This Week in V-Carbon: Bottom(s) Up!

As the price of carbon drops in the EU ETS and the global credit crunch drags on, the Financial Times looks at big banks that are shutting down their carbon trading desks and investment groups that are scaling back their socially responsible investment teams. UBS, JP Morgan, Henderson are among the companies affected by the drop in carbon prices and an apparent decrease in the profitability of environmentally responsible investing. Other firms with a primary focus in carbon trading have suffered too – Climate Change Capital, the low carbon investment firm based in London, is operating under threat of takeover by New York-based Bunge, a large agricultural commodities trader that is also active in the voluntary carbon market, while French investment banking firm Société Générale is selling its 50 percent stake in Orbeo to its partner Solvay Group.

– Read more from Financial Times
– Read more from Business Week
– Read about Climate Change Capital’s buy-out

The Oklahoma Carbon Initiative, a voluntary program that allows landowners to generate carbon credits for soil carbon sequestration, recently announced that it has more than 50,000 acres enrolled. The program verifies activities through the only active state government credit verification system in the U.S. – the Oklahoma Conservation Commission’s Credit Verification Program – which developed its own methodologies with the help of Oklahoma State University. Participating farmers receive per-acre payments for conservation practices – credits that are purchased in part through the state’s ECOpass program for state visitors to offset to offset their travel. Although initially a carbon mitigation program, it has become a broader program promoting payments for ecosystem services that covers wildlife conservation and water quality.

– Read more about the initiative

Back in April of this year, Greenpeace asked this question of the mushrooming class of cloud computing websites – think CO2-heavy data centers powering the likes of Google, Amazon, and Apple devices. While web giant Google forged its own comprehensive offsetting strategy, carbon offsetting firm CO2 Neutral Seal has developed a solution for websites that don’t have the resources to hire a carbon team. Its CO2NS Website service aims to make websites carbon neutral by purchasing offsets commensurate with websites’ visitor statistics. CO2NS uses Google Analytics to conduct a daily analysis of a client company’s website usage, then matches results with environmental impact to calculate a carbon footprint. The CO2 footprint is then neutralized with carbon credits, and client websites are issued a certificate of carbon neutrality.

– Read more from Environmental Leader

Carbon neutrality? Corní¨r Bank says “put it on the card.” In partnership with South Pole Carbon Assets Management, Corní¨r Bank has launched the Climate Credit Card for carbon-conscious businesses. The Climate Credit Card’s goal is to make it easier for individuals and businesses to offset emissions from their purchases – instead of relying on them to retroactively offset their emissions. The card is unique in that it contains an automatic built-in feedback mechanism: cardholders receive an annual statement of the carbon footprint of their purchases, and a corresponding volume of carbon offsets will be retired at year’s end to offset the purchases. Corní¨r is offsetting those emissions with money from its ad budget – generating, it hopes, both goodwill and good behavior on the part of its customers.

– Read more from Ecosystem Marketplace

British Columbia’s Carbon Offset Aggregation Co-op (COAC) announced on Friday that its fuel tracking program is trucking along – launched this past weekend in an effort to reduce diesel consumption and earn carbon credits. The Co-op employs its unique methodology for creating efficiencies in industrial vehicles and equipment to generate offsets that BC and other localities can purchase to meet mandatory or voluntary carbon targets. Co-op CEO George Stedeford says the Co-op’s current membership accounts for about 55 million litres of diesel consumption, mainly in the forestry and transportation sectors. He expects interest to continue to increase with the start of installs

– Read more about the Co-op’s fuel tracking efforts
– Read more about COAC

‘Tis the season of giving – and in the case of the global carbon markets, it’s the season for giving out awards to top offset suppliers, brokers and market service providers. This year’s Environmental Finance “Best of” survey found Evolution Markets at the top of the charts in categories ranging from Best Broker, North America, to Best Primary Originator and Secondary Market Broker, Kyoto Markets. Other awardees included EOS Climate (Best California Offset Originator), Element Markets (Best California Trading Company), Tricorona (Best CDM/JI Project Developer), Baker & McKenzie (Best CDM/JI Law Firm), Verdeo/Sindicatum (Best Project Developer, all North American Markets) and DNV (Best CDM/JI Verification Company).

– Read the full story (free registration)

Young professionals making their way in expensive cities across the US are all too familiar with Groupon – and similar websites offering lifestyle coupons for eateries, massages and occasional budget getaways. Last week, a new social enterprise – the Mutual – launched as an adaptation of Groupon-like mechanisms that gives perks to individuals and businesses for doing good. With a focus on “Earth, Air, Water, Education and Reform,” the Mutual has teamed up with Cause Partners Carbonfund.org (Air), The Center for Ecoliteracy (Education), World Resources Institute (Reform), Oceana (Water) and The Trust for Public Land (Earth) to offer perks from VIP service to early access to tickets and discounts from partner businesses – for US$10/month. Users select the Cause Partner that will receive their contribution, in turn, and the funds are applied to Partners’ distinct missions. The Mutual has so far launched in NYC, with intentions to soon expand to San Francisco and Washington DC in early 2012.

– Read more about Carbonfund.org’s partnership with the Mutual
– Visit the Mutual website

ERA Carbon Offsets Ltd recently announced that it has sold more than 2 million tonnes of forest-based carbon offsets. ERA reports that this sales milestone was achieved exclusively thanks to voluntary buyers – as all of its completed projects and carbon sales have been to clients in the international voluntary market. This may not be the case for long, ERA says, because they also project that future sales will include regional compliance schemes such as California and Western Climate Initiative, as well as markets in Australia, Korea and Japan. ERA reports that it is currently focused on its project in the Democratic Republic of Congo, which is the first concession based forest conservation project to be awarded in that country.

– Read the press release

Flower farms in Kenya are trying to repair their wilting image in Europe, where eco-conscious consumers are wary of the carbon cost incurred by flying in flowers from abroad. Carbon project developer Camco has been contracted by Kenya’s flower industry to develop projects that will lower emissions, generate carbon credits, and maybe give some peace of mind to European buyers. Some of the potential project types include installing solar panels, tree planting, and biogas capture. In order to enable small and big farms to be able to pay for those projects, Camco has recommended the creation of a revolving fund that would give farms the upfront capital to pay for projects, while a World Bank study co-authored by Camco recommends that flower farms pool together to generate carbon credits to sell on the international voluntary and compliance markets.

– Read about the plan

A group of environmentally-conscious DJs has acknowledged the significant carbon footprint that their frequent air travel, jet-setting to fabulous parties across the globe, incurs. As a result of this concern, the group DJs Against Climate Change was born. DJs Against Climate Change encourages DJs to offset their travel emissions through investing in offsetting projects such as wind farm development and gas sequestration. Over the past few years, the group has offset more than 400,000 lbs of CO2, using Terrapass as their intermediary for investing in these projects. DJs Against Climate Change believes that because governments are behind in developing the policies to enable offsetting climate change, it is ultimately up to individuals to be aware of their footprint and take action to offset their own emissions.

– Read about carbon conscious DJ’s

A new protocol from the Climate Action Reserve and the Environmental Defense Fund will allow rice farmers to quantify, monitor, and verify GHG reductions from changes in rice cultivation practices. It is estimated that in California, a large cultivator of rice in the US, about 180,000 tCO2e per year can be cut from changing to low-carbon rice management. Traders are keeping an eye on the California-facing rice protocols for the California Air Resources Board to consider under the state’s cap-and-trade program – though the protocol’s anticipated reductions are small compared to other accepted approaches, including forest management, agricultural methane and ozone depleting substance destruction. The American Carbon Registry and the Verified Carbon Standard are expected to adopt rice protocols in 2012.

– Read a press release from the EDF
– Access the protocol documents

You don’t need hip waders to walk through the VCS Association’s draft requirements for Wetlands Restoration and Conservation (WRC) GHG benefits crediting – but you do need to have some significant WRC experience to take part in its most recent call for peer reviewers. The draft requirements, which have been developed by the VCS Wetlands Technical Working Group, will be incorporated into existing VCS requirements for AFOLU. Peer reviewers are expected to vet the draft to ensure that requirements are conceptually rigorous, scientifically robust and workable in practice, and should have significant expertise and experience with WRC.

– See the announcement

Back in 2008, South Australia’s premier was talking the carbon neutral talk, saying that the South Australian government would offset all emissions from government travel and office emissions. He simultaneously announced a plan to make sure the desalination plant at capital city Adelaide’s Port Stanvac was carbon neutral. Now, three years later, the government’s plans have been scrapped and it was forced to admit non-attainment of the carbon neutral target. Although AU$65,065 was spent on carbon offsets in 2007-2008, only AU$5,390 has been spent since, and the desalination plant won’t achieve carbon neutrality through offsets, but will be powered by regional renewable energy sources. Environment Minister Paul Caica responded to criticism, “The State Government is exploring opportunities to offset the emissions of Cabinet ministers from 2010-11, but we are confident this will be achieved.”

– Read more

The Vodafone McLaren Mercedes’ Formula 1 team has been engaging in activities to reduce its emissions for a few years now, and was *thisclose* to achieving carbon neutrality – but had a run in with 18,297 tonnes of unavoidable carbon emissions. Those emissions, from transporting cars and air travel, will now be offset by purchasing credits from hydro-electric projects in India and Brazil. The team worked with Carbon Neutral Investments (CNI), a carbon services firm that utilizes VERs to offset emissions for clients, achieving carbon neutrality this year. CNI also provided offsets for Swan Offshore Racing, the first carbon neutral powerboat team.

– Read more
– Read the press release

South Africa’s largest brick manufacturer will be selling CERs from a fuel switching project to Guangzhou Shengzhou Investment Limited Corporation to offset the entire Chinese delegation’s travel to and from the COP17 in Durban. Neutralizing 1,844 tCO2e, the agreement was brokered by the South-South Global Assets and Technology Exchange and the Special Unit for South-South Cooperation under the UN Development Programme. “South to South exchange” – when countries in the southern hemisphere exchange technology, capital, and knowledge to mitigate and adapt to climate change – is one of the development tools currently being promoted by multilaterals like the UN and World Bank.

– Read more

– Read more from Chicago Business

RGGI has reported results from its 14th quarterly auction, the final auction of the program’s first three-year compliance period. The auction raised a total of $51.5 million through the sale of 27,293,000 allowances. Auction 14 results by percent sold are an improvement over Auction 13’s dismal results (63% of available allowances sold versus 18% sold, respectively – or, 37% unsold versus 82% unsold, says the cup-half-empty). This improvement could be indicative of RGGI’s push to move toward selling fewer allowances at higher prices. Notably, 86% of the purchasers at Auction 14 were electricity generators and their affiliates. Bids for the first control period ranged from $1.89 – $5.00 per allowance, with a clearing price of $1.89. Allowances for a future control period (2012-2014) did not generate any buyers. Cumulatively, RGGI has raised $952 million over its first three years.

– See the auction results (PDF)

This year’s Conference of Parties has come and gone. Kyoto has been extended until 2020, although without Canada, Russia, Japan, and the U.S., and parties agreed upon a global, legally binding mandate starting as early as 2017 that would require ALL parties to comply. Guidance on REDD+ MRV and safeguards found its way found its way into the final text , but decisions on finance were put off until next year. The $100 billion Green Climate Fund was created, although when and where the money for the Fund will come from is unclear. All in all, it wasn’t enough to boost the carbon market, and prices remained low due to the limited good news from Durban, an oversupply of CDM credits, and the dim economic outlook in Europe and elsewhere.

– Read the IISD’s overview of COP17
– Get “just-the-facts” on Durban from Ecosystem Marketplace
– Read analysis from Reuters

CDM UNEP Risoe reports that in November, project developers filed 268 new project submissions, the highest number of new clean development mechanism (CDM) project submissions to date. Market participants speculate that this increase might be related to the fact that CDM projects in developed countries must be registered by close of 2012 in order to be traded in Phase III of the EU ETS. In addition, the programmatic CDM is also expanding, having added 16 new programme of activities (PoA) from September through November. Overall, CDM has 7347 projects in its pipeline, with another 134 in the registration process. 206 of those projects are located in Africa. Joint implementation (JI) announced 16 new project submissions in November (two track 1 project and 14 track 2 projects). Cumulatively, the JI pipeline has a total of 492 projects.

– Read more from Argus

Mexico City, one of the largest and smoggiest metropolitan areas in the world, is trying to clean up its act. Its metrobus system is one of 10 transportation projects registered under the CDM, carrying an average of 390,000 passengers every day, and ostensibly taking thousands of cars off the road. It is projected to generate another US$4 million in credits over the next 15 years. Unfortunately, given the potential changes in the EU ETS, in which only credits from projects in least developed countries would be eligible, countries like Mexico could be left high and dry. However, Roberto Frau, an environmental consultant who worked on the early planning of Metrobus, stated that “the probability is that developed countries will still need to buy carbon credits from developing parts of the world.”

– Read more from Reuters

… a lot of work in a short amount of time for Brazil’s second-largest city, where a new environmental exchange is set to open by mid-2012. Bolsa Verde do Rio de Janeiro, or BVRio, as it will be known, will trade environmental assets including carbon credits, securities related to Brazil’s new forest code, and other ecosystem service assets. The exchange will be led by Pedro Moura Costa, co-founder of EcoSecurities. Moura Costa’s E2 Sí³cio Ambiental is working with the city and state governments in Rio de Janeiro to set up BVRio, which he expects will be operational ahead of the Rio+20 summit next May. Costa and others have some work cut out for them, including “(Building) a framework to create the underlying assets, and… (choosing) the trading platform” according to Eduarda La Rocque, Rio municipal finance secretary. The exchange will also have to compete with BM&F Bovespa, Latin America’s largest exchange, which has a carbon trading program and refuses to share its clearing system with rival exchanges.

– Read about BVRio
– Read about Moura Costa’s involvement with the exchange

The Australian Competition & Consumer Commission (ACCC), a government agency that ensures compliance with competition, fair trading and consumer protection laws, is putting businesses in Australia on watch. As the country’s carbon tax goes online next July, the ACCC is forcing businesses to explain price hikes related to the tax. ACCC chairman Rod Sims explains that while electricity utilities – which operate with futures contracts – may already see an impact from the passage of the law, other goods shouldn’t see prices affected until the tax goes into effect. The Commission has released a “carbon price claims guide for businesses” to assist Australian businesses in assessing their claims of price increases related to the tax.

– Access the claims guide here

China is the world’s largest GHG polluter – but where and how is the carbon emitted? To answer that question, China recently announced plans to develop a comprehensive system for monitoring and calculating its GHG emissions, reports a leading scientist from the Chinese Academy of Sciences (CAS). This system is needed in order to help China standardize its GHG accounting and to serve as a reliable basis for the country’s carbon emission reduction efforts. Researchers will develop lists for quantitative evaluation of CO2 emissions from both natural processes as well as human activities such as energy utilization, cement production, land use and livestock farming. In addition, China will implement a system for monitoring atmospheric CO2 concentration through satellite remote sensing, aerial and ground monitoring, and atmospheric modeling.

– Read more about China’s monitoring plans

Certain projects under the CDM may soon be banned from the EU ETS, including large hydropower and coal-related projects. JI projects approved by Russia and the Ukraine may also face sanctions, according to Sindicatum Sustainable Resources Group Ltd, a Singapore-based developer of carbon offset projects. The sell-off of credits this week may have to do with the potential expansion of banned credits from certain project types – which Standard Bank’s Geoff Sinclair says could create a “junk market.” According to Tom Greenwood, an analyst for IdeaCarbon in London, “It’s uncertainty about eligibility criteria that is increasing the risk of holding CER futures contracts.” Meanwhile, 592,000 ERUs generated in Russia have been issued, including 234,810 to Orbeo.

Additional resources