This Week In V-Carbon News…

The California Air Resources Board approves a new offset protocol for coal mine methane. But market participants say there is still more to be done with land-based offsets. The United Nations faces criticism over the administrative budget for the Clean Development Mechanism, while China and Africa look for alternatives to finance certified emissions reduction projects.

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


30 April 2014 | California has long been taking its cues from the voluntary carbon markets in developing the offset component of its cap-and-trade program. The US state has now welcomed another voluntary project type into its program, but market participants are lobbying for the addition of even more protocols to help thwart any potential offset shortages.

The California Air Resources Board (ARB) announced on Friday that it has approved a new protocol that would generate compliance-grade carbon offsets from coal mine methane projects. This project type joins forestry, urban forestry, livestock and ozone-depleting substances protocols also originally developed in the voluntary markets as being eligible to produce offsets for entities regulated by the cap-and-trade program. ARB staffers have previously estimated that the coal mine methane protocol could produce a potential domestic offset supply of 60 million tonnes of carbon dioxide (tCO2e) in emissions reductions.

The ARB sees emission reductions from carbon offset projects, including from agriculture and forestry projects, as a vital factor in achieving California’s ambitious greenhouse gas (GHG) reduction goals. In 2006, then-California Governor Arnold Schwarzenegger signed into law Assembly Bill 32 (AB 32) – a landmark piece of legislation that outlined the state’s efforts to mitigate climate change. The legislation featured targets for reducing California’s GHG emissions to 1990 levels by 2020 and 80% below 1990 levels by 2050. The cap-and-trade regulation is currently in place through 2020 but may be extended.

Market participants see opportunities for more land-based offsets – emissions reductions generated via agriculture and forestry projects – to be added to the system, including avoided grassland conversion, wetland restoration, composting, rangelands and rice cultivation projects. The ARB could add rice cultivation as a new compliance offset protocol in September, making it eligible to generate carbon offsets for the program starting on January 1, 2015.

But bringing more of these types of projects into the state’s regulated carbon market will not be an easy task, given the high costs involved, particularly the costs of monitoring and verifying these emissions reductions.

“There is a lot of potential for relatively low-cost reductions in the agriculture sector, but some of these opportunities we’re talking about can be fairly marginal at the going price of carbon offsets,” Derik Broekhoff, the Climate Action Reserve’s (CAR) Vice President of Policy, said at the Navigating the American Carbon World conference in San Francisco last month. The prices for California-bound offsets have generally hovered around $9 per tonne.

These and other stories from the voluntary carbon marketplace are summarized below, so keep reading!

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V-Carbon News

Voluntary Carbon

World Cup’s carbon neutral GOOOOAAAAL!!!
Brazil’s Ministry of Environment has announced that it will accept certified emissions reductions (CERs) from Clean Development Mechanism (CDM) projects based in the country in exchange for publicity during the upcoming FIFA World Cup. Donations will be accepted until July 18 and participating companies will receive an official certificate of participation in the ‘Selo Sustentabilidade – Baixo Carbono’ program. Of the almost 150 existing Brazilian CDM projects with more than 90 million CERs issued, perhaps 14 million CERs could be eligible to offset the 2.7 million metric tonnes of emissions (MtCO2e) associated with the event’s stadium construction, local transportation, and fossil fuel electricity consumption. However, the Brazilians do not have any plans to buy offsets directly.Read more from UN RIC
Read more from Reuters


Flying higher and greener
A new start-up company called TripZero aims to tackle the stubborn problem of rising GHG emissions in the global travel business. Partnering with online travel agency Expedia, TripZero will earn commissions from hotel bookings made through its site, with a portion of these commissions paying for carbon offsets to cover transportation and hotel-related emissions. The carbon offsets will come from reforestation, renewable energy, and methane capture projects under the Verified Carbon Standard (VCS) and Green-e Climate Standard.Read more here


Not going up in smoke
Women are being sold clean-burning liquid petroleum gas (or propane) cookstoves to help reverse the deforestation and negative health impacts associated with wood and charcoal cooking in Northern Sudan. The Darfur Low Smoke Project was launched in 2007 by the Women’s Development Association Network, the international NGO Practical Action and Carbon Clear. To date, 6,000 stoves have been delivered resulting in a reduction of more than 36,000 tonnes of carbon dioxide emissions (tCO2e). The stoves are registered with the Gold Standard and the first offsets were recently sold to a United Kingdom-based insurance firm. The project hopes to save more than 300,000 tCO2e within the next decade and replant local community forests.Read more here


Follow the green light
Renewable Choice Energy has joined Green-e Climate, and can now provide certified carbon offsets to green building projects under the newest version of the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) guidelines for green power. This certification is awarded when a building provides at least 35% of its grid-connected electricity from renewable sources. CAR registered landfill gas projects in Georgia, South Carolina, and Texas will supply the offsets. Since 2003, Renewable Choice Energy has supplied green power and carbon offsets to more than 5,000 LEED projects worldwide.Read more here


Hail from the Queen
ClimateCare, a project developer based in the United Kingdom, was awarded a Queen’s Award for Enterprise in Sustainable Development on April 21, Queen Elizabeth II’s birthday. The Queen’s Awards for Enterprise are the most prestigious awards given to UK businesses for outstanding achievement in their field. ClimateCare’s projects include the LifeStraw Carbon For Water project in Western Kenya, Gyapa Stoves project in Ghana, and Kimbale rainforest restoration in the Congo Basin. To date, the company has assisted with reductions totaling more than 16.5 mtCO2e.Read more here


Cleaning the friendly skies
United Airlines has become the first US carrier to offer carbon offset redemption through its frequent flyer mileage program. Customers could previously calculate and offset their travel and cargo shipments only through additional monetary purchases. After booking on the airline’s website, customers can now exchange miles to offset their emissions through partner projects such as the Garcia River Forest Conservation project certified by CAR, Capricorn Ridge Wind Project in Texas certified by VCS, and Conservation International’s Alto Mayo Forest Carbon Project in Northern Peru certified by VCS. Between March 2012 and December 2013, a total of 7,370 tCO2e were purchased by customers through this program. United Airlines’ carbon offset program was designed in collaboration with Sustainable Travel International.Read more here


Climate North America

Keep on fallin’
The US Environmental Protection Agency (EPA) recently submitted its annual Inventory of US Greenhouse Gas Emissions and Sinks to the United Nations Framework Convention on Climate Change. In 2012, total emissions of the six main GHGs in the US were equivalent to 6,526 MtCO2e. This represents a 3.4% decrease from 2011 and a 10% decline from 2005 levels. The US has committed to a targeted 17% reduction from 2005 levels by 2020 and upcoming EPA rules for existing power plants due in June aim to help the country get there.Read more here
Read the full report
Read more here from Ecosystem Marketplace


A carbon pie in the sky?
After signing the Pacific Coast Action Plan in 2013, California, Oregon, Washington, and British Columbia have made progress in cooperating on climate issues but more work lies ahead. A non-partisan legislative agency is researching a carbon tax in Oregon with its final report due on November 15. Washington Governor Jay Inslee is an outspoken advocate of action on climate change and has made it a priority of his administration, but he faces challenges in the state legislature. Carbon pricing programs in these states could build on previously established voluntary offset programs such as the Climate Trust.Read more at Ecosystem Marketplace


A taxing discussion
In a recent editorial, the Citizens’ Climate Lobby (CCL) suggests that a price on GHG emissions would be beneficial for Wisconsin’s clean energy-oriented manufacturing and research and development sectors. The organization asserts that a revenue-neutral carbon tax on fossil fuel producers is the most effective means of achieving a carbon price. In such a model, revenues from the tax are returned to the public in order to offset higher prices for consumer consumption of fossil fuels. CCL points to a recent study of California that shows growth in that state’s economy under a carbon tax when all revenue is returned to the public.Read more here


Kyoto & Beyond

Earning their keep
With activity in the CDM well off its 2012 peak, some are questioning the wisdom of continuing to support an administrative staff of close to 150 for the program. While the mechanism has reserves to finance operations at current levels almost until 2020, experts suggest that the surplus could be used to support the market through purchase of offsets or development of mechanisms earmarked for the anticipated post-2020 climate agreement. The CDM Executive Board has been working to make improvements in the system and promote the offsets outside the Kyoto Protocol to increase demand.Read more here


Global Policy Update

Peru doing the PES limbo
Peruvians have spent the last six years developing a comprehensive legal framework for the sticky issue of payments for ecosystem services (PES). The current bill is one of the most advanced pieces of legislation of its type, but it’s been stuck in committee for five years, and its future is uncertain since a recently scheduled debate was scrapped. The bill provides a legal framework to support a diverse range of ecosystem services – including GHG emissions reductions, biodiversity conservation, the preservation of natural beauty, and investments in watershed services – where land stewards are compensated to practice sustainable land use.Read more at Ecosystem Marketplace


Up, up, and away
Trading volumes have soared as speculative players drive up prices in China’s newest regional pilot emissions trading system. In Hubei, 1.6 million allowances were traded in the first 12 days, versus 66,000 total allowances for China’s five other pilot markets in the same period. Prices have risen modestly from the initial set amount of 20 yuan to 25 yuan in mid-April. Speculators are encouraged by the performance of the Shenzhen pilot market last year, which spiked from 30 yuan to 130 yuan, albeit on small volumes. A key difference seems to be the absence of a capital threshold to trade in the Hubei system. Trading is expected to remain volatile until compliance entities report emissions and participate in the market in 2015.Read more at Reuters


Is the party over?
Revenues for China’s top sellers of CERs dropped to a tenth of 2012 values. China Longyuan Power Group Corp, Huaneng Renewables Corp and China Datang Corp Renewable Power reported combined revenue of $20 million in 2013, down from more than $150 million in 2012 and almost $300 million in 2011. This presents a challenge for carbon projects seeking funding that once steadily flowed from Europe. Many independent project developers will seek opportunities in China’s burgeoning emissions trading systems – almost 60 new projects are already trying to transition to domestic funding- but it is unclear if former CDM projects will be able to participate due to contract disputes.Read more at Reuters


Carbon Finance

Money is everything
Thirty donor countries recently pledged $4.43 billion over the next four years for the Global Environment Facility (GEF) to support developing countries’ efforts in preventing degradation of the global environment. More than 140 countries will benefit from these funds for projects addressing climate change, deforestation, land degradation, extinction of species, toxic chemicals and waste, and threats to oceans and freshwater resources. Since 1991, the GEF has provided $12.5 billion in grants and leveraged $58 billion in co-financing for nearly 3,700 projects in more than 165 countries.Read more here


Bank on Africa
The African Development Bank has started a new climate change fund for the continent, the Africa Climate Change Fund (ACCF), with an initial investment of $6 million by Germany. The ACCF will begin by focusing its funds on climate finance readiness projects with the aim of securing larger amounts in the future from the United Nations’ Green Climate Fund (GCF). The ACCF is a lessons-learned response to the relatively small amount of funding that African countries received from the CDM. The GCF is scheduled to launch in May.Read more here


Science & Technology

China seeing green (grass)
A new methodology just approved by the VCS could help farmers in China and other countries tap into the carbon markets to help them manage their grasslands more sustainably. The methodology, developed by the United Nations’ Food and Agricultural Organization, the Chinese Academy of Agriculture Science, the World Agroforestry Center and the Northwest Institute of Plateau Biology, could be particularly useful in mitigating the impact of China’s growing population on its carbon footprint. Projects under the methodology, which helps overcome the major hurdle of high measuring and monitoring costs, could also be recognized by the China Certified Emissions Reduction offset program.Read more here


The grazing could always be greener
The American Carbon Registry recently released a new methodology for avoided GHG emissions on grazed grasslands for public comment. Developed by Terra Global Capital with support from the Environmental Defense Fund, Silver Lab at the University of California Berkeley, and the Marin Carbon Project, the methodology provides an accounting framework for the carbon storage achieved by adding compost to fields – both by enhancing plant growth and by diverting organic waste that would otherwise decompose in landfills, releasing methane. If approved, it would generate offsets for the voluntary carbon market. The public comment period is open through May 14.Read more here

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