This Week In V-Carbon: Hedging Against Open Fire

Ghana and Sudan register projects for clean cookstoves, while Peru wins support for forest carbon projects from Disney and Latam Airlines. The Partnership for Market Readiness helps ready countries’ market-based plans for emission reductions, while clean air experts in the US examine prospects for markets within federal GHG regulations on power plants and prospective carbon tax legislation.

Ghana and Sudan register projects for clean cookstoves, while Peru wins support for forest carbon projects from Disney and Latam Airlines. The Partnership for Market Readiness helps ready countries’ market-based plans for emission reductions, while clean air experts in the US examine prospects for markets within federal GHG regulations on power plants and prospective carbon tax legislation.

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

28 March 2013 | In parallel with the exodus of market participants from the Kyoto Protocol’s Clean Development Mechanism, a whopping 80 percent of project developers and investors surveyed for Point Carbon’s newly released Carbon 2013 report expressed interest in exploring the voluntary carbon markets as an alternative avenue.

Honing in on the above issue, Ecosystem Marketplace will very soon release its own cautionary report covering opportunities (albeit very limited) for compliance suppliers to sell or enter into the voluntary carbon markets. Stay tuned!

On to the news, project developers are cooking up new milestones in Africa with the recent registration of clean cookstove projects by  ClimateCare  in Ghana  and  Carbon Clear in Sudan  – Sudan’s first-ever registered carbon offset project.

 

The biggest deals announced this past month point to Peru, where Disney  made a $3.5 million investment in the dually VCS/CCB-verified Alto Mayo REDD project developed by Conservation International, and Latam Airlines Group purchased 7,000 tCO2e in offset credits from the Campo Verde reforestation project developed by Bosques Amazonicos.

 

Taking a step back to look at the latest country-level developments,  Costa Rica, China, Chile, and Mexico shared their market-based approaches  to GHG emission reductions at the World Bank’s Partnership for Market Readiness meeting last month in Washington, DC.

 

As for how markets might figure into GHG regulations here in the United States at the federal level, Ecosystem Marketplace  provides a few reflections  in response to a symposium hosted by Senator Tom Carper where panelists discussed options for GHG regulation within current Clean Air Act legislation, as well as prospects for the new carbon tax plans being incubated by Senators Barbara Boxer and Henry Waxman.

 

International Emissions Trading Association CEO Dirk Forrister noted there that while politically difficult, a new carbon tax bill would have advantages over existing regulations in providing legal stability and some basis for harmonization with carbon markets abroad.

 

“Part of the interest in these new carbon tax plans [supported by Senators Boxer and Waxman] is to allow discussion on options or proposals that might follow a path like Australia’s, which began as a fixed price that looks like a tax and then shifts into an emissions trading program,” Forrister said.

 

The landscape of US demand for carbon offsets could shift drastically within the next five years depending on if and when Congress provides clarity on how market provisions might fit into federal GHG regulations, and through impending linkages between members of the Western Climate Initiative, chiefly California – which is slated to review recommendations in April for inclusion of REDD offsets into its cap-and-trade scheme after the REDD Offset Working Group’s  workshop on jurisdictional linkage.

 

Keep reading below for these and more voluntary carbon market news items, hot off the presses. Here at Ecosystem Marketplace, we are transitioning from data collection to report-writing mode in order to bring you this year’s State of the Voluntary Carbon Markets report. If you have not yet responded with data and wish to participate in the survey, please notify  Daphne Yin. Visit our homepage for a map of our survey’s geographic coverage and full list of respondents.

 

A special thanks to those organizations that have already contributed complete responses to our 2013 State of the Voluntary Carbon Markets survey, most recently including: Advanced Global Trading, Ag Methane Advisors, Appalachian Carbon Partnership, Bonneville Environmental Foundation, BP Target Neutral, BorgaCarbon Consultancy, Brighter Planet, C&D Consultores, Carbon Clear, Carbon-connect, CarbonSinkGroup, CARBONyatra, Carbonzero, CERPD, Climat Mundi, Climate Clean, Climate Friendly, Climate Neutral Group, Climate Partner, ClimeCo Corporation, CLP Wind Farms (India), Ducks Unlimited, E+Carbon, East Central Solid Waste Commission, Easy Carbon, Eco2librium, Ecoprogresso, egluro, General Carbon, GERES, Green Evolution, Greenfleet, Green Mountain Energy, GT Environmental Finance, GTE Carbon Trading, Guizhou Honor Carbon Asset Management Co,  IdleAir, Impact Carbon, Instituto Açí£o Verde, Instituto Perene, Karbone, KDF Energy, Korea Energy Management Corporation, Less Emissions, Microsol,  NativeEnergy, Nedbank Capital, Neutralize Carbono, Nexus-Carbon for Development, Pacific Carbon Trust, The Paradigm Project, Proyecto Mirador, Recast Energy, Sindicatum Sustainable Resources, SPVS, Sustainable Carbon, Uganda Carbon Bureau,  WeAct, Wind to Market, and  World Wide Carbon.

 

We are still $23K away from publishing our flagship report again this year! To financially support our report, please contact Molly Peters-Stanley, Ecosystem Marketplace Associate Director, at  mpeters-stanley@ecosystemmarketplace.com.

—The Editors

For comments or questions, please email: vcarbonnews@ecosystemmarketplace.com


V-Carbon News

Voluntary Carbon

Cookin’ up something good in Ghana

UK-based ClimateCare – which developed the Gold Standard’s first methodology for clean cookstoves projects – recently registered a clean cookstoves project in collaboration with implementation partner CookClean Ghana Ltd and  investment partner BioCarbon. The project, registered under the CDM as a Programme of Activities, has the potential to cut carbon emissions by 1 MtCO2e while reducing ‘black carbon’ or soot in the atmosphere. Production and sales for the project began late last year; going forward, ClimateCare intends to quantify health improvements from this project in order to obtain results-based finance.

   – Read press release

 

Sudan mines other gold

 

Another clean cookstoves project was registered in Africa, this time in Darfur in the wake of recent conflicts over gold reserves. UK-based Carbon Clear registered its Low Smoke Stoves project a few weeks ago to Gold Standard guidelines    the very first carbon offset project to be registered in Sudan. Emission reductions on the project started accruing several years back, ultimately projected at 300,000 tCO2e over 10 years through the use of 10,000 clean cookstoves in lieu of traditional indoor cooking methods. Carbon offset revenues feed into the microfinance fund used to subsidize stove costs, and pay for all project management and monitoring costs. Given the reluctance of emissions auditors to send staff to the war-torn area, the Gold Standard created rules to allow objective observers from NGOs or UN staff already deployed in Sudan to help with monitoring and verification.

 

   – Read press release
   – Read more from AlertNet (Reuters)

 

The happiest forest on earth

The Alto Mayo REDD Initiative, a VCS/CCB-verified project operated by Conservation International and the Government of Peru, recently supplied 437,000 VCUs to the Walt Disney Company in exchange for $3.5 million ($7-8/tCO2e) to support the conservation of 2.8 million hectares of rainforest in Peru’s northern San Martin province. The credits account for over 20% of Alto Mayo’s total credit supply. Disney’s investment through its Climate Solutions Fund contribute toward the company’s long-term goals to achieve carbon neutrality. Further east, the VCS-verified and CCB-validated Campo Verde reforestation project developed by Bosques Amazonicos in Peru’s Ucayali province also received a fresh injection of capital, with Latam Airlines Group’s purchase of 7,000 VCUs to offset its ground operations in Latin America.

   – Read more from AlertNet (Reuters)
   – Read more from Mongabay

 

At 100, still some Entergy left for PES

 

As New Orleans-based utility Entergy celebrates its 100th anniversary of services to southern US customers, the company is casting a broad net to identify environmental improvement projects to support through its shareholder-funded Environmental Initiatives Fund. The fund is targeting offset projects, as well as other energy and wetlands restoration innovations. Qualification requirements can be requested by providing your contact information and an email address to  EIF@entergy.com. Proposals must be submitted by midnight on April 5. Entergy has previously supported wetlands restoration in Louisiana, reforestation in Mississippi and Arkansas, among other projects.

 

   – Read press release

 

A (de)finite step forward

The Farm Cove Forest Carbon Project, developed by Finite Carbon, recently made it on to California Air Resources Board’s registry of compliance offset projects, and is the only forest offset project currently listed. Registered as an improved forest management (IFM) “early action” project with the Climate Action Reserve (CAR) in September, the project initially obtained an issuance of almost 200,000 tCO2e in offsets. The associated carbon offsets from the 19,118-acre project in Eastern Maine will finance the Downeast Lakes Land Trust’s capital campaign to enlarge Community Forest around the village of Grand Lake Stream, Maine.

   – Read press release

 

1, 2, 3, it’s easy as GHG

VCS recently approved a methodology developed by Michigan State University and the Electric Power Research Institute to count and credit GHG emission reductions generated from reducing the amount of nitrogen fertilizer applied to cropland in the United States. The methodology was based on corn, soy, and wheat production projects in the Midwest. Following the American Carbon Registry’s similar approval last summer, VCS’s approval is expected to make the methodology further accessible to project developers. Environmental Services, Inc and Det Norske Veritas Climate Change Services aided in the methodology assessment.

   – Read more about the methodology

 

Environmental Finance wants you

It’s that time of year again! Leading environmental market publications Environmental Finance and Carbon Finance  invite you to nominate the leading brokers, traders and offset and service providers for this year’s global rankings for the voluntary carbon markets. The survey is open to any organizations that participate in the wholesale voluntary market, but not to individual retail buyers of carbon offsets. Beyond the volume of transactions they handle, candidates will be evaluated based on efficiency and speed of transaction; innovation; quality of information and service provided; and influence in the market. The survey is open until March 31.

   – Take the survey

 

A Momentis occasion

Just Energy’s subsidiary marketing firm Momentis recently launched JustGreen Lifestyle, an initiative to raise consumer awareness about what they can do to curb climate change, whether through direct reductions of their carbon footprints or by buying renewable energy or carbon offset credits. JustGreen supports solar, hydro, wind, and methane capture facilities throughout North America, which generate credits through certifications like VCS, the Climate Action Reserve, IOS, and EcoLogo. The program, available across North America, offers two product options    a $19.99/mo family membership package and a $9.99/mo metropolitan offer. To date, Momentis has invested over $15M in offsetting over 1.23 MtCO2e, equivalent to taking 240,000 cars off the road for a whole year.

   – Read press release

 

A true BluForest?

Last month, carbon offsets marketing firm BluForest Inc and the Commonwealth of Northern Ecuador (MNE) signed an agreement to develop a 1,500,000-hectare, REDD+ project in the province of Sucumbí­os, Ecuador. BluForest – which has allegedly committed funding for the project through a pre-pay contract covering five years’ worth of carbon credits – intends for the project to be developed in accordance with VCS and CCB standard guidelines and expects the project to generate 17 million tCO2e in credits. The Ecuadorian Ministry of Environment and MNE are developing this project in collaboration with the Yasuni ITT initiative, an initiative with over $300 million in funding to protect Yasuni National Park and its oil reserves.

   – Read press release

 

Reduce & Retire: The Latest on Carbon Neutral

A petition to (UN)do emissions

Over the past month, the Project Developer Forum has been accumulating petition signatures in support of an initiative calling on UN Secretary General Ban Ki-Moon to offset emissions from the United Nations’ activities. The Project Developer Forum is offsetting 1 tCO2e for every person who signs the petition by April 23. Petitioners believe that by offsetting with CERs, the UN would not only demonstrate that it can walk the talk, but also signal confidence that the UN has an active interest in maintaining the CDM as a relevant platform for project developers who might otherwise turn to other markets. So far, just under 1,000 supporters have signed the petition out of the 10,000 goal.

   – Read more from the Project Developer Forum
   – Sign the petition

 

Sochi receives en-Dow-ment

In an ongoing quest to deliver the most sustainable Olympic Games, Dow Chemical has been named the Official Carbon Partner to the Sochi 2014 XXII Winter Olympics. Dow plans to offset expected emissions of 300,000-400,000 MtCO2 by applying its technology to projects in Russia that improve building infrastructure, industrial processes, and farming practices. The Sochi 2014 Organizing Committee also announced “Gateway to the Future” Sustainability Awards that recognize the best projects carried out in preparation for the 2014 Games. In comparison, the London 2012 Games, which were declared the “most sustainable summer Olympics of modern times” by Bioregional and World Wildlife Fund-UK, reduced forecasted emissions by 28%, to 311 tCO2e.

   – Read press release
   – Read more from Environmental Leader
   – Read report on London 2012

 

Developments down under

Low Carbon Australia  – the Australian Government’s carbon offsetting authority   recently certified the City of Melbourne (Victoria’s capital city) as carbon neutral, allowing it to  join the ranks of the Cities of Sydney, Yarra, and Moreland to become one of Australia’s carbon neutral cities. In addition to taking steps to directly reduce its emissions – ranging from improvements in waste management, heating, cooling, and water systems, and transportation, this Australian metropolis has offset a portion of its carbon emissions in compliance with the National Carbon Offset Standard (NCOS).

   – Read more

 

Climate North America

For clean air, do we dial 111, Boxer, or Waxman?

Unless further delayed, the US Environmental Protection Agency is slated to pass GHG regulations on power plants this year under the Clean Air Act, while Senators Boxer and Waxman work to inject a carbon price back on to the federal legislative agenda. In a recent blog post, Ecosystem Marketplace provides a few reflections on the undercurrent of discussion on how tradable mechanisms for climate mitigation might figure into federal GHG regulations down the line, featuring insights from thought leaders at a Climate Change Symposium hosted by Senator Tom Carper last week. In an E&E TV interview released today, Dirk Forrister, CEO of the International Emissions Trading Association, weighs in on prospects for EPA regulation vs. brand new legislation.

   – Read Ecosystem Marketplace blog post
   – Read interview with Dirk Forrister

 

California play by play

The California Air Resources Board (ARB) announced last week that it plans to auction 14.5M vintage 2013 carbon allowances and 9.6M vintage 2016 allowances at its second auction, to be held on May 16. The scheme’s first joint auction of allowances, slated for August in partnership with fellow Western Climate Initiative member Quebec, could be up in the air until California governor Jerry Brown formally recommends linkage with Quebec.  Another development potentially in California’s cards is a bill sponsored by Lieutenant Governor Gavin Newsom for California to launch a state-run bank (dubbed the ‘Green Infrastructure Bank’) that finances environmentally friendly economic development efforts, financed by the ARB’s auctions of carbon credits.

   – Read more about upcoming auctions
   – Read more about Green Infrastructure Bank

 

Chiapas knows better

REDD talks have come a long way since former California Governor Arnold Schwarzenegger first set the stage with the governors of Chiapas, Mexico and Acre, Brazil regarding forest protection and statewide emissions targets. When Los Angeles Senator Kevin de Leí³n visited Chiapas recently, he was struck by the extent to which the state’s community organizations, officials, and indigenous people had working knowledge about California’s AB 32 law – reportedly more than the average California citizen.

 

The REDD Offsets Working Group (ROW) will hold its third of three workshops on April 5, honing in on potential benefits and challenges of linking foreign jurisdictions like Chiapas and Acre to California’s cap-and-trade scheme as sources of REDD offset credits.

   – Read more from the Sacramento Bee
   – Read about third ROW workshop

 

RGGI turns six

Further east, the Regional Greenhouse Gas Initiative (RGGI) celebrated its sixth anniversary last week with its 19th auction of carbon allowances, selling just under 38 million allowances (100% of available allowances) at a clearing price of $2.80/tCO2e for a total of $105.9M in revenue. This marks a significant improvement from RGGI’s 18th auction held last December, which saw 19.7 million allowances (53% of available allowances at a clearing price of $1.93/tCO2e. Revenue will be earmarked for investment in clean energy technologies and climate change adaptation efforts against RGGI’s nine Northeast US member states.

   – Read more

 

Kyoto & Beyond

EU ETS on the operating table

Are we at a point of no return? In Point Carbon’s  Carbon 2013 report, 45% of compliance entities surveyed in the primary market reported that they plan to withdraw from the CDM project development space within the next three years, up from 14% in last year’s survey. As for the secondary market, 26% plan to stop procurement and trading of primary CERs, up from 8% last year. By and large, respondents believed that the EU will pass its backloading proposal, deepen its 2020 emission reduction target to 30%, and expand the scope of the EU ETS.

 

EU environment ministers and the European Parliament have agreed to  table the controversial carbon tax on airline emissions  for another year, in order to provide time for the International Civil Aviation Organization to develop a global alternative or reach a compromise on the issue.

 

 

ERUs see the end of an era

The Joint Implementation Action Group (JIAG) announced closure of its operations last week, stating that there is no reason for emission reduction unit (ERU) prices to be able to rise meaningfully from their record lows. The December 2013 ERU contract closed last Wednesday at  €0.11/tCO2e; JIAG chairman Lennard de Klerk said the mechanism would need to see prices of at least  €5/tCO2e to be able to work. “The EU ETS in and of itself has limited demand and I do not see other schemes around the world providing a source of demand for ERUs in the near future,” says de Klerk.

   – Read more

 

European Commission plays by the rules

Last week, the European Parliament approved two laws – a Monitoring Mechanism Regulation as well as a set of rules concerning land use change and forestry – in an effort to better GHG emissions accounting rules in the EU. These laws will allow Europe to develop groundbreaking climate policies and record progress towards emissions targets in a more efficient manner. In particular, the laws relate to forestry and agriculture and will improve upon the accounting of emissions and include new elements such as the reporting of emissions from LULUCF and the reporting of Member States’ low-carbon strategies. The improved legislation will place increased value on the farmers’ and forest owners’ efforts to implement forest and soil carbon storage.

   – Read press release

 

Global Policy Update

Peking ahead to 2015

 

At a recent meeting for the World Bank’s Partnership for Market Readiness (PMR), China indicated that it would not begin work on the establishment of a national carbon market before 2015. Until then, efforts will focus on the regional pilot schemes already underway in several cities and provinces. This clarifies the timeline for the national market’s development, which many expected to begin earlier under China’s five-year plan for 2011-2015. Meanwhile, China continues to explore other carbon policies including new air quality standards and a carbon tax. While reports from the Chinese government suggest implementation of a carbon tax by 2015, China noted at the PMR meeting that a carbon tax policy is still in the process of study and coordination with no confirmed schedule.  The idea for a carbon tax of RMB10/tCO2e in 2012, rising to RMB50/tCO2e in 2020, was originally proposed by the ministry three years ago.

 

   – Read more from RTCC
   – Read more from Sydney Morning Herald

 

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