Voluntary Carbon Volume Hits Seven Year High on Demand for Natural Climate Solutions

5 December 2019 | MADRID |

Airlines, oil companies, and individuals are using voluntary carbon markets to achieve net reductions in greenhouse gas emissions at levels not seen in seven years, according to Financing Emissions Reductions for the Future: State of the Voluntary Carbon Markets 2019, which was published by Forest Trends’ Ecosystem Marketplace initiative today at year-end climate talks (COP25) in Madrid, Spain.

“Companies feel an urgency to reduce their emissions, but they can’t eliminate them internally overnight,” said Michael Jenkins, President and CEO of Forest Trends. “Many are now using voluntary carbon markets to offset those emissions they can’t eliminate until they can transition to new technologies.”

This is the 12th edition of the report, which Ecosystem Marketplace first began publishing in 2007. It draws on extensive market data gathered from the years 2017 and 2018, coupled with interviews to interpret findings and identify trends in the current calendar year.

For 2018, the report documents transactions equivalent to 98.4 million metric tons of carbon dioxide (MtCO2e) for a total market value of $295.7 million. This represents a 52.6% increase in volume and a 48.5% increase in value over 2016, which is the last year an annual survey was conducted.

Market participants told Ecosystem Marketplace that market growth has accelerated even further in 2019, although full market-wide data for 2019 will not be available until 2020.

The increase in transacted volume was driven by offsets associated with “nature-based solutions,” which are projects that reduce emissions by improving management of forests, farms, and fields. Volume in the Forestry and Land Use sector, for example, grew 264%, from 13.9 MtCO2e in 2016 to 50.7 MtCO2e in 2018, while volume in all other offset types grew just 21%.

Prices remained relatively low as developers worked through inventory that had been accumulated in previous years, although several market participants reported rising prices towards the end of 2019.

Within the Forestry and Land Use sector, volume from offsets associated with REDD+ (Reducing Emissions from Deforestation and Degradation, plus enhancement of carbon stocks) increased 187%, from 10.6 MtCO2e in 2016 to 30.5 MtO2e in 2018, while volume of offsets associated with afforestation/reforestation (A/R) increased 342%, from less than 2 MtCO2e in 2016 to 8.4 MtCO2e in 2018. Geographically, new REDD+ volume was concentrated in Peru, which accounted for 19.7 MtCO2e of the increase. New A/R volume was more evenly distributed around the world.

In interviews, market participants credited the increase to a growing desire on the part of consumer-facing companies to exceed regulatory climate requirements, rather than a desire to acquire inventory for compliance markets such as the International Civil Aviation Organization’s (ICAO) emissions trading program, CORSIA. CORSIA becomes active in 2021 but will not reach full-scale operation until 2027.

Instead, interviewees repeatedly stressed the emergence of major voluntary buyers, such as Shell, which has committed to invest $300 million in offsets associated with nature based solutions from mid-2019 through mid-2022. British Airways and Air France, meanwhile, have announced they will offset emissions from all domestic flights beginning next year, while EasyJet announced in November that it will offset all emissions from its use of jet fuels immediately. EasyJet has confirmed to Ecosystem Marketplace that it expects to purchase 7.5 MtCO2e through September 2020

Photo by David Clode on Unsplash

Bright REDD Spot in Otherwise Dismal Copenhagen Accord

“We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries.”

19 December   2009 | COPENHAGEN | That’s the good news on REDD from the otherwise disappointing Copenhagen Accord, which was recognized in the wee hours of Saturday morning by delegates to COP 15 in Copenhagen after being put forward by the US, China, India and South Africa and supported by the Coalition of Rainforest Nations but shunned by many island states and African nations.

US President Barack Obama framed the deal as a step towards building a bridge between the developed and developing worlds, and EU President José Barroso complained that the G-77 was placing too much emphasis on money and not enough on mitigation results.   At one point, he said that the EU had offered to reduce emissions by 80% by 2050 if the developing world came on board, but the offer was shot down.

The Accord does not carry the weight of a Protocol, but rather hopes to act as a stepping stone to a meeting next year in Mexico City, Mexico.

The specific REDD policy text has not yet been posted in electronic form, but the methodological text has been posted and looks to be final.

Negotiators on the policy side say they’ve come close to resolving the debate over national vs. sub-national accounting – specifically, in the relevant text, they have removed the brackets around “national” accounting but kept them around “sub-national”, and have removed the “s” from references to national emissions levels in the paragraph on accounting.

The most recent text I saw, which was around 2am Saturday morning and probably pretty close to being done, failed to include two provisions that other sources had told me would be included – namely, a specific reference to deforestation targets, and a specific reference to private-sector financing mechanisms – although the latter is between the lines throughout the text.

The US apparently managed to have the word “development” inserted into the section on technology transfer, so it now reads “technology development and transfer”.  

If a big agreement is reached in Mexico, the REDD text will suddenly burst to life within that.  

 

 

 

Six Key Lessons as Greenhouse-Gas Emissions Hit All-Time High

This story first appeared on the WRI blog.

4 December 2019 | MADRID | Global carbon dioxide emissions from fossil fuels are on track to again climb to a record high in 2019, according to a new report from the Global Carbon Project, putting the world at risk of catastrophic climate change due to these heat-trapping gases. This is further evidence that the plateau in emissions growth between 2014 and 2016 was short-lived: emissions from fossil fuels grew 1.5% in 2017, 2.1% in 2018 and are projected to grow another 0.6% in 2019. This growth is at odds with the deep cuts urgently needed to respond to the climate emergency.

The alarming news was released as almost 200 nations gathered in Madrid, Spain to finalize rules of the Paris Agreement on climate change and prepare to enhance their national climate commitments in 2020.

Here are six takeaways from the report and accompanying analyses, which offer deeper insights into the data:

1. Another Year of Growing Emissions

For the first time, fossil fuel carbon emissions hit 10 gigatons per year in 2018 (or, just under 37 gigatons carbon dioxide), more than double the level in the 1970s.
In developed countries where emissions have already peaked, carbon dioxide emissions aren’t dropping quickly enough to offset emissions growth elsewhere. Emissions in 2019 are expected to decline in both the European Union and United States by 1.7%, as India’s emissions are expected to rise 1.8% (notably lower than the past five-year growth rate of 5.1%), China’s are expected to rise 2.6% and emissions in the rest of the world are expected to rise 0.5%.

Average per capita emissions were 4.8 tonnes of fossil fuel carbon dioxide per person last year. This number was considerably higher in Australia (16.9 tonnes per person), China (7.0 tonnes per person), the EU (6.7) and the United States (16.6). Notably, China’s per capita carbon dioxide emissions are now higher than those of the EU (although historically they were not), while India’s per capita emissions (2.0 tonnes per person) are about one eighth of those of the U.S.

2. Oceans and Land are Soaking Up More Carbon Dioxide

Land and oceans – our carbon sinks – are continuing to soak up carbon dioxide at a rate that tracks the rise of carbon dioxide concentration in the atmosphere, partly compensating for the growth in emissions. The global ocean has taken in 2.5 gigatons per year in the last decade, more than double what it did in the 1960s. Lands took in 3.2 gigatons per year in the last decade, more than 1.5 times the rate in the 1970s.

But our ocean and land sinks could be compromised by future warming, which could limit the amount of carbon dioxide they absorb, making global temperatures rise even faster than they are now.

3. Coal Is on a Clear Decline, but Still Dominates Emissions

Coal is the largest contributor of fossil fuel carbon dioxide emissions, making up 42% of the global total. However, as renewable or lower-emissions power sources become more economically competitive and more countries turn away from coal due to its impact on climate and health, there are signs that coal is clearly in decline. U.S. generation from coal is projected to decline 11% from 2018 to 2019 to a level that has not been witnessed for more than 50 years, about half of what its peak was in 2005. In Europe, coal-based emissions declined 10% in 2019. And in the UK, coal has dropped from 42% in 2012 to only 5% of electricity generation in 2018.

At the same time, coal use is increasing elsewhere to meet energy demand, although more slowly than in the past. In China, coal use is expected to increase by 0.8% this year, with a decline of coal use in the power sector and lower growth in industrial production. In India, carbon dioxide emissions from coal are anticipated to grow by 1.8% this year, less than half the average growth rate of the last five years.

4. Natural Gas, the Fastest-growing Fossil Fuel, Doesn’t Always Replace Coal

Globally, the use of natural gas rose an average of 2.6% per year over the past five years and its emissions are expected to increase 2.5% in 2019. Even with this rapid growth, it contributes around half the emissions of coal.

Previously dependent on pipelines for transport, natural gas markets are becoming more global as liquified natural gas (LNG) markets grow – LNG trade is up 10% in 2018 alone. This is reducing regional price differences and driving demand where prices are dropping, mainly in Asia.

While natural gas is sometimes considered a bridge fuel between coal and renewables because it emits about half the carbon dioxide of coal, the investments being made now in natural gas infrastructure will lock in its use and its emissions for decades to come, potentially delaying the shift to lower carbon sources. For example, in 2019, the U.S. Federal Energy Regulatory Commission has approved 11 LNG export projects.

Most critical to watch is whether natural gas is replacing or adding to coal use. So far, replacement appears to be happening in some major markets, like the United States, but not in others, like Japan, where it is substituting for lost nuclear power.

5. Oil Is on the Rise, Driven by Increasing Demand for Transport

As with natural gas, oil use also continues to increase globally, up an average of 1.9% per year over the last decade and making up just over a third of global fossil fuel emissions. Around half of oil is used in land transport, with demand rising in developing and many developed countries. In the United States there is already nearly one vehicle per person, while in many developing markets this ratio is far lower, with one vehicle for every six people in China and one for every 40 people in India. Projections for increasing private vehicle ownership in China, India and other developing markets suggest demand for oil will continue to grow for years to come.

Airline travel, while representing only 8% of emissions from global oil use, is also growing. The number of passenger trips is up 7% per year on average from 2013 through 2018 and shows potential to continue, especially in developing countries where per capita use of airline travel remains comparatively low.

6. Solutions Exist

A number of approaches can be used to decarbonize economies, including replacing fossil fuels with renewables and setting fuel efficiency standards. As at least 18 countries have shown, national emissions levels can fall as economies grow. What’s needed is the commitment by more countries to do so and transform their economies for rapid decarbonization.

The COP25 Opportunity

This month’s international climate conference, COP25, in Madrid, provides a key opportunity for countries to signal that they will increase the ambition of their national climate commitments, known as nationally determined contributions or NDCs. Sixty-eight already have indicated they will enhance their NDCs in 2020, but they represent only 8% of global emissions. Major emitters need to step forward and lead the world.

While this year’s report indicates a lower growth rate than the past few years, even zero growth in emissions is not enough. Furthermore, on top of rising emissions during the past few years, preliminary data estimates for 2020 suggest that emissions will continue to increase next year. We need to actively bend the emissions curve downwards to have any hope of being on track for a world that is well below 2 degrees C (3.6 degrees F) and ideally less than 1.5 degrees C (2.7 degrees F) warmer than before the Industrial Revolution. Only by getting emissions growth below zero can we realistically expect to avoid the most severe impacts of climate change.

Shades of REDD+:
Should Forest Carbon Credits be Eligible for CORSIA?

3 December 2019 | Forest carbon credits have long been perceived as riskier and less robust than carbon credits from other sectors. When operating details of the Kyoto Protocol’s Clean Development Mechanism (CDM) were negotiated from 2001-2003, many voiced concerns about forest carbon credits and their high risk of reversals, potential to displace emissions, and the difficulties in accurately quantifying emission reductions. As a result, only limited types of forest activities became eligible under the CDM. Forests were also kept out of the European Union’s Emission Trading Scheme.

Nearly two decades on, it is worthwhile to reconsider the question of whether or not forest mitigation could be ready for carbon markets. The question is back on the table as the International Civil Aviation Organization (ICAO) sets up a scheme for reducing emissions from international air travel.

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is an emissions mitigation scheme covering the global aviation industry. Among other things, it will require airlines to reduce or offset emissions from international flights to keep net emissions at 2020 levels. A technical body set up by ICAO is currently evaluating which greenhouse gas (GHG) “standards” will be eligible to provide carbon credits for offsetting purposes.

To inform decision makers for CORSIA, we have analyzed the most significant GHG standards that issue forest carbon credits, testing them against CORSIA’s eligibility criteria, including Verra’s Verified Carbon Standard (VCS), the World Bank’s Forest Carbon Partnership Facility (FCPF) Carbon Fund, and the Warsaw Framework for REDD+. We focused on five key criteria that directly impact the GHG integrity of carbon credits: reference level or baseline establishment, additionality, quantification, permanence, and leakage management. You can find our assessment here.

We conclude that forest projects, or jurisdictional REDD+ programs, should not all be thrown into one basket: just as in other sectors, certain project types are of higher quality than others. And certain GHG standards are better tailored to manage and regulate forest-related risks than others.

Setting a crediting baseline:  A crediting baseline represents a benchmark level of emissions that a project or program needs to outperform in order to issue carbon credits. For many types of mitigation activities, setting reliable baselines is the most important factor in generating robust carbon credits, and is also the most challenging task. As a counterfactual scenario, it requires making assumptions about expected business-as-usual future trends.

This is true for both forest and non-forest projects. Setting baselines for avoided deforestation projects tends to be more challenging than setting baselines for other project types (including other forest project types). The drivers of deforestation and pressures on forests are particularly hard to predict. Our analysis suggests that current methodologies for avoided deforestation baselines can sometimes (but not always) lead to hot air. New approaches to “nest” REDD+ projects into a jurisdictional crediting baseline can help promote more robust crediting levels. Project-based programs, such as the VCS, are in the process of developing nesting rules.

Jurisdictional forest standards also differ in how they determine reference levels. The FCPF Carbon Fund mandates the use of a historical and conservative reference level. The Warsaw Framework for REDD+ offers little guidance on how to set a reference level, resulting in high variability in the quality of forest reference levels. It also does not have requirements for baseline revisions, allowing countries to decide when they wish to revise their forest reference levels.

Ensuring additionality:  Determining additionality is closely linked to the baseline setting. Most GHG standards require the application of additionality tests that confirm a project is not already required by law, is not financially viable without income from carbon crediting, or common practice.

Here, forest carbon projects usually fare better than other types of projects. Because forest protection in many tropical countries is weak, budgets for forest protection small, and economic incentives for deforestation abound, many avoided deforestation projects are clearly additional. In the case of jurisdictional programs, additionality is often assumed to be reflected in a conservative reference level—although VCS Jurisdictional and Nested REDD (JNR) and the FCPF Carbon Fund have further requirements, such as demonstrating new policies or actions have taken place.

Conversely, for certain types of renewable energy projects located in emerging economies (e.g. large solar and wind projects), financial, technological and political barriers have significantly reduced. As these projects also generate revenues from sources other than the sale of carbon credits, demonstrating additionality is much more challenging. Gaming of additionality with dubious rates of return was an issue for some of these projects. However, many GHG standards have worked towards closing loopholes for non-additional projects.

Quantification and verification:  Quantification, monitoring, reporting and verification is needed to measure the number of carbon credits that a project or program can have issued. For non-forest projects, GHG standards tend to require conservative approaches in estimating carbon credits, setting limits on how much uncertainty is allowed and mandating third-party verification.

The relatively greater complexity of estimating GHGs from forests means, in some instances, higher uncertainty in quantifying carbon credits. Improving the accuracy of measurements in the case of forest projects may be achieved through, for example, increasing the number of forest plots measured or using higher-quality satellite data. This is, however, much more challenging for larger-scale jurisdictional programs and not always cost-effective or even possible.

Our analysis suggests there is a need to carefully scrutinize forest carbon methodologies to ensure a robust estimation of uncertainty. It also questions the relaxed approach of several GHG standards that appear to allow high uncertainty when crediting jurisdictional forest carbon programs.

Ensuring permanence:  There is always the risk that mitigation benefits of a project or program are reversed (e.g. a restored forest burns or is cleared for agriculture). Forest carbon credits carry a higher potential risk of non-permanence than non-forest credits. Most GHG standards make use of buffer accounts to manage this risk.

The VCS requires forest projects or programs to deposit a certain quantity of credits into a pooled buffer account, which is to be used to offset any reversal. The number of credits to be placed in reserve is based on an analysis of the likelihood of a reversal, specific to each project or program. To date, the buffer approach has been successful—there have been few reversals and there is a glut of reserve carbon credits in buffer pools. Verra suggests even reversals that may occur due to the recent Amazon fires would be well covered by the buffer.

However, there is no experience yet on the effectiveness of buffer reserves for jurisdictional crediting. The necessarily smaller number of jurisdictional programs (relative to the high number and variability of projects) may constrain effective risk-balancing. Furthermore, other GHG standards, like the Warsaw Framework for REDD+, do not yet offer any particular approach to deal with non-permanence, merely stating that REDD+ should promote and support actions to address the risk of reversals.

Accounting for leakage:  Leakage describes the displacement of emissions (e.g. a forest is protected in the project area but cleared somewhere else). Almost every mitigation activity carries with it a risk of leakage. Forest project activities have varying risks of leakage. Some have inherently low leakage risk, such as forest management projects that do not reduce the amount of production. By contrast, REDD projects that address highly mobile deforestation agents (e.g. commercial agriculture) causing forest loss can have high leakage risks.

All project-based programs require leakage prevention in project design, quantification of residual leakage, and deduction from overall emission reductions once the project is up and running. The FCPF Carbon Fund or the Warsaw Framework for REDD+ do not quantify or deduct for leakage risks, with the argument that larger accounting areas should not have to do so. By contrast, the VCS does require such accounting for leakage, even for their jurisdictional programs.

Conclusions

For offsets to be market-ready, a tonne of GHG reduction from forestry mitigation must be as good as a tonne of GHG reduction from any other sector. GHG standards need to ensure a credible baseline, quantify and deduct for residual leakage, have in place a robust buffer reserve, guarantee permanence of emission reductions and include provisions for robust quantification of emission reductions.

While stand-alone avoided deforestation projects are prone to baseline inflation, robust carbon credits could be expected to come from nested REDD+ projects – where private-sector led projects are embedded into a conservative jurisdictional program. Forest management projects and tree planting projects are also good options to deliver credible carbon credits. Jurisdictional programs could also deliver robust carbon credits – if (and this is an important ‘if’) – a set of adjustments are made; such as to guarantee necessary corrections for unavoidable leakage or estimation errors.

We are hoping for a careful yet positive decision with regards to forests under CORSIA. It would be a pity if forests were left out yet again. They offer an important piece of the solution to climate change, and can also play an important role under CORSIA.

Photo by Miguel Ángel Sanz on Unsplash

How You Can Participate in this Series

This is the first in a continuing series articles focused on REDD+. We invite you to post comments or propose your own submissions as the series evolves.

You can propose submissions by contacting Steve Zwick, Managing Editor of Ecosystem Marketplace, at SZwick@forest-trends.org. Please write “REDD+ Series Submission” in the subject header.

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World War Zero: John Kerry’s Effort to Achieve Zero Net Emissions by 2050

1 December 2019 | As year-end climate talks kick off in Madrid, Spain, former US Secretary of State John Kerry is launching an initiative called “World War Zero,” which brings moderate Republicans like former governors Schwarzenegger of California and John Kasich of Ohio together with former Democratic presidents Bill Clinton and Jimmy Carter and Hollywood actors like Leonardo DiCaprio and Ashton Kutcher to engage more Americans in the global climate challenge.

The initiative launched quietly on Sunday, one day before the 25th Conference of the Parties (COP25) to the United Nations Framework Convention on Climate Change (UNFCCC) kicks off in Madrid and just a few days after the UN’s Emissions Gap Report showed that current pledges and progress are nowhere near deep enough to prevent global temperatures from rising to a level 1.5°C (2.7°F) above preindustrial levels.

“We’re going to try to reach millions of people, Americans and people in other parts of the world, in order to mobilize an army of people who are going to demand action now on climate change sufficient to meet the challenge,” Kerry told The New York Times, which broke the story.

As Emissions Rise, Cost of Fixing Climate Soars. Now $2-4 Trillion Per Year

26 November 2019 | One week before negotiators from around the world are to gather in Madrid for a year-end summit to beef up commitments under the Paris Climate Agreement, the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) says decades of foot-dragging have increased carbon dioxide concentrations 50 percent above where they were before the Industrial Revolution and raised the cost of meeting the Agreement’s 1.5°C target to somewhere between US$1.6 trillion and US$3.8 trillion per year.

The lower figure is what it will cost if we act now, while the higher cost is what it will cost if continue to move slowly.

Tragically, moving slowly is all we’ve been doing , according to UNEP’s latest annual Emissions Gap Report, which draws on WMO data and is published on the eve of global talks to identify the gap between current pledges and actions and where we need to be.

The WMO’s Greenhouse Gas Bulletin found the global average concentration of CO2 had reached 407.8 parts per million in 2018, which is 50 percent higher than in 1750.

“It is worth recalling that the last time the Earth experienced a comparable concentration of carbon dioxide was three to five million years ago,” said WMO Secretary General Petteri Taalas . “Back then, the temperature was two to three degrees Celsius warmer, and sea level was 10 to 20 meters higher than now.”

Carbon dioxide concentrations are now higher than they’ve been for over 3 million years. Source: World Meteorological Organization

In terms of heat trapped – or “warming potential” – the increase from methane represents more than a doubling from pre-industrial levels. Methane comes from fossil fuels, but also ruminants like cows and sheep, as well as rice paddies and melting permafrost. Because of its higher warming potential, methane now accounts for 17 of global warming.

Total greenhouse-gas emissions is 55.3 billion metric tons of CO2 (“GtCO2e” for “gigatonnes of carbon dioxide equivalent”) in 2018, which is 32 GtCO2e per year higher than the maximum we can afford to be averaging in just ten years if we’re to meet the 1.5°C. That translates into a drop of 7.6 percent annually over the next decade.

A gentler cut of 2.7 percent might help us meet the Paris Agreement’s initial 2°C goal, but global scientific consensus, in the form of detailed summaries compiled by the Intergovernmental Panel on Climate Change (IPCC), tells us that goal won’t avoid catastrophe.

Economists agree that the most effective way to reduce emissions is to put a price on carbon, and the World Bank recently found that nearly 20 percent of global emissions – or 11 GtCO2e – are now covered by carbon markets. Ecosystem Marketplace is slated to publish its latest State of Voluntary Carbon Markets report in Madrid next week, and the report is expected to show steep growth in those markets as well.

A staggering 78 percent of all emissions come from the Group of Twenty Industrialized Nations (G-20), but only five of those countries have committed to a timeline for net-zero emissions.

Shades of REDD+
Nesting: A Good or Bad Piece of Swiss Cheese?

24 November 2019 | There was a time when people thought that forests were the low-hanging fruit of the climate challenge, and that reducing emissions from deforestation was fast, easy, and cheap.  No one thinks that anymore. One particularly significant challenge of tackling emissions from deforestation is the large, diverse, and geographically diffuse set of actors that drive forest loss. Because of this, as we saw in the previous installment of this series (see Bridging the National vs. Project Divide), achieving large-scale mitigation requires collective action from multiple stakeholders undertaking different activities at different levels.

Over the past decade, donor governments have paid for over 330 million tons of CO2 “results” from forest countries.  Most of this (over 260 million tons) have been for Brazil’s reductions in emissions from deforestation, with the remaining purchases of around 70  million tons from six other countries.  Such results-based payments have been for government-led national (or subnational) programs designed to reduce deforestation, with payments contingent on quantified performance. More recently, purchases of project-based forest carbon credits by the private sector have been rising rapidly (see “Issuances of Forest-related Verified Carbon Units,” below), sourced from a wide range of countries.  New pledges by corporate players to offset emissions using ‘nature-based’ credits suggest this market will continue to grow.

Therefore, it would seem encouraging that multiple sources of finance (public and private) at multiple scales (from national to project) are available to provide incentives to a range of actors needed to tackle deforestation.

The Challenge:  Simultaneous Crediting by Projects and Jurisdictions

Problems, however, have arisen when projects are selling forest carbon credits at the same time governments are trying to access results-based finance from programs such as the Green Climate Fund or the Forest Carbon Partnership Facility’s Carbon Fund.  Donors will not “pay twice” for the same emission reduction, so before getting paid for mitigation results, forest country governments are required to subtract credits sold by projects from their estimated jurisdictional performance.  In some cases, once a government subtracts project credits, there is nothing left for the government to claim—reducing the “incentive” for government action.

This happens for a variety of reasons.  Sometimes it is because the government has not actually taken sufficient action to reduce deforestation.  In other cases, it is because national systems to measure GHG performance are substantially different than data and methods used by projects.  In order to ensure that these two incentive systems—government-to-government results-based payments and private sector purchase of project-scale carbon credits—work together, countries must develop “nested systems”.

The core objective of a nested system is to allow a variety of stakeholders to take mitigation actions and receive a “fair share” of rewards for their efforts.  It involves developing GHG measurement and monitoring systems at project, subnational and national scales that are aligned and setting baselines that promote equity among actors—allowing each to receive finance in proportion to their mitigation contribution.

The Complaint:  Nesting Creates Swiss Cheese

Some complain, however, that nested programs create a “swiss cheese” effect whereby project (or subnational) accounting creates a complexity within a country—in effect, creating multiple accounting areas operating simultaneously.  The figure below illustrates this scenario on a slice of Emmental cheese.  Within a country, some projects may “buy in” to the national (or subnational) program, transferring the Emission Reductions (ERs) they achieve to the government in return for promised benefits.  Others, however, may have the right or wish to keep their ERs and find their own buyers (and reap the financial reward).  Creating an operational accounting framework for this situation requires a robust carbon accounting framework, transparency and alignment of data, reliable government institutions, clear regulations that provide legal security for those operating projects, and a functioning registry.

Illustration of a Nested System

Those who argue against the swiss cheese often promote one of two ideas: (1) carbon crediting can only occur at the national (or subnational) level; or (2) projects may only issue credits that, in aggregate, fall at or below national performance, as measured by the government. The unintended consequence of the first approach is that REDD+ country governments may be tempted to nationalize carbon rights, ensuring that only one national agency would be recipient of result-based payments. Projects, in such countries, would only be rewarded for their mitigation contribution if—after paying all the costs of the national mitigation program—there is something left to distribute.  In the second case, project crediting would be dependent on national performance—providing little predictability for a ‘return on investment’.  Both cases reduce the incentive for local actors and dry up private investment.

Benefits of Nesting

Despite their complexity, nested systems may, in some countries, be more likely to mobilize collective actions and achieve large-scale mitigation than a pure national approach, i.e. where only national governments have access to result-based payments. This is particularly true in contexts where governmental institutions do not have the resources to establish and enforce environmental policies and regulations.

Nested systems may also be necessary where the legal right to forest carbon should rest with those who own or have the management right to the forest.  Results-based payments to national governments for ERs achieved at the national level may generate conflicts with stakeholders who claim rights to ERs accrued on a variety of lands—including private lands, lands of indigenous people, lands of peasant communities, lands granted in concessions, and lands that are under the jurisdiction of subnational governments. In other words, a national government monetizing all the country’s ERs, regardless of the legal condition of the lands on which they were accrued, may be controversial or even legally untenable in some countries.

Nesting overcomes these problems by allowing carbon finance to go directly to landowners or to those entities to whom landowners have transferred the right to develop and trade ERs on their behalf.  It enables a country to leverage the capacities of its entire society to take mitigation actions. It builds on the standpoint that no single stakeholder group should have the exclusive right to access result-based payments and carbon markets, and no stakeholder should be relegated to the role of becoming, at best, a beneficiary of a “benefit distribution scheme” designed by another more privileged group.

While governments are uniquely responsible for accounting of all ERs generated within the national territory, and for achievement of the country’s nationally determined contribution (NDC) under the Paris Climate Agreement, they can enable projects or subnational crediting.  Many countries may, in fact, see this as the most promising pathway to achieving large-scale mitigation.

Nesting also sets up a framework that enables private capital to flow into mitigation actions.  Where a government has little funding available for forest protection, it may create a policy to drive investment in forest protection activities to ‘hotspot’ areas of deforestation, where innovative approaches to forest conservation can be tested and developed beyond the scope and capability of governmental action.  If done right, nesting could allow a country to benefit from the emerging and increasing finance available from companies—a cost savings for the government—without disturbing the government’s ability to also access results-based payments at national (or subnational) scale from programs such as the Green Climate Fund or other donor government funded offers.

For many countries, it is unimaginable that the national government alone, with limited human and financial resources, can successfully address deforestation and forest degradation at the scale required to achieve meaningful emission reductions. The proactive contribution of subnational jurisdictions as well as the material contribution of civil society and the private sector through REDD+ projects are of critical importance for many countries to successfully reduce deforestation and forest degradation.

Emmental cheese is known for its holes but also for its good quality.  The price of the slice of cheese is determined by its weight, not by its volume.  This, perhaps, is an allegory for a nested system.  The presence of “gaps”, or independent projects generating Emission Reductions (that need to be subtracted from the national accounting), need not to imply a loss of environmental integrity or quality of the national program—just as holes in the cheese do not imply poor quality of the product.

Lucio Pedroni is President and CEO of Carbon Decisions International and a leading authority on forest carbon accounting methodologies.

Donna Lee is an independent consultant and serves as an advisor to governments, multilateral organizations, private companies and non-profit organizations; prior to this, she was a State Department official and represented the U.S. in climate change negotiations for several years. She considers herself a proud member of the “REDD+ community” since 2007.

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EasyJet Says it’s Now Carbon Neutral

20 November 2019 | UK discount airline EasyJet says it has offset all emissions from its use of fossil fuels, effective yesterday – and it did so at a cost of just £25m for the next financial year by purchasing carbon offsets generated by saving endangered forest (REDD+) and planting trees (afforestation/reforestation).

The offsets come from 17 different projects through a three-year forward contract for less than $4 per tonne of CO2, and CEO Johan Lundgren said the airline was looking to develop its own projects after that.

The announcement not only highlights the low cost of reducing emissions, but one-ups rivals like British Airways and Air France – both of which have vowed to offset emissions from domestic flights next year. BA has also pledged to be carbon neutral across all flights, but not until 2050.

Lundgren emphasized that offsetting was not a permanent solution, but a stopgap measure that can deliver steep reductions now, with with the technology that already exists.

“We recognize that offsetting is only an interim measure,” he said. “Aviation will have to reinvent itself as quickly as it can.”

Towards that end, he added, the airline has signed a memorandum of understanding with Airbus to co-develop hybrid electric planes for short-haul European flights.

The move comes amid growing enthusiasm for both voluntary offsetting, which involves using carbon offsets to reduce emisisons beyond what can be done technologically, and Natural Climate Solutions (NCS), which reduce emissions by financing improved management of forests, farms, and natural ecosystems. Such strategies have been integral to voluntary carbon markets since their inception in 1989, but they have gained in popularity over the past two years, according to Ecosystem Marketplace’s latest “State of Voluntary Carbon Markets Report” which is due to be published at year-end climate talks in Madrid.

The move comes as airlines prepare for new rules that require airlines to cap emissions from international passenger flights at 2020 levels, beginning in 2021 – first on a voluntary basis that allows countries to opt in, and then on a mandatory basis from 2027 onwards. Under the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), airlines can meet their obligations by purchasing ICAO-recognized offsets, but it’s not yet clear what those offsets will be.

Emissions from all passenger flights topped the equivalent of 900 million metric tons of carbon dioxide in 2018.

Securing Climate Benefit: a Guide to Using Carbon Offsets

20 November 2019 | The world has finally awakened to the enormity of the climate challenge, and many people are choosing to drive less, fly less, and eat more veggies.

We can’t, unfortunately, eliminate all of our emissions, but we can offset those we can’t eliminate by financing programs that pull greenhouse gasses out of the atmosphere by planting trees or saving endangered forests, among other things. And to do that, we purchase carbon offsets — as you can see in this chart here:

But how do we know that the offsets we buy actually reduce emissions? That’s the question that the Stockholm Environment Institute and the GHG Management Institute set out to answer in a handy little flier called “Securing Climate Benefit: A Guide to Using Carbon Offsets”, which is available for download here.

Trump Formally Serves One-Year Notice to Withdraw From Paris Agreement

5 November 2019 | The US presidential election is one year away, and the Trump administration marked the date by formally giving the United Nations its one-year notice of intent to withdraw from the Paris Climate Agreement.

The withdrawal is officially set to take place the day after the 2020 election, meaning the US will pop back into the agreement two months after the agreement if Trump loses next November. That ensures climate will be a top issue in the year-long campaign that lies ahead, and it leaves the rest of the world in a sort of limbo state regarding the United States. France and Germany, for example, say they want the US on board as a global partner in the effort to meet the climate challenge, but they have also gone ahead with a proposal to impose carbon taxes on goods imported from high-emitting countries, including the United States.

The announcement comes as climate negotiators prepare for year-end climate talks, which will take place next month in Madrid, Spain, from 2 through 13 December. There, countries are supposed to be submitting plans for ratcheting up ambition under the Paris Agreement.

Within the United States, regional and voluntary efforts are also moving forward.

“Cities, states, and businesses haven’t had a formal place at the negotiating table, but the Paris Agreement succeeded in large part because their voices were heard,” said former New York Mayor Michael Bloomberg in a statement. “They will keep us moving forward until we have a president who will confront the climate crisis and put the public’s health and safety first.”

Bloomberg heads an initiative called America’s Pledge, which tracks regional efforts within the country. On Monday, he announced that regional and private sector actors will once again host a “US Climate Action Center” at year-end talks to serve the role the US pavilion had done before the election of Donald Trump as President.

It’s Official: Climate Talks Will Take Place in Madrid, From 2-13 December

1 November 2019 | Madrid will host the 25th Conference of the Parties (COP 25) to the United Nations Framework Convention on Climate Change (UNFCCC) from December 2 through 13, the UNFCCC announced today.

The talks, originally planned to take place in Brazil, were switched to Chile late last year, after the election of Jair Bolsonaro as President of Brazil. Chile was forced to withdraw as host after weeks of civil unrest, but Spain offered to host the event, with Chile still acting as chair.

How Forests, Farms, and Fields Can Become a Net Carbon Sink in 20 Years

This story first appeared on Mongabay
1 November 2019 | Overhauling how humans manage Earth’s surface could account for the equivalent of 15 billion metric tons (16.5 billion tons) of CO2 every year through a combination of lower emissions and higher sequestration, according to a new report.

That amount of carbon is almost a third of what we need to mitigate by 2050 to keep the global temperature rise under 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels, scientists say.

“Coming on the heels of historically high summertime temperatures, and in the wake of reports sounding alarms about the state of our forests and food system, this report highlights land-based climate solutions — what to do where, and by when — that are feasible now and deliver many other benefits,” Stephanie Roe, an environmental scientist at the University of Virginia and the study’s lead author, said in a statement.

Small-scale agriculture in Madagascar. Image by Rhett A. Butler/Mongabay.
Small-scale agriculture in Madagascar. Image by Rhett A. Butler/Mongabay.

In a paper published Oct. 21 in the journal Nature Climate Change, Roe and her colleagues pulled together research on the predicted impacts of various strategies involving the “land sector” aimed at winnowing down emissions and removing existing carbon dioxide from the air. Their recommendations serve as a roadmap for avoiding the dangers of unchecked climate change, they write.

Among the most important steps in the next decade or so are cutting deforestation and the loss of peatlands and mangroves by 70 percent, bringing back those ecosystems in places where they’ve been lost, and increasing the use of techniques like agroforestry to integrate trees with food crops. The authors also say that bolstering carbon storage capabilities in agricultural soils and human behavior change — such as eating less meat and cutting food waste — are also priorities.

The team figures that putting all of these measures in place would account for up to 30 percent of the contributions necessary to remain below that 1.5-degree threshold laid out in the 2015 Paris climate accords. In particular, moves by just a handful of countries, including the United States, China and the members of the European Union, will go a long way toward meeting this benchmark, as will efforts by Brazil and other tropical countries.

A mangrove swamp in Panama. Image by Rhett A. Butler/Mongabay.
A mangrove swamp in Panama. Image by Rhett A. Butler/Mongabay.

Following the authors’ prescriptions would make the sector carbon neutral on balance by 2040. And 10 years after that, land uses could be pulling more CO2 from the atmosphere than they put out, the team writes. But these actions aren’t only about slowing changing climate, Pete Smith, a biologist at the U.K.’s University of Aberdeen and one of the co-authors, said in the statement.

“Protecting forests, for example, provides cleaner air and water, more food, improved livelihoods, more biodiversity and resilience to climate extremes,” said Smith, who was also a lead author of a recent report released by the Intergovernmental Panel on Climate Change. “These multiple benefits are a real selling point for land-based climate solutions.”

Lately, however, trends haven’t been moving in the right direction, especially on forest protection, Charlotte Streck, who directs the think tank Climate Focus, said in the statement. Deforestation has risen by more than 40 percent in the five years since 200 countries, companies and organizations signed the New York Declaration on Forests in 2014, according to a 2019 report that Streck co-authored.

Peatlands in Indonesian Borneo. Image by Rhett A. Butler/Mongabay.
Peatlands in Indonesian Borneo. Image by Rhett A. Butler/Mongabay.

“What’s worrisome is the large gap between where we are and where we need to go to avoid climate chaos,” said Streck, also a co-author of the Nature Climate Change study.

Bridging that divide requires limiting emissions along with siphoning some of the CO2 that’s already in the atmosphere, Roe said, which will mean finding technological solutions to complement moves like forest and peatland restoration.

“The land can [do] and already does a lot, but it can’t do it all,” Roe said. “Research and investment in negative emissions technologies today will be critical for assisting in their sustainable deployment in the future.”

Baobab trees in Madagascar. Image by Rhett A. Butler/Mongabay.
Baobab trees in Madagascar. Image by Rhett A. Butler/Mongabay.

The drastic rebalancing of atmospheric CO2 necessary to avoid a future with average temperatures higher than 1.5 degrees Celsius above pre-industrial levels will likely require methods such as the direct air capture and storage of carbon from the atmosphere and finding ways to implement the controversial bioenergy with carbon capture and storage, or BECCS, approach without causing problems for human health, biodiversity or water supplies.

On top of investing in a wide array of strategies, Roe said that acting quickly is also vitally important to keep a lid on climate change.

“[T]he window of opportunity is getting smaller,” she added. “The longer we delay action, the lower our chances of achieving Paris Agreement goals, and the higher the burden we put on our natural and food systems.”

Banner image of a mix of mangroves and oil palm in Malaysian Borneo by Rhett A. Butler/Mongabay.

Roe, S., Streck, C., Obersteiner, M., Frank, S., Griscom, B., Drouet, L., … Lawrence, D. (2019). Contribution of the land sector to a 1.5 °C world. Nature Climate Change. doi:10.1038/s41558-019-0591-9

After Chile Backs Out, Speculation Focuses on Bonn or Madrid for Climate Summit

31 October 2019  (updated)| 30 October 2019 (posted) | UN Climate Change Executive Secretary Patricia Espinosa says the United Nations is “exploring alternative hosting options” for year-end climate talks after Chilean President Sebastián Piñera canceled plans to host the event in Santiago, Chile in December.

German media are focusing on the former German capital of Bonn as the location best equipped to step up as a replacement, while Piñera himself is advocating for Madrid, and the Spanish government has formally offered to host the event there on the same days it was planned for Chile: December 2 through 13, with Chile still acting as chair.

This is to the 25th Conferences of the Parties (COPs) to the United Nations Framework Convention on Climate Change (UNFCCC) and more small technical meetings. Dubbed COP 25, it was initially slated for Brazil, which pulled out after the election of Jair Bolsonaro as President. Chile stepped up late last year and was scheduled to host from 2 to 13 December, but backed out in the wake of increasingly violent protests sweeping the country. The UNFCCC has not commented on either possibility.

The cancellation echoes an earlier event in 2015, when the island nation of Fiji was forced to back out of hosting the 2017 meeting, COP 23. In that case, Bonn served as the location, while Fiji still presided over the event. The swap, however, was executed over more than a year, and not cobbled together in a matter of weeks.

The UNFCCC is headquartered in Bonn, and it regularly hosts annual technical meetings in the former Bundestag building, which is now the United Nations Campus. The COPs, however, are massive undertakings that require the construction of giant tented facilities housing supplemental meeting rooms for side events and other gatherings that feed into the main plenary. If the talks are to be held on days even close to those originally planned, they would have to be scaled back or hosted in an area that can accommodate them.

German Environment Minister Jochen Flasbarth inadvertently fueled speculation over Bonn when he tweeted that he had been in touch with the government of Poland, which hosted last year’s meeting. After several proponents began pushing for Bonn to host the event, however, Flasbarth pushed back, also by tweet.

“It’s not just about professionalism and commitment,” he answered. “It also has to be logistically feasible. This is the problem for many potential locations – including Bonn. And besides, it is not necessarily desirable to do it more and more frequently in the global north.”

This is a developing story.

As Impeachment Pressure Grows, Trump Attacks Paris, California, and Climate

23 October 2019 | US  President Donald Trump today reiterated his intention to pull the United States from the Paris Climate Agreement, which enters into force next year and is designed to prevent global temperatures from rising to catastrophic levels. He made the pledge at a meeting of the Marcellus Shale Coalition in Pittsburg, even as his attorneys were in California filing suit over the state’s joint cap-and-trade pact with the Canadian province of Quebec – a program initially set in motion by Republican Governor Arnold Schwarzenegger and carried forward by every governor since.

“Today is just the latest evidence that Donald Trump is the worst president in history for the climate and our clean air and water,” said Michael Brune, Executive Director of the Sierra Club. “Trump has proven beyond a reasonable doubt that he is guilty of perpetrating repeated attacks on clean air and water, and his polluting legacy is nothing short of sickening.”

Alden Meyer, director of strategy and policy at the Union of Concerned Scientists, also slammed the speech.

“President Trump’s anti-science stance that climate change is not a serious threat demanding meaningful action puts the profits of fossil fuel polluters above the health and well-being of current and future generations,” he said. “It also impedes the ability of American companies and workers to compete with other countries like China and Germany in the rapidly expanding market for climate-friendly technologies.

“Fortunately,” he added, “no other country is following President Trump out the door on Paris, and here at home, states, cities and businesses representing more than half of the U.S. GDP and population have committed to take action to meet the Paris Agreement’s goals.”

Chief among those states is California, which has emerged as a leading center of environmental innovation – not just for the United States, but for the world.

“Under Republican and Democratic governors, California rigorously designed this program to be on solid legal and constitutional ground,” said Derek Walker, Vice President in charge of US Climate for the Environmental Defense Fund (EDF). “California and Quebec are modeling an innovative, legally and environmentally robust program that cuts pollution and delivers economic incentives for cleaner energy, fuels and business practices.”

The complaint, which names Democratic Gov. Gavin Newsom and others, alleges that California usurped federal power to conduct foreign policy and make international accords when it signed an ongoing agreement with Quebec to limit emissions.

 

The UK Finds “Net Gain” Might be Cheaper Than “No Net Loss”

23 October 2019 | When British Ecologist David Hill launched the UK’s Environment Bank in 2009, he followed US precedent and built it on the premise of ensuring “no net loss” of habitat for infrastructure and housing projects that impact protected areas. He soon, however, started pushing for policies that go beyond “no net loss” and instead deliver a “net gain” of habitat whenever offsetting is involved.

“It’s the right thing to do,” says Hill, “but it also makes economic sense, because off-site mitigation is orders of magnitude less expensive than on-site mitigation is.”

From Local Experiments to National Law

When Hill launched the Environment Bank in 2009, offsets had no status under UK law, but they were recognized in two key European Union directives – one for Birds and one for Habitats – as a tool for meeting conservation objectives related to the Natura 2000 protected areas program, and Germany had utilized offsetting since 1976.

The UK began piloting offsets for regulatory purposes in 2011, and the Government’s Ecosystem Markets Taskforce recommended mandating them in 2013, but a blatantly distortive campaign by provocateurs like George Monbiot of the Guardian delayed implementation. Hill responded by growing the bank on a county-by-county basis, always emphasizing the concept of “net gain” and forging agreements with local planning authorities to create offsets that are recognized under existing planning policies and meet the permitting requirements of local authorities. Once the regulatory requirements were clear, the bank would enter into binding agreements with both developers looking to mitigate for biodiversity impacts and land owners looking to sell offsets by placing conservation easements on their land.

In March of this year, his perseverance – and that of dozens of other ecologists – paid off when the Chancellor of the Exchequer announced that the net gain provisions would become official UK policy.

The Business Plan

As its US counterparts do, the company identifies farmland or other areas that are suitable for habitat creation and enhancement in regions of accelerating development and negotiates conservation easements on the land – in this case, of 30 years or longer. It aims to make a profit by charging up-front consultation fees for identifying biodiversity risks and then transaction fees and brokerage for delivering the mitigation, as required.

According to a business analysis that Hill created, the cost of developing habitat off-site on degraded land is at least 1/30th that of developing habitat on-site, with the bulk of the savings coming by eliminating the cost of using land purchased at development rates for habitat creation, eliminating the cost of losing development revenue (because the land taken up to deliver biodiversity net gain cannot be used for the development, and eliminating the costs of 30 years of management and monitoring of the biodiversity within the development site).

The analysis examined the cost of on-site mitigation for a 100-hectare housing development with various ratios of developable area and public open space, ranging from 80 developable/20 open to 60 developable/40 open. While the cost per square meter of ecological construction was fairly low, the cost of lost income from undevelopable land was significant. Using the 80/20 scenario and assuming typical rates of various habitat cover common in the United Kingdom, he showed that developers achieving the required 10 percent net gain off-site could build 2800 housing units, but a developer delivering just 10 percent of that mitigation on-site would build 343 fewer units, and a developer delivering just 20 percent of the mitigation on-site would build 686 fewer units.

It costs less to deliver biodiversity net gain (BNG) off-site than on-site, often with better ecological consequence that provide more contiguous habitat. The above chart shows increasing costs associated with higher net-gain requirements and higher amounts of mitigation onsite. Source: David Hill, unpublished business case.

Biodiversity Metrics and Calculators

In 2012, the Department for Environment, Food and Rural Affairs (Defra) introduced a metric for measuring the biodiversity losses and gains that result from development projects, and that metric was then upgraded through a technical review process into the Defra Metric 2.0, which can take account of linear features and other requirements.

The Environment Bank was one of a number of experts who contributed to the upgrade, which is expected next year, but it also worked with local planning agencies to create the Environment Bank Biodiversity Impact Calculator, which is available for free and includes local priorities and circumstances. The Environment Bank Calculator builds on the Defra Metric and can be used to estimate a site’s biodiversity impacts and compensation needs. Those using the Environment Bank calculator then approach them to find an offset or habitat bank solution in order for the development to be policy compliant and deliver biodiversity net gain.

The Role of the Bank

Because everyone involved in biodiversity mitigation uses the same metric, there is little disagreement on impacts and how to apply the mitigation hierarchy (see “Mitigation Banking”). Once net gain becomes a mandatory requirement of the planning system, this will create a standard under which the development sector can operate. Hill believes the level playing field and certainty provided will also stimulate significant investment into offsite habitat creation, enhancement and long-term management.

The Environment Bank, in other words, presents itself as the leading option for dealing with unavoidable habitat loss, and offers a vehicle for dealing with it – a necessary step for getting a permit. The metric ensures that losses and gains are accounted for in the same way, rather than in a subjective approach. Hill emphasizes that the real value of the Environment Bank is that it provides offsite solutions which are easier for developers, far less costly, and deliver far greater benefits for nature conservation than trying to place ‘biodiversity’ within the development site. It does this by facilitating the creation and long-term management of large areas of land specifically for nature.

Permanence and Uncertainty

Developers acknowledge that current metrics have an inherent amount of uncertainty, but in a theme that emerges repeatedly in our interviews, the project reduces cost by sacrificing precision, yet it increases ecological integrity by adding in buffers that more than offset any uncertainty.

Specifically, companies purchasing offsets are required to compensate by applying multipliers of between 4:1 and 8:1, which is significantly higher than the uncertainty. The key attraction to developers is that they can use the Environment Bank model with ease and don’t get burdened with a long-term liability for habitat within their development site, which almost always gets changed by occupants through recreational use, lack of management or cutting in the interests of tidiness.

Although the contracts only last 30 years, the property could then be protected by law through the application of voluntary agreements on the land. But by choosing the right landowner with an interest in wildlife, it is considered that once established these sites will remain as part of the national infrastructure for nature, in perpetuity.

Permanence is not assured, but land can become recognized as habitat and would then need permission to develop, and owners could create a “conservation covenant” that could, for example, provide tax-free status. David Hill is advocating the use of Conservation Property Relief (CPR) on these areas. Much in the same way that farmers get tax relief through Agricultural Property Relief (APR), why not incentivize those who do good for conservation in the same way, or indeed replace APR with CPR to incentivize more conservation creation and management.

The Economics of Saving Newts

Hill is putting the practices to work through a company called the NatureSpace Partnership. It uses off-site habitat creation for the conservation of great-crested newts, a species given the highest level of protection under EU law. Joining a NatureSpace scheme eliminates the cost to the developer of having to survey for newts and the huge cost of mitigating for them if newts are found. NatureSpace provides the solution to de-risk the development industry and provide far better population-based conservation for newts.

The bank secured funding of £1.5 million and proactively paid land-owners for easements and built ponds, then began marketing with the objective of expanding the initiative from one region of the UK to several more, using a ‘District Licensing’ approach regulated by Government.

Cutting the Cost of Surveying

One of NatureSpace’s strategies it to reduce the cost of surveying newts. The company used the investment to survey a stratified set of ponds in the South Midlands region of England using environmental DNA, and used the survey data to model newt distribution and abundance˘. They divided the South Midlands into five color-coded impact risk zones: black no-go zones where the newt is protected and no development should take place, red where the newt is likely plentiful, amber where newts are likely present but at lower concentrations, green where the newt may or may not be present, and white where it is probably not present.

This reduces costs because the development industry traditionally surveyed ponds on a site-by-site basis, and if newts were found had to apply separately for a specific license, and follow a detailed and problematic methodology to determine presence, which very often led to delays or prevented developers being able to get on with the development for many months, all creating great cost to the industry. Individual mitigation schemes were found by the government to be only 3 percent successful and to present a serious cost burden to developers. NatureSpace, using the District Licensing approach, made it possible for developers to first search regionally to determine risk and to pay for a pre-application assessment. Depending on where the development is located (black, red, amber, green or white zones) the developer pays a second fee on the permitting of their development in order for new newt habitat ponds to be created in strategically located areas agreed with the permitting planning authority.

Landscape-Level Surveys

In traditional mitigation, the cost of conducting a site-specific survey can be up to seven times the cost of carrying out the mitigation itself, and developers often incur this expense only to find that the concentration of newts is too high for development. Such areas can now be screened out early and the best areas become unsuitable for development. But the NatureSpace model has eliminated the need for site-specific surveys to be undertaken at the development level by creating regional surveys that identify concentrations of habitat across entire landscapes, modeling the data to produce these ‘heat maps’ of newt distribution.

To date the take up by developers has been very high in those planning authorities engaged by NatureSpace as it saves them time and money and is better for newt conservation at a population level.

Battling Entrenched Interests

The greatest challenge is in ensuring environmental consultants recommend the new District Licensing approach to developers since the consultant industry makes a significant income from conducting site-specific surveys, carrying out lengthy translocation exercises including the erection of barrier fencing, and designing and building newt habitat next to or within the development in some way. Consultants can, however, now play a critical role in ensuring that their developer clients are made aware of the new licencing model and can work with Environment Bank to monitor the large-scale habitat creation schemes that they are facilitating. These schemes are already proving to be more successful than the ‘old’ licensing method because more habitat is created and newt populations are better protected because of the expansion of range at significant spatial scale.

In Chesapeake Bay, Simple Targets Lead to Compound Results

21 October 2019 | People have been harvesting clams, crabs and fish from the massive and fertile Chesapeake Bay since the end of the last ice age, and its name appears to come from an Algonquin word meaning “great water,” although the exact etymology is a matter of conjecture.

No one, however, disputes the bounty that Europeans found when they arrived in the 1500s – and which continued up until the 1970s, when agricultural runoff had spawned algae blooms that were already suffocating the shellfish that are the Bay’s defining fauna.

But cleaning up the Bay proved challenging, mostly because it’s fed by 150 rivers and waterways which are regulated by six different US states as well as Washington, DC and the federal government. That’s eight different jurisdictions, each with a different objective and approach, so while some states prioritized the revitalization of oyster beds and others the restoration of specific riparian habitat, no two had the exact same measure of success.

That changed in 2010, when the federal government imposed a specific limit on the total amounts of nitrogen (185.9 million pounds), phosphorous (12.5 million pounds) and sediment (6.45 billion pounds) that the Bay can handle per year, with a target compliance date of 2025 and progress being evaluated and adjusted every two years.

The limit, technically called a mandatory Total Maximum Daily Load (TMDL), applies to all water pollution, which means regulators must find ways of reducing discharges from both point sources, such as waste treatment plants, and nonpoint sources, such as farms and fields. The seven jurisdictions worked together to create individual Watershed Implementation Plans (WIPs) under the Chesapeake Bay Watershed Agreemen, which established 10 goals and 31 verifiable outcomes, including specific localized TMDLs.

While some states are struggling to meet their targets, Maryland isn’t one of them. The state is not only meeting its targets, but doing so in ways that deliver benefits beyond just clean water.

Gabe Cohee, a Restoration Finance Director for the Maryland Department of Natural Resources, cited six factors in its success: the clarity of the target, the standardized approach for meeting it, the focus on staying current with best practices, the flexibility given to local authorities, and the awareness generated across the Bay by several NGOs and state agencies.

Payments for Activities and Results

Cohee says the imposition of a TMDL provides a clear target, which guides the dispersal of federal funding granted through the Chesapeake and Atlantic Coastal Bays Trust Fund.

The fund contributes roughly $50 million per year towards the reduction of nonpoint source pollution runoff into the Bay. Of that, $24 million goes directly to farmers and agricultural technical assistance for specific activities like planting cover crops or moving manure away from the water’s edge. The remainder, roughly $26 million per year, finances local efforts to reduce runoff, primarily through ecological restoration.

The Fund receives requests for more than $70 million per year and actively encourages the submission of new proposals. Grants are awarded based primarily on TMDL projections, but also on co-benefits such as habitat restoration or positive social impacts.

“We don’t want to be in a position where we’re just throwing gabion baskets and imbricated rock into streams to reduce sediment while missing opportunities to enhance habitat and restore functional stream systems,” he says. “On the other hand, there’s a tendency for these funds to get so watered down and spread so thinly that the impact is lost, and we need to guard against that.”

Knowledge-Sharing and Uncertainty

Scientific uncertainty is addressed through constant engagement with the scientific community, at both the state and federal level. The federal program, for example, creates Goal Implementation Teams (GITs), with representation from each state, to develop management strategies based on best management practices that are constantly updated. Local implementers utilize an online system called FieldDoc, which utilizes GIT-approved algorithms to ascertain the environmental impact (nutrients and sediments reduced) of their project and inform funders to make cost-effective, efficient funding decisions. In this way, real-world experiences with emerging models are shared across all implementers, and a scientific advisory panel also provides annual updates on new developments in water management.

FieldDoc also provides a way for prospective project developers to formulate proposals before applying for state funding. Specifically, anyone looking to submit a project can first model their proposed intervention using field data and methodologies available on FieldDoc. Modeling can be done for both TMDLs and co-benefits. By standardizing both the proposals and the evaluation procedures through FieldDoc, water authorities can compare and contrast proposals, outcomes and discharge-reduction costs across the watershed.

The cost of meeting the TMDLs varies widely by site and applied management practices.

Operational Risk and Payment

Operational risk is generally handled by working closely with project developers in the design phase to ensure that known geographical idiosyncrasies are incorporated using the latest science, and then adapting to unforeseen disruptions on a case-by-case basis.

“Something always goes wrong, like the discovery of unknown infrastructure in the development area, and most of the groups developing these projects are watershed organizations or community groups without deep bankrolls for risk,” says Cohee, adding that the Fund shares some of the risk by providing up-front funding, but does not cover unforeseen costs unrelated to the deliverables of the investment.

Projects are selected by a multi-agency review team that evaluates and chooses fundable projects, which means that roughly 50 reviewers weigh in on the project before it is approved. Then a smaller six-person team evaluates progress through site visits and quarterly reports from the grantee. When projects encounter unforeseen challenges, the teams can freeze the project and determine whether to proceed or to end the program, resulting in a lower payout for reduced implementation.

Principio Creek: Paid on Delivery

At least one of the projects embedded in the system follows a “pay for success” model, and that is the Principio Restoration Project, located on a dairy farm in a sub-watershed called Principio Creek. The project is being spearheaded by the Cecil Land Trust, which negotiated a permanent easement with the Horst Brothers Dairy Farm. This project differs from all others in the Fund portfolio in that the state only makes payments after the project has been fully built and objectives are met. The project developers are operating on a for-profit basis; they are carrying all of the risk, but hope to earn a profit by reducing discharges at a lower cost than the payment they earn from the state.

Specifically, all up-front funding is coming from investors in the for-profit restoration group Ecosystem Investment Partners (EIP), which is restoring 8,215 linear feet of streams and 24.8 acres of riparian buffers, with the aim of reducing discharges of nitrogen by 6,219 pounds per year, discharges of phosphorous by 1,850 pounds per year, and suspended sediment by 1,344 tons. EIP hopes to turn a profit at the end of the project by selling discharge reduction units to the Fund at a rate of $800 each – or less than half the current average cost across the watershed.

“It reduces our costs and our risk, while freeing the government workers up a bit on the capacity side,” says Cohee.

Because the final payment is based purely on discharge-reductions verified in-stream, the state does not have to worry about paying out large sums for a reduced implementation if something goes wrong.

Such projects, unfortunately, are rare – largely because investors are unwilling to take the associated performance risk and regulatory risk. Specifically, investors are looking for returns of 20 percent and up for risk they understand, and will seek higher returns for risks they are unfamiliar with. According to mitigation bankers interviewed for this survey, investors don’t trust the US regulatory regime to be consistent, so they don’t invest the time needed to understand the landscape.

Building the Project Pipeline

The Fund currently receives nearly three-times as many proposals as it can finance, but Cohee says it took nearly five years for the Fund, working with the Chesapeake Bay Trust, to build up that pipeline.

“We started by identifying areas that had the highest sediment loads and publicizing the assessments so that people knew the issue,” he says. “We played matchmaker – getting consulting companies to work with watershed organizations or local governments, and getting people talking about pinch points and problems and solutions, and gradually we started seeing proposals that gave the funders in the state a lot of confidence.”

 

Shades of REDD+:
Bridging the National vs Project Divide

21 October 2019 | We must tackle tropical deforestation if we’re to meet international climate and biodiversity goals, and to do so we must confront humankind’s hunger for the food, fuel and fiber that drives deforestation. This is a daunting task and excruciatingly difficult. Cooperation in addressing deforestation seems to be essential, offering win-win outcomes for governments and private investors. However, a look at the history tropical forests’ inclusion under the climate regime shows that agreeing on how to create incentives for reducing deforestation has been hard. From the beginning, a private sector-driven vision clashed with one that sought to empower governments, often one at the expense of the other. Here I argue that, if we are to conserve forests, we need both private direct investment and national plans, and the challenge is bringing them into alignment.

Addressing Deforestation Under the Climate Regime

Attempts to address deforestation under the international climate regime date back to the adoption of the UN Framework Convention on Climate Change in 1992. However, the Convention did not define country-specific obligations or create specific mechanisms and, with regard to forests, only asked countries to ‘promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases’.

It was the task of the 1997 Kyoto Protocol to translate the Convention into a concrete mitigation architecture based on targets for industrialized countries that, at that time, were responsible for the bulk of emissions. The Kyoto Protocol required that developed countries account for their emissions from deforestation under their binding reduction targets but failed to create incentives for developing countries to protect their vast forest estates. Since the Kyoto Protocol did not assign emission limitation obligations to developing countries, the only way developing countries participated in its formal mitigation framework was through sponsoring or approving Clean Development Mechanism (CDM) projects. The inclusion of ‘avoided deforestation’ into the CDM – as suggested by a number of negotiators – would have allowed public and private actors to generate offset credits through investments in protecting tropical forests.

A number of developing countries were eager to see reduced deforestation be rewarded with carbon credits. However, allowing carbon credits to be awarded to avoided deforestation projects sparked controversy. Brazil feared that it would lose control over the Amazon by linking it to offset markets (a fear that prevails until today). Many governments, primarily in Europe, and civil society worried that reducing deforestation would be easy (the contrary proved to be true) and would serve as a substitute for the needed decarbonization in other sectors. Finally, there were worries about the lack of accuracy in measuring and monitoring forest carbon; the potential for reversals, i.e. that forests could be cut down after receiving credit; and leakage of emissions, i.e. the risk of displacement of deforestation from the project site to other areas (worries that have been diminished but persist). In the end, avoided deforestation was excluded from the CDM.

In December 2005, when negotiations on a post-Kyoto agreement began, Papua New Guinea and Costa Rica revived the discussion on avoided deforestation. The two countries put forward a submission to consider whether and how incentives to reduce deforestation could be included in the future climate regime. The proposal to avoid or slow deforestation was welcomed by the global community as one of the first internationally publicized developing country-proposal to make a quantifiable contribution to scaled-up mitigation efforts under the UNFCCC and led to the adoption of a Warsaw Framework of ‘Reduced Emissions from Deforestation and forest Degradation’ (REDD+) in 2013.

Putting Trust in Different Actors: CDM and REDD+

However, the theory of change that supported ‘avoided deforestation’ had shifted since the adoption of the Kyoto Protocol, and this fundamentally influenced the design of REDD+. As it goes when actors and Zeitgeist change, the departure from previous discussions was complete and radical to the point that it ignited a dispute within the forest community which continues to smolder until today – and still triggers occasional disruptions. Let me explain.

The CDM put its trust in the ability of non-state actors to identify and mobilize emission reduction opportunities. Consequently, the vast majority of CDM projects were developed by private actors who developed projects in renewable energy or waste sectors in developing countries and sold certified carbon credits primarily to EU actors that sought to use CDM credits to meet regulatory obligations to reduce greenhouse gas emissions. The role of developing country governments in the CDM was limited to confirming that a project contributed to the country’s sustainable development.

The CDM received a lot of criticism over the years1 but also brought about benefits unusual for international treaties: It created a vibrant carbon market, motivating private (for-profit and non-for-profit) actors and empowering local communities around the globe to actively engage in climate mitigation through the implementation of carbon projects.2 What the CDM did not do – and never was designed to do – was motivate governments to adopt climate policies. The relative independence of the CDM catalyzed private actors in countries with weak governance to take action, but it failed to create similar incentives for governments. The CDM operated as a truly bottom-up carbon market mechanism.

When REDD+ was negotiated, the clear intent was not to build on the CDM, but rather to design a mechanism that put governments front and center of the action. Its underlying assumption was that governments had so far failed to put in place the regulatory and policy frameworks that would protect forests due to a lack of, mainly financial, incentives. If they received the promise of payments upon delivering forest conservation results, they would be properly motivated and do what was necessary to conserve their tropical forests. Consequently, REDD+ does not speak about ‘projects’ or ‘private entities’ but suggests that governments should take the lead in reducing deforestation through implementing a wide range of forest and land planning policies, including payment for ecosystem services, tenure reform, forest sector and forest restoration programs, stronger standards for the production of deforestation-free commodities, and support for improved productivity and organization in smallholder systems. They would then be paid – ideally ex-post – for their performance in terms of reduced emissions from deforestation.

REDD+ willfully ignored projects and replaced the carbon market-based sensibility of the CDM with a system that relies on a comparatively soft set of guidelines and principles formulated in the Warsaw Framework for REDD+. (Note that stringency may be added if REDD+ is included in the system of cooperative approaches under Article 6 of the Paris Agreement, but this is uncertain and a topic for a future blog post.)

It is important to mention that, despite the clear desire of some negotiators, REDD+ did not eliminate ‘avoided deforestation projects.’ Forest projects have remained a popular project class in voluntary markets, not least due to their many co-benefits, such as biodiversity or watershed protection, but also for their strong links with local communities and livelihoods. The recent investments of big oil companies into forest carbon and ‘nature-based climate solutions’ that we discussed in our last blog post demonstrates that forest projects have not lost their lure.

In sum, the regulatory transition from the CDM to REDD+ played out on three fronts: from a focus on private actors to a focus on governments; from project scale to national scale; and from a market-driven, regulatory approach to government-to-government payments for results.

Why REDD+ and Carbon Markets Should Coexist

Today, as the limitations of REDD+ become obvious3, one can only wonder why international negotiators thought in such a binary system (national or project-level) and failed to confront the reality that is obvious to many operating on the ground: forests can only be protected by creating complementary incentives for public and private actors. An international system that discriminates against one or the other is by definition weaker than a system that creates incentives for all actors with the means and the ability to protect forests.

Without a doubt, governments must act as guardians of the forests and of the people depending on forests for their livelihoods. But governments have proven to be shaky partners –  for other governments, even more so for local citizens and civil society, and most disappointingly for local communities and indigenous peoples. This does not mean that efforts to engage governments should be reduced – on the contrary. Building robust institutions makes them less vulnerable to corruption, more accepted, and less likely to be dismantled.

But their fickleness also means that relying on governments alone to solve the deforestation crisis is prone to failure. Tropical forest governments more often than not fail to prioritize conservation and sustainable rural development over the desires of powerful economic lobbies. Even where political will does exist, governments often lack the means to confront deforestation. Whether it is the Colombian Amazon, the Central American forest corridors, or the vast forests of the Congo Basin, government institutions at the forest frontier are often weak or absent.

Civil society and the private sector play important roles in protecting forests. Corporations and financial institutions are important agents of deforestation and carry the responsibility to make their investments and supply chains forest- and climate-proof. When it comes to carbon markets, private project developers are more flexible and nimbler than governments and hold the potential to contribute to reduced deforestation in areas beyond governments’ reach. As project developers, their efforts may be limited in scope and territory (even though some projects cover large areas), but they are often the only efforts that provide local communities with alternative sources of income or seek to implement community forestry. Most of these projects depend on donor funds and private donations, which can be fickle. Selling carbon credits can sometimes offer these programs a lifeline to raise new funding and – at least temporarily – become independent from donations.

The solution is the integration of carbon projects into national REDD+ systems. If projects are ‘nested’ within national accounting frameworks, they may attract carbon market finance while the environmental integrity of the system is protected: Double counting can be avoided, reference levels adjusted, and leakage captured. If government systems fail, projects should be able to survive; and where projects falter, government action may still protect forests. This double-track strategy also allows tapping into different sources of funding. Governments could benefit from public results-based-payment programs, capacity building, and policy support, while projects could attract funds from philanthropies and private investors. Together with investments into supply chains, green credit lines, subsidy reform, and demand-side measures, this integration could bring us a long way towards the proposed Marshall Plan for forests.

It is time for REDD+ policymakers to recognize that the system needs to rest on two pillars: technical and financial support to tropical forest governments that have proven they have the political will and regulatory ambition to protect tropical forests; and clear recognition in policy and action of private actors and civil society that work towards forest conservation on the ground. International and national systems must be adjusted accordingly. Let’s bridge the decade-old divide and marry the bottom-up and top-down world views on REDD+!

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More on the Bionic Planet Podcast

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[1] For many : M. Cames et al. (2016), How additional is the Clean Development Mechanism? Study prepared for DG CLIMA, Ref: CLlMA.B.3/SERl2013/0026r; Agarwal, A. (2016), How sustainable are forestry clean development mechanism projects?—A review of the selected projects from India, Mitigation and Adaptation Strategies for Global Change January 2014, Volume 19, Issue 1, pp 73–91

[2] For many: J. Ellis et al. (2007), CDM: Taking stock and looking forward, Energy Policy 35 (2007) 15–28.

[3] Until today, only very little money has been disbursed to reward REDD+ results. The World Bank’s Forest Carbon Partnership Facility (FCPF) has only signed three Emission Reduction Payment Agreements and has not disbursed results-based funding. Tropical deforestation continues to rise.

Will Small Forest Owners Finally Be Able To Tap Carbon Markets?

18 October 2019 | The Wong family of Peru amassed a fortune building up a chain of supermarkets, but much of their wealth today is in real estate – including the 220,000-hectare (543,400-acre) Madeacre forestry concession that family’s late patriarch, Erasmo Wong, cobbled together in the province of Tahuamanu.

He purchased the land with the aim of managing it sustainably, and his family has honored that objective: The entire estate is managed in accordance with the rules of the Forest Stewardship Council (FSC). Among other things, that means the company practices reduced-impact logging (RIL), which involves carefully harvesting only mature trees that can be chopped down without damaging those around it.

It’s an ecological success story, but the massive Madeacre and the smaller concessions around it are also a microcosm of the challenges to scaling up environmental markets around the world – a key focus of this month’s Environmental Markets and Finance Summit, which takes place in Washington, DC from the 29th through the 31st of October.

The Challenge of Scaling Up

“Some of our neighboring concessions are just 5,000 hectares,” says Nelson Kroll, Madeacre’s forestry manager. “They’d be operating at a loss under FSC, so they don’t do it.”

The problem is partly scale. RIL is a tedious and labor-intensive approach, while FSC certification adds in an equally tedious layer of documentation. This drives the cost of production up by about 35 percent, Kroll says, while the premium the company gets for FSC-certified wood is just 5 percent.

“We do FSC because the Wongs have all the money they need, and they’re not hoarders,” he says. “Plus, it’s a massive concession, so we have the scale to actually make a profit, even with the added costs.”

From a purely business perspective, FSC doesn’t pay, even for Madeacre, and certainly not for the smaller concessions around it – despite the fact that FSC issued a streamlined but still daunting Small and Low-Intensity Managed Forests (SLIMF) methodology more than a decade ago. SLIMF reduces some of the burden for smaller landowners, but uptake has been disappointing.

In theory, this is where carbon finance could play a role. After all, if those small concessionaires could afford to practice RIC, they’d be avoiding the collateral destruction of trees, which means they’d be reducing their greenhouse gas emissions – and by as much as 50 percent, according to The Nature Conservancy (TNC). If the only way they can afford to avoid the collateral destruction of trees is to get paid for the avoided emissions, they meet the “additionality” requirement of carbon markets.

The Verified Carbon Standard has recognized offsets generated under RIL for almost five years, but Kroll says today’s carbon prices are just too low, and the cost of carbon accounting too high, to make the practice viable.

The story continues below, but you can learn more about Madeacre by listening to Episode 36 of the Bionic Planet podcast, which is available on all major podcatchers, as well as at Bionic-Planet.com, and on this device here:

Finance and Technology

The problem is a global one, but several companies and NGOs are experimenting with ways of scaling up financing mechanisms that support sustainable practices, in both developing countries like Peru and developed countries like the United States.

One company active in the United States is the Forestland Group, which has been experimenting with carbon finance for nearly a decade. It recently participated in a massive experiment spearheaded by the Dogwood Alliance to see if it was possible to make FSC viable by generating RIL offsets under California’s cap-and-trade program. The conclusion: yes, carbon finance can cover the cost of FSC certification, but only for landowners whose forests are at least 2,600 acres in size, and only if the carbon price is $11.50 or higher.

That’s roughly twice the average price identified in Ecosystem Marketplace’s last State of Voluntary Carbon Markets report, but Forestland has, nonetheless, embarked on a plan to expand its carbon finance area from 9,700 acres to 240,000 acres in the Southern Appalachians. Roughly 8 percent of private forestlands are registered in California’s cap-and-trade program, and forest offsets have delivered more than 75 percent of the mitigation offsets to-date.

Australia-based New Forests has also been working with US landowners through its Forest Carbon Partners program, which channels investment into a developing a portfolio of carbon projects on third-party land. They’ve worked with 18 landowners to date, covering an area about the same size as the Madeacre concession.

By working with multiple landowners, both companies aim to bring efficiencies to carbon project development, enabling landowners of varying sizes to access the market and bringing down the costs of developing and verifying carbon projects.

“Essentially, a challenge for smaller forests for carbon has been the same as accessing FSC markets for small forest owners – they lack the economies of scale,” says MaryKate Bullen, who is Director of Sustainability and Communications for New Forests. “We’ve brought these efficiencies about through operating an aggregated portfolio of carbon projects, enabling streamlined processes and development of expertise and skills in the procedures of project management for carbon over time.”

She also sees costs dropping as remote sensing technologies finally deliver on their potential. Although no technologies can yet replace on-the-ground sampling, for example, Silvia Terra’s CruiseBoost uses remote sensing data to determine the exact number of samples needed to generate reliable carbon accounting in a given terrain. In some cases, the number of samples is reduced by half, and the cost drops accordingly.

Ultimately, however, the cost of carbon must simply rise higher than it is now. A recent paper in Nature Climate Change concluded that forests would remove 5.7 billion additional tons of carbon dioxide from the atmosphere by 2050 at a carbon price of $20 per ton, and an additional 15.1 billion tons at a price of $50 per ton prices that are still far below the $75 per ton figure that the International Monetary Fund says we need by 2030 if we’re to meet the targets set out in the Paris Agreement, and that pale in the comparison to the cost of doing nothing.

How You Can Support Our Work
When it comes to environmental solutions, the question too few people ask is, “How will you pay for it?”
It’s a critical question, because all environmental problems are, at heart, economic problems. Indeed, if the cost of environmental degradation were embedded in the cost of production, we’d have met the climate challenge years ago.
Ecosystem Marketplace has been covering the nitty-gritty and wonky (but oh, so important) issue of how you pay for it since 2005 – and never with a paywall. But generating high-quality content is hard work, and it’s clear to us that we’ll need more resources if we’re to continue shining a light on these important issues.
If you like our stories and want to see more of them, then help us out, with either a one-time payment or an ongoing subscription here:

The Case of the Billion-Dollar Foot (or The High Cost of Cheap Regulation)

16 October 2019 | Dave Groves remembers the incident all too well.

“We had projects with a combined economic value in the billions of dollars,” he says. “And we were waiting on a Corps site visit to check up on the growth of vegetation.”

The “projects” he’s referring to are roads, pipelines, and other infrastructure developments that local authorities had determined were critical for regional development, but which could only proceed if they could be developed in a way that wouldn’t disrupt downstream waters.

The “Corps” is the Army Corps of Engineers, which is responsible for protecting the “waters of the United States,” including wetlands that act as floodplains and headwaters for rivers and streams.

The “site” is a massive swath of once-degraded wetland that Groves’s employer,  The Earth Partners (TEP), had acquired and restored to create a “wetland mitigation bank” – a reservoir of environmental credits that infrastructure developers could buy to offset the impacts that their new projects would have.

The “vegetation” are the mosses, grasses, and shrubs that can only grow in functioning wetlands, and the site visit was one of the final steps in a long review process that had to be completed before the credits could be released.

“Anyway,” Groves continues, “We’re waiting on a site visit, and the Corps project manager broke his foot.”

The story continues below, but you can learn more details by listening to Episode 46 of the Bionic Planet podcast, which is available on all major podcatchers, as well as at Bionic-Planet.com, and on this device here:

That minor injury had outsized consequences, in part because of Congressional penny-pinching that left the Corps short on staff.  With no one available to step in for the project manager, the infrastructure projects, already a year behind schedule, were on hold once again.

“I’m not blaming that Corps officer for breaking his foot by any stretch of the imagination,” Groves stresses, “but a system where a single broken foot will result in billions of dollars in delays and economic value is a broken system.”

Parts of it may be broken, but the US system of wetland protection is also true a regulatory success story. When properly funded, the system not only protects critical wetlands, but does so in a way that’s cost-effective for regulated entities and helps support a $25 billion restoration economy that employs more people than logging, more than coal mining, and more than steelmaking.

That’s because Section 404 of the Clean Water Act allowed for the evolution of “compensatory mitigation”, which is a regulatory system that lets developers impact waterbodies, but only under some circumstances, and only if they either fix their mess or create something as good or better than what is lost.

The system offers developers flexibility, and it maintains environmental integrity because the Corps works with tribal and state authorities to make sure the messes really are fixed. It does so on a relatively small regulatory budget of roughly $200 million per year, including a $10 million increase that was recently approved by the House Appropriations Committee. That, however, leaves the Corps about $50 million shy of what’s needed to conduct all the inspections that are needed without cutting corners, according to the Ecological Restoration Business Association (ERBA), an industry trade group.

Tammy Turley, who is Chief of the Corps’s New England District, points out that delays only impact projects that require mitigation, which is a minority of those the Corps permits. In most cases, developers are able to design their projects so as to avoid any disruption of waterways. Projects that do impact waterways are only approved after an extensive public consultation process, but they still cannot proceed until environmental credits are released.

According to Corps guidelines, environmental credits are supposed to be approved within 225 days, but the Corps’s own figures show they often take more than 1400 days – or almost four years – leading to billions of dollars in lost income for infrastructure developers and increased risk for developers of mitigation banks.

“When you add it all up, we’re talking five-plus years to get a mitigation bank permitted, and a lot can change in that time from a market standpoint,” says Groves. “That adds a rather sizable layer of uncertainty to the process of developing a mitigation bank, and therefore makes it difficult to attract the big capital players into the marketplace.”

What’s more, the financial losses are routinely (and unjustly) blamed on environmental regulations themselves, even though the actual mitigation costs pale in comparison to the overall cost of such projects, not to mention the costs incurred when projects are delayed or the damages inflicted when projects are done on the cheap. The late Supreme Court Justice John Paul Stevens even took note of that in a landmark 2006 dissenting opinion.

“It is true that the cost of §404 permits are high for those who must obtain them,” he wrote, “but these costs amount to only a small fraction of 1% of the $760 billion spent each year on private and public construction and development activity.”

In an effort to identify both bottlenecks and potential solutions, the Alliance for Environmental Markets and Investments (AEMI), together with Ecosystem Marketplace publisher Forest Trends, are convening month-end summit called the Environmental Markets and Finance Summit, while several NGOs are advocating for increased governmental funding.

Both the Army Corps and the Environmental Protection Agency are exploring ways of fast-tracking the approval of credits from mitigation bankers who meet certain criteria, but that could require costly insurance strategies.

Todd BenDor, a professor of Land Use and Environmental Planning at the University of North Carolina, Chapel Hill, points out that regulated entities have the most to gain from shortened delays, and he argues that, theoretically, they should be willing to cover the shortfall through user fees, much as participants in the securities and derivatives industries fund the Securities and Exchange Commission and the Commodity Futures Trading Commission. In that case, fees would still go to the Department of the Treasury, and Congress would still have to appropriate the funding.

One thing is clear: until a solution is reached, small delays will remain inevitable, and small delays have a way of ballooning into long ones.

“This is an industry that depends on natural processes,” says BenDor. “There’s a growing season and a harvest season, just as there’s a building season and a hunkering-down season.”

That means a two-week delay in late fall – caused, perhaps, by a broken foot – could become a six-month delay if it bleeds into winter.

How You Can Support Our Work
When it comes to environmental solutions, the question too few people ask is, “How will you pay for it?”
It’s a critical question, because all environmental problems are, at heart, economic problems. Indeed, if the cost of environmental degradation were embedded in the cost of production, we’d have met the climate challenge years ago.
Ecosystem Marketplace has been covering the nitty-gritty and wonky (but oh, so important) issue of how you pay for it since 2005 – and never with a paywall. But generating high-quality content is hard work, and it’s clear to us that we’ll need more resources if we’re to continue shining a light on these important issues.
If you like our stories and want to see more of them, then help us out, with either a one-time payment or an ongoing subscription here:

IMF: $75 Per Ton Carbon Price Needed by 2030 to Meet Climate Challenge

This story is reprinted from the IMF blog.

11 October 2019 | Global warming has become a clear and present threat. Actions and commitments to date have fallen short. The longer we wait, the greater the loss of life and damage to the world economy. Finance ministers must play a central role to champion and implement fiscal policies to curb climate change. To do so, they should reshape the tax system and fiscal policies to discourage carbon emissions from coal and other polluting fossil fuels.

The Fiscal Monitor helps policymakers choose what to do and how to do it, right now, globally and at home.

A better future is possible. Governments will need to increase the price of carbon emissions to give people and firms incentives to reduce energy use and shift to clean energy sources. Carbon taxes are the most powerful and efficient tools, but only if they are implemented in a fair and growth-friendly way.

To make carbon taxes politically feasible and economically efficient, governments need to choose how to use the new revenue. Options include cutting other kinds of taxes, supporting vulnerable households and communities, increasing investment in green energy, or simply returning the money to people as a dividend.

The price to pay

To limit global warming to 2°C or less—the level deemed safe by science—large emitting countries need to take ambitious action. For example, they should introduce a carbon tax set to rise quickly to $75 a ton in 2030.

This would mean household electric bills would go up by 43 percent cumulatively over the next decade on average—more in countries that still rely heavily on coal in electricity generation, less elsewhere. Gasoline would cost 14 percent more on average.

But the revenues from the tax, between ½ and 4½ percent of GDP (depending on the country), could be used to cut other taxes, such as income or payroll taxes that harm incentives for work and investment.

Governments could also use the money to support disproportionately affected workers and communities, for example coal-mining areas, or pay an equal dividend to the entire population. Alternatively, governments could compensate only the poorest 40 percent of households—an approach that would leave three quarters of the revenues for additional investment in green energy, innovation or to fund the Sustainable Development Goals.

Taxpayer money would also help save more than 700,000 people a year in advanced and emerging market economies who currently die from local air pollution. And the money would help contain future global warming, as agreed by the international community.

It can be done

About 50 countries have a carbon pricing scheme in some form. But the global average carbon price is currently only $2 a ton, far below what the planet needs. The challenge is for more countries to adopt one and for them to raise the price.

Sweden has set a good example. Its carbon tax is $127 per ton and has reduced emissions 25 percent since 1995, while the economy has expanded 75 percent since then.

Acting individually, countries may be reluctant to pledge to charge more for carbon if, for example, they are worried about the impact of higher energy costs on the competitiveness of their industries.

Governments could address these problems with agreement on a carbon price floor for countries with high levels of emissions. This can be done equitably with a stricter price floor requirement for advanced economies.

For example, a carbon price floor of $50 and $25 a ton in 2030 for advanced and developing G20 countries respectively would reduce emissions 100 percent more than countries’ current commitments in the 2015 Paris Agreement on Climate Change. Countries that want to use different policies, like regulations to reduce emission rates or curb coal use, could join the price floor agreement if they calculate the carbon price equivalent of their policies.

Polluters pay

Feebates are another option at policymakers’ disposal. As the name implies, in a feebate system governments charge a fee on polluters and give a rebate for energy efficient and environmentally-friendly practices. Feebates encourage people to reduce emissions by choosing hybrid vehicles over gas guzzlers or using renewable energy like solar or wind over coal.

Policies need to go beyond raising the price of emissions from power generation or domestic transportation. It is also necessary to introduce pricing schemes for other greenhouse gases, for example, from forestry, agriculture, extractive industries, cement production, and international transportation.

And governments need to adopt measures to support clean technology investment. These include power grid upgrades to accommodate renewable energy, research and development, and incentives to overcome barriers to new technologies, such as the time it will take companies to efficiently produce clean energy.

The world is looking for ways to foster investment and growth that create jobs. What better way to do it than investing in clean energy to both slow and adapt to climate change. The transition to clean energy may seem daunting, but policymakers can act to change the current course of climate change. As Nelson Mandela once said, “It always seems impossible until it is done.”

Want to Save Endangered Species and Clean Up Our Water? Hop in a Sandbox!

9 October 2019 | When the US Environmental Protection Agency surveyed the country’s rivers and streams a decade ago, it found that 46 percent of them were in ‘poor’ biological condition, usually because of agricultural fertilizer. More gunk has certainly piled up since, in part because no one can agree on how to establish total maximum daily loads (TMDLs).

That matters because TMDLs are the amount of fertilizer that water bodies can realistically absorb in a given day, and they’re used to determine the caps in cap-and-trade for waterbodies – technically known as water quality trading (WQT). Science-wise, WQT should be able to reduce runoff across the United States, according to a 2017 mapping exercise conducted by Ecosystem Marketplace, the National Network on Water Quality Trading, and the US Environmental Protection Agency’s EnviroAtlas project.

Policy-wise, however, WQT can’t exist without agreement on TMDLs, and that agreement doesn’t exist.

But what if regulators could test different regulatory approaches over limited areas and for a limited amount of time, much as they already pilot new technologies? And what if they did so in an iterative process that captured what worked and discarded what didn’t? Might this accelerate agreement on sticky regulatory issues that have been hindering progress for a decade?

Yes, say the authors of “Sandboxing Nature: How Regulatory Sandboxes Could Help Restore Species, Enhance Water Quality and Build Better Habitats Faster,” a paper published this week by the Environmental Policy Innovation Center (EPIC).

The authors, Phoebe Higgins and Timothy Male, are both regulatory veterans. Higgins ran Environmental Defense Fund’s California Fisheries Fund for six years, as well as a fisheries finance program, before joining EPIC. Male also put in time as an EDF scientist working in restoration before winning election to a city council in Maryland and serving as a senior adviser to the Obama administration.

The paper will serve as the basis for a panel discussion at the Environmental Markets and Finance Summit, which takes place in Washington, DC from the 29th through the 31st of October. Co-hosted by Ecosystem Marketplace, the summit will explore ways of scaling up successful environmental solutions and abandoning unsuccessful ones.

Regulatory Sandboxes

The paper argues that environmental regulators can lift a page from their peers in the financial service sector by deploying a regulatory sandbox approach to environmental challenges. Like the sandboxes of our youth, regulatory sandboxes are walled-off areas of activity, but instead of kids building sandcastles, they’re full of adults building new approaches to stubborn regulatory challenges.

The authors are careful to differentiate between sandboxes, which are designed to incubate new regulatory approaches and often exist outside of existing regulations, and pilot projects, which are designed to test new approaches to implementing programs under existing regulations.

“Regulatory sandboxes provide problem-solving-oriented staff whose job is to help applicants efficiently,” the authors write. “Pilots often take a long time to get started and a long time to show results—sandbox projects don’t.”

They stress that the approaches being tested in sandboxes are designed to either grow and proliferate or flop and die.

“Sandboxes require risk identification and mitigation, clear outcomes, objectives and outputs and feedback loops to ensure that participants and the public learn from and can adapt to the success or failure of the novel approach,” they write.

New Challenges, New Technologies, but Old Regulations

In the United States, sandboxes began with the Consumer Financial Protection Bureau, the brainchild of Sen. Elizabeth Warren while she was still a college professor. The bureau has run two sandbox efforts in the financial services sector, but the approach has not yet been tried in the environmental sphere.

The paper, however, identifies several examples of challenges that the authors believe can benefit from a sandbox approach – especially cases where new technologies and challenges seem completely at odds with decades-old regulations, like the Endangered Species Act of 1973.

“The internet didn’t exist the last time the law was reauthorized,” the authors note. “Laws and policies like this carry anachronisms in them that simply make it harder to use today’s technologies and data tools.”

They also cite proposals to use green infrastructure in one part of a watershed to absorb stormwater runoff from another part, potentially using real-time data to optimize stormwater and flood control systems.

“They’re often stuck in cities’ multi-year consent decree and permit renewal processes before deploying solutions,” they write. “A sandbox for stormwater technology could encourage testing ways for cities to achieve their stormwater-related water quality goals faster and more cost-effectively by creating a quicker path for EPA or states to approve permit amendments and other approvals, and quickly deploy and learn from new techniques.”

Another example: efforts to revive depleted soils across the United States.

These usually work by paying farmers to implement certain predetermined practices, “but what if they had the flexibility to tailor their approaches and methods to their own lands and get paid a set amount based on soil health outcomes rather than practices?” the authors ask.

A sandbox approach, they argue, can make just such an approach viable.

The paper is available for download here.

You can register for the summit here.

Carbon Offsetting: the Frequently Asked Questions

This story has been adapted and condensed from a piece we originally ran in 2017.

8 October 2019 | So, Greta Thunberg got to you, and you’ve decided to reduce your carbon footprint by going vegan and riding your bike as much as possible. Good for you! But what about those emissions you can’t eliminate? Maybe you have to drive to work, or maybe you have to fly to meetings.

You can offset your emissions by purchasing carbon credits, which are generated by reducing emissions elsewhere – by, say, planting trees or saving endangered forest, or building giant wind farms in developing countries. All legitimate offsets conform to one carbon standard or another, and all follow the same basic rules of carbon accounting, which have evolved over decades of trial, error, and adjustment. Here are some of the most commonly-asked questions about carbon accounting.

It’s very much a work in progress, and I’ll make changes to it as people suggest them. So, if you’re an expert who sees errors, e-mail me at szwick@forest-trends.org. If you’re a novice who finds parts of this confusing, do the same. For now, here it is:

How do I Calculate my Carbon Footprint?

You can use scores of sites to calculate your greenhouse gas emissions, and all are self-explanatory. I recommend CarbonFootprint.com because it’s not trying to sell anything. As far as I know, all footprint calculators use the same formulas.

Where do I Buy Carbon Offsets?

I’ve found a few platforms that provide multiple ways to buy offsets, and am listing them at the end of this piece because I wanted to explain a few things first. Feel free to scroll to the Buyer’s Guide at the end. You can always scroll back up if something isn’t clear.

What are Greenhouse Gasses?

We all know the basics: greenhouse gasses float around in the air and cause the atmosphere to act like a “hothouse”, as Swedish scientist Svante Arrhenius called it when he identified the phenomenon back in the 1800s. (Yes, it’s been that long, and Spencer Weart’s 2003 book “The Discover of Global Warming” told the tale quite well 15 years ago.)

Greenhouse gasses work by reflecting some of the sun’s heat back out into space but trapping more of it down here with us, along with heat coming from the Earth’s core. We need greenhouse gasses to prevent Earth from turning into an ice ball, but too much greenhouse gas will cook us.

Some greenhouse gasses – like carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) – existed before we came along, but our activities are increasing them. Others – like the perfluorocarbons (PFCs), the hydrofluorocarbons (HFCs), and sulphur hexafluoride (SF6) – are our own contribution to the mess.

If There are so Many GHGs, why do we Talk of a “Carbon” Footprint?

Mostly because carbon dioxide is the greenhouse gas that we humans generate the most of, thanks to the fossil fuels we burn and the forests we chop. It’s also a benchmark for the other greenhouse gasses, but not a perfect one.

Remember your high-school biology? Living forests breathe in both carbon dioxide and nitrous oxide, and they breathe out oxygen, while keeping most of the carbon for themselves and injecting most of the nitrogen into the soil, where it acts as fertilizer. Carbon, therefore, concentrates in plants and animals, and it becomes the main ingredient of fossil fuels like coal and oil after those beings die and ferment.

We release carbon dioxide by burning fossil fuels, and we release methane and nitrous oxide by draining peat bogs, raising cows, and spreading nitrogen-based fertilizer, among other activities.

What do you Mean by “a Benchmark for the Other Greenhouse Gasses”?

Each of these greenhouse gasses behaves a little differently. Methane, for example, traps about 100-times more heat than carbon dioxide does, but it also disintegrates more quickly. Over a period of 100 years, methane is “only” 25-times as bad as carbon dioxide, but over 20 years, it’s 72-times as bad. On top of that, rising temperatures will force our natural systems to release more and more methane – so a little warming now could mean a lot more later.

Scientists managed to simplify the mess – albeit imperfectly – by coming up with something called “CO2e”, which stands for “Carbon Dioxide Equivalent” and acts as a standardized measurement of greenhouse gases. It works by first determining how many times worse than carbon dioxide a given greenhouse gas is over the next century, and using that as the multiplier.

Because methane is 25-times worse than carbon dioxide over 100 years, for example, its multiplier is 25; but many environmentalists argue it should be 72, because the next 20 years are so critical. For carbon accounting purposes, that means you have to buy 25 metric tons of carbon offsets, each representing one metric ton of CO2e, to generate enough emission-reductions to offset one ton of methane emissions. You can also triple that and buy 72 carbon offsets, and some companies are, in fact, doing so. As an individual, however, methane is hard to calculate, which is one reason we need companies to reduce their emissions – preferably by fixing their processes, but also by offsetting those emissions they can’t reduce themselves.

Nitrous oxide’s multiplier, by the way, is 298, and Sulphur hexafluoride’s is a staggering 22,800. Between them are a wide range, which you’ll find here.

Is “Carbon Price” the Same as “Social Cost of Carbon”?

No. The “social cost of carbon” is the theoretical cost to society of every tC2Oe emitted, and most people peg it around $100 per ton.

The “price” is what people pay for a one-ton emission reduction, and they can do so either voluntarily, or, if they are a regulated company, under a cap-and-trade program like California’s. Be aware that compliance programs are a bit more complex, because some prices are set as taxes, while other prices are determined through bidding for allowances, which are issued by the government, and still others are determined through buying and selling offsets. Most cap-and-trade programs are a hybrid of all three.

Why are Prices so Different?

Now we’re getting into the meat of this issue. At Ecosystem Marketplace, we track voluntary prices, and we’ve found them from lower than a penny per ton of C2Oe (often abbreviated as “tC2Oe”) for offsets from the now-defunct Chicago Climate Exchange to higher than $120 per ton for Japan’s “J-VER” credits.

Some of the cheapest offsets are no longer being produced because buyers rejected them. One type, for example, worked by reducing man-made industrial gasses, which is good, but did so by going into developing countries and simply adding catalyzers that burned away the gas – a practice that was mandatory in developed countries, and that arguably rewarded bad actors who simply stopped being horrible. (For details, see this EU press release).

Other project types, like those generated by building hydropower plants, are cheap because buyers don’t like the fact that hydropower plants often force poor people to move (and, it turns out, may be emitting more methane than previously believed because of the plants that rot in the reservoirs).

On the flip side, people in developed countries like Japan and the United States often prefer buying offsets generated closer to home, and they’re more expensive to generate than those in developing countries.

For the most part, the actual emission-reductions are uniform across standards, because they use the same basic science. They differ in the way they treat “co-benefits” – or how they impact indigenous people and biodiversity – as you can see by reading the 2012 article “Carbon Offset Prices Vary Widely By Standard And Project Type”.

How do Standards Work?

They work by creating frameworks within which carbon offsets can be developed and then overseeing the process through which the offsets are created, tracked, and sold.

The Ecosystem Marketplace State of Voluntary Carbon Markets reports track almost 20 standards, but they’ve each evolved similar modus operandi: first, someone (usually a project developer or environmental NGO) has to create a “methodology” for a certain type of offset, such as ones generated by saving peat forests. A methodology is a process for generating offsets that are real, measurable, verifiable, and additional. While most of those terms are self-explanatory, “additional” means that the payment actually caused the emission-reduction to take place, or that the project would not be economically viable without the carbon payments. A company that saves a ton of money by becoming more energy-efficient will, therefore, not be able to earn carbon offsets unless it can prove the offsets made the project possible, and even they would only earn offsets for a small percentage of their overall reductions. Once a company creates a methodology, it runs it through a gauntlet of scientists and carbon accountants who try to shoot holes in it. Only after the methodology survives this process is it recognized under a given standard, but there is some debate over the additionality of certain project types.

But it’s not over yet: once a methodology exists, a project developer has to design a project within the methodology’s guidelines, and this specific project design also goes through a rigorous process of peer review. If approved, the project is “validated”. Then, to sell offsets, it’s “verified” by outside auditors who make sure it’s doing what it’s supposed to do.

Any offsets that are verified are then deposited in a registry, which is like a clearinghouse tracks offsets so the same one doesn’t get sold twice. When you buy an offset, it’s “retired”, meaning it can never be sold again.

Almost 90 percent of all offsets are certified under one standard or another, according to our most recent “State of the Voluntary Carbon Markets” report.

One standard that’s not listed on the Rainforest Alliance site is the Clean Development Mechanism, which was launched by the United Nations to help companies meet their obligations under the Kyoto Protocol. Though created for companies under cap-and-trade, the offsets are available for anyone who buys them.

What are “Project Types”?

Project “type” refers to the technology that reduces emissions: are you paying to build wind-farms? Or are you paying to plant trees?

Where Can I Buy?

There are plenty of places to buy, and I certainly haven’t seen them all. Having said that, I wanted to start with two that I know and trust, as well as one that offers left over credits from the Kyoto Protocol’s Clean Development Mechanism. I also encourage people to send in recommendations, and we’ll review them and expand this list.CoolEffect

Cool Effect launched last year, and we’ll be profiling them soon. They focus on projects that reduce emissions by helping farmers recycle their methane (turning “poo into power“, as one project description puts it) or switch to clean-burning stoves. All projects are certified to the highest standards, and the group also adds their own filters. What’s more, they provide detailed project descriptions in clear language, as well as monthly updates on project developments, and 90 percent of all the money goes to the project developers. This is the most user-friendly and educational site I’ve seen so far.

StandforTreesLogo

When I offset my own emissions, I use a site called Stand for Trees, which has aggregated offsets from several projects I’ve written about over the years. I can’t say they’re better than others, but it just happens that several projects I’ve written about ended up on the site. Offsets go for $10 per ton, and the project developers get $7 of that.

CarbonNeutralNow

Another option is to buy offsets from a portal that the United Nations created to sell CDM offsets. It’s called “Go Climate Neutral Now”, and it categorizes projects by type, which are pretty self-explanatory. All projects are certified under the Kyoto Protocol’s Clean Development Mechanism, but one of them – specifically #5461 (the Fatima N20 Abatement Project) is an industrial gas project that did legitimately reduce emissions, but did so by just installing a catalyzer that breaks the gas into inert substances, an action that is mandatory in most parts of the world.

What’s Wrong with Cheap Offsets?

I’ll close on a personal opinion of mine, but want to first acknowledge that there is an argument for buying the cheapest offsets: if everybody on the planet decided to go carbon-neutral, the demand will go through the roof. The cheap ones will get bough up, driving money into the most efficient emission-reductions. Then the price will rise, driving money into more expensive technologies.

On the other hand, right now most project developers are hurting. They took a lot of risk to generate these emission-reductions, and I believe that should be rewarded. Plus, if enough of us buy more expensive offsets, we send a price signal to other project developers.

I’ve got friends who buy the cheap offsets, but they buy multiples of what they need to offset their emissions.

In the end, offsetting is just one tool among many, and we ultimately have to reduce our own emissions. Ecosystem Marketplace has found, however, that offsetting is a kind of “gateway strategy” for more sophisticated strategies, and the act of offsetting forces us all to become more aware of our emissions.

Month-End Summit Aims to Accelerate Investments in Natural Infrastructure

4 October 2019 | In 1639, a Flemish alchemist named Jan Baptist van Helmont ripped a willow tree from the pot he’d planted it in and dusted off its roots, kicking off four centuries of scientific inquiry that culminated in the Intergovernmental Panel on Climate Change’s (IPCC) recent warning that 23 percent of all the greenhouse-gas emissions generated by man come from the way we manage our forests, farms, and fields.

Van Helmont began his experiment while under house arrest for heresy – a charge he’d incurred for questioning the supernatural powers of saintly relics during the Spanish Inquisition. Turning his attention to living things, he planted a five-pound willow in a 200-pound pot of dried soil and then watered it for five years. To his astonishment, the tree had gained almost 165 pounds of weight by the time he pulled it out, but the soil, once it dried, weighed only two ounces less.

The tree, he realized, hadn’t grown up from the soil; it had grown down from the sky, and that insight eventually led to our realization that plants use the energy of the sun to pull carbon dioxide out of the air and break it into carbon and oxygen, keeping the carbon for themselves and releasing the oxygen back to the rest of us. If they’re not eaten or absorbed back into nature, the plants eventually become crude oil, coal, or other fossil fuels.

By the late 1800s, Nobel laureate Svante August Arrhenius had coined the term “hothouse effect” to describe the way carbon dioxide traps heat in the atmosphere, and he warned we’d be amplifying that effect by incinerating thousands of years of stored carbon all at once. By the 1990s, hundreds of other scientists had shown that we were also amplifying the greenhouse effect by farming too aggressively and chopping forests.

To meet the climate challenge, the IPCC tells us, we must not only reduce emissions from fossil fuels, but we must embrace natural climate solutions that reduce emissions from farming and forestry as well. Even before this year’s IPCC report, similar findings had fueled calls for a Green New Deal in the United States, one that would revitalize family farms and restore degraded ecosystems across the country, providing millions of high-paying rural jobs and bolstering a restoration economy that already employs hundreds of thousands of people.

It’s a tantalizing idea, but how do we make it a reality?

That’s a question that the Alliance for Environmental Markets and Investments (AEMI) and Ecosystem Marketplace publisher Forest Trends will be addressing at the Environmental Markets and Finance Summit, which takes place in Washington, DC from the 29th through the 31st of October.

In the lead-up to the summit, Ecosystem Marketplace will be running a series of articles built around themes to be explored there – from the ways that government can enable nature-based solutions to the ways green infrastructure projects can attract investors.

We Know What to Do, But Not How to Pay for It

Technologically, we know what to do. On the climate front, scientists from 15 research organizations recently identified 20 “natural climate solutions” that can get us 37 percent of the way to meeting the climate challenge. These solutions range from planting trees in among crops (agroforestry) to applying fertilizer more carefully (nutrient management) to grazing more cattle on less land (intensification), and they are all, to one extent or another, being practiced right now.

Beyond climate, the field of ecological restoration has matured dramatically from the days of landscape design, which focused on aesthetics, to practices that restore the ecological function of degraded landscapes. This means reviving wetlands so they filter water and reviving rivers and streams as part of green infrastructure projects that incorporate ecosystem services into development, so that man and nature can live in harmony.

This all sounds great and exciting – until it comes time to pay for it.

On this front, hundreds of governments, institutions, and green-minded companies have been experimenting on a grand scale, and Ecosystem Marketplace has profiled scores of these efforts over the years. In the coming weeks, we’ll be revisiting some of these programs, including broad-based initiatives like the Livelihoods Funds, which are using carbon finance to help small farmers implement agroforestry projects across the developing world, and individual projects that restore specific parts of degraded rivers or other ecosystems. We’ll also be revisiting the challenges that small landowners face when trying to tap carbon markets, especially at today’s low prices, and covering new initiatives designed to bring risk-sharing lessons from the energy sector into the field of environmental finance.

Like van Helmont before us, we’ll be questioning cherished premises and, no doubt, incurring charges of heresy, at least from some quarters. But hopefully, once we shake the dirt off these old roots, we’ll have a better idea of what works, what doesn’t and why – and how we can scale up what works and abandon what doesn’t.

If you’ll be in DC, be sure to register for the summit here.

Understanding Elizabeth Warren’s Risk Disclosure Act

24 September 2019 | The Green New Deal has been the focal point of the climate debate among the Democratic presidential candidates. Less publicized is the Climate Risk Disclosure Act, a proposal from Senator and presidential contender Elizabeth Warren, that seeks to frame climate change as a threat to the public markets.

The idea: force companies to publicly disclose how their valuation would fare should climate change continue versus how they would do should temperature rise be capped at 1.5 degrees Celsius higher than pre-industrial levels, the benchmark outlined in the Paris Agreement.

“The Climate Risk Disclosure Act empowers investors to make smart decisions about where to invest their money by requiring that public companies be straight about how climate change and related policies will affect their bottom lines,” said Sen. Warren in an exclusive statement sent to Cheddar. “Shareholders weighing this new information will compel big companies to speed up the transition to a clean energy economy, reducing the odds of an environmental and financial disaster without spending a dime of taxpayer money.”

First proposed in 2018, and reintroduced with changes earlier this summer, Warren’s bill would use the Securities and Exchange Commission to force publicly-traded companies to confront their own position within the climate crisis — and share that information with investors. The law, the Senator’s office explains, would also have companies reveal their direct and indirect greenhouse gas emissions, share the total fossil fuel assets they own or manage, and outline their climate change risk management strategies.

It’s certainly not the only climate proposal from the Massachusetts senator, but the Climate Risk Disclosure Act does appear fundamentally Warren-esque in its hope to use regulatory agencies — in this case, the SEC — to push the free market toward a less environmentally-destructive future.

Notably, the legislation was co-sponsored by several other presidential hopefuls, including Sen. Kamala Harris, Sen. Cory Booker, and Sen. Amy Klobuchar. It has also won the endorsement of sustainability advocacy organizations, including the Coalition for Environmentally Responsible Economies (Ceres) and the U.S. Forum for Sustainable and Responsible Investment (US SIF).

Rep. Sean Casten (D-Ill.) introduced the bill in the House, where it just passed the House Financial Services Committee.

“Public corporations must take responsibility for the large financial risks posed by the impacts of climate change, while embracing the economic opportunity of being global leaders in developing a clean energy economy,” said Rep. Casten in a statement to Cheddar. “Our bill utilizes market mechanisms to incentivize climate action by ensuring that corporations disclose the risks posed by climate action to the benefit of their shareholders and the public.”

This is not the first time an idea like this has come up. As early as 2007, state officials, investor advocates, and climate groups — including Ceres, Friends of the Earth, and Environmental Defense — had begun pushing the SEC to issue guidance as to how companies should disclose risks related to climate change.

“Companies’ financial condition increasingly depends upon their ability to avoid climate risk and to capitalize on new business opportunities by responding to the changing physical and regulatory environment,” they wrote in a letter to the agency. For instance, the organizations argued the physical impact of climate change could impact a company’s ability to operate or expose it to new legal proceedings.

Three years later, the agency commissioners’ — in [a party-line vote](https://www.nytimes.com/2010/01/28/business/28sec.html —finally issued guidance suggesting how companies might go about disclosing the risks related to the impact of climate change. The guidance noted that climate change could impact how a business described itself, its legal proceedings, managements’ discussion and analysis of operations, and risk factors facing the company.

“It did not change any of its rules. It just said our current rules mandate addressing the risks of climate change,” explains Alan Palmiter, a business law professor at Wake Forest University.

Palmiter has written that, at first, the SEC’s guidance drew a good amount of attention. He found that a “flurry” of law firms sent letters to their clients notifying them of the new guidance, with many noting that the SEC could take further action on the subject.

However, Palmiter found that some law firms were unsure how to follow the guidance. Some also questioned the capacity of companies to determine how climate change might affect them, and some doubted the existence of climate change altogether, he found.

But despite some initial fanfare, the guidance didn’t seem to have much impact on how many — or how much — companies disclosed about their climate risks. Palmiter notes that “during the first years after the SEC guidance, fewer than three-fifths of companies in the S&P 500 mentioned climate change in their 10-K annual reports” and that most of these were simply “a short one-paragraph risk factor.”

In 2014, Ceres argued the SEC had not prioritized “the financial risks and opportunities of climate change as an important disclosure issue.” The non-profit noted that the agency comment letters related to the adequacy of climate change-related disclosures had dwindled from 38 in 2010 to none in 2013. Many companies had said nothing about climate change in their annual SEC filings, the organization found, and disclosures were highly variable, often revealing little detailed information.

Two years later, the SEC requested comment on a wide range of issues, including climate change, but there doesn’t appear to have been any subsequent action under the Trump administration. Last year, the SEC also received a request for a petition for broader rulemaking governing “environmental, social, and governmental” disclosures.

When asked about its guidance for companies in regard to climate change, the SEC directed Cheddar to the 2010 guidance. The agency did not respond to follow-up questions as to whether further guidance had been issued since then and why enforcement appears to have slowed.

The Government Accountability Office’s February 2018 review of the guidance found that the SEC was limited because it “primarily relies on information that companies provide,” couldn’t subpoena more information, and the information it did have wasn’t standardized across companies. It also reported that industry associations said “they consider the current climate-related disclosure requirements adequate and no additional climate-related disclosures are needed,” but that “some investor groups and asset management firms have highlighted the need for companies to disclose more climate-related information.” Echoing the GAO, Jim Hempstead, a managing director at Moody’s told Politico this June, “Climate disclosures that are coming out right now are all over the map,” and implying that disclosures “comparable across companies” would be more helpful.

Warren re-introduced the legislation this summer, saying it would “give investors, and the American public, the power to hold corporations accountable for their role in the climate crisis.”

The failure of the 2010 guidance has been at the foundation to push this bill ahead, with the leaders of both Ceres and US SIF, citing the SEC’s “lax” enforcement in their support for Warren’s 2019 Climate Risk Disclosure Act.

Whether the bill will be passed or not, like so much of a growing slate of bills meant to combat the climate crisis, may rest on the ability of Democrats to win back the Senate and the White House in the upcoming election.

And while it’s not likely to be signed into law yet, Bryan McGannon, director of government relations at US SIF, notes: “It builds a track record.”

Forests, Farms, and the Global Carbon Sink: How Developing Countries Put Forests on the Climate Agenda

23 September 2019 | As a child of rubber tappers in the Brazilian Amazon, Chico Mendes saw how quickly the life-sustaining forest could disappear if soy farmers and cattle ranchers wanted the land for themselves. They didn’t harvest the trees for rubber or nuts, but chopped them down, burned them, and scraped them away.

Cattle ranching and soy farming, he concluded, didn’t create wealth; they merely shifted it from hundreds of forest people to a dozen or so ranch hands, over and over again, until hundreds became millions and the forest was no more.

He also concluded that indigenous people and rubber tappers, who’d long competed for territory, were natural allies – defenders of the forest – and he began reaching across the bitter divide.

By the time Steve Schwartzman met him in 1985, Mendes had unified these once-bitter foes and begun expanding the alliance to include environmental NGOs like the Environmental Defense Fund (EDF), who Schwartzman worked for.

Cattlemen assassinated Mendes in 1988, three days before Christmas, but his legacy lives on: in the extractive reserves developed in his name, in the expanded rights of forest people now under renewed threat across Brazil, and even in the creation of financing mechanisms embedded in the Paris Climate Agreement – mechanisms that could provide billions of dollars for forest conservation in the coming years under the rubric “REDD+” (Reducing Emissions from Deforestation and forest Degradation, plus the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks).

REDD+ uses carbon finance to protect endangered forests in the tropics, in part by supporting the forest people who have long been among the most effective stewards of the land. It exists today because a coalition of developing nations embraced the work of scientists like Schwartzman and pushed for its inclusion in the United Nations Framework Convention on Climate Change (UNFCCC), the global treaty within which the Paris Agreement nests.

Schwartzman, who now heads EDF’s work on both tropical forests in general and economic incentives for large-scale forest protection in particular, says it was Mendes who inspired him to make this his life’s work.

“Conceptually, I remember him saying, in about 1987, that since the rubber tappers were protecting resources of global importance, there should be some way for them to be compensated,” he says.

In this, the third installment of the series “Forests, Farms, and the Global Carbon Sink,” we revisit a critical moment in the evolution of global climate talks to see how that protection, which had been left out of the Kyoto Protocol, found its way back into global climate talks.

The Rich/Poor Divide

Chico Mendes was assassinated just two weeks after the United Nations formally launched the Intergovernmental Panel on Climate Change (IPCC) to provide a global compendium of known climate science. It was the start of a period during which the world seemed to be addressing greenhouse gasses the way it had ozone-depleting substances in 1987.

In 1989, 24 heads of state, meeting in The Hague, formally recognized the reality of climate science, the need to create a global response to it, and the fact that developed countries had generated the bulk of industrial emissions.

The resulting Hague Declaration on the Environment sought to build on the success of the 1987 Montreal Protocol, which eliminated the chlorofluorocarbons that were depleting the ozone layer. Referencing that success, it explicitly noted that “most of the deleterious emissions originate in industrialized nations.”

When dealing with greenhouse gasses, they agreed, countries whose “level of development and actual responsibility for the deterioration of the atmosphere” are highest should help others bear the burden of slowing or reversing climate change.

As talks evolved, however, developed countries pushed back against what political scientist Joyeeta Gupta, in her 2015 book “The History of Global Climate Governance,” calls the “liability paradigm” that implied major emitters “would in the future also be held liable for climate harm.”

Instead, she says, they drifted towards a “leadership paradigm” that “framed developed countries as leaders rather than polluters. Leaders would show the way for carbon reform. They would not be obliged to compensate other countries, but instead could make resources voluntarily available to countries that were affected by climate change. Leaders would lead, the rest of the world would follow. There was no need for finger pointing or unpleasant liability discussions.”

Within four years, negotiators had signed the United Nations Framework Convention on Climate Change (UNFCCC) at the 1992 Earth Summit in Rio de Janeiro, recognizing the concept of “Common but Differentiated Responsibilities and Respective Capabilities” (CBDR–RC). In 1995, world leaders began convening annual Conferences of the Parties (COPs) to the UNFCCC. In 1997, at COP3 in Kyoto, Japan, they signed the Kyoto Protocol,

The Kyoto Protocol and the Great Divide

The Kyoto Protocol is an addendum to the UNFCCC. It expires at the end of next year and sets emission-reduction targets for developed (rich) countries but imposes no such restrictions on developing (poor) countries. The protocol’s Clean Development Mechanism (CDM) even said that companies in developed countries could, under some circumstances, “offset” part of their emissions at home by financing clean development projects in developing countries.

The European Union implemented a cap on total emissions from industries like energy, metals, and pulp and paper. The cap is still in place and covers 12,000 installations. Companies that can’t meet their targets are allowed to buy credits from those that can under a “cap-and-trade” system works through the European Union Emissions Trading Scheme (EU-ETS). In some circumstances, credits generated through the CDM are permitted into the EU-ETS.

The United States also signed the Kyoto Protocol, but then-President Bill Clinton, facing Republican opposition, never submitted it to the Senate for ratification. His successor, George W. Bush, then vowed never to endorse a treaty that “exempts 80% of the world, including major population centers such as China and India, from compliance, and would cause serious harm to the US economy.” That was the end of US participation in Kyoto Protocol, and the beginning of the end of the “leadership paradigm.”

Kyoto: a Forest-Free Zone

The protocol lived on without the United States, but NGOs and governments were divided over whether to include projects like Mi Bosque (see Forests, Farms, and the Global Carbon Sink: The Genesis) in the CDM. Opponents objected on several grounds – some derided the idea of “putting a price on nature,” which they found morally repugnant, while others focused more on nitty-gritty issues: How can you be sure the money goes to activities that are actually saving the forest and not just rent-seeking (the “additionality” challenge)?  How can you be sure that deforestation avoided in one place doesn’t just move down the street (leakage)? How can you be sure that forest saved and paid for one year doesn’t go up in smoke another year (permanence)?

European governments alternately argued that deforestation wasn’t a major source of greenhouse gasses and that low-priced credits generated by saving forest would flood the EU-ETS, driving prices down too low to really incentivize the kind of engineering adjustments needed to reduce industrial emissions. Brazil opposed inclusion for a similar reason.

As a result, when the Kyoto Protocol was finalized, it recognized offsets generated by planting trees, but not those like Mi Bosque, which reduced emissions by saving endangered forest. (See “Forests, Farms, and the Global Carbon Sink: The Genesis”)

The story continues below, but if you want to learn more about technical issues such as leakage, permanence, and national vs sub-national accounting, then check out our companion series “Shades of REDD+”, which offers a deeper dive into these and other issues. Also, be sure to sign up at the end of the story to receive updates as this series rolls out, and look for this story to be re-edited as well. We rushed it to get it up for Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story. Which brings up another point: stories like this take a lot of work, and Ecosystem Marketplace has been offering them since 2005 without a paywall. If you like our work and want to continue or evenexpand, then help us out, with either a one-time donation or by becoming a monthly supporter:   

Momentum for Saving Forests

NGOs like EDF and The Nature Conservancy (TNC) continued to push for the inclusion of mechanisms that could save forests – and for more ways than one.

“We felt that including forests would not only reduce emissions, but also bring both developing countries and rural America into the mix,” says Annie Petsonk of EDF.

Outside the UNFCCC, the concept was moving forward as green-minded entrepreneurs, global research organizations, and major development banks experimented with different ways of using carbon finance to slow deforestation. Some focused on refining techniques for measuring the ways human action impacted the carbon content of a forest, while others drew on this to experiment with financing mechanisms that built on the model pioneered by Mi Bosque – mechanisms then generally referred to as “avoided deforestation.”

The experiments yielded mixed results, but the World Bank, often criticized for funding development projects that destroy forests, had begun offering development loans that were contingent on reducing deforestation – including one to Papua New Guinea (PNG).

Papua New Guinea

PNG had already run afoul of US and EU laws forbidding the import of illegally-harvested timber; and in 2003, the World Bank offered to loan the country $17 million to clean up its act. The Prime Minister, Sir Michael Somare, liked the idea but not the amount – which came to less than half of what his country earned from logging every year. He turned to a young banker named Kevin Conrad.

Conrad, who held dual citizenship in PNG and the United States, had grown up in PNG but earned a finance degree at the University of Southern California. Somare had met him while Conrad was working in California, and he persuaded him to come back to PNG.

“He basically asked me to look into the carbon stuff,” Conrad says. “I learned that the World Bank was the biggest holder of carbon credits at the time, so the first person I called was Ken Newcombe, who was running the World Bank’s carbon program at the time.”

He says Newcombe offered him a brief history of the Kyoto Protocol and how forests had been excluded.

Conrad reported his findings to Somare, who asked him to keep digging and eventually appointed him to negotiate on PNG’s behalf in the UNFCCC – a job Conrad took while working towards a master’s at Columbia University on deforestation as a market failure.

This story will be updated with additional voices and perspectives later in the week. That’s not the way we like to do things, but we wanted to get this simplified version up in time for Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story. CCN’s initial phase ends today, and we felt it was important to get this piece up before it ended. If you want to hear the full interview with Kevin Conrad, be sure to check out our three-part podcast series, “Forests in the Paris Climate Agreement.” It’s available on iTunes, TuneIn, Stitcher, and on this device here:       

The Learning Curve and the Power of Cooperation

Conrad began reaching out to key people in the carbon space, beginning with Peter Frumhoff of the Union of Concerned Scientists (UCS), Annie Petsonk of EDF, and Ghanaian attorney Seth Osafo, who was acting as a senior advisor to the UNFCCC.

“Peter helped me understand the science, Seth helped me understand the legal issues, and Annie helped me identify key people in developing countries who were interested in saving forests,” Conrad says.

One thing everyone agreed on: the first order of business was to get avoided deforestation back on the UNFCCC agenda – specifically, to get it recognized as an official agenda item in a negotiating track called “SBSTA”, or the “Subsidiary Body for Scientific and Technological Advice.”

SBSTA is where sticky technical issues are worked out before going to the general meeting, or COP, and avoided deforestation was full of sticky technical issues. To get avoided deforestation onto the SBSTA agenda, Conrad was told, he’d need to have it introduced in plenary and then voted on. The earliest he could hope to do that was at COP11, which was slated for the end of November 2005, in Montreal.

Conrad finagled a meeting room on the 45th floor of JPMorgan’s New York headquarters and began inviting UN ambassadors from forest nations to lunch.

“I would basically say, ‘Guys, I’m just an accidental tourist in the space,’” he says. “I’d say, ‘I’m not a diplomat; I’m not an environmentalist; I’m not a climatologist; but coming from the outside, this doesn’t make sense to me, and it doesn’t make sense to our prime minister. Does it make sense to you? If not, what do we do about it?’”

Through Columbia, he was able to invite leading economists like Jeffrey Sachs and Nobel Prize recipient Joseph Stiglitz to some of the meetings and to pick their brains himself.

“I quickly learned that, a lot of times, the ambassadors and the actual people who negotiate the UNFCCC don’t even know each other,” he says. “So we had to get ambassadors going to UNFCCC meetings and meeting their own countrymen. It wasn’t a very easy process, but it was possible, and we made it happen.”

Now formally registered as a negotiator, he represented PNG at SBSTA meetings and other scientific workshops throughout the year, both inside the UNFCCC process and outside it. In early 2005, Petsonk arranged a meeting that brought key people together for the first time.

“She had a network of developing countries where EDF was doing projects,” he says. “She organized a little dinner, and…that was one of the very first times where ambassadors and the people who are actually negotiating were together in one place.”

Carlos Manuel Rodriguez soon emerged as a key ally. As environment minister of Costa Rica, he’d overseen a dramatic reduction in deforestation – due, he says, to the backing of then-President Oscar Arias Sánchez.

The Sinner and the Saint

Over lunch, Conrad and Rodriguez found common ground.

“I said something to the effect of, ‘Papua New Guinea is sort of the sinner here, and you’re the saint,’” he says. “I said, ‘We’re getting put on blacklists for deforestation, but you’ve turned it around. Everybody’s looking to you. Why don’t we work together?”

And they did.

By May of 2005, they had gotten six other countries interested in working to get forests into the Kyoto Protocol, and they formally created a negotiating block called the Coalition for Rainforest Nations (CfRN), with a secretariat headquartered at Columbia University.

Working out of the school library, Conrad was able to draw on the latest research around avoided deforestation – which everyone agreed needed a better name.

A group of leading American and Brazilian scientists, including Steve Schwartzman, were circulating a paper called “Tropical Deforestation and the Kyoto Protocol”, which used the term “compensated reduction” to emphasize the focus on reducing emissions and not just getting paid to sit on carbon stocks, while others had begun talking about “reducing emissions from deforestation.”

The Acronym and the Submission

“I don’t remember who came up with it first, but we were sitting there going, ‘R-E-D… reducing emissions from deforestation… RED,’” Conrad says. “I think the movie ‘Code Red’ had just come out with Jack Nicholson and Tom Cruise, and we were worried about the association.”

He credits the late land-use expert Bernhard Schlamadinger with making the name final.

“He wanted to do a forest workshop, and he wanted us to come and present, and he wanted to give it a catchy name, so he just said, ‘Well, what can we call this thing?’ I said, ‘Well, we’re sort of stuck with RED,’ and he’s like, ‘That’s great!’ and that was the first time we agreed to use that acronym in the context of a technical workshop.”

As the year progressed, the CfRN’s own submission began coming into focus, and by summer they had agreed on a draft submission called “Reducing emissions from deforestation in developing countries: approaches to stimulate action.”

It was a stunning submission, in part because it offered a chance to bridge the divide between developed and developing countries. Specifically, in a section called “Developing-World Accountability for Emissions,” it explicitly stated that “climate stability cannot be achieved while over three-quarters of the world’s nations develop without emissions reduction commitments.”

But Conrad soon learned that some powerful countries were lining up to block it.

“Robert Aisi, who was our Ambassador to the United Nations, came to me and said, ‘Brazil says no way in hell. This isn’t going to happen. Will you talk to them?’” he recalls.

Brazil wasn’t the only country lining up to block RED.

Coming next: Success in Montreal and the Showdown in Bali

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Meet the Lawyers Beating Back Trump’s Reckless Environmental Policies — and Winning

22 September 2019 | WASHINGTON | Drew Caputo was sitting on the couch at his home in the Bay Area watching the election returns on November 8th, 2016. As soon as it became apparent Trump was going to win, Caputo, a senior lawyer with the group Earthjustice, had two immediate thoughts: The first was that a Trump administration would be nothing short of a disaster for the environment, climate, and public health.

The second thought, he says, was: “Time to go to work. Time to go to the mattresses.”Caputo and his colleagues quickly identified several critical issues that Trump might go after and formed internal teams to prepare for the worst. One potential disaster, he and his colleagues envisioned, was the undoing of the Obama administration’s efforts to protect parts of the Arctic, Atlantic, and Pacific oceans from oil and gas exploration. Even before Trump was sworn in, lawyers at Earthjustice had started lining up potential plaintiffs and honing their arguments to block a fossil-fuel free-for-all in the fragile ocean waters. “We knew the Trump guys would be an environmental wrecking crew and we wanted to be in a position to respond immediately,” Caputo says.

Sure enough, in April 2017, Trump signed an executive order to throw open the Arctic and parts of the Atlantic and Pacific oceans for oil exploration. Within a week, Earthjustice and a coalition of groups including the League of Conservation Voters, Sierra Club, and Natural Resources Defense Council sued Trump to block the order.

Almost two years later, a federal judge struck down a key section of Trump’s executive order, calling it “unlawful and invalid.” The Obama-era protections would “remain in full force and effect unless and until revoked by Congress.”

Caputo was visiting colleagues in Juneau, Alaska, not long afterward when a breaking news story lit up their phones. David Bernhardt, Trump’s new Secretary of the Interior, had told the Wall Street Journal that he was shelving the agency’s plan to expand offshore drilling. The administration had appealed the court’s decision, but Bernhardt said he wouldn’t push ahead on a new drilling plan until the legal fight played out, a process that could take years. “By the time the court rules, that may be discombobulating to our plan,” Bernhardt said.

Caputo and his colleagues traded high-fives. The ocean waters in question were safe from new oil and gas exploration — at least for now. To top it off, the Interior secretary himself had admitted that the litigation brought by Earthjustice and its allies had foiled his plans.

“I said, ‘We’re the discombobulators,’” Caputo says.

THINK BACK to early 2017. One of the biggest fears about a Trump presidency was the damage he would inflict on the environment and the climate. And we were right to be afraid. The administration has unleashed an onslaught of attacks on environmental safeguards — reversing or freezing regulations, making public lands and protected waters available for extraction, and doling out tax breaks and policy tweaks to cronies in the oil, gas, and coal sectors. At a moment when the U.S. needed to take drastic action to combat the global climate crisis, Trump and his industry-loving underlings like EPA chief Scott Pruitt and Interior Secretary Ryan Zinke were poised to take us back in time and risk the future of the planet.

Trump and company have had some notable successes, but two and a half years in, they have failed a lot more than they have succeeded. Waiting for them at every turn has been a network of lawyers who work for the nation’s leading environmental groups. These lawyers have sued the administration at a breathtaking clip. And in the cases that have been decided, they’ve won almost every time. It’s a David-and-Goliath story that doesn’t dominate the headlines or send the Twittersphere into frenzy. But measured in lives saved and planet-wrecking policies thwarted, it’s one of the most consequential stories of the Trump era.

Consider the raw numbers: Since Trump took office, the Natural Resources Defense Council has sued the administration — including the Environmental Protection Agency, the Commerce and Interior and Energy departments, and yes the president himself —more than 90 times. That’s one lawsuit every 10.8 days. Of the 53 cases that have been resolved, NRDC has won 49 of them. That’s a 92 percent win rate.

Earthjustice, for its part, sued the administration 120 times in the first two years of the Trump presidency. In the 17 cases where there’s been a major decision, Earthjustice has won 16 times and the administration just once.

These victories include forcing the EPA to implement new smog standards that will prevent an estimated 230,000 asthma attacks per year, delaying the construction of the Keystone XL tar-sands pipeline, restoring federal protections for grizzly bears living in or near Yellowstone National Park, and preventing the EPA from scrapping a chemical-safety rule that would protect up to 117 million Americans.

It’s not uncommon for multiple environmental and public-health groups to bring cases together alongside state attorneys general, and lawyers for these groups stress how much of their success was due to the unprecedented amount of collaboration across the environmental movement. “We’re more coordinated and better coordinated because there’s just so much more going on,” says Aaron Colangelo, the co-director of litigation at NRDC.

Rolling Stone spoke with half a dozen lawyers on the front lines of the fight against the Trump administration’s war on the environment. All of them say they knew from the moment Trump was elected that they would have to prepare for an administration hell-bent on dismantling the progress of the Obama years and handing the keys of government over to private interests. “We knew that it was all vulnerable,” Colangelo says. “I don’t think we anticipated that it would be as bad as it has been. We sued Obama. We sued Clinton. We sued Bush. But it’s never been anything like this.”

Climate Week - Sierra Club Joanne Spalding and Elena Saxonhouse for Rolling Stone

Joanne Spalding, chief climate counsel at the Sierra Club, and Elena Saxonhouse, an attorney at Sierra Club. The administration is “trying to do all sort of bad things,” says Spalding. “But they’re actually bad at doing bad things. Partly because the things they want to do are illegal.”
Photo: Jessica Chou for Rolling Stone

IT DIDN’T take long for environmental lawyers to pick up on the Trump administration’s strategy. From day one, there was a complete, extreme, across-the-board bias against regulations. Regulation? Bad. Coupled with that was a knee-jerk reflex to try to undo the previous president’s work. Obama? Bad. This was hammered home by the so-called Priebus memo, a directive issued by Trump’s first chief of staff, Reince Priebus, on the first day of the new administration. It ordered a government-wide freeze on new regulations. Even rules that Obama had signed and were on their way to the printers were frozen until further notice.

One of those was the mercury effluent rule. Five tons of mercury was going into the nation’s rivers each year for the simple reason that dentists removed fillings from their patients and flushed them down the sink without any way of catching the fillings’ mercury. Dangerous levels of the toxin ended up in rivers and in fish, endangering pregnant mothers who ingested the fish, putting their unborn children at an increased risk of learning disabilities, lower IQ, and impaired fine motor skills.

In its final days, the Obama administration passed a rule that required dentists to use a trap to catch the mercury. The environmental groups supported it, as did the main lobbying group for dentists. But because the mercury effluent rule hadn’t been published in the Federal Register yet, the Priebus memo blocked it from going into effect.

NRDC sued over the reversal in one of the earliest cases brought against the Trump administration. They argued — as they and other environmental groups would in dozens of future cases — that it was illegal to suspend a rule for political reasons; there needed to be science and facts to back up such a decision, just as there had been when the rule was put into place. In this case, there were no such facts, and the EPA didn’t even bother to defend its decision in court, capitulating without a fight.

Early on, it looked as if the administration was just trying to see what it could get away with. Lawyers call this the no-plaintiff rule. “The impression I got was that their underlying strategy was: It’s only illegal if we get caught,” says Patrice Simms, vice president for litigation at Earthjustice.

Pruitt, Zinke, and Commerce Secretary Wilbur Ross seemed to be pushing to roll back laws and regulations as fast as possible in an effort to impress their new boss. But in their haste to blow things up, they often ignored the laws and procedures for how to make policy. If you run out of Ambien and want to put yourself to sleep, try reading the Administrative Procedures Act, which spells out the process for creating or eliminating regulations. Trump officials flat-out ignored it, which left them vulnerable to lawsuits.

With a chuckle, Spalding adds, “These are not evil geniuses.”

But that didn’t mean environmental lawyers could let their guard down — and not every case would be so easy. They assigned staffers to scour the Federal Register (another good Ambien substitute) and the websites of government agencies for any clues about new policy decisions. They also got tips from whistleblowers to look out for upcoming announcements or new policy proposals released without a press release or advisory notice. One time, NRDC lawyers got an anonymous package from an EPA insider. It looked like the person had written the address with their non-dominant hand, and it contained a copy of a 1977 U.S. Attorney General’s opinion that could help them in an ongoing suit against the EPA. “It looked like a ransom note,” Colangelo recalls.

The environmental movement’s legal strategy had another key element: the Freedom of Information Act. After Trump’s election, the Sierra Club was barraged with offers from outside lawyers to help out in any way they could. Elena Saxonhouse, an attorney at the Sierra Club, had an idea to put those volunteer lawyers to work filing FOIA requests for documents and, when necessary, suing the government to get them. The FOIA Force, she would go on to call them.

It’s typically the job of Congress to conduct oversight of federal agencies, but environmental groups couldn’t count on a Republican-controlled Congress to do that. So the FOIA Force, led by Saxonhouse, filed dozens of sweeping document requests. They wanted copies of all of Scott Pruitt’s communications with industry groups and conservative media outlets. They asked for emails sent and received by Pruitt’s closest aides and assistants. They requested Interior Secretary Zinke’s phone logs, calendars, and meeting records — and when the Interior ratcheted up the secrecy of how it operated, the Sierra Club sued the department to get those records too. When the agencies fought those requests, Sierra Club took them to court and each time forced them to hand over documents. As of last month, the Sierra Club had received more than 100,000 pages of emails from the EPA and Interior; many thousands more are still on the way.

The documents obtained by Sierra Club contained damning revelations. They showed how Pruitt coordinated with a former foreign lobbyist to arrange a personal getaway to the Outback while in Australia supposedly on government business. How Pruitt’s staff shielded him from public scrutiny and “unfriendly” journalists. How one of Pruitt’s closest aides reached out to the head of Chick-Fil-A to set up a meeting about making Pruitt’s wife a Chick-Fil-A franchisee. (Fun fact: A legal intern first discovered the Chick-Fil-A email buried in a trove of documents.)

The uncovering of these dealings prompted multiple ethics investigations and, it’s fair to say, contributed to Pruitt’s resignation in 2018. “We’ve uncovered things that we never would have if we had targeted our searches more narrowly,” Saxonhouse says. “There’s no trust at all in the people who are supposed to be protecting our air, water, and lands.”

9/17/19, Washington, D.C. Aaron Colangelo at the NRDC office in Washington, D.C. on Sept. 17, 2019. Gabriella Demczuk / Rolling Stone

Aaron Colangelo, co-director of litigation at the NRDC. “We’re winning cases to stop the worst things the administration is doing, but that isn’t enough to make them do the right thing,” he says.
Gabriella Demczuk / Rolling Stone

THERE IS an ambivalence, a catch in the voice, when these lawyers reflect on the past two and a half years. They know they’re doing the most important work of their lives. “To be a participant in [this work] just makes me feel lucky to have the job,” Mitch Bernard, chief counsel at NRDC, tells me. “This is the reason I became a lawyer.”

A few minutes after we hang up, Bernard calls me back. He wants to clarify something. He feels good about the work he and his colleagues are doing but not good that they have to do it in the first place. “I don’t want to seem like I’m sugarcoating or passing over how horrible this situation is,” he says. “There’s also this darkness.”

This is how Drew Caputo of Earthjustice puts it: “I’m proud of our response, but the fact that we need to do it really pains me. When I started my career in the 1990s, environmentalism was [still] a bipartisan thing. Some of the most important environmental laws were signed into law by Richard Nixon.”

The environmental groups suing Trump have sued Democrats and Republicans in the past. “But the Trump folks, they’re just at a different scale,” Caputo adds. “Even tough administrations in the past, we’ve been able to talk to them on some issues. The Trump guys are just an unvarnished extension of industry.”

And sometimes the industry wins. While environmentalists have amassed a great track record fighting Trump’s agenda, there have been painful setbacks. These lawyers couldn’t stop the administration from repealing Obama’s Clean Power Plan or chipping away at the Endangered Species Act — two major accomplishments of the Trump crew so far. Environmental groups can sue to reverse those setbacks — several suits were filed last month against the EPA’s weak replacement for the Clean Power Plan, and litigation challenging the latest endangered species changes is coming soon — but that will take years to wind through the courts. “It’s heartbreaking to realize the limitations of a successful litigation strategy,” Colangelo says. “We’re winning cases to stop the worst things the administration is doing, but that isn’t enough to make them do the right thing.”

Nor can these lawyers prevent Trump’s allies in Congress from carrying out his deregulatory agenda. Environmentalists may have stymied Trump’s efforts to expand offshore drilling in the Arctic, Atlantic, and Pacific oceans, but they failed to prevent Sen. Lisa Murkowski (R-AK) from adding language to the 2017 Trump tax bill to open up the Arctic National Wildlife Refuge for oil drilling, a longtime goal of the fossil-fuel industry and the Republican Party. (Conservation groups are considering legal action to stop the measure from going forward.) So it goes in the Trump era — win a protection in one case only to watch it flare up in a different direction.

What keeps these lawyers going, they say, is the fact that the nation’s judicial system has held firm at a time when the country’s other institutions are wobbling. They’ve won cases in front of Bush and Trump appointees and lost them in front of Obama and Clinton appointees, and vice versa. “The story that is not frequently enough told these days is that the courts have held up remarkably well,” Bernard says. “That’s the one branch of federal government that I think is shining in this moment because they are being very vigorous enforcing the law without regard to what the politics of the situation might be.”

The danger for the environmental movement is that the second wave of Trump appointees — ex-coal lobbyist Andrew Wheeler at EPA, ex-oil and gas lobbyist David Bernhardt at Interior, and so on — prove more effective at undermining laws and regulations than their bumbling predecessors. Just this week, the Wheeler-led EPA announced its plan to revoke California’s ability to set tougher standards on tailpipe emissions, the leading source of pollution in the country.

“Pruitt and Zinke got in their own way in ways that Wheeler and Bernhardt are less likely to do,” Bernard says. “That will make it harder for people like us to challenge what they’re trying to do. Because their agenda is not more moderate. It’s just their way of going about putting it into effect that appears more moderate. That’s a danger for us.”

One stealthy tactic used by the current crop of administration officials is attacking the underlying science as a way to gut environmental and public-health protections. You can have a strong law to protect the air we breathe, but you can undermine that same law by mandating that the agency can only look at certain kinds of studies that narrowly define the problem. “They’re attacking the underlying architecture of the science,” says Patrice Simms of Earthjustice.

If anything, the Trump administration appears set to take more aggressive action between now and the 2020 election, like dismantling nationwide tailpipe emissions standards or weakening the Clean Water Act. “We’re going to have fights that are just as hard or harder over the course of the next year and a half,” Simms says. “Even if there is not a second Trump administration there is a lot of stuff that’s going to have to be fixed. The work is not going away anytime soon.”

Debunked: Eight Myths About Carbon Offsetting

19 September 2019 | The California Air Resources Board today endorsed the Tropical Forest Standard, which lays out rules for energy companies and other greenhouse-gas emitters in California to “offset” their greenhouse gas emissions by paying to save trees in the tropics. With the endorsement comes a renewed interest in carbon offsetting, and a revival of old critiques, some of which are valid, most of which are not.

Let’s preface this post with an indisputable fact: buying carbon offsets isn’t going to solve climate change. No one (outside of the climate denial camp) disputes that avoiding climate catastrophe will require a deep decoupling of the economy and greenhouse gas emissions. But when Forest Trends’ Ecosystem Marketplace surveyed companies that buy carbon offsets a few years back, it found that they’re using carbon markets to accelerate this deep transformation, rather than to create a green-tinted perpetuation of the status quo. As we begin surveying buyers for this year’s report, it’s becoming clear that these truths are as valid as ever.

buyers_top5_voluntary

So, keeping in mind the proper role of offsetting – and parking our prejudices at the door – it’s time to take a look at offsetting and how it can strengthen corporate strategies to reduce carbon emissions. Where better to start than with these eight oft-recycled misconceptions about the practice:

Myth 1: Companies that buy offsets are just buying their way out of their obligations. We hear this one all the time, but our research shows something completely different: namely, that those companies that do buy offsets are doing so as part of an overall carbon-management strategy, and they’re mostly using offsets to either tackle emissions they can’t eliminate internally or to create an internal “price on carbon” that focuses attention on emissions and accelerates reductions. Among businesses tracked in EM’s 2016 buyers’ report, 88% of voluntary offset buyers and 92% of compliance buyers have formally adopted emissions reduction targets. In 2014, the 314 businesses that engage in offsetting invested more than US$42 billion in emissions reduction activities, surpassing the combined investment of the 1,522 companies who did not engage in offsetting (US$41 billion). In fact, companies that included offsetting in their carbon management strategy typically spend about 10 times more than the typical company that didn’t offset. Contrary to the “greenwashing” narrative, it appears as though using offsets is increasingly the hallmark of a company that’s leading on climate action rather than bringing up the rear.

Myth 2: Offsetting is niche or arcane. Actually, a lot of prominent consumer-facing brands use offsetting, including household names like General Motors, Delta Air Lines, and Microsoft, all of whom were among the top five buyers on the voluntary market in 2014. They’re hardly alone: of the nearly 2,000 companies who publicly disclosed data to CDP last year, 248 (17%) invested in projects to reduce carbon emissions outside of their immediate operations, purchasing the equivalent of 39.8 million tonnes of carbon dioxide (MtCO2e) in 2014. (See the list of top-20 buyers from 2012-2014 here.)

Myth 3: Offsetting is expensive. Ultimately, offsets should be expensive to reflect the true cost of climate change, and companies that internally price carbon often do set their internal prices high to focus attention on the issue, but the average offset on the voluntary market sold for just $3.3/tonne of CO2 equivalent last year. Even when the average price was more than double that value, it still fell significantly under the internal per-tonne price on carbon adopted by many companies: 120 of these businesses reported a median internal price of $18/tonne to CDP last year. Over time, the price of offsets should rise to reflect the cost of dealing with carbon emissions, but that’s not an added cost imposed on us randomly; it’s an existing cost being properly reflected. For now, however, offsets are cheap – too cheap.

buyers_report_fig11
(Click any of the figures in this post to enlarge)

Myth 4: Offsetting is too cheap to incentivize real change. This is true for now, but that’s a question of policy, and not of product. So far, nearly all governments introduce caps on overall greenhouse gas emissions, and as those caps lower in accordance with the Paris Agreement, the price of allowances (issued by governments to permit emissions up to the level of the national cap) and offsets (created by entities that actively reduce emissions) should rise – unless, of course, emissions drop so far and fast that the problem is resolved.

Myth 5: Offsets come from a land faraway, from nebulous projects. Legitimate carbon offsets come from projects and are rigorously verified by third parties in accordance with recognized carbon standards, and many companies choose to buy from offset-generating projects close to home. Among voluntary offset transactions reported with geographical details in 2014, about a quarter involved a buyer purchasing offsets from the same location as its corporate headquarters. This practice is especially prevalent in North America, exemplified by the purchasing habits of companies like TD Bank and Waste Management Inc. The EM report speculates that brands buy offsets close to home in order to demonstrate impact to their consumers and bolster their “social license to operate” in a country or region.

buyers_report_fig10

Myth 6: Offsetting does not directly address emissions. Unlike the allowances used in cap-and-trade markets, offsets always represent real removals of carbon dioxide from the atmosphere or avoided emissions somewhere in the world, and carbon standards require that developers demonstrate “additionality,” which means they have to show that the emission reduction wouldn’t have happened without the project. What’s more, EM’s newest report found that 79 companies are generating offsets within their own operations or supply chains by reducing emissions above and beyond regulatory requirement and economic incentives. L’Oreal, for example, distributes efficient, cleaner-burning stoves to women in Burkina Faso who boil the shea nuts used in its cosmetics products. Those stoves reduce emissions by reducing the need to chop trees, thereby saving forests, and they also reduce the health hazards of indoor smoke.

Myth 7: Offsetting barely makes a dent. Well, this one might be sort of true, but that’s partly because global emission reduction agreements have yet to take effect, and also because offsets are designed to be part of an overall reduction strategy and not a substitute for one. Companies surveyed in the report typically offset less than 2% of their total emissions, usually because they’re using offsets to compensate for just one segment of that total, like employee travel or the carbon footprint of a single product. Even the small percentage, however, represents a tangible impact on the climate – the over 140 MtCO2e in offsets reported to CDP in 2014 had the equivalent impact of taking 30 million cars off the road for a year. As more companies sign on to the Science Based Targets Initiative, the percentage of emissions they address may go up.

buyers_figure_2

Myth 8: Offsetting isn’t scalable because there simply isn’t enough demand. So far, the vast majority of companies that offset do so voluntarily, because there’s no law telling them they have to. That’s already changed in places like California, where companies are using offsets to help meet up to 8% of their emissions reduction obligation under the state’s cap-and-trade system, and it will continue to change around the world as emissions trading ramps up under the Paris Agreement. Buyers in these nascent compliance markets disclosing to CDP reported purchasing nearly 27 MtCO2e in offsets in 2014. As industrial emissions drop, project developers are waiting with bated breath to see how things shake out in the aviation sector, where the International Civil Aviation Organization (ICAO) is determining rules for a Market-Based Mechanism (MBM) to help airlines achieve carbon-neutral growth starting in 2020.

Will Tucker is a writer with a background in climate change communication, history, and public health.

Green Goal: Soccer Enters the Carbon Markets

Organizers of the World Cup Soccer tournament are looking to a voluntary 100,000-ton carbon offset agreement to help them achieve their "Green Goal" for the world's most-watched sporting event. The Ecosystem Marketplace gets the details. Martin Cames says he wasn't exactly panicking on the eve of the United Nations Climate Change Conference last November, but he wasn't toasting the return of Eden, either. "We needed to find a Gold Standard project in South Africa to offset 65,000 tons of carbon," he recalls, "and we needed it fast." Cames' employer, a German non-governmental organization (NGO) called the Ökoinstitut (Ecology Institute), had persuaded both the German Soccer Federation (DSF) and soccer's world governing body, the Federation Internationale de Football Association (FIFA), to adopt an ambitious plan to make Germany's 2006 World Cup the most environment-friendly prolonged sporting event in modern history. They had a war chest fortified with backing from the DSF, the German government, the German Environment Foundation (Bundesstiftung Umwelt), and some of the blue ribbon companies that had signed on as official World Cup sponsors; but the lion's share was coming from FIFA itself. They also had a catchy name: the "Green Goal", a play on soccer's sudden-death overtime "golden goal". All they lacked was a way to achieve one of their most important objectives – namely, offsetting an estimated 100,000 tons of additional carbon emissions generated by shuffling millions of soccer fans around the country. Although official figures are a closely-guarded secret, the budget for carbon neutrality is estimated at one million euros, half of which was raised at a charity soccer match for victims of the 2004 South East Asian Tsunami. That comes to an average price of ten euros per ton of carbon offset – roughly 1/3 the going rate for allowances on the European Union's Emissions Trading Scheme (EU-ETS), but well within striking distance of the $15 per ton carbon regularly traded in the European voluntary carbon markets.

Going for Gold

Climate neutrality is important to the "Green Goal" organizers because it was one of the key selling points of the initiative to sponsors, organizers, and even other NGOs – many of which are skeptical of market-based solutions to environmental problems. That meant that whatever the Green Goal did on climate, it had to be well above the stench of greenwash. "We felt we were launching a project that would set the standard for all World Cups to come," says Christian Hochfeld, the Ökoinstitut project manager who spearheaded the Green Goal initiative. "We decided to look for projects in the developing world, and we wanted them to meet the highest standards out there – the CDM Gold Standard." The Gold Standard was developed by WWF and is administered by the Basel Agency for Sustainable Energy (BASE). It sets an independently-audited, globally applicable best practice methodology for carbon offset projects. The criteria are detailed, stringent, and difficult to achieve. "I was against it," laughs Sascha Lafeld, managing director of Dresdner Allianz spin-off 3C Climate Change Consulting GmbH in Frankfurt. He'd contacted Ökoinstitut three years ago, after first hearing of the project. "They gave me this list of criteria that I figured would be too difficult – not to mention expensive – to implement." Despite these misgivings, he took on the task of certifying that Ökoinstitut's projects reduce global carbon emissions by an amount equal to the increase generated by added traffic in Germany. As the tournament nears, he's acting as an agent for FIFA, buying the emission reduction certificates on their behalf. The first project came easy. "We had set our sights on implementing one project in a region impacted by the tsunami," Hochfeld says. "Coincidentally, a women's organization in Tamil Nadu, India – in the tsunami region – had gone to BASE looking for financing on a project to renovate houses and villages destroyed in the tsunami. BASE sent the women to us." Although the emissions reduction purchase agreement (ERPA) has yet to be finalized, the shape of the project is clear. "We will buy small biogas plants – either 850 or, if the scaling effect proves worthwhile, 1000," says Lafeld. "Either way, the project will, at the very least, provide cooking for 1,000 houses, offsetting roughly 35,000 tons of carbon emissions over the next 30 years." And at 500,000 euros, its cost fits the amount budgeted for tsunami aid. Unfortunately, the project achieves just 35% of their targeted reduction, with a price per ton estimated at between 13 and 14 euros. Still, Lafeld says it's worth it: "One reason is that the carbon component covers 100% of the cost of technology, which means the entire project is financed through the certificates. T hat's a huge benefit, because certificates usually cover just five to 15% of a project's cost." "This project met Gold Standard criteria for transparency, accountability, and additionality – which is a project's ability to keep on giving," says Hochfeld. "A baseline analysis showed that implementing the project would generate quantifiable environmental benefits, because diesel, kerosene, and wood-burning stoves would be replaced by climate-neutral biomass power." And the project is also stimulating the local economy. "These aren't high-tech gizmos imported from Germany," says Hochfeld. "They're the simplest type of device, manufactured locally." "Approximately half of the payment is up front and the rest is upon delivery," explains Lafeld. "We define delivery as presenting a verification report that the intended reduction has been realized." In addition to auditing the projects and negotiating on FIFA's behalf, 3C adds value by reducing risks. "In the ERPA, we add an article that states that if the project developer cannot deliver, he guarantees that he delivers the same amount of comparable credits from another project," Lafeld says. "But in this case, because the up-front that we are paying in is so high, we are also negotiating with an insurer for an upfront payment insurance in case the project blows up. This adds between 6% and 10% to the reduction credit price, but at least we're covered." While the India project was progressing better than planned, however, the other leg was floundering. "We'd set our sights on South Africa, because the next World Cup is slated to take place there in 2010," Hochfeld says. "But there was a problem."

A Hot Commodity

"All the South African projects were sold out," Cames recalls. The Group of Eight Industrialized Nations (G8) had just wrapped up a carbon-neutral summit in Gleneagles, Scotland, and the summit achieved carbon emission neutrality by buying up all certificates on the first-ever CDM Gold Standard project near Cape Town, South Africa, as part of Tony Blair's pledge of support to the continent. The Ökoinstitut had ruled out buying carbon allowance credits on the EU-ETS, which would have enabled them to pay for their pollution by purchasing allowances out of the national caps allotted to European Union countries under the terms of the Kyoto Protocol. "There were several reasons for not going that route," says Lafeld. "First, carbon credit allowances on the EEX [one of the markets trading EU carbon allowances, EUAs] are currently trading at 27 euros per ton, which would have cost nearly three million euros to offset." Another reason: you don't want to make enemies. "The allowances trading on EEX exist to enable companies to come into compliance with statutory limits," says Lafeld. "If we bought them to comply with a voluntary reduction program, we'd be adding to the scarcity and driving up prices." And a third reason: marketing. "It's more attractive to have a real emissions reduction project you can point to, like building biomass generators in India, than it is to buy credits on some exchange," he says. So, why not fund forestry projects? After all, trees have been touted as ideal carbon-capturing machines – so-called "carbon sinks" – and who doesn't love trees? "I have no problem with trees, but planting them as carbon sinks doesn't get at the root of the problem, if you'll forgive the pun," says Renat Heuberger, a broker for MyClimate, a Switzerland-base NGO and environmental services provider. "We argue in favor of reduction credits, which come in the form of certificates that prove you have cut off emissions before they got into the air, as opposed to allowance credits, which say it's OK to make a problem as long as you also make allowances for correcting it later." Then, there's the so-called "scientific" argument: "By planting trees, you don't offset carbon emissions," he says. "You just store them, and as soon as the tree is harvested, the co2 is out in the atmosphere again – unless you can prove it went into a building or something, in which case it's there until the building is removed." And that brings up the third problem: accounting. "If we implement a wind farm, then every second it runs, you are offsetting co2," says Heuberger. "But you can't really account for forestry – and you aren't really given CERs (Certified Emission Reduction credits), but rather temporary CERs – so-called t-CERs [one of the official structures established by the Kyoto Protocol's Clean Development Mechanism (CDM) to deal with forestry carbon]." Lafeld agrees – to a point. "Using forestry to offset carbon emissions is an idea whose time isn't here yet," he says, "but it will definitely come – both in voluntary programs and in the international climate policy negotiations." And that brings up the biggest negative of all: forestry projects are not recognized by Gold Standard. By late November, however, with no South African Gold Standard projects in sight, forestry didn't seem like such a bad idea. "We were drawing blanks on the eve of Montreal," recalls Cames, referring to the November-December United Nations Climate Change Conference in the Canadian city. He'd e-mailed perhaps one hundred other participants before hitting the event, and arranged to meet scores of people at side events there. One of those people was MyClimate's Heuberger, who presented a portfolio of South Africa projects. "We're a non-profit foundation with a for-profit section," Heuberger explains. "I work for the for-profit section, and my job, in part, is to buy projects as cheaply as I can and sell them as high as I can." The section makes money for the foundation by acting both as brokers, traders, and project managers of Gold Standard endeavors. "As brokers, we find projects that have fixed prices and then go out and find buyers; while as traders, we try to buy projects low and sell them high." As project managers, they provide audits and quality assurance. Cames came back from Montreal with six projects, two of which the committee dropped because baseline analyses indicated the world wouldn't lose much in the way of environmental functionality if the projects weren't implemented. Another was dropped because certain numbers just didn't add up. "Some of these groups are trying to sell the same project three or four times," says Hochfeld. They've now whittled it down to three projects, two of which had been presented by Heuberger, who is haggling on behalf of the projects, while Lafeld is haggling on behalf of FIFA. Two of the projects are renewable energy efforts similar to Tamil Nadu, and the third is a wind project. Beyond that, details will remain scarce until the deal is hammered out. "We're not sure which we'll ultimately end up doing, or if we're doing a combination of them," says Hochfeld. Even sponsors are laying low. Of course, you can guess at who will be tacking their name to Green Goal, since only companies recognized as official World Cup sponsors can do so, but the plan is to go public with a coordinated PR blitz once the details are all pinned down – probably in early March. The only company to openly tout its participation so far is Deutsche Telekom. Hochfeld says the city of Vancouver is monitoring the project, in the hope of finding a template for the 2012 Olympics. He's also gotten strong interest from several major sporting organizations, including the Union of European Football Associations (UEFA), which sponsors European Champion's League soccer. Clearly, Germany's "Green Goal" will set carbon neutrality precedents for dozens of sporting events to come, so Hochfeld and Cames want to make sure they get things right. They are keenly aware that their work needs to "score" on all fronts: economic, environmental, and social. Additionally, any and all deals that are signed as part of the initiative are likely to be closely scrutinized, not just by skeptical environmentalists and the climate change community, but also by potential sponsors of future events, as well as potential sellers of future projects. But this does not bother Hochfeld and Cames; indeed, it is what they want. They want to both set a high bar for 2010 World Cup in South Africa, at the same time that they provide the organizers of that event with the tools they need to meet – and perhaps even surpass – any and all precedents set this year. So, while they may not be panicking, neither are they totally stress-free. Perhaps they will rest once the last game of this carbon-neutral World Cup draws to a close later this summer… Perhaps. Steve Zwick is a free-lance journalist and Editor-at-Large of Futures Magazine. He can be reached at Steve.Zwick@gmail.com. First published: February 16, 2006

Shades of REDD+: Can Oil and Aviation Fuel a Marshall Plan for Forests?

17 September 2019 | Over the past year, energy giants Shell, BP, Total and Eni have announced climate mitigation goals that include offsetting emissions through financing forests.  Shell and Total together have pledged 200 million US dollars per year on forest protection or restoration. Only five donor governments—Germany, Japan, Norway, the United States and the United Kingdom—provide annual contributions to international forest finance around or exceeding this amount.

Meanwhile, airlines that have international routes will be soon be forced to hold their emissions at 2020 levels beginning in 2021 – something they can partly achieve by reducing the weight of planes or fuel switching, but will ultimately involve some form of “offsetting” or paying others to reduce emissions or to remove greenhouse gases from the atmosphere. Negotiations are continuing, and we’ll soon know whether that may include offsets generated by planting trees or conserving forests.

This new wave of finance elicits schizophrenic feelings from the environmental community, long the champions of forest conservation.  Some react with vehemence, saying that oil companies are just greenwashing, or that aviation should not use forest credits as a substitute for emitting fossil fuels.  Others feel it is a double-edged sword—a welcome relief for underfunded conservation efforts but, at the same time, leaving them worrying about the overall impact on the climate.

This leads to the question: What role can oil and aviation play in the proposed “Marshall Plan for Tropical Forests”?

Offsetting:  Only for extra credit

We all know that the world needs to increasingly avoid emitting greenhouse gases into the atmosphere.  The Paris Agreement suggests that by mid-century we must be ‘carbon neutral’.  Therefore, governments, companies and individuals must: First, wherever possible, avoid using fossil fuels. Next, we must reduce fossil fuel use. Only lastly, where it is currently extremely difficult to either avoid or reduce, can we consider “offsetting” our residual emissions.

Offsetting is therefore a stopgap measure. Any company must demonstrate first and foremost ambitious efforts to avoid emissions, and then reduce them, before being given social license to use offsets.  There are differences in the way companies use forest or nature-based offsets.  For example, they may use such offsets against emissions from their own operations or from the generation of purchased energy (called Scope 1 and Scope 2 emissions).  Or, they may use them within their value chain (called Scope 3 emissions)—for example, offering such credits to downstream consumers that wish to reduce their carbon footprint.  Companies also buy units to meet compliance targets or to go further as part of voluntary efforts, i.e. self-imposed targets, which vary widely in terms of ambition.

While the practices of oil and aviation companies should be scrutinized, there is no doubt that such finance could help fill the funding gap in the land-use sector. As mentioned previously, protecting and restoring forests is one of the most underfinanced climate mitigation opportunities—one that comes with some of the strongest social and environmental benefits. Private finance is also faster, more flexible, and more nimble than public funds—which are chronically slow to deploy.

In sum, yes, finance from oil and aviation—or any company that supports forests—should be part of the Marshall Plan, but only under certain circumstances.  There is a need to more clearly define when and how companies may use or claim offsets and be considered environmentally and socially responsible.

Off-taking:  Only A+ rated credits

Companies can either invest directly in forest projects or act as an off-taker of credits generated by others. Whether companies use credits to offset their emissions or to offer consumers “carbon neutral” fuel or flights, the quality of the emission reductions should be sound—to ensure that a ton emitted is truly being offset by a ton (or more) purchased.  In other words, the Marshall Plan should not include finance for forests that comes at the expense of climate mitigation.

All carbon units are not created equal.  Some have high integrity and others suffer from questionable additionality (meaning it’s not always clear that the claimed tons of carbon stored or emission reductions actually happened), potential impermanence (meaning the forest restored and credited may be cut down in the future), and unaccounted leakage (meaning it’s not always clear that the deforestation didn’t just move to another area).

The new wave of finance from oil and aviation should motivate standard-setting bodies and civil society organizations to revisit standards and methodologies used to estimate emission reductions from forests and set a high bar for their use as offsets.  Oil and aviation companies, with their current market leverage, should also play a role in improving the quality of forest offsets by setting a high bar.

Offline:  Voluntary crediting

In recent years, there has been an increase in climate action.  One issue that many worry about is called “double counting” – or the concern that emission reductions may be claimed more than once.

The Paris Agreement focuses on national commitments and national accounting.  It states that any given emission reduction can only be counted towards one country’s Nationally Determined Contribution (NDC).  So, for example, a country may develop a compliance system designed to help meet its NDC by requiring companies to either reduce their emissions or purchase carbon credits.  If credits are purchased overseas, they may require that such credits come with an “NDC adjustment”. In other words, the country that the credit comes from must subtract that emission reduction from its own national account.  This is also the case for airlines under the International Civil Aviation Organization’s (ICAO) scheme, i.e. airlines that wish to use offsets to meet given targets must purchase ones that have the NDC adjustment from the host country.

Conversely, voluntary crediting currently occupies a “no-man’s land”.  Let’s say a company in the Netherlands or the UK buys a forest carbon credit voluntarily from a project in Peru or Indonesia.  Both European countries have said they would not use such credits towards their nationally determined contribution.  In this instance, the Paris Agreement suggests Peru or Indonesia may then count that emission reduction.  However, some suggest that every emission reduction should only be used or claimed once, i.e. every offset, even those voluntarily purchased, must come with an NDC adjustment.  Others suggest there exists a parallel universe of private transactions, where companies may purchase and claim offsets that are separate, or “offline”, from Paris Agreement accounting.

The question is:  Which scenario results in more emission reductions?  On one hand, a strict interpretation of double counting could lead to higher ambition and more emission reductions if countries take their NDCs seriously—both in setting their own targets and achieving results. However, it could also have unintended consequences, including incentivizing weak country targets (to leave headroom to sell carbon credits).  Or, it could stifle investments and finance for emission reductions—including and especially for forests, which currently run outside many compliance-based schemes—if companies are told they can only use offsets with the NDC adjustment.

This is particularly true in the near term, as companies are ready and willing to invest in forests, but there remains much uncertainty as to whether, and if so how, countries may be willing to give up such emission units. Where such investments are voluntary, they simply may not happen if a narrative is generated where voluntary crediting—i.e. the case in which a forest country “keeps” the emission reduction in its national reporting supported by a company or consumer claiming they have catalyzed the reduction—is not an appropriate or credible approach.

Finding answers between the extremes

The forest carbon community, especially those engaged in REDD+ (Reducing emissions from deforestation and forest degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries) often wages wars within itself when staking positions at opposite ends of a philosophical spectrum.  Good answers often lie somewhere between the extremes.  This instance—whether to embrace finance from oil and gas or repudiate it—is a case in point.

Simply saying to companies “no offsets, period” is likely not optimal—particularly when such companies are doing their part to avoid and reduce emissions.  It is also not appropriate to give social license to companies for unconstrained offsetting. There is a place at which to turn the dial that optimizes finance for forests and emission reductions and we, as a community, should seek to find that space.

Until our community has a pragmatic discussion on this issue—rather than setting two discourses at opposite ends of the spectrum—we are unlikely to mobilize the potential for oil and gas to contribute, responsibly, to both fossil fuel reductions as well as the Marshall Plan for Tropical Forests.

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Investment in Regenerative Agriculture Connects the Dots Between Soil and Plate

18 September 2019 | Anthony Myint vividly recalls the moment he encountered the idea that would shift his life’s path. In 2014, the San Francisco chef and his wife and business partner, Karen Leibowitz, visited California carbon ranching pioneer John Wick at Nicasio Native Grass Ranch in Marin County.

“He had a bunch of whiteboards out and he was just wrapping up a talk with some U.N. people,” Myint recalls. Wick had been working on the Marin Carbon Project, the now well-known collaboration with U.C. Berkley scientist Wendee Silver that examined whether or not several “carbon farming” practices—such as managed grazing and adding a thin layer of compost to the land—could in fact pull greenhouse gases from the atmosphere.

Wick talked about the difference between durable carbon—deposited and locked into the ground for up to centuries by plant roots and decaying and dead microorganisms—and carbon that routinely circulates from above to below ground. Hearing of the work the couple was doing helping restaurants offset their greenhouse gas emissions, Myint recalls, Wick “told us we weren’t thinking big enough.” Atmospheric carbon wasn’t just something to avoid emitting, or to pay others to scrub from one’s environmental footprint, Myint and Leibowitz now understood: farming itself could regenerate the land.

That day, Myint and Leibowitz joined a much larger movement to bring regenerative agriculture to the mainstream and help farmers, chefs, and eaters understand the value of healthy soil. “We’re in the midst of a massive cultural change in response to global warming, and farming and healthy soil are probably the most practical and biggest solutions we have,” says Myint. “Imagine if there were a fuel additive that made burning gasoline no-emission—or actually pulled it out—and it cost almost nothing, say five cents per gallon. Everyone, corporations, governments, would be racing to scale that up. That’s the opportunity food and farming and soil offer.” It’s a solution, he adds, that’s “massive and non-invasive.”

And restaurants are only one piece of a growing puzzle. In the wake of the U.N.’s latest report on climate change —which urged rapid shifts in the way we manage land and source food amid increasing climate-related flooding and drought events—a regenerative agriculture ecosystem built around healthy soils is emerging. Efforts range from federal, state, and local government initiatives to nonprofit and private sector ventures. But it remains to be seen which ones will work, and how fast they will take effect.

Engaging Diners

Myint and Leibowitz have spent the last five years figuring out how to help the competitive, thin-margin, high-burnout world of creative chefs, restaurants, and their fickle diners play a role in regenerative agriculture. Their first effort was the nonprofit Zero Foodprint, which helped restaurants offset their greenhouse gas emissions. Their recently shuttered restaurant, The Perennial, sought to serve food produced regeneratively and educate consumers about the role food plays in absorbing carbon.

“We assumed people would be excited about optimistic solutions, and would line up for the Tesla of food,” says Myint. But the public wasn’t ready. They learned that “we couldn’t rely on one consumer, one chef at a time to create system change.” They needed, as Wick encouraged them, to think bigger.

Now, under their nonprofit The Perennial Farming Initiative (PFI), Myint and Leibowitz have started laying the groundwork for a program, Restore California. Participating restaurants add an optional “1 percent for healthy soil” surcharge to customer tabs. PFI has already signed 30 restaurants up for the Restore California surcharge; if 1 percent of the state’s restaurants follow suit, the group estimates it could generate $10 million per year in funding for healthy soils.

The project is a collaboration between the California Air Resources Board (CARB), the California Department of Food and Agriculture, and PFI; when it is fully up and running, proceeds will go directly to farms and ranches working to improve soil health as a complement to the state’s Healthy Soils program. CARB, which administers the state’s cap and trade system, low-carbon fuel program, and other efforts to fight climate change—the majority of which are transportation-related—embraced PFI’s creative idea for direct funding of healthy soils. “This was a unique opportunity to put our name out there on another way of getting greenhouse gas reductions, so we’re all pretty excited about the idea,” says Dave Clergen, a spokesperson for CARB.

Restore California also offers the state a timely boost in its efforts to meet former Governor Jerry Brown’s goal of achieving carbon neutrality by 2045, and coincides with current Governor Gavin Newsom’s pledge to put $28 million into healthy soil funding in this year’s budget. That healthy soils funding counts for barely a drop in the bucket of the nearly $1.4 billion in state cap and trade revenue invested in climate solutions; the program’s initial $7 million provided capacity for just a half-dozen carbon farming operations. Still, the state’s pledge is a starting point, and a program like Restore California can only help support the growth of healthy soils programs. “We know that to really achieve on aggressive timelines it helps to have additional reductions from the private sector, and to leverage what existing programs we have,” Clergen adds.

Cattle grazing on fresh grass after a moving to a new paddock at Headwaters Cattle and Guest Ranch in Boulder, Utah. (Photo courtesy of Land Core)

Cattle grazing on fresh grass after moving to a new paddock at Headwaters Cattle and Guest Ranch in Boulder, Utah. (Photo courtesy of Land Core)

Myint notes that during the “pre-launch” phase of the optional Restore California surcharge many restaurateurs will have questions, but is optimistic that “once it becomes more well known that increasing soil carbon can solve global warming, and that these funds are actually going directly to solve the issue, then adoption will scale up. “

PFI’s operations also got a major boost in July, when Myint was awarded the 2019 Basque Culinary World Prize, a €100,000-Euro award ($110,000) from the Basque government and the Basque Culinary Center. Leibowitz says the prize from this tight-knit, global circle of Michelin-starred chefs served as validation for the work the couple has been doing, and has encouraged other donors. It will allow them to hire staff, build up the program, and lay the groundwork for expansion to other states. PFI is also applying for a USDA Conservation Innovation Grant.

Jury member Joan Roca, the superstar chef of Spain’s El Celler de Can Roca, noted that Myint stood out for his commitment to addressing climate change and “involving different actors from the gastronomic world.” Joxe Mari Aizega, general manager of the Basque Culinary Center, says that the Center and its digital gastronomy innovation lab are looking at how it can implement PFI’s programs, as are each member of the jury’s restaurants.

Other Healthy Soil Models Taking Root

Myint and Leibowitz’s efforts to give restaurants and their patrons a way to directly fund healthy soils is just one answer to a problem that many public and private initiatives are now grappling with: how to fund the shift from extractive to regenerative agriculture? Among public programs, California’s soil health initiatives have led the way. Five states (VermontIllinoisNebraska, and New Mexico) passed healthy soils legislation in 2019, and at least another 20 are working on similar initiatives for 2020.

A map of healthy soils and regenerative agriculture policies in the U.S.

This “State Healthy Soil Policy Map” was created by Soil 4 Climate and Nerds for Earth. Click the map for the interactive version.

Presidential candidates are talking about the potential roles farmers can play in sequestering carbon (several mentioned it in the recent Climate Town Hall). At the county level, California’s Santa Clara County will next year launch a $220,000 agricultural resilience pilot project that operates on a reverse auction basis and farmers will bid for funds for pre-approved practices. “The lowest bid for the highest public benefit—not only carbon sequestration but other ecosystem services that improve regional resilience, like improved aquifer recharge—will be awarded,” explains Michael Meehan, the county’s senior planner and agricultural plan program manager.

“The sense of emergence” in the regenerative agriculture space, “the kind of grassroots, decentralized awakening from the ground up, has been explosive,” says Phil Taylor, the founder of Colorado-based Mad Agriculture. Since 2015, the Colorado-based organization has worked to help farmers “break out of the agricultural industrial complex” by tailoring carbon farming programs to fit their land. Taylor’s organization, like PFI’s Restore California initiative, tries to “leverage existing and trusted networks for financial and technical resources to de-risk the transition to regenerative agriculture,” Taylor explains.

He offers technical expertise, helping farmers to gain access to the millions of dollars available from the National Resources Conservation Services (NRCS), the arm of the USDA designed to help farmers and ranchers on the land. Taylor connects them to a network of other farmers and ranchers who have made the transition. By working with companies like Minnesota-based Pipeline Foods, he also helps connect them to improved supply chains. “I don’t want them to sell to grain elevators, where the commodity value of your blood, sweat, and tears has to compete with China and Argentina,” Taylor says. “We work hard to de-commoditize, find premium markets, and diversify the farm so that the farmer gets paid as much as possible.”

Often during the transition from commodity market model to regenerative, farmers and ranchers face a period of financial instability because they’re putting in more labor and investing in new systems. One way for them to help bridge that transition is to access healthy soils programs like California’s, or to get involved with the growing number of organizations and private companies that put a value on ecosystem services. In the case of the Canadian nonprofit organization ALUS, those might range from establishing native grasslands to launching a rotational grazing program or restoring wetlands. Launched in 2008, ALUS now includes close to 1,000 farmer members and covers about 24,000 acres in 25 Canadian communities, says CEO Bryan Gilvesy. ALUS determines payments at the local level, which can range from US $30 to $152 per acre yearly.

Meanwhile, Seattle-based Nori is preparing to start a new carbon-removal marketplace, based on the idea that farmers need financial incentives to draw down carbon while corporations are increasingly looking for ways to offset their own carbon footprints. The blockchain-based marketplace depends on increasingly sophisticated methods of forecasting carbon drawdown using tools such as COMET-Farm, a farm and ranch carbon and greenhouse gas accounting system used by the NRCS.

In the pilot stage now, Nori is working with Maryland farmer Trey Hill, who will be the first to have his carbon drawdown measured and awarded carbon removal certificates, which he can then sell. He’ll be seeking at least $10 per ton, says Christophe Jospe, Nori’s chief development officer. At the company’s broader market launch next year the price will be determined by market demand. Independent verifiers will vet each farmer’s carbon removal claims; eventually, Nori hopes to be able to conduct “desk verification” using satellite imagery, tillage reports, and other tools.

While companies like Nori and Indigo Ag’s Terraton are focused on monetizing the tantalizing potential of carbon drawdown, Los Angeles-based Land Core is more concerned with the need to establish soil health as a critical tool for helping farmers become more resilient, especially in the face of drought and flooding.

Noting the variability of carbon drawdown on a single piece of land over time and the difficulties that still exist in accurately measuring it, Aria McLauchlan, Land Core co-founder and executive director, points to the possible pitfall of excessive “carbon exuberance” in the emerging rush toward drawdown. She says healthy soil also helps mitigate risks, and will help farmers and ranchers access “a wider range of economic incentives, such as corporate supply chain integration, preferential bank loans, and crop insurance that recognizes soil health outcomes” [if the latter were put in place in the next farm bill]. Land Core also lends its expertise to politicians working to add regenerative agriculture to their own agricultural policies.

Whereas companies like Indigo Ag hope to amass private data about the farms they work with, the newly launched OpenTEAM is the first open-source technology system to address soil health. Funded with more than $10 million in public and private funds, the group’s goal is to aggregate practice-based feedback from farms around the world, interpret field observations, and share this knowledge with farmers ranging from small holders to large-scale enterprises.

Organic cows grazing at Wolfe's Neck Center for Agriculture & the Environment, in Freeport Maine

Organic cows grazing at Wolfe’s Neck Center for Agriculture & the Environment, in Freeport Maine. (Photo courtesy of OpenTEAM)

The goal is to create a connected platform where farmers can get help measuring carbon, improving soil health, and managing their digital records, among other things. “It’s a little like a Google account for farm data,” explains Dorn Cox, research director at the Wolfe’s Neck Center for Agriculture and the Environment. “It’s a prototype of how to collaborate in a new way, on a global scale,” he adds, comparing the project to international scientific efforts like the human genome project or the building of the Large Hadron Collider.

By studying people and practices in place, at a large enough scale to draw conclusions, Cox adds, “We farmers in this part of the world might find more affinity with farmers in Northern India and Argentina than we do with Iowa.” This way of working, he explains, also signals a shift from slower-moving, peer-reviewed forms of scientific research to a more active, participatory science of continual improvement. “If we can share knowledge faster, we can capture carbon faster,” he adds.

OpenTEAM tools can be freely modified and expanded with a Creative Commons or similar license, and large databases (for weather, plants, inputs and soils, for example) will also be freely available. Individual farm, ranch, or business data belongs to the entity that generated it, so sharing of this data is on an opt-in basis. OpenTEAM’s software (which includes web-based tools such as LandPKSFarmOS and Our.Sci) is now being trialed by thousands of farmers around the world, says Cox.

Cox points out that pivoting from a highly competitive agricultural marketplace to one that scales through collaboration, sharing, and creativity contains an element of fun. “That’s easy to discount, but it’s a key advantage as to why it works,” he adds.

The emerging public/private rush to carbon drawdown in some ways resembles a digital-age gold rush. Global players are jumping into the fray, many in hopes of pulling in big profits along the way to saving the world. But Cox sees a more utopian vision of information sharing, and an agricultural system united in regenerating ecosystems. Referring to Myint and Leibowitz’s work, he says, “I love that restaurants have a role to play in this … There’s joy in pulling all these pieces together.”