This Week in V-Carbon: If you want to get technical about it…

If you self identify as a carbon wonk, get ready – this issue of V-Carbon News has it all. From new standards and emissions reporting to market rulemaking to carbon-weighted indexes and carbon-backed currencies, we get down to the nitty-gritty of the voluntary carbon-based life.

NOTE: This article has been reprinted from Ecosystem Marketplace’s Voluntary Carbon newsletter. You can receive this summary of global news and views from the world of voluntary carbon automatically in your inbox by clicking here.

27 September 2011 | If you self identify as a carbon wonk, get ready – this issue of V-Carbon News has it all. From new standards and emissions reporting to market rulemaking to carbon-weighted indexes and carbon-backed currencies, we get down to the nitty-gritty of the voluntary carbon-based life.

Starting with standards, both the Climate Action Reserve and the VCS released new international methodologies and protocols since our last issue. The Reserve’s Mexico Landfill Project Protocol Version 1.1 is its third international offset protocol, while the VCS added an ODS methodology to its long list of internationally applicable approaches.

Also on the standards front, there could soon be new player in town, with the Three Rivers (Sanjiangyuan) Carbon Standard currently being developed by the Qinghai Environmental Energy Exchange (QHEX) for China’s Qinghai Province. Add this to the lengthy list of Chinese market mechanisms that already includes a host of pilot provincial carbon exchanges and the Panda Standard.      

Market mechanisms aren’t the only ones moving in on untapped CO2 reductions. Companies themselves have been delving into and airing their carbon inventories. Like Google, which made headlines last week by disclosing its carbon footprint and carbon neutral chops – achieved in part through the purchase of offsets from a hog waste management project.

The Carbon Disclosure Project’s (CDP) new report also reveals that more companies than ever are reporting reduced GHG emissions and profiting in kind. As of this week, interested offset suppliers can now shuffle through hundreds of detailed company responses to the CDP survey.

Finally to California, where market rulemaking is well underway. Although the California Air Resources Board (ARB) released new rules last week that would limit the liability of offset buyers under California’s ETS – a major point of contention – the reviews have been mixed.

Point Carbon reports that while some welcome the new regulations, others are nonplussed about the regulators’ edits. And others still seem to be wondering what all the fuss is about. “I think offset buyers are a little bit more worried than necessary about offsets being invalidated,” one broker told the news service.

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading! And if you value what you read in this news brief, consider supporting Ecosystem Marketplace’s Carbon Program as a Supporting Subscriber. Readers’ contributions help us keep the lights on and continue to deliver voluntary carbon market news and insights to your inbox biweekly and free of charge.

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V-Carbon News

Voluntary Carbon

Rimba Raya debacle casts pall over Indonesian REDD

Bureaucratic machinations on the part of Indonesia’s Ministry of Forestry have knocked the wind out of a pioneering forest carbon project that had become one of the first to attract big-league financing, lured in part by the promise of a profitable carbon market. Ecosystem Marketplace takes a look at the future of REDD in Indonesia, where conflicting interests between the nation’s leadership turned ugly last month when the Rimba Raya Biodiversity Reserve REDD Project in Central Kalimantan was halved to offer a concession to a palm oil company. But shortly after this article was published, the Indonesian government announced the establishment of a new REDD+ task force, headed by Kuntoro Mangkusubroto, Chairman of the of Presidential Working Unit on Development Monitoring. “The new Task Force for a REDD+ agency will continue to ensure the coordination of all activities related to REDD and will report directly to the President,” said Kuntoro, who also chaired the previous Task Force.

Read the Ecosystem Marketplace article
Read more about the REDD+ Task Force

Eco Global Markets inks Vitol deal

Carbon management consultancy Eco Global Markets has joined forces with global energy trader Vitol in a deal they expect will bring a fresh supply of carbon credits to their clients. Eco Global Markets helps both businesses and individuals offset their emissions and become carbon neutral, while Vitol is one of the world’s largest energy traders of over 5.5 million barrels of crude oil and products per day. “We are very pleased to be doing business with a huge multinational company such as Vitol,” said Robert O’Brien, Director at Eco Global Markets. “With a turnover in 2010 of $195 billion, it is very flattering to be mentioned in the same breath as them.” O’Brien says the partnership enables Eco Global to offer its clients “CERs, EUAs, ERUs, VERs and just about any type of carbon credit in the world.”

Read the press release

IDB to facilitate Colombian carbon trading

Colombia is set to receive a voluntary market boost from the Inter-American Development Bank (IDB), with a US$10.5 million initiative to help the nation develop a trading system for Verified Emissions Reductions (VERs). The three-pronged project aims to cut over half a million tonnes of carbon emissions over four years by creating a Colombian-based voluntary market platform for trading nationally generated VERs, which will be accessible to domestic buyers and sellers as well as international investors; validating and registering a stock of VERs generated by agriculture, forestry and REDD projects; and concentrating on voluntary mitigation and offsetting by the corporate and institutional sectors. According to a press release, 464,000 tCO2e will be verified from supported forest carbon projects – with 371,200 VERs expected to be traded on the new market platform.

Read the press release

Three Rivers Carbon Standard to begin development

Qinghai Environmental Energy Exchange (QHEX) is initiating the development of a new made-in-China carbon standard, the Sanjiangyuan – or Three Rivers – Carbon Standard. According to QHEX, the standard was “inspired by the need to balance the links between management of GHG emissions and socio-economic development in the Three Rivers Source Area of Qinghai.” It is intended to be directly relevant to the Chinese context and needs, to facilitate private sector investments in macro-level plans. The development of the standard will include definition of its scope, objectives, rules to ensure the environmental integrity of the GHG emission reductions accredited and guidelines to ensure that environmental and social safeguards are put in place. QHEX is establishing the TRCS Secretariat to be responsible for development of the Standard, which can be contacted at [email protected].

Read the public notice from QHEX

Ven money is no object

Back in May, we reported on the Ven, an innovative virtual currency traded on the social networking site Hub Culture that was used in an ACR credit transaction involving Nike’s Mata no Peito initiative. Well the Ven is still around, backed by a basket of commodities, currencies – and carbon futures, reports Environmental Finance. Although users can’t exchange Ven to other currencies at present due to regulatory issues and the risk of money laundering, the currency can be used to pay for goods and services online. According to Stan Stalnaker, founding director of Hub Culture, the inclusion of EU allowance futures in the basket, along with other commodities, means that a carbon offset is embedded in the system. Although the club is exclusive – 50% of applications to the site are not approved – ten years out, Stalnaker would like to see “half of 1% of global commodity trades … being done in Ven”.

Read the Environmental Finance article

Suppliers counting their allowances

Your mom may have cautioned you not to spend your entire allowance in one place, but that’s the idea behind efforts like Carbon Retirement – that purchase and cancel allowances from mandatory schemes like the EU ETS in order to effectively take them out of circulation. This is in contrast to the traditionally diffuse project-based carbon offsetting model. The idea of allowance retirement has been floated for years by such groups and was most recently acknowledged in the Guardian’s Complete Guide to Carbon Offsetting, where author Duncan Clark notes that the Guardian itself switched from purchasing offsets to supporting Sandbag – a UK-based company responsible for ripping up compliance permits. With only 49,491 tCO2e retired as a result of this type of climate action in 2010, Carbon Retirement’s Jane Burston nonetheless notes that the “broader ambition is that this approach to offsetting could be the future of offsetting.”

Read more from Business Green
Read more from the Guardian

Would you like offsets with that?

Swedish restaurant Max’s burgers is gaining international attention – but not for their great taste. According to the Globe and Mail, Max’s claims to be the first restaurant chain to publish carbon emissions data on its menu, a choice CEO Richard Bergfors made after taking a look at the size and source of the firm’s carbon footprint. Beef production alone accounts for 70 percent of the firm’s total emissions – news Bergfors called “an eye opener.” Along with offsetting all of its carbon emissions by planting roughly 89,000 trees in Africa each year, Max decided to do the unthinkable: entice customers away from its biggest seller, the beef burger. The restaurant introduced a line of non-beef products that it now encourages its customers to choose – but progress has been slow. While sales of the climate friendly products have increased, non-beef items still account for just 8 percent of sales at Max.

Read the Globe and Mail article

New methodology beating the ODS

VCS announced yesterday the approval of a new methodology to quantify the GHG emissions reductions from activities that recover and destroy ODS – both in the US and internationally.. Developed by USG Umweltservice GmbH and Energy Changes Projektentwicklung GmbH, VM0016 Recovery and Destruction of Ozone-Depleting Substances (ODS) from Products is applicable to project activities in any country – both Article 5 (developing) and non-Article-5 under the Montreal Protocol. This applies even if the destruction facility is not located in the country in which the ODS were recovered. The methodology does differentiate between Article 5 and non-Article 5 countries in the calculation of leakage. Projects in Article 5 countries must use the substitute chemicals specified in the most recent version the Reserve’s Article 5 ODS Project Protocol, while projects in non-Article 5 countries must use industry data to determine the most appropriate and conservative substitute chemical.

Read more from VCS

Nuevo from the Reserve – Mexico Landfill Project Protocol

The Climate Action Reserve has announced that its Mexico Landfill Project Protocol has gone through technical program revisions and is now available on the Reserve website. It is the Reserve’s third international Protocol behind the Mexico Livestock Project Protocol and the Article 5 ODS Project Protocol. First adopted by the Reserve Board in July 2009, the Protocol provides guidance to quantify, report, and verify GHG emission reductions associated with installing a landfill gas collection and destruction system at landfill operations in Mexico. The Mexico Landfill Project Protocol Version 1.1 was released on September 13, 2011. The revisions involved minor editorial changes, modified project start date definition, an added option for a second project crediting period, improvements to the quantification methodology, and the addition of the verification protocol guidance to the project protocol. Questions about the Mexico Landfill Project Protocol should be directed to the Reserve’s Policy Team.

Read more from the Reserve

Commute Scores big in carbon challenge

A group of energy policy consultants and software developers have come up with some innovative ways to green the urban commute – cutting carbon along the way. A competition called the Cleanweb Hackathon gave participants 24 hours to build applications with the ultimate goal of demonstrating “the impact of applying information technology to resource constraints,” reports the New York Times. The big prize for Biggest Impact went to Commute Score – a system that would reward commercial buildings with incentives – including carbon credits – when occupants bike, walk and bus to work instead of driving. According to team member Kimberly Goodrich, the group created a way to track a commute on a smartphone and then identify the transit signature – walk, bike, bus, train or car – of the commuter, using estimated carbon emissions to generate a ‘Commute Score.’

Read the New York Times article

Voluntary market not averse to risk…

…especially not Energy Risk’s Environmental Rankings 2011 awards survey. Even with a focus on compliance and energy markets, the survey does allow readers to write in their preferred VER dealers and brokers in the US and UK. Respondents will receive a complimentary issue of Energy Risk that details the survey results – and of course we’ll report them in V-Carbon News. Cast your vote today!

Vote for your favorite VER dealers and brokers

Reduce & Retire: The Latest on Carbon Neutral

Google bought the farm

…or the offsets anyway. For the first time ever, internet giant Google has disclosed its carbon footprint – 1.46 million tCO2 in 2010 – and announced its achievement of carbon neutrality. In Google’s Green Blog, Carbon Offsets Team Program Manager Jolanka Nickerman described the company’s internal efforts to increase efficiency and use of renewable energy. “For what’s left over,” she said, “we buy carbon offsets.” The post described Google’s partnership with a North Carolina hog waste management project managed by the Duke Carbon Offsets Initiative. The system is expected to prevent nearly 5,000 tCO2e per year, according to a Duke press release. Although Google did not disclose the number of projects from which the company had purchased offsets, Point Carbon revealed that the bulk were from landfill gas projects and a few from forestry projects. Last May, it purchased 300,000 Climate Action Reserve-registered offsets from a landfill gas project in South Carolina.

Read more from Climate Connect
Read more from the Guardian
Read more from Biomass Magazine

Wallabies jump into offsets

Not the cute little marsupials, to be clear – but Australian Rugby team the Qantas Wallabies, who plan to offset their entire carbon footprint while on their New Zealand campaign to become the number one Rugby team in the world. Australian Rugby Union (ARU) reports that the ‘Qantas Wallabies Go Green’ campaign will see the Qantas Wallabies flights offset through the Qantas Carbon Offset Program, while Lexus will offset all ground transport and the Carbon Trade Exchange will offset the remaining footprint for the whole touring party. All carbon offsets used will be approved under the Australian Government’s National Carbon Offset Standard (NCOS). “Hopefully our decision to work with our partners to offset the teams carbon footprint will act as encouragement for other teams to follow suit,” said ARU Managing Director and CEO, John O’Neill.

Read the ARU article

CDP releases corporate carbon report

Last week, the Carbon Disclosure Project (CDP) released its Global S&P 500 Report 2011: Accelerating Low Carbon Growth. The report found that, for the first time, the majority of the world’s largest firms have climate change actions embedded as part of their business strategy. There was also an increase in the number of companies reporting reduced GHG emissions as a result of emissions reduction activities – 45 percent, up from 19 percent in 2010. Although the report doesn’t track or report on the use of offsets – except regulated instruments purchased in the energy sector – interested offset suppliers can now search by company and scan through a long list of detailed corporate responses from survey respondents.

Read more from UKPA
Read more from BBC News

Sherpas carbon-freeski in new flick

Sherpas Cinema is already known for epic freeskiing – but is now bridging the gap into the environmental realm with the newest ski video on the scene. All.I.Can – which features 15 skiers across five countries – has been dubbed “An Environmental Awareness Snow film,” aiming to combine spectacular cinematography, extreme sports and foreword thinking. The film also broadcasts itself as a 100 percent carbon neutral production – achieved by purchasing carbon offsets from Native Energy. Sherpas’ contribution will reportedly – among other things – help to develop a separation farm project to help farms minimize their GHG emissions and make them more economically efficient. Featuring athletes JP Auclair, Ian McIntosh and Chris Rubens and backed by heavyweights such as the North Face and Arcteryx, the film is sure to be epic – and educational.

Read more about All.I.Can from Metrosnow

PotsandPans picks up the carbon tab

Online cookware store has signed on to UPS’s carbon neutral program – using a fee system to offset US customers’ air and ground shipping. As of August 18th, the company will automatically pay UPS a fee for each customer order resulting in a US shipment, which UPS will then use to purchase certified carbon offsets from the CarbonNeutral Company. Since launching its service, UPS has purchased offsets from the Garcia River Forest project in the US; La Pradera Landfill Gas project in Columbia; Fujian Landfill Gas project in China; and Chonburi Wastewater Biogas-to-Energy project in Thailand, all verified under VCS or Climate Action Reserve. Suzanne Murphy, Vice President of Marketing at Meyer Corporation, US – owner of the e-commerce site – estimates that could raise up to US$27,000 in carbon offset fees during the first year.

Read the press release

Climate North America

California carbon: costs and liabilities

ARB released new rules last week that could limit the liability of offsets buyers under California’s ETS – but received a mixed response from stakeholders, reports Point Carbon. The proposal could shorten the period of time that ARB can invalidate erroneous carbon credits from eight years to just three years – as long as they are verified twice. Although Erin Craig, CEO of TerraPass, called the regulations “way better,” others don’t think they go far enough. “Having invalidation exist as a rule shows that they (ARB) are not standing behind their own rules,” said Ethan Ravage, West Coast Representative for IETA. “It serves to undermine the integrity of the offset system.” ARB has posted the Second 15-day “Notice of Public Availability of Modified Text for the Proposed California Cap on Greenhouse Gas Emissions and Market-Based Compliance Regulation, including Compliance Offset Protocols” and “Notice of Public Availability of Modified Text for the Proposed Amendments to the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions.” Comments can be submitted here until September 27, 2011.

California carbon allowances (CCAs) for delivery in 2013 were valued at US$18.50 per tonne on Thursday – down nearly 12 percent from a week ago, when sources said allowances had been overvalued. Some have attributed the sluggishness of the market to a lack of compliance buyers. “The market is still trying to find its feet,” John Melby, GreenX’s North American managing director, told Point Carbon. “The big thing will be when people have allowances in their accounts to trade, and that’s still a year away.”

Read more in Point Carbon’s CMNA (free .pdf)
Read more about mandatory GHG reporting
Read more about the cap-and-trade program

RGGI turns three

The ten states participating in the RGGI program have announced the results of their 13th quarterly auction of CO2 allowances, held on September 7th. 7,487,000 – or 17.75 percent – of the 42,189,685 current control period (2009-2011) CO2 allowances were sold. The auction clearing price was US$1.89 per allowance – the minimum reserve price for the auction. Thirty-one entities submitted winning bids, with bids ranging from US$1.89 to US$5.18. The auction marked three years since the launch of the RGGI auctions in 2008. Participating states are preparing for a comprehensive review of the program in 2012 that will consider – among other things – the reduction in emissions that has occurred since the regional emission cap was put into place. A stakeholder session to receive input on various analyses that the participating states are undertaking has been scheduled for September 19, 2011. Jonathan Schrag, head of RGGI, recently announced that he will be leaving his post by the end of September to join the Connecticut Department of Energy and Environmental Protection.

Read more about the auction
Read more about the program review

BC tells municipalities to relax

Local governments that signed on to British Columbia’s Climate Action Charter (CAC) – agreeing to be carbon neutral in their corporate operations by 2012 – will have more time to meet their goals now that the deadline has officially been relaxed. BC Local News reports that the Green Communities Committee (GCC) confirmed that local governments can still reduce emissions and purchase carbon offsets to become carbon neutral if they choose – but it will no longer be mandatory by the year 2012. Cariboo Regional District (CRD) chair Al Richmond says the extension gives them more time to lobby for changes to how its payments for carbon offsets are applied. “We understand carbon neutrality,” said Richmond, “but we believe rather than paying to buy carbon credits from [Pacific Carbon Trust], they should be letting us put that money into projects here that are going to make a difference to our community.”

Read the BC Local News article

Christie not under the influence

Despite allegations from environmental groups, New Jersey Governor Chris Christie claims that at no point in two meetings with oil tycoon David Koch earlier this year did the businessman lobby him to pull out of the RGGI program. PolitickerNJ reports that Christie said the two discussed a “whole range of political and policy issues” in a two-hour meeting at Koch’s New York City office in February – but not the cap-and-trade program. “Reggie (RGGI) never came up. He never brought it up. I never brought it up,” Christie said – though he acknowledged that defeating the initiative has been a major policy goal of Koch’s Americans For Prosperity advocacy group. But not everyone is convinced that Christie wasn’t under the influence of big oil. “This is the smoking gun that shows he’s been working with the Koch brothers from the beginning,” said Jeff Tittel, director of the New Jersey Sierra Club.

Read the PolitickerNJ article

California releases RFPs for cap-and-trade services

The California Air Resources Board (ARB), along with Western Climate Initiative (WCI) Partner jurisdictions working on the cap-and-trade program, has released three Requests for Proposal (RFPs) for the following cap-and-trade services: Auction and Reserve Sale Operator; Financial Services for Auction and Reserve Sale; and Independent Market Monitor. ARB has also released a fourth RFP for a Market Monitor Trainer to provide training to agency staff on monitoring markets. The final date for submitting proposal is October 14, 2011. A bidders’ conference to discuss the RFPs will be held at 9:00 am PDT on Tuesday, September 20, 2011 at the California Environmental Protection Agency. More information can be found on the ARB website. More information on the process for a company to be able to do business with the State of California is available here.

Read more from the WCI
Read more from Climate Connect

Kyoto & Beyond

CDM becomes latest Wikileaks casualty

A diplomatic cable released by Wikileaks earlier this month sheds light on the hostile attitude of US policymakers towards the CDM, reports Point Carbon. The cable quotes R.K. Sethi, a former Indian official in charge of Kyoto offset projects, as saying his office took the “project developer at his word” when proving projects were additional. The dispatch, prepared by the US Consulate in Mumbai and marked for the attention of the Department of Energy in Washington, is dated July 2008 – just four months before an influential Congressional committee called the integrity of offsets generated under the CDM into question. This was regarded as a blow to the standing of the CDM at the time – when US Congress was still debating the use of international offsets under a future US trading scheme. It also drew a response from UN climate chief Yvo de Boer, who countered, “we are not printing money in the garage here.”

Read the Point Carbon article

IETA hits back at EU proposal

An EU draft document obtained by Bloomberg revealed that the European Commission will propose classifying spot CO2 contracts as financial instruments in an effort to better protect the EU ETS from fraud – a move IETA has called a “hurried and inadequate response.” The European Commission opted to extend its Markets in Financial Instruments Directive (Mifid) to cover spot carbon deals rather than design a tailor-made regime. IETA responded by calling on the Commission to “remove the classification of allowances as financial instruments from the forthcoming Mifid review proposal,” – a demand European Commission Director-General for climate, Jos Delbeke, has so far rejected, arguing that IETA has “long been calling for a genuine oversight regime.” Last week EU member states approved draft rules for setting up a single EU-wide auction platform from the second half of 2012.

Read more from Business Week
Read more from Bloomberg
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