This Week in V-Carbon: Springing into new directions

Earlier this month, we released a new report investigating the use of traditionally voluntary carbon market mechanisms in emerging domestic carbon markets around the world.  


March 23  
|  Earlier this month, we released a new report investigating the use of traditionally voluntary carbon market mechanisms in emerging domestic carbon markets around the world.  

Several news items in this issue echo this topic, including Point Carbon’s report of Sindicatum Sustainable Resources’ shift in focus from CDM to domestic markets where it has some expertise. One could have seen this coming from Managing Director Jay Mariyappan’s pre-Durban observations – coupled with the EU ETS’ pending restriction to LDC-only offsets after 2012 and the higher prices potentially commended by credits in regional schemes.

One region where Sindicatum is heavy on expertise is Asia, where NRDC authors in another article offer pointers to China and other regions about some critical elements to include in a successful domestic trading scheme.

Also shifting focus are VER project developers themselves, claims one Financial Times article that examines the potential for a stronger relationship between carbon offset programs and “results-based” aid institutions. And could the US Congress refocus on GHG policies after taking the year off? Experts say yes.

Here at Ecosystem Marketplace, we are transitioning from data collection to report-writing mode in order to bring you the 2012 State of the Voluntary Carbon Markets report. Our survey is now closed – if you have not yet responded with data and wish to participate in the survey, please notify Carbon Programs Manager Molly Peters-Stanley. Visit our homepage for a map of our survey’s geographic coverage and full list of respondents.

Special thanks to the over 250 organizations that have so far provided complete responses to our 2012 survey, including: Climate Bridge,  AIDER, Australian Carbon Traders, Ag Methane Advisors, 3GreenTree Ecosystem Services Ltd., Appalachian Carbon Partnership, Atlantica Simbios C. S. A. Ltd.,  Bischoff and Ditze Energy GmbH,  Bonneville Environmental Foundation,  Bosque Sustentable, A.C., BP (Target Neutral), Brighter Planet, Brokers Carbon, BTAAB Transacoes de Ativos Ambientais do Brasil, Canopy,  Carbon Advice Group Plc,  Carbon Market Solutions, CarbonBrake Limited, Carbonzero, Clean Air Action Corp, CLEVEL, Climate Friendly, Climate Care, ClimeCo America Corporation, Community Energy, Inc., Conservation Carbon Company (Pvt) Ltd., Cool nrg International Pty Ltd., Cool Planet, CoolClimate Holding, Inc., Credible Carbon and PACE – and many more to come in upcoming issues, so stay tuned!

—The Editors

V-Carbon News

Voluntary Carbon

Dirt don’t hurt Aussie carbon farmers

While soil carbon does not count towards Australia’s national target under the Kyoto Protocol, Australian government has recently initiated its own five-year pilot program to scope out the potential market for credits from soil carbon sequestration. The program has awarded contracts to eleven farmers in the Lachlan catchment, with soil carbon storage methods to include low-till ploughing and time-management grazing of livestock. Sequestering carbon helps secure soil nutrients and moisture in place, particularly salient given the region’s recent drought. Though projects of this type do not qualify to generate credits that companies can surrender against their future national compliance obligations, they can be sold into the domestic voluntary carbon market – which has traditionally exhibited a preference for “at home” offsets.

   – Read more from The Age
   – Read more from The Australian
   – Read more from the Sydney Morning Herald


Help Build(TM), help offset

Native Energy and a 25-member all-star cast of US-based companies recently announced their collaboration to provide upfront financing for the construction of renewable energy and carbon offset projects in Iowa, Oklahoma, and Pennsylvania. By purchasing Help Build ™ offsets from project developer NativeEnergy, the supporting companies seek to boost the economies of local communities while collectively offsetting over 400,000 tCO2e worth of emissions. Supporting companies include eBay, Clif Bar, Comedy Central, Aveda, and National Geographic, among others. Projects supported include two wind turbines in Iowa, a landfill gas-to-energy project in Oklahoma, and a farm methane reduction project in Pennsylvania.

   – Read more


O-VER the mark

What’s common between the electricity consumption of 1.1 million US homes, 1.8 million cars on the road, and the impact of Gold Standard Foundation’s issuance record? As of this week, 10 MtCO2e of GHG reductions. The Gold Standard has issued its 10-millionth VER, a milestone in its diverse portfolio of carbon reduction projects that range from cookstoves to water filters and wind energy. One project that brought The Gold Standard over the 10Mt mark is a Turkish wind farm implemented and owned by Alize Enerji Elektrik í¼retim A.S and developed by Mavi Consultants. The Kuyucak project would prevent the release of 47,993 tCO2e and contribute to diversifying the country’s energy grid, a much-needed activity in Turkey’s attempt to move towards lower fossil fuel dependence. The Gold Standard aims to issue credits to projects that deliver social benefits as much as they do environmental gains in CO2 reductions.

   – Read more about the Gold Standard’s milestone


The PCT gain is…

How much should Canucks pay for carbon offsets? British Columbia is toggling the question as it undergoes a review of the Pacific Carbon Trust (PCT), investigating the large inflow of cash from its schools and health authorities. As part of BC’s carbon neutral plan, public institutions are required by law to pay $25 to the PCT for each tCO2e they emit—a scheme that saw the University of British Columbia pay $1.5 million in 2010. The PCT, however, may be buying offsets at a much lower price than $25. BC’s Environment Minister asserts that this amount was set without knowing what the price of carbon would be, and the PCT says that the amount is comparable to the price set by other carbon retailers in Canada. A main concern voiced is that public institutions may have less cash for their own emissions-reduction activities. The government will examine the gap in the buying and selling prices and explore the creation of a fund, seeking to assure compatibility between the amount paid by PCT for offsets with its market price.

   – Read more
   – And read the Pacific Carbon Trust’s response


Appeal to FSA on green “bucket shops”

While the UK’s Financial Services Authority has some jurisdiction in the carbon markets and is able to crack down on more obvious scammers, its regulatory grey areas have allowed a number of fraudulent trading schemes to gain traction and escape regulation at the expense of unknowing investors. Some advertisements for carbon credits and other green investments not only draw upon promises of high returns and environmental perks, but come from seemingly well-staffed and educated companies operating within London. The author of the article presses for the FSA to police these new-generation “bucket shops.” Failing to do so may compromise the performance and reputation of both environmental markets and the City of London as legitimate investment hubs.

   – Read more from the Financial Times


Better World’s offsetting on the Books

Buried in news of the launch of its LEAP Grants for Non-Profits – an initiative designed to redirect company revenue toward support for specific programs and communities worldwide – Better World Books mentioned that it has offset 29,000 tCO2e with carbon-neutral shipping. Every order at has the option to be shipped carbon balanced for a few extra cents. BWB partners with US-based offset supplier 3Degrees to secure verified carbon offsets and RECs from wind farms. BWB’s carbon offsets support the Tatanka Wind Farm, the largest renewable-energy project in North and South Dakota. This wind farm reportedly will generate enough clean energy to power more than 60,000 homes. Over the years, BWB has re-used or recycled over 70 million books while raising over $11 million in funding for global literacy and donating over 6 million books to those in need.

   – Read more about Better World Books’s carbon offsets


Carbon payments and then some

Even carbon projects that deliver substantial social and environmental co-benefits  sometimes have difficulty translating those into cost premiums for their carbon offsets. Environmental Finance reports that some project developers are turning to donors who are pursuing ‘results-based’ aid projects, noting that their carbon projects offer the kinds of health and community benefits that donor groups are pursuing. For example, efficient cookstoves could reduce instances of pneumonia while also reducing deforestation and carbon emissions. Edward Hanrahan, director of ClimateCare, notes that “if you could finance these deliverables on a results basis, and overlay that on the carbon revenue, these projects may become some of the more financially attractive projects.”

   – Read more from Environmental Finance


New methodology lets small businesses get into the carbon game

Small businesses that find it challenging to access the carbon market may now have their chance, thanks to a new VCS methodology developed by Gedden, ICF Marbek and CertiConseil. The methodology aims to enable small businesses to engage in grouped energy efficiency and solid waste diversion projects. Eventually, Gedden hopes to expand the methodology to cover GHG reductions from other activities, like transport optimization. Martin Clermont, CEO of Gedden, announced his plan to group 5,000 business units in Quebec during the next 3 years, resulting in up to 32 MtCO2e reductions. VCS, Gedden and SGS will host a webinar on 27 March to describe the methodology’s approval process.

   – Read about the methodology
   – Read more here


ERA offsets GLOBE 2012

ERA Carbon Offset, Ltd. was the official offset sponsor for GLOBE 2012, the North American business sustainability conference held in Vancouver last week. They also co-hosted a CODE REDD event alongside Wildlife Works. The CODE REDD program that was announced by ERA last year will consist of a campaign to support diverse protection of the world’s rainforests. The partnership for the GLOBE 2012 CODE REDD event comes on the heels of an  announced joint venture to develop a REDD project  in the Democratic Republic of the Congo.

   – Read more


Climate North America

New (or same) administration may revive GHG policy

It looks like carbon could make it onto the US Congressional agenda after the November elections, though perhaps not in the way that Waxman or Markey may have envisioned it. If Congress pursues GHG regulation again, Capitol Hill experts say it may be in the form of a tax rather than cap and trade. While cap and trade carries the stigma of being associated with the finance sector and the difficulty of setting up a trading program, the carbon tax is not particularly flexible and may have its own set of policy hurdles. Still, this Environmental Finance article points out that a tax may be more actionable in the short term – particularly with the EPA expected to launch a utility-only GHG regulation this or next year, and support for a tax emerging from major companies like ExxonMobil.

   – Read more from Environmental Finance


Caps off for New Mexico

It’s been just a month since the Environmental Improvement Board scrapped rules that would have allowed New Mexico to join a regional cap-and-trade program. In the same vein, New Mexico regulators have since then also voided the state’s own regulations that would have required electric utilities and oil and gas developers to cut emissions by 3% annually starting in 2013. To the dismay of New Energy Economy and other supporters of the cap, the Board has adopted an industry-led repeal petition and dismissed the regulations for their stringency compared to federal rules, also alleging that New Mexico’s adoption of federal permitting rules had triggered a sunset clause for the state’s regulations.

   – Read more


Quebec: you got a friend in me

Despite California’s loss of New Mexico and other WCI allies, it still has a fellow advocate in Quebec. Quebec’s environment minister, Pierre Arcand, visited California last week to spur interest in creating a cap and trade carbon market. The state and province still plan to launch the market in 2013. Critic Scott McKay from Parti Québécois, Quebec’s centre-left political party, says Quebec has isolated itself with a smoke-and-mirrors mission, and could alternatively curb emissions by simply taxing heavy-polluting vehicles and rewarding electric car drivers.

   – Read more


Highway to the… carbon credit zone

Despite Alberta’s objection to participating in a regional cap-and-trade program, it continues to be active on its own carbon initiatives, sporting a carbon tax and active offsets program. Most recently, Alderman Andre Chabot of Ward 10 in Calgary has made plans to transform his ward into a carbon credit zone, an idea suggested by the International Avenue Business Revitalization Zone. The zone would provide incentives for businesses in Ward 10 to lower their GHG emissions, possibly funding improvements on International Avenue. For the feasibility study, Chabot will target the 21 local businesses with the largest potential for increased energy efficiency. If successful, the carbon credit zone may provide a creative new method of community finance.

   – Read more


Burke to lead WCI pack

While the Western Climate Initiative initially began as a government initiative in 2007, it was not until November 2011 that WCI, Inc. formed as a nonprofit to provide administrative and technical services to support the implementation of state and provincial GHG trading programs. WCI, Inc. announced Tuesday that it has pulled Anita Burke on board as the organization’s first executive director, acknowledging her business experience, commitment to environmental progress, and knowledge of carbon markets. Burke’s role involves coordinating administrative support for the emissions trading programs of WCI, Inc.’s participating jurisdictions.

   – Read more


Kyoto & Beyond

CDM needs a shake up

The Clean Development Mechanism (CDM) may have been revived for a second Kyoto period, but according to the Economic and Social Research Council (ESRC), it is currently being undermined by poor governance and vested interest. One of the authors of the study went so far as to say the CDM risks turning into a “’rich man’s club’ of project developers, emission verifiers, and government officials.” The three-year study claims that CDM projects are skewed towards the interests of polluting corporations and people who earn a living from the CDM market rather than the communities that host the projects. The authors suggest reforming the CDM to ensure that it builds stronger governance institutions and increases community involvement.  

   – Read about the CDM study


EU CO2 permit set-aside risks being set aside

The EU, the world’s largest emissions market, faces the decision of whether to include a CO2 permit set-aside in its latest energy efficiency law. The set-aside would provide the option of rationing or withholding some carbon permits from the market, possibly aiding the recovery of carbon prices—no small matter after prices dropped 47% in the past year amid oversupply. Last week, European Parliament committee members voted in favor of withholding the necessary amount of CO2 allowances from auctions as early as 2013, in hopes of garnering higher emission prices. Yet the Danish government, which holds the EU’s rotating presidency, omitted the set-aside in its draft legislation. Depending on how the two sides reconcile differences in upcoming weeks, the European Commission may introduce a temporary curb on CO2 permit supply in 2013-2020.

   – Read about the set-aside


Global Policy Update

Korea set to try again on carbon trading, says climate chief

After a decision on cap-and-trade legislation was delayed on Feb 27, South Korea is now on its second attempt at passing a bill for an emissions trading system for 2015 and that would allow lawmakers to work out the details later. South Korea would be the third Asian Pacific country to use cap-and-trade, but its largest business lobbies have urged the government to delay the scheme on the basis of increased costs and lower competitiveness. Lawmakers fear the possibility of having to start over again on the climate bill, since uncompleted bills would be abolished when a new National Assembly is established in June. In the event that it is passed, the law will take effect within 6 months and the government has that time frame to work out its main operating details. In Nov 2009, President Lee sent the goal of cutting emissions by 30% from projected levels by the end of 2010. South Korea has also imposed forest carbon reduction goals, and is in talks with Indonesia over a reforestation deal.

   – Read more about Korea’s cap-and-trade vote


Say G’day to your neighbors

The Climate Institute, an Australia-based research organization, released a discussion paper stating that Australia should look to bilateral or regional trade deals as a model to set up carbon trading links with individual countries, especially developing countries in the Asia-Pacific region. The report said too much focus had gone into setting up a deal with Europe, and that instead countries like South Korea and Indonesia should be the focus of creating market links.  

   – Read more


Food for thought on designing China’s carbon market

Earlier experience gained from environmental exchanges in Beijing, Shanghai, and Tianjin may offer valuable lessons as China’s National Development and Reform Commission prepares to launch carbon-trading pilots in five cities and two provinces—perhaps in anticipation of an absolute cap on emissions. To be on the safe side, Alvin Lin and Yang Fuqiang from the Natural Resources Defense Council offer some additional recommendations to ensure the success of China’s carbon market: 1) push for a carbon-emissions peak, currently rare in city and provincial strategies; 2) cut coal consumption; 3) create local legislation to help resolve carbon trading disputes; 4) take a multi-pronged approach to emissions reduction that goes beyond energy consumption; and 5) respond to market supply and demand, perhaps using a carbon tax to support trading volume during the market’s early stages.

   – Read the commentary for Climate Spectator


Rio+20 means business

While the landmark Rio Earth Summit in 1992 was government heavy, the business community will figure much more prominently into this year’s Rio+20. A key theme in the conference will involve discussing ways in which business can help create “a green economy in the context of sustainable development and poverty eradication.” This may include pursuing sustainability measures that tackle multiple, often compounded issues – for example, projects that not only mitigate climate change but also support food security and public health. Also on the to-do list is to standardize – and perhaps embed as policy – corporate disclosure on environmental and social impacts. As gleaned through conversations with business leaders, standardized reporting may not only be important for companies to manage their emissions, but also in enabling investors to better compare corporate performance and investigate the potential for positive returns on investment.

   – Read more from the Financial Times


Carbon Finance

Clean energy in Chongqing finds an advocate

As Chongqing Energy Group looks to develop a series of clean energy projects in southwest China, J.P. Morgan is reportedly stepping up to the plate as its potential broker for over 7 MtCO2e worth of potential credit trades in 2013-2017. The prospective partnership between the energy company and financial services provider comes at a ripe time, just as China’s National Development and Reform Committee prepares to help launch a series of pilot carbon trading schemes across the country. In the meantime, China will push for stronger government incentives, pricing and tax measures, and credit aid support required to scale up energy-saving and low-carbon projects.

   – Read more


EEX rapid-fire product launch

The European Energy Exchange (EEX) is slated to introduce new products in upcoming months. Later this month, the Leipzig-based exchange will begin listing CER contracts with deliveries for 2013-2020. At the end of April, EEX will launch futures on Emission Reduction Units (ERUs), for the first time offering credits issued to emission-reduction projects in industrialized, Kyoto-compliant nations. Around the same time, EEX will debut a derivatives market for EU Aviation Allowances (EUAAs), with an EUAA spot market to follow midyear. These new product launches may perhaps reflect EEX’s anticipation of an extended Kyoto Protocol term and the EU cap-and-trade scheme’s third trading scheme running 2013-2020.

   – Read more from Reuters


Carbon fall economic impact dwarfed by high oil – HSBC

The low price of compliance carbon has been a forefront concern of industry players in recent times. Yet, analysts say that the high price of oil in fact warrants more worry. The current oil price is equivalent to 153 euros, a startling seventeen times the current price of EU carbon credits. A note by HSBC stated that the current EU ETS per-tonne price of 8.6 euros, if applied across the economy, would only have an impact of an oil price increase of 3.3 euros a barrel. It also argues that high oil prices are hardly helpful in lowering carbon emissions, estimating that a 10 percent increase would reduce emissions by only 0.2 percent in 2030. The rocketing economic costs would make raising oil prices a less effective method than a carbon tax in driving down emissions. Enhancing energy efficiency is in fact the way out and will save over 5.6 trillion euros by 2035.

   – Read more


Science & Technology

Aussies set the bar for carbon controls


Sydney-based CarbonSystems has landed a contract to provide sustainability software for US-based Microsoft, using cloud computing to simplify and streamline Microsoft’s global GHG management. CEO David Solsky attributes Australia’s expertise in emissions management to the country’s experience with state-based schemes and the National Greenhouse and Energy Reporting Act. As a growing range of organizations seek to track and manage their carbon footprints, Solsky underscores the option for emitters to move from spreadsheets to a more robust emissions management platform.


   – Read more


Fossil fuel drives the ticking clock

The OECD projects that without more ambitious climate policies, fossil fuels may continue to dominate the energy mix at 85% in 2050, whereupon global GHG emissions could rise by 50%. This bodes poorly for a global economy in 2050 expected to be four times larger than today’s and one that would use about 80% more energy. CO2 emissions from energy use alone may grow by 70% and would contribute to an increase in global average temperature by 3-6 degrees Celsius by 2100—exceeding the 2 degrees allowance and translating into large financial, human, and biodiversity costs. Further delays in international climate action may make it increasingly difficult to stay within the 2 degree limit and may require accelerated emissions cuts after 2020 in order to compensate.

   – Read about the OECD projections


Featured Jobs

Carbon Markets Modeller – Carbonjobs

The markets modeller will lead the development of energy, carbon and clean energy price models for the Australian and New Zealand markets as well as regional CDM/CER markets.

   – Read more about the position here


Technical Expert – The Gold Standard Foundation

The Beijing-based technical team member will be involved in project and methodology reviews, as well as the further development of The Gold Standard rules and procedures.

   – Read more about the position here


Sales Manager, Zurich – South Pole Carbon Asset Management

The sales manager will work with sales activities globally, acquiring new customers for VER offsetting, negotiating terms and contracts, and helping with marketing. Candidates should have strong sales background with 1-2 years of carbon markets experience.

   – Read more about the position here


Emission Markets Broker – Karbone

Karbone seeks a candidate to broker all classes of environmental market products such as RECs and carbon allowances in the North American market. A minimum 2 years of experience in these markets is desired.


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