Both markets and forests found their place in the Paris Climate Accord, capping a tumultuous year that saw a new “bottom-up” approach to the climate crisis deliver something that no one hates and many even seem to love. In all this tumult, what were the top carbon market stories of 2015? Here’s your chance to let us know what you think.
This article was first published in the Carbon Chronicle newsletter. Click here to read the original.
28 December 2015 | Negotiators leapt to their feet on December 12 when French Foreign Minister Laurent Fabius banged his gavel to signal the adoption of the Paris Climate Accord. Both markets and forests found a place in the 32-page final text.
Results-based payments for avoided deforestation were elevated to the level of a stand-alone Article (#5) in the Paris Agreement, though the acronym REDD+ (Reducing Emissions from Deforestation and forest Degradation) itself does not appear in the text.
Nevertheless, “this unexpected development sends a clear message that REDD+ is a prominent piece of the new global climate action strategy,” Gustavo Silva-Chavez, manager of Forest Trends’ REDDX initiative, wrote.
Article 6 of the Agreement lays the groundwork for markets but doesn’t prescribe the best method. Instead, it recognizes both bottom-up and top-down approaches. For the former, the Agreement lets countries team up in “cooperative approaches that involve the use of internationally transferred mitigation outcomes” and in the process created a new acronym: ITMOs. For the top-down approach, the Agreement establishes a new global mechanism, with more focus on sustainable development than its predecessor.
Vikram Widge, Head of Climate and Carbon Finance at the World Bank, writes that the carbon trading mechanism will be “very different from the Clean Development Mechanism (CDM), but will be informed by the breadth of experience that the CDM helped create.”
The Paris Agreement clearly states that market approaches must avoid double counting by two or more countries. The details are still vague, and will be left up to the Subsidiary Body for Scientific and Technological Advice to work out at a later date.
In the meantime, countries aren’t necessarily waiting for the top-down guidance from the United Nations Framework Convention on Climate Change (UNFCCC) to materialize. Eighteen countries – Australia, Canada, Chile, Colombia, Germany, Iceland, Indonesia, Italy, Japan, Mexico, Netherlands, New Zealand, Panama, Papua New Guinea, South Korea, Senegal, Ukraine, and the US – have signed a New Zealand-led declaration to cooperate on carbon market standards to facilitate international trading.
More news from the carbon markets is summarized below, so keep reading!
TOP STORIES OF 2015, AND NEW YEAR’S PREDICTIONS
Every year, we ask our readers to weigh in on the biggest carbon stories of the past year. What moved the needle towards climate neutrality? What melted your climate-hardened heart?
Cast your votes HERE. The survey closes January 11, 2015.
Around this time, we also collect reader predictions on what is to come in 2016. Predictions may entered through the top story survey or sent directly to Allie Goldstein (firstname.lastname@example.org).
HERE’S THE DEAL
Not the Stat-us quo
Norwegian power giant Statkraft will buy “hundreds of thousands” carbon offsets from the Big River and Salmon Creek Forests project in California managed by The Conservation Fund, according to Managing Director of Statkraft US, Patrick Pfeiffer. Though the company does not have operations in California, it will purchase converted compliance offsets. Pfeiffer said that the purchase reflects “our support and confidence in the integrity of the California cap-and-trade program as a means to reduce greenhouse gases globally.” The Conservation Fund has sold a total of 3.5 million offsets worth $38 million to various groups since 2008, but the deal with Statkraft is its largest single transaction to date, according to Chris Kelly, the organization’s California program director.
The city of Richmond, a coastal suburb of Vancouver, Canada, has identified five local carbon projects from which to purchase upwards of 2,000 offsets at a cost of CA$80,000, to maintain its carbon neutral status. Richmond businesseswere invited to submit proposals on underfunded renewable energy, organics composting, and land restoration projects to earn community carbon credits, or “C3s”, that would be purchased by the city government. Levi Higgs, Richmond’s corporate energy manager, said the city plans to spend more than CA$200,000 total on the emissions reductions projects. The city offers “affordable, professional” offset calculations to eligible projects, though its website doesn’t specify a carbon standard. Richmond describes its Community Carbon Marketplace as the “farmer’s market of the carbon market.”
Fertilizing CER demand
Germany launched an initiative to buy certified emissions reductions (CERs) from nitric acid destruction projects developed under the CDM but now at risk of closure. The German government has indicated that it can spend up to 20 million Euros a year for the initiative, and Norway’s climate ministry is considering supporting it as well. Nitrous oxide isalmost 300 times as potent as carbon dioxide in its global warming potential and is a byproduct of nitric acid, used to make synthetic fertilizers. Silke Karcher, an official from Germany’s environment ministry, said the CER purchases would not be used against Germany’s domestic climate target and that ideally each country should take responsibility for their own nitrous oxide emissions post-2020.
Make it register
Peru’s National REDD+ Program announced its National Registry for emissions reductions at a side event in Paris hosted at the offices of law firm Baker & McKenzie. Gustavo Suárez de Freitas, who leads the country’s National Forest Conservation Program for Climate Change Mitigation, gave strong indication that the registry will work with project-level REDD+ initiatives. “These projects have done a lot to reduce emissions and bring private capital into our country, now it is the time that we share our methodologies, data and best practices,” he said. Peruvian projects sold a collective four million offsets last year to voluntary buyers at a value of $23.9 million, according to Ecosystem Marketplace’s State of Forest Carbon Finance 2015 report.
Better in the second act?
The New Zealand government’s recent review and discussion paper of its emissions trading system (ETS) unexpectedlyquestioned many of the features that domestic forest owners have long critiqued and opened the floor for comments on a minimum carbon price, international units, and the 2-for-1 rule that gives emitters extra leeway. “If you take them at their word, you might think they are prepared this time around,” said Ollie Belton, Managing Director at Carbon Forest Services. New Zealand’s ETS has been floundering in oversupply since the government allowed international offsets into the program in 2010; they were finally excluded in May 2015 but will likely be reintroduced. The ETS discussion paper is open for public comment through February 19.
Full piggy bank
California legislators have been dragging their feet in deciding how to spend $1.4 billion in revenue generated through the state’s cap-and-trade program. Though earmarked for efforts to reduce emissions, lawmakers have been bickering over whether to spend the remaining funds on fixing the state’s roads, building out mass transit, weatherizing low-income homes, or a variety of other options since June this year. The money is currently “just sitting there,” Assemblyman Jimmy Gomez told the Los Angeles Times. Gomez is now leading a charge to hatch a plan for spending the money early in 2016 rather than waiting for the state budget to be finished next summer.
Retailer Marks & Spencer, logistics giant DHL, energy company Eneco, honey producer Breitsamer, and coffee roasters Beyers and the Java Coffee Company welcomed the Fairtrade Climate Standard at its official launch December 4 in Paris. The standard, which is currently only available to Gold Standard carbon projects, requires buyers to pay a minimum price of 13 Euros (US $14.1) for tree-planting projects, 8.2 Euros (US $8.9) for energy efficiency projects, and 8.1 Euros (US $8.8) for renewable energy projects. A Fairtrade “premium” of 1 to 1.5 Euros is paid directly to producers, who must invest in climate adaptation. Buyers are also required to have an emissions reductions plan and to communicate what portion of their offset portfolio is Fairtrade.
Where the Wild Things went
Defaunation, or the loss of large animal species, is directlyconnected to lower carbon storage in Brazil’s Atlantic Forest, according to new research out of São Paulo State University,published last week in Science Advances. Species such as toucans, spider monkeys, and tapirs disperse the seeds of large, long-living hardwood trees by eating and then defecating them. The loss of these animal species due to hunting led to a 10 to 15% decline in carbon storage as hardwoods were slowly replaced by softwood trees, which have smaller seeds dispersed by birds and bats. The study authors say its findings describe a process likely occurring in other tropical forests.
A new study published in Nature Communications suggests that the Intergovernmental Panel on Climate Change’s methodologies may overestimate tropical forest carbon stocks by almost 10%. The researchers looked at carbon storage at the edges of forests, where wind speeds are higher, species composition is often different, and manmade fires may encroach. Analyzing large remote sensed datasets from the tropics, they found that forest biomass was 25% lower within the first 500 meters of forests’ edges and 10% lower within 1.5 kilometers. “Our results highlight the impact of breaking up large blocks of forests into smaller chunks,” said study author Paul West, of the University of Minnesota. The findings may also have implications for REDD+, Stanford News notes.
Temporary Program Director – International Carbon Reduction and Offset Alliance (ICROA)
Based in London, UK, the Temporary Program Director will manage ICROA, a global business association housed within the International Emissions Trading Association, while the permanent director is on maternity leave. The position requires excellent communication skills; a demonstrable background in carbon management and markets; and an entrepreneurial approach.
– Read more about the position here
Project Manager, Payment for Ecosystem Services (PES) – Conservation International
Based in Nairobi, Kenya, the Project Manager will manage a stacked PES project in the Chyulu Hills that involves water, REDD+, and solar energy. The manager may also help with additional PES projects within Africa. The successful candidate will have an advanced degree, at least five years of PES management experience, and a proven track record of securing grants to support conservation and/or sustainable development agendas.
– Read more about the position here
Program Development Manager – Nexus
Based in Phnom Penh, Cambodia, the Program Development Manager will foster Nexus’s growth by originating strong projects in the low-carbon, pro-poor sector – including improved cookstoves, water filters, waste to energy, distributed renewable energy, and household biogas digesters. The successful candidate will have a relevant master’s degree, knowledge of climate finance, demonstrated ability to secure funding and/or consultancies, and work experience in developing countries. The position requires travel 30% of the time.
– Read more about the position here
European Union (EU) Policy Officer – Carbon Market Watch
Based in Brussels, Belgium, the EU Policy Officer will support Carbon Market Watch’s European climate policy work, with a particular focus on the EU’s 2030 climate framework. The position requires establishing relationships with EU policymakers; designing and implementing advocacy strategies; and preparing information to disseminate. The successful candidate will be able to communicate effectively with different audiences (political, technical, media) and have demonstrated project management skills.
– Read more about the position here
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