadian energy company designed a facility to collect unwanted CO2, which was then sold to be injected beneath an oil field to free up oil that had been stuck in rock formations. The U.S.-China plan suggests a similar approach, but with the byproduct of extra oil swapped out in favor of fresh water something China badly needs.

Those seeking a comprehensive explanation of the process should seek out scientific writings, but here we can provide some basics. Once CO2 is captured from emissions, it can be compressed and transported to a geologic formation where it will be securely, and permanently, stored. Depending on conditions at the storage site, the injection of CO2 into these spaces can effectively push water from the ground, allowing it to be collected for industrial use or distribution to areas in need. In some cases, water extracted in the process can be clean enough to drink.

The project certainly has its share of unanswered questions, technical challenges, and areas for concern. And there is also the question of whether this non-binding agreement will receive continued long-term commitment from each country. But with proper safeguards and execution, the carbon-capture water project could represent a novel approach to an urgent problem, and potentially a meaningful blueprint for cooperative climate actions to come.

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Mike Noren is a Chicago-based writer and editor with more than 15 years of experience across a wide variety of educational and reference publications. He can be reached at mikegnoren@yahoo.com.

Staring Down the California Drought: Looking at Solutions to Our Water Crisis

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3 November 2014 | The punishing California drought has become part of our national consciousness, with the bad news seeming to grow worse each week. Last year was the driest on record for much of the state, and in January of this year, Gov. Jerry Brown declared a drought state of emergency and directed officials to take all necessary actions to prepare for water shortages.
California residents can be heavily fined for wasting water, and nothing seems to escape the drought’s ill effects — including Halloween(pumpkin growers in the state are suffering from the water shortage). The state’s lakes are at “crisis levels,” and the drought will cost the state $2.2 billion and close to 20,000 agricultural jobs this year. Parched forests are vulnerable to forest fires, creating a terrifying and often deadly situation for nearby residents, ever-vigilant for the smell of smoke in the air.

In September, the governor signed legislation to make the state more resilient to drought and strengthen local management and monitoring of the state’s water needs. The problem isn’t just a lack of rain; it’s a lack of resilience in the forests and fields that collect what little rain does come and funnel it into rivers. “We have to learn to manage wisely water, energy, land and our investments,” said Brown. “That’s why this is important.”

Our planet’s water crisis is something we can no longer ignore, and extends beyond California. Indeed, the Intergovernmental Panel on Climate Change this weekend reiterated its warning that water supplies will become more tenuous as the climate changes.

“The fractions of the global population that will experience water scarcity and be affected by major river floods are projected to increase with the level of warming in the 21st century,” the IPCC said.

A Global Crisis

The water crisis has been a part of our global consciousness for years, and the message has been clear: Keep it clean, don’t waste it. But sustainable, working solutions and a full picture of the crisis have been less than straightforward.

Alarms have been raised across the country, as in Ohio where there have been exceptionally high levels of algae found in Lake Erie. The algae produces a toxin for which there are no federal or state standards of acceptable levels — even though it can be lethal. Globally, 70 percent of water use is for agriculture, and agriculture is largely unregulated under the Clean Water Act. That algae blooming in Lake Erie, for example, can be attributed to animal waste and fertilizer run-off from farms.

In the energy sector, too, excessive water usage is a problem. Energy development requires a tremendous amount of water. In coal production, it’s especially high.

The need for a sustainable clean-water solution is clear — and probably not the kind of solution that most people might think of, according to the State of Watershed Investment 2014 report, published by Ecosystem Marketplace, an initiative of the nonprofit Forest Trends. The report might just change the way you think about water — and give you reasons to be optimistic about our future.

The report presents nature-based solutions — forests as filters, for example — to the problem of sustaining the planet’s clean-water supply. And in the face of manifestations of the crisis like California’s severe drought, solutions demand our attention and support.

Nature as Infrastructure: An Answer to the Problem

What has been largely missing from the discussion about our water crisis is the connection between land use and adequate water.

Forests, wetlands, and grasslands work as sponges, saving excess water in the wet season for drier periods of the year, and as filters, removing contaminants that threaten public health. This “natural infrastructure” also regulates local and global climates, and prevents erosion. Protecting and enhancing nature’s ability to do this work keeps water safe and well-timed.

“We’re finding that the global water crisis is forcing governments and business to get creative,” says the report’s lead author, Genevieve Bennett. “Why is Coca-Cola helping the U.S. government reduce the risk of wildfire on forest lands? Why are water utilities paying farmers to go organic? Because it’s often more cost-effective to keep the landscape healthy — and keep your water supplies clean and flowing at their source — than to deal with pollution and supply disruptions after they’ve already happened. For a long time we’ve focused mainly on how to solve water problems through engineering alone.”

Denver found exactly this creativity when it recognized the stakes of increasingly severe forest fires in the city’s catchment. Beyond causing millions of dollars in firefighting costs and property damage, just one fire could result in sediments and heavy metals entering the city’s water supply — increasing treatment costs dramatically. To tackle this issue, the utility Denver Water partnered in 2010 with the U.S. Forest Service to improve forest management in the city’s catchment — reducing wildfire risk, stabilizing soils, and improving the timing of the delivery of snow melt to downstream users. As a result, water user fees in Denver don’t only contribute to keeping the lights on at the treatment plant; they also support the maintenance of critical natural infrastructure on which the city depends.

“We tend to think of water management as something that happens around population centers, for human consumption, but that’s only a small part of the picture,” says Gena Gammie, manager of the Water Initiative at Forest Trends. “The water challenges we face require solutions that stem from broader thinking. We have to consider the landscapes that catch and deliver water, through to the agricultural and energy-production systems our society depends upon.”

The new report shows how water users have begun to creatively engage full landscapes to improve water resources management, complementing the protection of “natural infrastructure” with positive incentives for agricultural producers to implement better land use practices. In fact, the majority of programs tracked by the report work on improving management of productive lands, or combine this strategy with the protection of natural areas.

China, where critical water shortages are a major problem in addition to pollution, is a leader in this kind of investment, “watershed investment,” and its programs account for 90 percent of watershed investment in the world, according to the report. Many such “eco-compensation” programs pay landowners to take degraded or marginal lands out of agricultural cultivation to protect water sources.

Does Watershed Investment Work?: The Need for the Data

The report is one-of-a-kind in the breadth of its tracking of watershed investment programs around the world and its quantification of the impacts of these programs. The information gathered, therefore, can be invaluable in assessing whether watershed investment is actually effective and for which reasons.

The report found, for example, that in 2013, governments and companies invested $9.6 billion in nature-based solutions to the water crisis. At least $6 billion of this funding went to more than 7 million households, and restored and protected 365 million hectares — an area larger than India. This amount of investment is up from transactions in 2011, which Ecosystem Marketplace benchmarked at $8.2 billion. This increase points to continued growth in the sector, and most importantly, governments’ and businesses’ willingness to prioritize clean water supplies — and their appreciation for alternative ways to achieve that end.

The report offers a unique opportunity to discuss these types of programs in depth, and the data it presents are especially important in terms of attracting investment and buyers in watershed investment. “I’m not aware of another source of information out there that attempts to really rigorously track these investments or offer a framework for thinking about them. Natural capital investment is just like any other investment in that you need information to make good decisions,” says Genevieve Bennett.

Trees, Water — and People

Investment in watershed services can reach beyond the land and the water. It can affect people living in and managing the watershed as well, bringing them into the deal. Residents might receive cash payments, technical support, and other needed materials. Projects that work with land users to ensure that investments targeting water benefits also offer sustainable livelihood benefits “are generally more effective over time,” says Gena Gammie.

In cities, too, people can benefit from this kind of investment. “Worldwide, many cities are growing faster than they can sustainably incorporate and meet the needs of new residents,” says Gammie. “So to the extent that watershed investment can function as urban-rural bridges that support, develop or strengthen rural economies in a green and sustainable way, then that’s good for cities, as well.”

An example of such a success story is Working for Water in South Africa, where invasive plants cause tremendous damage and threaten water security. Working for Water, administered through the country’s Department of Environmental Affairs in partnership with local communities, each year provides training and jobs in clearing these plants to 20,000 people, 52 percent of whom are women. The program is recognized internationally for its success in fighting poverty for these workers, and is an example of how the water, food, and environment nexus can be addressed with a holistic solution.

“Watershed investment isn’t just a conservation issue,” says Bennett. “It’s also potentially a very powerful tool for helping us address pressure on our water, energy, and food systems. We should be thinking about natural infrastructure when we consider how to extend basic water services to everyone on this planet, or in preparing for a changing climate or meeting future demand for food or energy.”

An area larger than the size of India — that’s the amount of land over which these kinds of nature-based solution have been implemented successfully. And that means there’s reason for optimism — but only if these kinds of best-practice solutions are scaled up and adopted across our planet.

Today, you have the chance to become part of this work. Until Dec. 5 every gift to Forest Trends will be matched by the Skoll Foundation. Your gift helps protect forests and other threatened ecosystems and contributes to local livelihoods and conservation.

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Opinion US Feds Should Give Credit For Saving Unlisted Species, But Must Do It Right

29 October 2014 | The United States supports roughly 200,000 species of plant and animal, but less than one percent are protected by the federal government under the Endangered Species Act (ESA). The remainder are under state authority, sometimes managed on federal lands or subject to no oversight whatsoever. Thousands of those species are rare or declining.

Ideally, programs and policies would exist to encourage conservation efforts that help turn them around. The U.S. Fish & Wildlife Service (FWS) just proposed exactly that opening the door to an entirely new market for advance conservation credits.

In November, they will finish taking public comments on this proposed policy that would make it possible for the federal government to recognize credits generated by state-sanctioned conservation actions taken to benefit an unlisted species. Ideally, those actions will be enough to keep a species from declining further, but if the species ends up under federal protection, the credits can be used to offset impacts from development or other projects. As proposed, credits would have to be accumulated through an approved state-managed program, but those programs could potentially benefit any of thousands of species that are rare or declining. Credits can be bought or sold. Both private and public lands can be used to accumulate credits, which is especially important given that some states are nearly 90% public land. Federal land-management agencies are likely to be some of the biggest investors in projects that generate advance credits.

Yet in order to encourage any investment, the policy needs to be better designed.

Crediting programs and offset markets have little value if no one knows how to produce a unit of credit or its exchange value against a debit. Whereas wetland banks, conservation banks and even Habitat Conservation Plans have defined responsibilities for the development of such accounting systems, this policy still lacks much detail on whether it is state or federal agencies responsible for that work and what standards an accounting system needs to meet. This can be fixed in the final policy simply by looking at the approach taken in many of these mature offset systems.

The agency has proposed a strong conservation goal for the program a version o net benefit to the species conservation or recovery. Assuming they can work out the details of the needed credit reserves, mitigation ratios and other structures to achieve that goal, credits and debit traded using these prelisting credits will move listed species closer to recovery. This is quite distinct from the current standards for Habitat Conservation Plans and for federal projects. The respective goals of those programs are just to minimize harm and to avoid pushing the species too much closer to extinction. This is perhaps why the draft policy has attracted criticism from the National Association of Home Builders who say that the policy goes “above and beyond the mandate of the statute. The agency should stick to the proposed net benefit standard which is actually not at all inconsistent with the law’s standard requiring federal agencies to develop programs to contribute to species recovery, but they should clarify that it is not the credit generator but the permittee who will need to achieve this net benefit by paying for or developing their own set of offset credits. Doing so is also in keeping with the agencies strong approach to mitigation for the Greater Sage Grouse.

The policy also needs to take account of other programs that exist in the space of landowner assurances and offset markets. In particular, Candidate Conservation Agreements with Assurances and Conservation Banks. The three tools could work together seamlessly. Candidate Agreements provide a form of insurance landowners who take conservation actions won’t face additional regulation and get a permit that covers future harm they might cause to the species. It makes perfect sense to let landowners in these programs, leave them if they are willing to give up that permit and sell benefits to businesses or agencies needing offsets. Doing so would result in longer term protection. Second, participants in either program could serve as a farm team for conservation banks adding permanent protection and endowments in exchange for an even stronger preference for these credits in future offset markets.

Even without these repairs to the draft policy, the new proposal from the U.S. Fish and Wildlife Service is a watershed moment actions benefiting any of thousands of rare species can earn credits. Given that there are more than 20,000 species in NatureServe database  of U.S. plants and animals at risk, this is a new world of opportunity to benefit biodiversity through a market approach.

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California May Void Some Carbon Offsets After Investigation

9 October, 2014 For the first time, California regulators plan to invoke the dreaded invalidation provisions featured in the state’s carbon offsets program.

The California Air Resources Board (ARB) the agency tasked with overseeing the state’s cap-and-trade program and its offset composition in May began reviewing offsets issued for ozone depleting substances (ODS) destruction events at the Clean Harbors Incineration Facility in El Dorado, Arkansas. These substances, which include foam blowing agents and refrigerants, are much more potent than carbon dioxide in terms of their global warming potential, so the ARB has adopted a process to count the greenhouse gas emissions reductions associated with destroying these materials in the United States and allow these reductions to be used for compliance in its program.

California’s cap-and-trade regulations include so-called buyers liability provisions that allow the regulators to invalidate offsets found to be faulty or fraudulent and require regulated entities to surrender replacement offsets for compliance. These controversial rules are often blamed for a lack of liquidity in the California offset market.

In a preliminary decision, the ARB ruled that the offsets generated by two ODS projects one developed by Environmental Credit Corp (ECC) and the other by EOS Climate should be invalidated because the Arkansas facility was out of compliance with its operating permit issued under the Resource Conservation and Recovery Act (RCRA). Of the 231,154 offsets the ARB is seeking to invalidate, 142,199 were generated by ECC’s offset project and 88,955 from the EOS Climate project. However, the ARBÃ’s preliminary decision cleared the vast majority of the 4.3 million compliance offsets being investigated.

ECC declined to comment, but EOS Climate officials say the Clean Harbors facility has been destroying ODS in full compliance with RCRA, the Clean Air Act and Montreal Protocol requirements for more than 20 years.

“At no point has the facility been the subject of any enforcement action related to ODS destruction, the company said in a statement. “EOS Climate believes that ARB’s determination is based on an incorrect interpretation and characterization of a number of fundamental facts and of ARB’s own regulations and guidance.

EOS Climate plans to ask the ARB to reverse its preliminary ruling before a final decision is made on invalidation. The preliminary decision starts the clock on a 10-day public comment period, followed by a 30-day internal review at ARB although the regulators can issue a final decision anytime in or after that 30-day period.

Once a final determination is made, the offsets not subject to invalidation will be returned to account holders after being removed in May when the investigation commenced, while the other offsets are marked for permanent invalidation.

The 1976 RCRA legislation gave the US Environmental Protection Agency the authority to control hazardous waste from “cradle-to-graveincluding generation, transportation, treatment, storage and disposal and established a framework for the management of non-hazardous solid wastes. ARB’s Executive Officer determined that the Clean Harbors Facility was not operating in accordance with its RCRA permit on February 2-3, 2012, meaning that offsets generated by destruction events taking place on those dates were subject to invalidation.

“It goes to show that ARB is very serious about their intention to invalidate offsets, said Julian Richardson, CEO of Parhelion Underwriting, a specialty insurer focusing on the climate finance sector that has developed a policy to cover the invalidation risk. “This is important for the long-term good of the offset mechanism, which needs to be robust in terms of environmental integrity for it to be credible.

Both projects were initially registered with the Climate Action Reserve (CAR), a voluntary carbon standard, before migrating to the ARB’s compliance program under its early action provisions.

“We’re pleased that ARB has reached this milestone point in the investigation and that the conclusion of this investigation is near, said CAR President Gary Gero. “I don’t think we can assess the real impact on demand until the final determination is issued, and with the final determination, we’re looking forward to seeing clear guidance on how to implement these provisions, which would more fully assist project developers and other market participants. This is certainly a precedent setting determination for the program.

Virginia’s Nutrient Trading Program Aims To Clean Up The Chesapeake Bay

16 December 2014 | In the US, there is an increasing number of programs that use a credit trading system to stem the flow of nutrient pollution flowing into waterways. The Pacific Northwest continues to assess possible approaches and in the Midwest, the Electric Power Research Institute is spearheading a program in the Ohio River Basin.

Now this market-based approach, called nutrient or water quality trading, has officially reached the Chesapeake Bay, a watershed so heavily polluted by nitrogen and phosphorous nutrients that President Barack Obama issued an executive order to restore water quality in the Bay in 2009.

Restoring water-quality is the intention of Virginia’s nutrient trading program. The initiative was recognized today by the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA) and the Council on Environmental Quality (CEQ) among other stakeholders. It was not only recognized for its potential to help the Chesapeake Bay but also for its ability to serve as a model for other watersheds dealing with similar problems.

“The Chesapeake Bay faces numerous challenges, and the Commonwealth of Virginia is responding with innovative thinking and collaboration across sectors,” said Mike Boots, who leads the White House Council on Environmental Quality. “Not only do creative approaches like these provide new markets for private investors and generate new revenue for farmers, they also bolster the strength of our natural resources, improving their resilience to threats posed by a changing climate and other stressors.”

Virginia’s Department of Environmental Quality initiated this innovative program Boots is referring to. It created a supply and demand market for land conservation projects that help to minimize water quality impacts in the Bay. The agency’s stormwater program requires that road project developers reduce the phosphorus runoff pollution their development causes. They are able to do this through purchasing phosphorous credits from state-certified credit banks. The credits project developers purchase is generated from farmers operating in the Bay watershed that have permanently reduced their nutrient pollution through more sustainable land practices.

It’s a cost-effective approach. Purchasing the credits cost Virginia’s Department of Transportation-the agency developing and, in turn, impacting water quality-is half the cost of traditional infrastructure like underground filters and detention ponds. Also, implementing the sustainable agricultural activities comes from private investors so the program relies less on public funds. And because farmers sell their nutrient reduction credits to credit banks, the program opens up a new revenue stream for them as well.

Aside from the monetary advantages, the Bay’s ecosystem benefits from a more natural approach. Overall land preservation that includes restoring wildlife habitat and stream buffers are positive byproducts of the trading approach.

“Virginia’s nutrient trading program is a strong example of how to create economic opportunity and new income for rural America while protecting and improving local waterways and the Chesapeake Bay,” said EPA Administrator Gina McCarthy. “The program is a win for the environment and our economy and we encourage states to look at Virginia as a model and a resource as they adopt similar programs.”

Federal support for nutrient trading, and environmental markets as a whole, is likely to increase in the coming year. The USDA and the EPA have a web-based water quality trading roadmap tool in the works that’s slated to come out in early 2015. Also in 2015, the agencies will sponsor a national conference on trading with the intention to move forward with the approach.

This article includes portions of the EPA press release.

Budget Deal Leaves Sage Grouse In Limbo. Can Private Conservation Do The Trick?

12 December 2014 | It’s a short paragraph – only 88 words in total.

But these few words, nestled within a 1,603 page document, have laid bare the divisive politics behind conservation measures and big money. The $1.1 trillion spending bill, which just passed both the House of Representatives and the Senate, has included a small provision about the sage grouse.

The sage grouse, a bird similar to pheasants, presents enormous challenges to conservation as the species’ range meanders through eleven Western states and cuts across various public property and lucrative oil and gas lands.

While petroleum companies spend big bucks lobbying in D.C., the sage grouse has much more limited resources at its disposal. But there was one enormously powerful tool in its back feathers: the Endangered Species Act. Grouse habitats have declined significantly through the years, to the point where the Department of Interior (DOI) must decide whether or not to list the species as endangered by September 2015.

This threat of the Endangered Species Act effectively clipped the wings of oil and gas ambitions, which has prompted the deferral of more than 8 million acres of sales of potential oil and gas leases on sage grouse land.

All that has changed with the passage of the Congressional spending bill a few hours ago. The bill includes a provision to withhold funding for the Department of Interior to decide on the sage grouse’s endangered status.


Sage-GrouseSec. 122. None of the funds made available by this or any other Act may be used by the Secretary of the Interior to write or issue pursuant to section 4 of the Endangered Species Act of 1973 (16 U.S.C. 1533) –

  • (1) A proposed rule for greater sage-grouse (Centrocercus urophasianus)
  • (2) A proposed rule for the Columbia basin distinct population segment of greater sage-grouse;
  • (3) A final rule for the bi-state distinct population segment of greater sage-grouse; or
  • (4) A final rule for Gunnison sage-grouse (Centrocercus minimus)

The End or Opportunity?

While mainstream conservationists balk at this Congressional rider, payments for environmental services practitioners cautiously view this as an opportunity to change the impeding conflict over the sage grouse.

“The fact that Congress intervened in this speaks to the need for conservation programs that engage landowners and communities as a solution for endangered species – rather than causing enough consternation that lawmakers intervene,” Says Jeremy Sokulsky, CEO of the performance-driven conservation company Environmental Incentives.

His company currently pilots two programs to save the birds. In Colorado, Environmental Incentives has teamed up with the Environmental Defense Fund to create the Colorado Habitat Exchange, which focuses on preserving sage grouse habitats through land management incentives to ranchers. Nearby Nevada has a similar pilot at the state level, which will similarly create quantified conservation outcomes (credits) and impacts from human activities (debits) to encourage overall conservation benefits.

Though the threat of an Endangered Species listing helped motivate locals to participate, the pilots are already up and running. Now, what they really need is more time to monitor project outputs. In this sense, the delay can be an opportunity to quantify the project’s benefits and impacts.

This could give payment conservation projects more leverage in the later Department of Interior decision. While FWS has experience with mitigation and conservation banking measures behind Environmental Incentives’ work, the Department of Interior does not: and it is ultimately up to the latter to decide on the fate of the sage grouse. “They [DOI] need to see it work before it can be given full or significant weight in the listing decision,” Sokulsky said.

Still Steps on Federal Toes

Over at the Interior Department, Spokeswoman Jessica Kershaw had harsh words for the uninvited Congressional intrusion, but said that, in the long term, it will make little difference to the department’s conservation work regarding the sage grouse.

With regard to the potential listing, the funding bill does not stop FWS from continuing to collect data and conduct analysis around a final decision, nor does it have implications for local and state plans or partnerships.

Ultimately, Kershaw said that, “the Interior Department remains optimistic that conservation measures can be implemented to avoid the need to list the Greater sage-grouse, and the rider will not stop the unprecedented collaboration happening across 11 Western states.”

Which means there’s yet hope for the chicken-sized bird – and for incentivized conservation.

DDOE Approves Trade For First Of Its Kind Stormwater Retention Credit Trading Program

This piece was originally posted as a press release on the DDOE website. Click here to read the original.

23 September 2014 | The District Department of the Environment (DDOE) has approved a trade of 11,013 Stormwater Retention Credits (SRCs). This trade, valued at $25,000, is the first in the nascent SRC trading program, which is the first of its kind in the nation.

The trade demonstrates how the SRC market can provide meaningful financial returns for voluntary installations of green infrastructure that reduce harmful stormwater runoff.

Under the District’s current stormwater management regulations, development projects permitted after January 2014 must meet river-protecting stormwater retention standards and can meet a portion of this requirement by using SRCs. Projects using SRCs must own them by the end of construction, which typically takes a year or longer.

According to DDOE Director Keith A. Anderson, the SRC market is expected to grow as additional regulated projects are completed. “Trades provide a strong incentive for voluntary installations of green infrastructure, says Director Anderson. “In turn, market participants are helping to ensure a more Sustainable DC.

Ann Benefield, seller of the SRCs, added, “Revenue from this trade will help cover the costs of designing, installing, and maintaining the rain gardens that generated the SRCs. Now we’re looking at other ways to install practices on our property to generate additional SRCs.

In addition to providing compliance flexibility for regulated development, SRC trading can increase the total volume of stormwater runoff being kept out of District waterbodies and provide other sustainability benefits, such as reducing the urban heat island effect and providing green jobs.

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This Week In Biodiversity: A Pre-Listed Species Credit Policy Stirs Debate

This article was originally published in the Mitigation Mail newsletter. Click here to read the original.

 

22 August 2014 | This month, the US Fish and Wildlife Service proposed a new draft policy on building a crediting system that would protect threatened wildlife that hasn’t yet been listed as endangered. The policy, which is part of the Service’s Candidate Conservation program, seeks to incentivize landowners into early conservation.


“The adage
‘an ounce of prevention is worth a pound of cure’ is appropriate here,” says the FWS’ Chief of Public Affairs, Gavin Shire. “This policy is one more tool that can be used in conjunction with the others to help prevent species decline.” Under the proposal, any landowning entity individuals, companies, government agencies, etc. can earn credits by practicing conservation that benefits an unlisted species.

But while early conservation isn’t disputed as a sure way to preserve a species, is some skepticism out there regarding voluntary measures. We cover the debate here. A public comment period on the draft policy is open until September 20, 2014.

In other news this month, environmentalists are not happy about evidence that a mining company successfully haggled down its mitigation costs by one-fourth, and Canada takes a crack at accounting for its natural capital values.

We also have two pieces on results-based finance: one looking back at the evolution of efforts to link payment to performance, and a blog post that considers how to refocus Farm Bill conservation subsidies on outcomes.

Happy reading,

The Ecosystem Marketplace Team

 

If you have comments or would like to submit news stories, write to us at mitmail@ecosystemmarketplace.com.


EM Exclusives

Should landowners earn biodiversity offsets for conserving a species’ habitat before it becomes endangered?

A new draft policy issued by the US Fish and Wildlife Service grants credits to all types of landowners for practicing conservation for wildlife not yet listed under the Endangered Species Act (ESA). The credits generated can be redeemed or traded only after the species becomes listed, which is already leading certain parties to question the effectiveness of the conservation being practiced.

Get coverage from Ecosystem Marketplace.

 

Results-based finance: breakthrough or backslide?

Everyone loves “results-based finance at least in the abstract because everyone likes to get what they paid for. Quantifying those results and packaging them for buyers, however, has proven elusive once you get beyond payments for ecosystem services. Here, Ecosystem Marketplace takes a look back on the evolution of results-based finance.

Read more.

 

Wrestling with orangutans: the genesis of the Rimba-Raya REDD Project

In 2007, businessman Todd Lemons had a hunch that anthropologist Birute Galdikas could help him rewrite the rules of conservation finance and save the Seruyan Forest. He followed that hunch to Borneo, where the two embarked on a five-year ordeal that would take them from the swamps of Kalimantan to the pinnacles of Indonesian society.

Read the latest in our series on palm oil versus the peatland forest.

 

Crossroads in climate negotiations when adaptation and mitigation meet in Bonn and Lima

While the United Nations Framework Convention on Climate Change hasn’t yet considered identifying linkages between adaptation and mitigation, several Parties agreed over its importance at last month’s climate conference in Bonn. The topic is likely to come up again during upcoming sessions in Bonn and at COP20 in Lima.

Learn more.

Mitigation News

Expansion of saltwater mitigation bank leaves opponents with bitter taste

The controversial salt marsh mitigation bank in the Savannah River Basin in South Carolina may double in size. The bank would be 840 acres in all, with 350 of those acres converted from freshwater wetlands to salt marshes. The area is adjacent to a wildlife refuge and initially caused a stir because freshwater wetlands, which act as vital habitat for birds and other wildlife, are becoming increasingly rare whereas salt marshes aren’t. Conservation groups filed a lawsuit against the bank’s construction but the case was dismissed because salt was already found within the area.


Meanwhile, S.C.’s Department of Natural Resources is claiming the Army Corp of Engineers’ alterations to a pipe allowed saltwater to infiltrate freshwater areas within the Savannah River Basin. The Corp’s Savannah District argues this isn’t true, and that it was authorized to carry out urgent work that protected property from being flooded.

Get the full story on the bank expansion.
Read about the debate between the SC DNR and the Corps.

 

Critics allege Australian mining co. ‘bargained down’ its offset requirements

Australian government officials are on the defensive after documents surfaced revealing that a mining company was able to bargain down its biodiversity compensation obligations. Initially, the Labor government required that GVK Hancock secure AUD$800,000 (USD$744,000) in biodiversity offsets to mitigate for impacts from a proposed coal terminal. But after GVK Hancock came back with a counter-offer of $375,000, the two settled on $600,000. “The offsets package is meant to be a measure of last resort if it’s not possible to avoid damage. The quantum of that should be determined by the environmental impact, you shouldn’t be able to haggle the amount down,” Greenpeace campaigner Adam Walter tells the Guardian. A Department of the Environment spokeswoman says that the opportunity to comment on offset requirements is standard procedure.

“Consistent with…legal requirements, Hancock was provided with the opportunity to comment on the proposed decision, conditions, and financial contribution before a final decision,” she said.

Read more from the Guardian.

 

World wakes up to wetland values

After discovering that wetlands act as buffers against flooding and hurricanes as well as act as huge carbon sinks, there is a newfound urgency to repair and maintain the world’s wetlands. Communities around the globe are looking for restoration techniques and ways to stem the ongoing loss. And several communities are delivering on innovative projects. In the Delaware Bay, for instance, a local non-profit is building a “living shoreline” with oyster shells and marine limestone which will protect the Bay’s marshes from erosion.

Read more at Yale 360.

 

Natcap accounting arrives in Canada, courtesy of Ducks Unlimited

Accounting for natural capital just got easier in Canada. The conservation organization Ducks Unlimited Canada published a report last month that measures the monetary and well-being value of the nation’s natural lands. The study is the first of its kind in Canada that establishes protocols for valuing natural assets like wetlands. The study also shows NGOs, governments and companies how to incorporate natural capital into their balance sheets.

Read more here.

 

Mit banking roundup

It’s been a busy month in the mitigation and conservation banking world. Here’s our roundup of news blasts:

In Minnesota, the St. Louis County Board approved the Sax-Zim land exchange, removing another hurdle for Ecosystem Investment Partner’s 21,000+ acre venture – which will be the largest private wetland mitigation bank in the United States.

Mitigation Solutions USA released a second round of American Burying Beetle credits from its Muddy Boggy Conservation Bank in Oklahoma, and plans to add another 579 acres to the bank.

American Timberlands Company of Pawleys Island got approval for its 1,304-acre Carter Stilley Wetland and Stream Mitigation Bank serving South Carolina’s Horry and Georgetown Counties.

Westervelt Ecological Services’ 160-acre Colusa Basin Mitigation Bank in California issued its first set of Giant Garter snake credits.

The Doonan Creek Environmental Reserve received an AUD$970,000 (USD$902,000) offset payment from a federally funded highway project that will provide 9.3ha of new koala habitat.

Sheboygan County, WI is buying the 322-acre Amsterdam Dunes property to develop its own wetland mitigation bank.

 

BLM’s Greater Sage-Grouse conservation plan receives failing grade in Wyoming

Conservation for the declining Western bird, the Greater Sage-Grouse, can now be graded. A scorecard developed by six conservation organizations is rating greater sage-grouse conservation efforts across 60 million acres of public land based on specific scientific recommendations. Organizations involved in its creation include WildEarth Guardians and the Center for Biological Diversity. So far, the scorecard has failed the Bureau of Land Management’s field office in Lander, Wyoming, saying its sage-grouse conservation plan didn’t meet 24 management recommendations.

Learn more about the scorecard.

 

Efforts made to keep Gunnison Sage-Grouse off the Endangered Species list

Closely related to another candidate for Endangered Species listing, the Greater Sage-Grouse, the Gunnison Sage-Grouse is also rare and up for a possible listing this November. In the meantime, the Bureau of Land Management (BLM) is updating various conservation plans into one range-wide plan. The range-wide plan is intended to iron out inconsistencies in protecting the bird’s existing habitat and hopefully avoid a listing status.

The Durango Herald has the story.

 

Louisiana farmers lend their fields to migrating water birds

Louisiana farmers are proving themselves good neighbors. The Migratory Bird Habitat Initiative that was put into place after the Deepwater Horizon oil spill has become popular among the locals. The initiative is meant to keep birds from settling in oiled areas by creating additional acres of water bird habitat by keeping water on cultivated fields longer. Research supports the program finding migrating birds did use the additional habitat on the agricultural lands. And because of its popularity, its creator the USDA Natural Resources Conservation Service has allocated $300,000 to continue the program.

Learn more.

 

New South Wales ecosystem services, biodiversity regulations in question

A review of Australia’s New South Wales’ environmental legislation is finally happening. A review panel will be addressing inadequacies in several of the state’s laws including the Native Vegetation Act 2003, Threatened Species Conservation Act 1995 and the Nature Conservation and Trust Act 2001. Among several areas of interest, the panel will be looking at ecosystem services and biodiversity protection requirements the landowners must finance themselves.

Learn more.

 

A new Farm Bill focus on conservation outcomes raises new challenges

The 2014 Farm Bill gives the US Department of Agriculture authority to integrate (on a limited, experimental basis) performance-based metrics for wildlife and habitat outcomes, which would reward landowners for outcomes rather than implementing practices. That could mean better return on public investment. But a shift toward an outcomes-based approach also requires careful choice of indicators, and risks placing too much responsibility on the landowner. A new blog post up at the Pinchot Institute for Conservation website considers how to actually “get what we pay for.”

Read the post here.

 

Live chat on natcap accounting searches for solutions to encourage investors

How can private sector investment in natural capital be scaled up? The Guardian newspaper asked that question during a live chat with several experts in the fields of ecosystem services and finance. The responses covered a lot of ground on the subject, but experts focused on the significance of recognizing natural capital as a valuable concept to invest in and the necessary tools and mechanisms needed to scale up investments.

Read the chat transcript at the Guardian.

 

Finding the value in restoration for coastal communities

While there is strong evidence that natural infrastructure protects coastal communities from extreme weather, evaluating the economic benefits of ecological restoration projects at the local level remains difficult. But new studies that identify the hefty financial increase in storm damage costs from wetlands loss (one acre of wetland lost results in a $13,360 jump in flood damages), as well as specific data on investments in restoration, might help change that.

Read more at The Nature Conservancy’s Cool Green Science blog.


EVENTS

16th Annual BIOECON Conference: Biodiversity, Ecosystem Services and Sustainability

The BIOECON Partners are pleased to announce the Sixteenth Annual International BIOECON conference on the theme of “Biodiversity, Ecosystem Services and Sustainability”. The conference will be held once again on the premises of Kings College Cambridge, England. The conference will be of interest to both researchers and policy makers working on issues broadly in the area of biodiversity, ecosystem services, sustainable development and natural capital, in both developed and developing countries. 21-23 September 2014. Cambridge, United Kingdom.

Learn more here.

 

Biodiversity and Food Security From Trade-offs to Synergies

This conference is the third in a series, organized by the French CNRS Institut Ecologie et Environnement (InEE) and the German Leibniz Association (WGL). The conference is based on invited keynotes and contributed posters for any of the topics relevant to the conference theme. Keynote speakers are now confirmed, including Professor José Sarukhí¡n, UNAM, México, and Professor Jacqueline McGlade, UNEP, Nairobi. Biodiversity at all levels, including the diversity of genes, species and ecosystems, is lost at alarming rates. Critical factors for these trends are habitat destruction, global warming and the uncontrolled spread of alien species. Pollution, nitrogen deposition and shifts in precipitation further affect biodiversity. Food security faces significant challenges due to population growth, poverty, globalization, climate change and other factors. Supplying healthy food to all citizens is crucial for global development – to reach it, not only food production but also equitable access to food for all people must be improved substantially. Biodiversity loss and global food security are hence two major challenges of our time. Linking biodiversity and food security issues from a research perspective, and seeking synergies between them is likely to generate multiple benefits for social, ecological and economic development. 29-31 October 2014. Aix-en-Provence, France.

Learn more here.

 

ACES 2014 Conference: Linking Science, Practice, and Decision Making

ACES: A Community on Ecosystem Services represents a dynamic and growing assembly of professionals, researchers, and policy makers involved with ecosystem services. The ACES 2014 Conference brings together this community in partnership with Ecosystem Markets and the Ecosystem Services Partnership (ESP), providing an open forum to share experiences, methods, and tools, for assessing and incorporating ecosystem services into public and private decisions. The focus of the conference is to link science, practice, and sustainable decision making by bringing together the ecosystem services community from around the United States and the globe. ACES 2014 will bring together leaders in government, NGOs, academia, Native American communities, and the private sector to advance the use of ecosystem services science and practice in conservation, restoration, resource management, and development decisions. We hope you will make plans to join more than 500 ecosystem service stakeholders in this collaborative discussion to advance use of an ecosystem services framework for natural resource management and policy. 8-11 December 2014. Washington DC, USA.

Learn more here.


JOBS

Ecosystem Services Specialist

The Willamette Partnership – Portland OR, USA

The Willamette Partnership works to increase the pace, expand the scope, and improve the effectiveness of conservation. We believe that measuring, tracking, and communicating the results of conservation investments can spark an exciting leap in conservation outcomes. Our success depends on working with partners with roots in place and community, and on our ability to connect good ideas, good people, and good solutions.

The Partnership is seeking to expand our team of policy and technical specialists that conduct research, analysis, and writing to support the ongoing work of the Willamette Partnership. Our specialists collaborate with project managers in developing the policy, science, and tools necessary to build and operate ecosystem markets and conservation incentive programs for water and biodiversity.

This position is expected to contribute to new and ongoing projects that may include:

  • Developing a set of national best practices for water quality trading;
  • Designing policy and technical tools for quantifying, tracking, and communicating changes in water quality and habitat; and
  • Operation of existing environmental markets.

Learn more here.

 

Sustainable Fisheries Initiative Program Assistant

Wild Salmon Center – Portland OR, USA

The Program Assistant is a nonexempt full-time regular position, eligible for organizational benefits. S/he is responsible for providing Russian-language program support for WSC’s Sustainable Fisheries Initiative (SFI). This program is using innovative market-based approaches to support salmon conservation and sustainable fisheries in the Russian Far East and across the Pacific Rim.

The ideal candidate will be independent and resourceful and will have real world experience working or living in Russia. Understanding the challenges and opportunities of working in the Russian Federation is a key to success in this position. The candidate should also have the ability to multitask, and have strong project management and Russian language skills. A background in international fisheries issues such as experience working as a fisheries observer or within the seafood industry and market incentives such as third party certification will be considered a valuable plus.

Learn more here.

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Verified Conservation Areas:
A Real-Estate Market For Biodiversity?

 

21 August 2014 | There are markets for silver and there are markets for houses, and it doesn’t take a genius to see the difference between the two: an ounce of silver is an ounce of silver, interchangeable with any other ounce of the same quality, but the value of a house or any piece of property can fluctuate with the color of the flooring.

Carbon markets resemble silver markets because a ton of carbon dioxide has the same impact on the environment regardless of whether it comes from a smokestack in Germany or a forest fire in Brazil. That made it possible to create a global transparent marketplace designed to support sustainable development and identify the most efficient ways to reduce greenhouse gas emissions.

Biodiversity markets, however, have always been local because habitat is often unique and irreplaceable. A road that damages a bit of sage grouse habitat in the United States might be able to make good by restoring or preserving habitat of equal or greater environmental benefit in the same ecosystem, but even that approach has only a narrow band of effectiveness. “You can’t offset an extinction, as Joshua Bishop of WWF Australia once said.

As a result, most biodiversity banking is confined to the developed world, which has the resources if not always the political will to balance development with conservation. Most degradation, however, is taking place in the developing world, which has massive development needs and little resources for conservation.

That got Frank Vorhies thinking: While we can’t offset biodiversity loss in one part of the world by saving habitat in another, could we somehow introduce the elements of transparency and accountability that work so well in carbon into conservation? And if we do, might this free up more capital for proactively supporting environmentally valuable areas, regardless of their location?

These questions, posed in 2008, launched an evolutionary process that drew on expertise from across the biodiversity spectrum and led to the formulation of something called “Verified Conservation Areas, which are areas with specific conservation needs that have been identified and specific conservation actions that have been defined. As envisioned, many will be areas that haven’t yet been degraded, but that are under some sort of threat that can be identified and then either avoided or minimized through a process that is audited and transparent.

The areas and their action plans will be listed on the VCA Platform, much as houses are listed on a real estate board. Nearly 20 VCAs are currently being considered, and the first one is expected to be approved later this year.

Real Estate and Habitat

Vorhies, who set up the economics and business programs at the International Union for Conservation of Nature (IUCN), says that to understand VCAs, you have to look at the real estate market.

“People will tell you what the going rate is for apartments to rent or to buy but each has got a different storyline, a different location, and that’s what biodiversity is like, he says. “Every bit of nature, every landscape on the planet, has a different set of issues and perspectives and legacies and threats and challenges.

Intuitively, we all know this, and the conservation community has long funneled money into protected areas around the world, but that money hasn’t flowed in a standardized way that makes it possible to determine its impact, and it rarely finds it way to areas that are environmentally important but unprotected. Contrast this with carbon, where there are extensive rules both guidelines and methodologies that must be followed, starting with establishing a baseline to measure any changes over time, and where the targets are explicitly those areas that aren’t already protected by law, in the case of forest carbon.

Where’s the Guidance?

“Nobody’s providing practical guidance on area-based biodiversity assessment, says Vorhies, explaining that to improve the conservation status of areas, we need to know baselines on ecosystems and their services, species and their habitats, and both the conservation and sustainable use of an area’s biodiversity.

“CI (Conservation International) produced a rapid biodiversity assessment tool, but it only looks at wild species, he explains. “CI, IUCN, FFI (Fauna & Flora International) and others are helping companies with biodiversity baselines, but these studies are generally not public.

What’s missing, he says, are publicly-available tools for developing conservation baselines that a critical mass of people can agree on.

2008: Why Reinvent the Wheel?

When the initiative first launched in 2008, the carbon markets were in full swing. The Clean Development Mechanism (CDM), the first global trading platform for environmental credits, was backed by the auspices of the United Nations, and Europe’s compliance emissions trading program meant that companies were eager to participate.

“So the folks over in the biodiversity world were saying, Look at those guys in the carbon world  they’re getting a stack of money. Why can’t we create a Green Development Mechanism (GDM) for biodiversity financing?

Thus the idea of a GDM was born, but it was a name without structure; and, as Vorhies later learned, that name was as much of a hindrance as a help in securing finance.

What’s in a Name?

When he approached different countries and investors for support of the project, Vorhies encountered two types of people: those who liked the CDM and those who didn’t. On top of that, he found that both camps read too much into the acronym and, for better or worse, they both saw it as more akin to the CDM than it was.

“So we had to change the name, he explains ruefully, “After the 10th Conference of the Parties to the Convention on Biodiversity (CBD) in 2010, we changed it to the Green Development Initiative, or GDI, to get rid of the CDM-GDM association because it was driving us nuts.

2010: Refining and Redefining

That letter change effectively stopped all comparisons between the two, but the initial problem remained: what would the initiative stand for? All Vorhies knew at the time was that he didn’t want it to be like the CDM.

“It was quite clear that it wasn’t a commodity market; biodiversity isn’t a commodity, he says. “The best market we could use was a property market to think of biodiversity as something that you would recognize, trade and indeed celebrate like you do in property management.

With a property market, such as apartments, each location has unique attributes: some might be close to public transportation; others may have a pool on the rooftop; and others might have a view. But aside from these additional features, all apartments can be described in terms of size, number of bedrooms, and other constant features.

Similarly, every landscape will have characteristics that can’t be replicated just as they will also have basic qualities, like size and ecosystem, which can be described anywhere around the world. Taken as a sum of these descriptors, every conservation hectare has a story and a price.

This holistic approach led to another key difference between the GDI and CDM, at a time when the latter began to crash in the carbon world. The initiative wouldn’t be limited to offsets, although offsets could be one of many options in a developer’s landscape management plan.

“The offset’s only there for when you’ve gotten to the point of irreparable damage and can’t do anything else, he explains. “But to get to that point, you have to do a whole lot of good things: like avoid, minimize, and restore. And that’s the stuff that needs to be recognized, celebrated and financed through making conservation visible.

Good Deeds Unrewarded

Vorhies spoke from experience, having previously consulted Yemen LNG, a natural gas company building a new harbor to export gas over a coral reef ecosystem. The company tried to minimize its impact, and it even contacted IUCN to review its decision to relocate the coral nearby, away from where the piers needed to be. Vorhies says they spent large sums on this innovative technique but received no recognition for their efforts. With nothing of value to show their shareholders and no external driver to conform to, the company couldn’t justify its costs.

“Do you see the coral reefs? asked the company’s environment manager in 2011, explaining his conundrum. “No. Just leave them. We’ve now got to get on with our business.

Vorhies believes that if the company had to do a performance report every year, and had an accountable action plan, that would at least give the environment manager an opportunity to fundraise inside of the company for a biodiversity budget. Indeed, they had already spent a large amount on relocation, and it would not take nearly as much to manage and monitor the conservation of the corals. The company and its investors, could also be recognized publically for their in-situ conservation efforts.

2013: Visibility, Accountability and Marketability

By now, Vorhies had a solid set of criteria for a biodiversity mechanism that he thought would work, but the GDI acronym didn’t quite capture it. “You try to do an elevator speech with the initials GDI and people say, that sounds really good but what is it?

Thus, the Verified Conservation Area (VCA) Platform rose from its rejected predecessors to become the final name of the initiative for now and it came with the elevator pitch that fit the name.

The elevator pitch is this: the VCA Platform will provide visibility, accountability and marketability to project areas, but the specific improvements are up to the project developer.  A verified conservation area may then focus on carbon, water, or any other “benefit while, ideally, the central focus would be a cohesive landscape approach much as the landscapes approach that’s evolving in the carbon world, where carbon sequestration is seen as a proxy for good land management.

But how do you create a methodology that’s applicable in any ecosystem?

A Wing and a Toolkit

Recognizing this challenge, the VCA Platform instead relies on making innovation as it goes by only requiring those involved with the project on the ground to have quantifiable metrics and present them publicly and transparently. Armed only with the standard and a basic toolkit approach, VCA hopes to develop best practice guidelines in this way.

“When it comes to actually measuring performance, we don’t have any agreed metrics to do a baseline assessment, let alone performance measurements, Vorhies explained.

Instead, the toolkit provides the basic building blocks for designing a management plan requiring a baseline assessment, SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, and a concrete action plan. The latter goes onto the VCA Platform, with yearly updates including independent audits. Every year, an annual performance report will detail what exactly has happened in the area. Similar to an annual financial report, the audit will provide transparency about detailed activities in the area. Investors or donors could then go online, and look at actual projects before contributing.

2014: Building up the Brand

Despite the long journey from GDI to VCA Platform, the brand still needs greater recognition. For companies to buy into a new standard, they need assurance that the standard itself is credible. The VCA Platform doesn’t have that yet.

Currently, the platform has started a pilot program and has a mandate from two government agency donors the Swiss and the Dutch to coalesce all of these ideas into a solid business plan for scaling up This business plan is now being presented to potential investors in the platform itself seed capital to establish a new marketplace for verified conservation.

Already, there are a few protected areas (PAs) on the waiting list; even though those areas traditionally have a government mandate for conservation, they see the VCA as a way to state what they are delivering and as a way to raise funds. There are also areas on the other end of the spectrum: both private biodiversity restoration areas, including a rainforest in Brazil and a savannah wilderness in Mozambique, and projects linked to commodity supply chains or traditionally suspect sectors like mining and oil and gas. Yemen LNG, for example, has recently proposed to register its industrial harbor as a VCA.

Regarding working with extractive industries, Vorhies says, “I don’t see myself why mining can’t be just as responsible as the tourism which we run in our national parks in the U.S., with all the roads and hiking trails and the campgrounds and facilities required for tourists. With mining, they could come into a conservation area for 20-30 years and leave an endowment; whereas with tourism, when do we get rid of these people and what do they leave behind?

Similarly with agriculture, a field is often seen as having “destroyed conservation areas, yet Vorhies remains optimistic about their inclusion. This is evidenced by the growing use of sustainability standards for various commodities including coffee, cocoa, soy, and palm oil. The VCA Platform, however, brings a landscape level focus to sustainable agriculture which is of real interest to major food companies like Unilever.

“The VCA in that sense is not about recognizing that we’ve totally damaged this part of the world and therefore must pay. It’s more like saying this is where we are today and this is what we can do to make it better It isn’t a conservation story; it’s a process of improvement. That’s the idea. We’ve tried to move the language from compensation to good practice. If we want to conserve our planet, we need to create a market for delivering conservation.

Should Landowners Earn Biodiversity Offsets For Conserving Species Habitat Before It Becomes Endangered?

 

19 August 2014 | It usually costs less to prevent a disease than it does to treat one, and it also costs less to manage forests in a way that prevents high-intensity wildfires than it does to fight those fires after they erupt.

The US Fish and Wildlife Service is following this same line of thought into conservation by proposing a policy on building a crediting system that would protect threatened wildlife. The draft policy, which is part of the Service’s Candidate Conservation program, seeks to incentivize landowners into early conservation.

“The adage ‘an ounce of prevention is worth a pound of cure’ is appropriate here,” says the FWS’ Chief of Public Affairs, Gavin Shire. “This policy is one more tool that can be used in conjunction with the others to help prevent species decline.”

How it works

Under the proposal, any landowning entity individuals, companies, government agencies, etc. can earn credits by practicing conservation that benefits an unlisted species. The conservation includes larger actions such as habitat creation and restoration, but also includes actions like planting trees, forgoing timber harvest, and removing invasive species. If the animal that benefits from those actions is later listed under the Endangered Species Act (ESA), those credits can be redeemed and used as mitigation to avoid practicing further conservation for the species.

The credits generated can also be sold to a third party-another entity requiring conservation actions for a listed species.

For example, a landowner, under no legal obligation, plants trees that provide a nesting habitat for a warbler species. The conservation actions are assessed, and the landowner receives credits based on its benefit to the warbler. If that species becomes an endangered or threatened species under the ESA in the future, and the landowner would like to develop an area of warbler habitat, he/she can redeem the credits and practice those actions without additional conservation. However, the value of the conservation must be greater than the negative activity being offset. If this isn’t the case, then additional conservation would need to be carried out. A requirement of the policy is delivering a net conservation benefit to the species.

Other requirements are fairly evident. First, it must be voluntary. The entity can’t be under any legal obligation to carry out the conservation. And the conservation must benefit unlisted wildlife.

Any at-risk species qualifies under the proposal. But because credits can only be redeemed after a species is listed under the ESA, it’s most likely landowners will conserve candidate species, which are those already under review to receive an official ESA listing. The risk of them being listed is higher.

Cost-effective Approach?

The FWS doesn’t have the exact numbers on how much more cost-effective it is to conserve a species voluntarily, but Shire says it’s only a question of how much and not if.

“Bringing a species back from the brink of extinction is always going to cost more than conserving populations before they get to that desperate status,” he says.

Ultimately, healthier ecosystems for wildlife mean a more sustainable flow of ecosystem services for people. And restoring ecosystems for people is expensive, Shire says, so everyone benefits from proactive conservation actions.

But while early conservation isn’t disputed as a sure way to preserve a species, Wayne White of the National Mitigation Banking Association, an organization meant to influence policy on behalf of the mitigation and conservation banking industry, is skeptical of voluntary measures.

For one, White questions the rigor of voluntary conservation standards and if those actions can act as offsets for detrimental impacts. The concept is designed to prevent species listing but, because it’s voluntary, the conservation is at a lower standard and then less likely to enhance the animals’ numbers, White says. A well-known example is the lesser prairie chicken, whose population continued to decline despite voluntary actions. The bird was listed as threatened under the ESA this year.

Then there is the cost of voluntary conservation. And again, because the standards are lower, White says, the cost is lower. Voluntary actions don’t have to ensure long-term preservation for a species and therefore can appear less expensive than conservation banking, which conserves at a high level and manages land for wildlife conservation in perpetuity. White argues this draft policy will undermine private sector investment in conservation banks.

“What we’re not seeing is the true cost of mitigation,” White says. “There is no certainty the voluntary conservation actions are going to be there long-term.”

Administration

White’s take on the draft policy is most likely one of many that will be streaming in over the next month. The proposal is published in the Federal Register and open to public comments until September 22.

As for administration, that will fall to individual states should they decide to adopt the policy. The FWS’ role is largely one of assistance and overseer. The states will take on primary tracking and implementation responsibilities and then report this information to the Service annually. This way, the states can ensure their conservation efforts will be recognized by the FWS should the species be listed eventually.

The FWS is also clear on how the draft policy would operate in coordination with the agency’s other ongoing voluntary initiatives. While some prelisting conservation measures may qualify under different programs, it can’t be treated under more than one. The intended outcomes of these different initiatives are different, the document notes. Candidate Conservation Agreements with Assurances (CCAAs), for instance, are meant to represent a property owners’ entire obligation to conserving a species. The draft policy, on the other hand, is allowing a conservation action to act as mitigation. It doesn’t guarantee further conservation won’t be needed.

CCAAS are also only for non-federal landowners whereas the draft policy is for every type of property owner.