This Week In V-Carbon News…

Forest Trends’ Ecosystem Marketplace has released the initial findings from our annual report, State of the Voluntary Carbon Market 2014. In other news, the Gold Standard has quantified the value of the co-benefits and the CDP reports that US corporations consider climate change risks to be more urgent than just a few years ago.

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


28 May 2014 | Voluntary buyers were driven to purchase carbon offsets for many reasons in 2013, but at the top of the list was a desire to combat climate change. Corporate social responsibility and leadership also remained prominent motivations, according to early findings from Forest Trends’ Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, the executive summary of which was unveiled today at Carbon Expo in Cologne, Germany. This year’s launch event is sponsored by ClimateCare, EcoAct and Santiago Climate Exchange.

State of the Voluntary Market 2014 sponsors

Voluntary demand for carbon offsetting declined 26% in 2013, with buyers transacting 76 million tonnes (MtCO2e) of greenhouse gas (GHG) emissions, according to the annual report. At first blush that may seem like a steep drop, but it reflects in part the fact that carbon offsets previously captured in Ecosystem Marketplace’s voluntary survey under the pre-compliance category are no longer featured in the data. With California launching its cap-and-trade program in January 2013, millions of tonnes generated by forestry, livestock and US ozone-depleting substances projects migrated into the compliance market. In addition, enthusiasm for pre-compliance activity in Australia dwindled last year amid the new federal government’s aggressive efforts to repeal the country’s carbon tax. Overall, pre-compliance declined to an all-time low on the list of primary motivations for voluntary offset buying.

That’s not to say the voluntary market is not facing many challenges. Buyers paid a total of $379 million for carbon offsets last year, a 29% decline compared to the previous year, with a sizeable decline in the average price to $4.9 per tonne of carbon dioxide equivalent (tCO2e), amid an overall drop in demand.

The affection that voluntary buyers have for forest carbon projects continues to grow, in large part because of the very attractive co-benefits of these projects. The Ecosystem Marketplace report shows REDD (Reduced Emissions from Deforestation or Degradation of forests) and avoided conversion projects firmly in the lead, with a 38% share of the voluntary carbon market, displacing perennial chart-topper renewable energy. But REDD prices did suffer amid an oversupply in the market, the lack of a firm signal of acceptance from a compliance market and competition from other, less expensive project types. The average price for REDD/avoided conversion offsets dropped 44% to $4.2 tCO2e, a price decline that would have been even sharper had it not been for a major transaction of about 8 MtCO2e between the Brazilian state of Acre and the German government that featured emission reductions priced at $5/tCO2e.

Ecosystem Marketplace will continue to publish a series of interviews with key participants in the voluntary carbon markets conducted as part of the research for this year’s State of report. We’ve already highlighted how Chevrolet is driving in the voluntary carbon market’s fast lane, why is hoping California’s carbon program steps up to the plate to accept REDD offsets, how the BioCarbon Group is investing in projects for both the voluntary and compliance markets and how Environmental Credit Corp is developing a new charismatic project type that could be added to California’s program in the future.

Save the date for Forest Trends’ Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 full report launch event on June 24 in Washington, DC from 4:30 – 6:00 PM EDT. Look for more information including registration and webinar details soon.

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

Every year, Ecosystem Marketplace relies wholly on offset market participants to financially support the State of research. In return, sponsors ($7.5k+) and supporters ($3k) benefit from the report’s growing exposure, early insight into our findings, and opportunities to engage directly with Ecosystem Marketplace in report-related outreach and events. Interested organizations should contact Molly [email protected]

—The Editors
For comments or questions, please email: [email protected].

V-Carbon News

Voluntary Carbon

More benefits for your buck
The Gold Standard has always touted the social and environmental “co-benefits” of its certified carbon mitigation projects, which are key to obtaining above-average offset pricing. Its new report, The Real Value of Robust Climate Action: Impact Investment Far Greater than Previously Understood, claims to have the number to back up those assertions. The study, published by NetBalance and commissioned by the Gold Standard, examined 109 projects certified to the standard – and found that their co-benefits contributed an estimated $686 million in additional annual value tied to their environmental, economic and social initiatives. The Gold Standard hopes this study will strengthen the value proposition for voluntary offset buyers while influencing policy discussions at the global scale.Read more at Ecosystem Marketplace


Riding the climate risk roller-coaster
A new report by CDP, formerly known as the Carbon Disclosure Project, reveals that US corporations consider climate change risks to be more urgent and physically immediate than they did just a few years ago. Of the physical climate risks that 62 participating companies disclosed in 2013, 45% are currently being felt or expected to be felt in the next one to five years, up from 26% in 2011. Many companies that disclosed information about climate risks voluntarily purchase carbon offsets, use internal carbon pricing – or both.Read more here


Be our guest
Hotel Verde in Cape Town, South Africa recently announced a partnership with impactChoice to neutralize carbon emissions by purchasing carbon offsets from the Sofala Community Carbon Project in Mozambique. The Plan Vivo REDD project, which has now been running for seven years, covers 11,744 hectares in Gorongosa National Park and is estimated to avoid the emission of 1 MtCO2e per year (342,423 Plan Vivo certificates have been issued so far). “We have committed to offsetting each guest’s stay or conference with us at no additional cost to the guest, taking straight from our bottom line,” said Mario Delicio, the hotel owner.Read more at Independent Online


All about the bennies
Emissions reductions are great, but reductions with added environmental, social and economic benefits are better. The Verified Carbon Standard, a leading voluntary offset standard, and SOCIALCARBON, a certification standard for contributions to sustainable development, have partnered to make going the extra mile easier. The two organizations have released new templates that will allow developers and auditors to validate or verify projects simultaneously to both standards, while only having to complete one set of documents. The resulting offset is a Verified Carbon Unit with a SOCIALCARBON tag. Other standards have demonstrated that offsets that can demonstrate additional co-benefits garner a price premium in the market.Read more here


A climate by any other name
TerraPass has sold its retail business to JustGreen, an initiative of Just Energy Group, and will take on a new name, Origin Climate. Origin Climate will continue the ongoing work of TerraPass in carbon offset verification, wholesale and energy consulting services. Erin Craig, CEO of TerraPass, said: “This transaction is a big step forward for us, for our customers, and for the environment. Just Energy’s scale and expertise in serving the retail market means greater support for our retail customers, while allowing us to focus on more tailored carbon offset and renewable energy solutions for our large commercial and industrial clients.” Origin Climate expects to originate more than 1 MtCO2e of new carbon offsets over the next two years.Read more here


Climate North America

Going, going, sold
On May 16, the California Air Resources Board conducted its seventh auction, selling all of the 16.95 million vintage 2014 allowances at a clearing price of $11.50/tCO2e. Also on auction were 9.26 million allowances which can be used in 2017, known as “advance” allowances. The state sold 4.04 million of those future allowances at the floor price of $11.34/tCO2e each. California has linked its emissions trading system with the Canadian province of Quebec, which will be holding its next auction on May 27.Read more from Bloomberg
Read full auction results from ARB


Fitting the carbon tax for cement shoes
The Cement Association of Canada (CAC) is again calling on the British Columbia (BC) government to change how its carbon tax is applied to the cement sector. Since the carbon tax began in 2008, BC producers have lost nearly a third of the market share to imports from the US and Asia not subject to a price on carbon. The disparity exposes the cement industry to unfair competition, according to CAC. “The cement industry wants to be part of the solution to climate change through equitable application of the carbon tax,” said Michael McSweeney, CAC’s president and CEO.Read more here


Clean bill of health
The Regional Greenhouse Gas Initiative (RGGI) has once again passed its annual checkup. Independent market monitor Potomac Economics released RGGI’s 2013 annual report showing no evidence of anti-competitive conduct. RGGI is a regional cap-and-trade program for electric power generators in nine northeastern US states. According to the report, the average auction clearing price was $2.92/tCO2e in 2013, a 51% increase from the $1.93/tCO2e average in 2012, after RGGI officials announced a major overhaul of the program. The most recent auction held on March 5 had a clearing price of $4.00/tCO2e. Carbon emissions in the region were down for a third straight year, to 86 million short tons in 2013 from 92 million tons in 2012.Read more here


75 million people can’t be wrong
“More than a quarter of the US population lives in a state with a price on carbon,” said Janet Peace from the Center for Climate and Energy Solutions (C2ES). Two weeks ahead of the US Environmental Protection Agency’s anticipated release of emission rules for existing power plants, C2ES has published a report looking at another option for addressing GHG emissions. Its report, “A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues”, gives an overview of the implementation potential of a carbon tax and looks closely at how to design the policy equitably for all households.Read more here


Kyoto & Beyond

Plugging the loophole
A new budget bill has closed a loophole in New Zealand’s emissions trading scheme (ETS) that allowed foresters who planted their trees after 1989 to earn New Zealand Units (NZU) from the government, sell them to emitters, and then buy cheaper international Emissions Reduction Units (ERU) to give back to the government. NZUs are currently worth 23 times ERUs, and foresters were able to earn several hundred million dollars through trading – with zero benefit to the climate. The budget bill came as a surprise to the Forest Owners Association, which said foresters who have bought ERUs in the last year will now be selling them at a loss.Read more here


The back-up plan
Jos Delbeke, Director General for Climate Action of the European Commission, said the commission is open to early consideration of a proposal to reduce the oversupply of permits in the European Union Emissions Trading System. The commission in January proposed a “market supply reserve” that would start in 2021 to address the oversupply of allowances blamed for low permit prices. This is a follow-up to the March program to temporarily withdraw or “backload” 900 million allowances between 2014 and 2016, including 400 million this year. The allowances would be reintroduced to the market at the end of the decade. “We are confident backloading will work, but it was always only a short-term fix,” he said.Read more here


Liquidation sales
Eco-Synergies Ltd, a wholesaler of voluntary carbon offsets, was at the center of an investigation by the United Kingdom’s Insolvency Service of 13 firms improperly selling voluntary offsets. Those firms, which have now been liquidated by the UK High Court, misleadingly sold voluntary offsets to individuals as investment instruments that would gain value. The Insolvency Service said Eco-Synergies had sourced credits for a total of 2.3 million pounds, or at an average of 65 pence each, and then sold them to investors via ostensibly unrelated companies at a mark-up of as much as 869%.Read more here


Global Policy Update

A promise is a promise
In 2009, President Susilo Bambang Yudhoyono committed Indonesia to cut GHG emissions by 26% on its own by 2020, and by 41% with sufficient international help. The announcement gained Indonesia international attention and investment through REDD project financing. But Yudhoyono will step down after elections are held on July 9. According to Deni Bram, an environmental law expert at Jakarta’s Tarumanegara University, the next president will have to live up to those promises at the risk of losing face with the international community. In an exclusive interview with Ecosystem Marketplace, Heru Prasetyo, head of Indonesia’s REDD agency, outlined the country’s national REDD+ strategy.Read more from the Forst Carbon Portal
Read more at Reuters


A little help from friends
The European Union (EU) has announced a three-year carbon market cooperation project with China to provide 5 million Euros in financial and regulatory assistance. The partnership will help China expand its current pilot programs and establish a national emissions trading system. The EU will also provide access to policy makers to help China develop medium to long-term programs for implementing emissions trading systems. The European experts will help China in critical areas such as establishment of emission caps, allowance distribution, monitoring, verification and reporting protocols.Read more here


Carbon Finance

Africa needs money to adapt
Monique Barbut, Executive Secretary of the United Nations Convention to Combat Desertification, said millions of people in Africa are at risk if soil erosion and deforestation problems aren’t prioritized. She called on the board members of the Green Climate Fund (GCF) to focus not just on those countries with the greatest GHG emissions reduction potential, but to also address adaptation measures in other countries that won’t benefit from mitigation financing. At its March meeting, the GCF board promised that at least 50% of all its finance flows would go towards adaptation in vulnerable regions.Read more here


Investing in the Earth
Representatives from Coady Diemar Partners, Equilibrium Capital, The Lyme Timber Company, Credit Suisse and others are exploring ways to scale up investments in ecosystem services that provide benefits such as clean water, clean air and carbon storage. Wetlands mitigation is fully investable, but the participants have yet to find other models. However, Peter Stein of Lyme Timber said: “We’re on the cusp of having the attention of institutional investors and that’s good news.”Read more here


Science & Technology

It’s hump day in Australia
The Australian government has withdrawn support for a camel culling carbon offset proposal under its Carbon Farming Initiative offset program. Recent amendments to the Carbon Credits Act say that “the federal government no longer believes that removing feral animals for an emissions reduction purpose is viable or important to Australia’s international commitments.” Camels in Australia are feral and have contributed to significant environmental degradation and are a source of methane, a powerful GHG. The Australian government has sponsored a $19 million camel cull between 2009 and 2012. Without further sources of funding for culls, some believe that the camel population will explode.Read more here

Featured Jobs

Programme Coordinator – WWF
Based in South Africa, the programme coordinator will support the work of the Fynbos Succulent Land Programme. The position will support and mobilize civil society participation in conservation. Qualified candidates will have a minimum four years experience in protected area management, environmental or biodiversity management, or biophysical research sectors. Ideal candidates will be familiar with South Africa’s Protected Areas Network and Stewardship Programmes. Fluency in at least two South African languages as well as South African citizenship or resident status is required.Read more here


Verification Program Assistant – The Climate Registry
Preferably based in Los Angeles or New York City, the program assistant will support The Registry’s verification and accreditation programs. The position involves maintain relationships with verification bodies, performing quality assurance checks on verified emissions inventories and developing or maintaining The Registry’s verification documentation.The ideal candidate will have two years of professional experience and interest in climate change, corporate environmental management, or air quality issues.Read more here


Director of Finance – EcoZoom
Based in Portland, Oregon or Nairobi, Kenya, the Director of Finance will drive the global growth of EcoZoom’s suite of clean cookstoves products for developing countries. The position involves working with senior management to develop a strategy for bilateral aid mechanisms such as carbon finance and Nationally Appropriate Mitigation Actions. The ideal candidate will have at least seven years work experience in finance, with a minimum of five years at a multinational company, preferably with offices in Africa.Read more here


Forestry Senior Program Associate – American Carbon Registry
Based in Sacramento, California (preferred) or Washington, DC, the Senior Program Associate will provide support on all aspects of registry management, support business development and outreach activities, and help to coordinate the development and/or approval of new quantification methodologies. A master’s degree in forestry and three to six years of experience working with forest projects in the carbon market or related fields is required. Candidates who have completed California Air Resources Board training and passed the exam in the US Forests Compliance Offset Protocol are preferred.Read more here


APX – Renewable Energy and Carbon Markets Intern
Based in Washington, DC, the Renewable Energy and Carbon Markets Intern will kick-start an analytics and research program through APX Environmental. The internship will emphasize learning and preparation for a potential future career in the field. Candidates must have a passion for research and analysis, strong communication skills, and enthusiasm about working in a start-up environment. Proficiency in Spanish is a plus.Read more here


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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