This Week In V-Carbon: State of Foreign Investment

On the ground, BRIC markets engage foreign investors – Acre, Brazil gives guidance to a US-based project developer in the state’s first private project while tweaking its jurisdictional REDD program, and China welcomes foreign investors to participate in voluntary emissions trading under its city and provincial cap-and-trade pilots. A Post-Doha panel discusses the role of voluntary carbon markets going forward.

On the ground, BRIC markets engage foreign investors – Acre, Brazil gives guidance to a US-based project developer in the state’s first private project while tweaking its jurisdictional REDD program, and China welcomes foreign investors to participate in voluntary emissions trading under its city and provincial cap-and-trade pilots. A Post-Doha panel discusses the role of voluntary carbon markets going forward.

This article was originally published in the V-Carbon newsletter. Click here to read the orginal.

27 January 2013 | At the beginning of this month alone, cap-and-trade came into force in  California, Quebec,  Kazakhstan and Croatia. While domestic markets emerge around the world, the EU Emissions Trading Scheme crashed to a record low yesterday and the Clean Development Mechanism market remains in limbo. Against this backdrop, what role should voluntary carbon markets adopt in upcoming years?


At a  post-Doha debrief  with industry leaders hosted on Wednesday by Ecosystem Marketplace, McGuire Woods and the International Emissions Trading Association, Zubair Zakir, Global Carbon Director at The CarbonNeutral Company, cautioned, “The voluntary market can’t be a stop-gap measure for surplus CER supply – it really is the role of governments to intervene.”

Some suppliers working in the compliance markets have sought to obtain a premium for low-priced CERs by selling into the voluntary carbon markets, but Zakir stressed that the priorities and capacity of the voluntary markets – which are limited in size and demand – lie elsewhere.



“The voluntary market’s real contribution, and what it does best, is focusing innovation on and highlighting areas where emission reductions can be efficiently created whilst generating significant sustainable development impacts,” he says.


Back to the demand side, panelists at Wednesday’s event pointed to the greening of supply chains as a bright spot of opportunity for corporate offsetting – and in some cases insetting – particularly in the realm of agriculture.


Overall, panelists voiced conviction that Doha’s extension of the Kyoto Protocol through 2020, alongside governments’ continued development and linking of domestic markets, provides a clear, long-term signal for carbon offset project developers and investors.

Panelists also stressed the shift during Doha toward planning for adaptation in addition to mitigation, through fund-based investments but also the emergence of  vulnerability reduction credits, a new form of market mechanism designed to finance climate change adaptation projects in developing countries.


Ecosystem Marketplace will shortly publish an article that discusses major points from the panel, keying in on prospects for climate finance and private sector engagement. Stay tuned!


These and other stories from the voluntary carbon marketplace are summarized below, so keep reading! Note that we are still  fundraising  for the State of the Voluntary Carbon Markets 2013 report, slated for publication at Carbon Expo 2013 – if we are able to raise sufficient contributions to continue this research. Many thanks to  The CarbonNeutral Company,  American Carbon Registry  and  Forest Carbon Group  for already coming aboard! This report – which is freely available thanks exclusively to sponsors’ support – remains a key benchmark for the market. To learn more about sponsoring next year’s report,  click here  for our prospectus and contact  Molly Peters-Stanley  for details.


—The Editors

For comments or questions, please email: [email protected]

V-Carbon News

Voluntary Carbon

Another Acre ace

The Acre-based Purus Project – developed by CarbonCo, LLC, a subsidiary of the Foundation – has just received dual validation from the Verified Carbon Standard and the Climate, Community, and Biodiversity Standard, as well as landed its first contract to deliver carbon credits to The CarbonNeutral Company. Representatives from both the project developer and buyer noted the State of Acre’s willingness to engage with market participants in early-stage project-level activities while the state irons out its jurisdictional REDD program – providing a positive indicator of the results that can potentially stem from collaborations between the private and public sector.

   – Read Ecosystem Marketplace article
   – Read press release


Shaking hands with Midas


The Gold Standard recently appointed Markit to develop and manage its new VER registry, hoping to offer a new suite of functionality and tools to support project developers. As for the standard’s other newly minted partnership with Fairtrade, a new article scopes out smallholders around the globe soon to be eligible for Fairtrade carbon finance. The Gold Standard Foundation’s CEO, Adrian Rimmer, noted that the Fairtrade carbon finance scheme will unlikely be restricted to projects run by Fairtrade producers, though they will likely be the main beneficiaries. The two partners must still decide whether to establish a distinct Fairtrade carbon credit or to tag existing Gold Standard credits with a Fairtrade stamp.


   – Read about Markit partnership
   – Read about Fairtrade partnership


China’s pilots want foreigners aboard


China typically limits foreign involvement in its securities and commodity markets, yet when it comes to the country’s emerging carbon markets – an area where China lacks trading experience – overall prospects for foreigners look optimistic.  As China ramps up its seven pilot cap-and-trade schemes, anticipation grows around the trading of China’s voluntary carbon credits (CCERs), a precursor to domestic compliance offsets that accommodates projects no longer viable through the CDM. “Pilot regions encourage every aspect of investors, including foreign investors, to participate in voluntary emission trading, based on projects such as renewable energy and carbon sequestration in forestry,” said Jiang Zhaoli, Director of National Policy & Compliance at the NDRC’s Department of Climate Change.


   – Read more from Bloomberg
   – Read about China’s pilots more broadly from Nature


The liquidity trap


Following last year’s chain of arrests for carbon credit fraud, the UK’s Manchester Crown Court ordered Eco Global Markets Ltd  –  yet another London-based carbon credit firm suspected of marketing fraudulent carbon credits to the public – into provisional liquidation this week. Eco Global Markets was incorporated back in 2010. MH Carbon, a fellow London-based carbon credit company established the same year, is similarly raising eyebrows with the rosy picture it paints of the carbon markets. Several customers note that MH Carbon brokers stopped returning their calls or emails after selling them carbon credits, and are finding it difficult to  liquidate their credits.


   – Read more about Eco Global Markets
   – Read more about MH Carbon


Suppressed demand charges up


The Gold Standard is accepting public comments on a new suppressed demand methodology, which covers micro-scale electrification and energization in communities that are not connected to regional or national grids. Renewable energy sources eligible under the methodology include solar, hydro, wind, biogas, and renewable biomass, with project activities generating emission reductions up to 10,000 tCO2e per year. The methodology is one of four suppressed demand methodologies in the works, being developed in collaboration with NIRAS, Perspectives, and SouthSouth North and slated for release later this year.


   – Read more


Critics get bearish


The Vancouver Sun raises questions over the Coastal First Nations’ improved forest management project in British Columbia’s Great Bear Rainforest, which critics say fails the additionality test for carbon emissions reductions. Among the arguments presented, Valerie Langer of Forest Ethics BC’s forest campaign says the First Nations shouldn’t receive credit for the protected areas (where carbon credits were reportedly not a part of the conversations that enabled area protection), but should for the new lighter-logging legislation for which their support was needed. Pacific Carbon Trust officials say they have no plans to buy credits from the project this year and next. As a result, the First Nations are looking to sell credits in the voluntary markets, with Vancouver-based Offsetters serving as marketer.


   – Read more from the Vancouver Sun
   – Read more from The Tyee


Aceh! That hurt!


Indonesia’s Aceh province has hit a conservation wall. Its Ulu Masen forests were originally slated to become a 735,000-hectare preservation area, but a new spatial plan drawn up by Aceh’s government fails to recognize Ulu Masen for conservation. Instead, the plan will reportedly reduce Aceh’s total forest cover from 68% to 45%. Orangutans, tigers, Sumatran rhinos and other endangered species living in the area are now under increased risk for extinction. Dorjee Sun, an Australian entrepreneur who hoped to generate voluntary forest carbon credits from Ulu Masen, can no longer develop his project as planned. This unfortunate development comes on the heels of a happier tale further east, where Indonesia’s Central Kalimantan province saw the revival of the Rimba Raya REDD project last month.


   – Read more


Manure management finds soft landing

This week, the Verified Carbon Standard announced a revision to the CDM methodology on methane avoidance through the separation of solids from wastewater or manure treatment systems. Developed by NativeEnergy, the update expands the methodology to apply to previously ineligible manure management projects at livestock facilities, in other words, those that use organic bedding material like manure, hay, or sawdust. Previously, projects were ineligible if the livestock farm used organic bedding material in its barns or intentionally added organic material to the manure stream. The means for quantifying baseline emissions have changed while maintaining the conservativeness of the underlying methodology.

   – Read the revised methodology


Bird’s eye on nested REDD in Vietnam


Two articles from Ecosystem Marketplace extract highlights from a recently published report on REDD+ in Vietnam by Forest Trends and Climate Focus. One piece shines light on applying the nested REDD+ approach in Vietnam, which Vietnam’s government is considering as it explores its potential to establish voluntary carbon markets domestically. The other piece discusses efforts to pilot “community carbon pools” in Vietnam intended to embed forest communities’ tenure rights into the REDD+ decisionmaking process. Within the report, Fauna and Flora International provides a case study of its ongoing community REDD+ pilot efforts in Vietnam, where the organization plans to facilitate REDD+ payments through voluntary markets and fund-based mechanisms.


   – Read Ecosystem Marketplace article on nested REDD+
   – Read Ecosystem Marketplace article on pools
   – Read report


Climate North America

Climate change on the stump


President Obama named climate change in his second inaugural address as a key priority for the new administration, citing the United States’ transition toward sustainable energy sources as the basis for national action on climate change – to be realized largely through efforts by the Environmental Protection Agency (EPA) to further restrict emissions from coal-burning power plants. The President couched his language in terms of national competitiveness and self-preservation, without mention of international collaboration or market-based measures to counter climate change. The International Emissions Trading Association’s Dirk Forrister wrote a letter in response, advocating for the President to take on market-based legislation, but also – in the absence of congressional action – for the EPA to adopt market mechanisms in its planned GHG regulations.


   – Read the inaugural address
   – Read IETA letter to Obama


WCI coasts into motion


As of January 1, Quebec and California launched their cap-and-trade schemes. It is not until August that the two jurisdictions will host their first joint carbon auction, says Alain Olivier, director of the Quebec Government Office, in an E&ETV interview. Prior to that, Quebec still needs to hold a mock auction in the spring. The province will be looking at agricultural waste management, landfills, and refrigerating foam to start off, with protocols in progress to harmonize offset policies between Quebec and California. Through expanded operation, Olivier says the Western Climate Initiative (WCI) hopes to influence US and Canadian federal policy to lead to a broader North American market. West of Quebec, Ontario is incubating its own carbon trading scheme as the third member of the WCI.


   – Read Quebec/California interview
   – Read about Ontario


The EU ETS cheat sheet


With the launch of California’s cap-and-trade scheme, the California Air Resources Board has been studying up on many of the challenges historically faced by the EU Emissions Trading Scheme regarding fraud and theft, including tax evasion on carbon sales and cyber-theft of carbon allowances. California seeks to remedy these problems by requiring registries to report spot-market prices and transfer of allowances, controlling the offset supply pool and closely monitoring auctions. These safeguards are intended to create a high-integrity system which has benefited from many of the lessons learned in Europe.


   – Read more


Kyoto & Beyond

EU ETS on the operating table


Yesterday, the energy and industry committee of the EU parliament opposed a proposal to backload 900M future permits, despite projections by analysts stating that such backloading would curb oversupply and help raise carbon prices to €15/tCO2e. In response, the price of carbon on the EU Emissions Trading Scheme dove to a record low yesterday, at one point dropping by 40% to €2.81 before recovering to over €4 later in the day. Poland opposed the backloading, while the UK advocated a more ambitious plan to backload 1.2 billion permits. Germany, the EU’s most influential member regarding industry, remains undecided. While Germany’s environment minister approves of the plan, the country’s incumbent economy minister opposes it. Elections on Sunday could potentially lead to a change in economy minister and resolve the deadlock.


   – Read about price crash
   – Read about Germany’s role


Global Policy Update

Sushi on the steppes


Last month, Japan got a case of vertigo and didn’t commit to the Kyoto Protocol’s second commitment period, citing the failure of major polluters to adopt similar obligations. Instead, Japan is working to limit carbon emissions bilaterally. Earlier this month, Japan signed its first bilateral offset credit agreement with Mongolia to help offset its GHG emissions, with intentions to develop similar bilateral offset credit mechanisms with countries like Indonesia, Vietnam and Bangladesh. Under the new agreement, parties from Japan and Mongolia will take on carbon offset projects located in Mongolia. Eventually, Japan plans to link the bilateral credits to existing carbon trading programs in Japan as well as to international programs like the EU ETS.


   – Read more from the Wall Street Journal
   – Read more from Bloomberg


Welcome to the carbon club


This month, Kazakhstan launched a domestic cap-and-trade scheme, while Croatia began trading on the EU Emissions Trading Scheme. Both countries now fall onto the radar of carbon markets around the globe, which include the Western Climate Initiative, the Regional Greenhouse Gas Initiative, the EU ETS, and schemes underway or in development in China, Vietnam, India, Japan, South Korea, Taiwan, Australia, New Zealand. Chile, Turkey, and Mexico are also moving toward domestic ETSs through the World Bank’s Partnership for Market Readiness. As for linkages, Australia has entered talks with California, and there is talk of China reaching out to Europe and Australia once it rolls out its domestic cap-and-trade system.


   – Read about Kazakhstan and Croatia
   – Read about other domestic carbon markets
   – Read about prospective linkages


Featured Jobs

Research Assistant, Carbon Program – Ecosystem Marketplace

Ecosystem Marketplace is seeking a paid part-time or full-time Research Assistant for our Carbon Program, to begin mid-February for a four- to six-month commitment. In return for this commitment, the Research Assistant will receive invaluable contacts and experience in liaising with international conservation NGOs, for profits and development multilaterals; executing survey research for an international market report; helping to plan/execute an international report launch event; and recommendations as merited. Candidates should have  

   – Read more about the position


Research Assistant, Forest Trade & Finance – Forest Trends

Based in Washington, DC, the assistant will support the Forest Trade and Finance Program’s REDD+ finance tracking initiative to promote a clearer and more comprehensive picture of the REDD+ financing landscape. Candidates should have an undergrad or grad degree in geography, environmental science, or related field, ideally with Spanish or Portuguese language skills.

   – Read more about the position


Technical Expert – The Gold Standard

Based in Turkey, the expert will contribute to the Quality Assurance process with the review of project activities submitted to the Standard for certification. S/he will also help further develop the Standard’s rules and procedures, new methodologies, and capacity building activities. Candidates should have a Bachelor’s in engineering, science, or related field, ideally with 4-5 years’ experience in the carbon markets, and fluency in Turkish.

   – Read more about the position


Three Positions – Verified Carbon Standard

VCS seeks a Brazil Director for a six-month position that will culminate in producing a proposal to the VCS Board of Directors for developing a long-term VCS presence in Brazil. VCS is also accepting applications for a Chief Operations Officer/Chief Financial Officer to oversee day-to-day operations and manage the organization’s financial administration. Finally, VCS is seeking a program manager to oversee the work of validation/verification bodies and VCS registries working under the VCS program, manage a growing staff of program officers and play an important role in the on-going development of the program.

   – Read more about the Brazil Director position
   – Read more about the COO/CFO position
   – Read more about the program manager position


Two Positions – The Climate Trust

The Climate Trust, based in Portland, Oregon, is seeking a Senior Project Analyst to expand The Climate Trust’s climate-friendly agricultural initiatives in the Northwest (soil carbon sequestration, biogas production, nutrient management). They are also accepting applications for a Project Analyst responsible for providing analytical expertise to support The Climate Trust’s project acquisition efforts primarily in the forestry sector, climate services initiatives, and management of our 20+ GHG mitigation project portfolio.

   – Read about the Senior Project Analyst position
   – Read about the Project Analyst position


Technical Advisor – Conservation International

Based in Virginia, the advisor will be responsible for overseeing the preparation of feasibility studies and detailed project designs to ensure that projects meet internationally recognized standards and generate verified emissions reductions. Candidates should have a Bachelor’s in forestry, natural resource management or related field, with 5+ years’ experience in designing, managing, or supporting international field projects in reforestation, afforestation, agroforestry and/or forest conservation.

   – Read more about the position


Environment and Natural Resource Specialist – Tetra Tech ARD

Based in Burlington, Vermont or Arlington, Virginia, the specialist will join the firm to work on program implementation and new business development, primarily for USAID-funded projects on global climate change adaptation, REDD+, coastal and fisheries management, and NRM-related food security, and environmental compliance. Candidates should have a grad degree in forestry, environmental sciences, natural resource management or related field, with 8-10 years’ experience including 3-5 years’ overseas.

   – Read more about the position


International Policy Intern – Environmental Defense Fund

Based in Washington, DC, the intern will assist with EDF’s REDD+ policy team, particularly on the Amazon Basin project which works with indigenous peoples to help them understand the potential benefits of REDD+. Candidates should be fluent or have advanced proficiency in Spanish or Portuguese.

   – Read more about the position


Research Assistant, Climate Change & Sustainability – ICF International

Based in Washington, DC, the RA will help support ICF’s clients and projects in climate change and sustainability, contributing to data collection and analysis, reviewing literature and performing research, and solving quantitative and qualitative problems, among other tasks. Candidates should have a Bachelor’s in environmental or other earth sciences, economics, or related field.

   – Read more about the position





Ecosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact [email protected].

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