V-Carbon Market Breathes Sigh of Re-leaf

Ecosystem Marketplace and Bloomberg New Energy Finance are pleased to bring you the latest annual report on the size and activities of the global voluntary carbon markets: Back to the Future: State of the Voluntary Carbon Markets 2011.  This week’s V-Carbon news features key findings from the report as well as an invitation to the North American launch event.

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.

15 June 2011 | Ecosystem Marketplace and Bloomberg New Energy Finance are pleased to bring you the latest annual report on the size and activities of the global voluntary carbon markets: Back to the Future: State of the Voluntary Carbon Markets 2011.

We invite you join us for the North American launch of the report, hosted by Baker & McKenzie at their Washington DC offices on June 22, 2011. The event will include a panel presentation of findings from 4:30-6:00 PM, followed by a reception. To attend, RSVP by Monday, June 20, 2011 via email to [email protected] or call +1 202 835 1661. Please provide full contact information including full name, company, title, address, and telephone number.   If you would like to bring a guest please also include their details.

For the fifth year running, suppliers that responded to the State of survey provided an unprecedented amount of information on trading volumes, prices, projects and buyer motivations in this continually evolving marketplace. A resurgence of voluntary buyers, refinement of voluntary standards and the expansion of registries all served to make 2010 the biggest year ever for the voluntary carbon market. While key findings are described below, we encourage you to read the full report for a 360 degree view of market dynamics in 2010:

Volume: Suppliers reported a total volume of 131.2 MtCO2e transacted in the global voluntary carbon markets – the largest volume ever tracked in this report series, exceeding 2009 levels by 34%. The “over the counter” (OTC) market transacted 127.9 MtCO2e – 97% of global market share – following the collapse of the CCX. A single bilateral OTC transaction of CCX Carbon Finance Units (CFIs) totaling 59 MtCO2e substituted for collapsed exchange activity – but will not likely be repeated.

Price and Value: The average price on the voluntary OTC market fell slightly to $6/tCO2e from $6.5/tCO2e in 2009. Value was placed at $424 million. The 59 MtCO2e CCX trade, priced at $0.017/tCO2e, only contributed ~$1 million to 2010 market wide value, most of which was generated by the remaining 69 MtCO2e OTC transactions.

Project Types: Land-based credits surged in 2010 to sequester 46% of OTC market share (29.1 MtCO2e). Reducing emissions from deforestation and degradation (REDD) took center stage, alone generating 29% of credits transacted in the voluntary market. Landfill methane credits transacted the second largest volumes, bought up by pre-compliance buyers anticipating a US climate bill. When these hopes were dashed, focus shifted to the emerging Californian compliance market – a boon for project types accepted as “compliance-grade” by the California Air Resources Board (ARB).

Project Locations: North America once again took the top spot among origination locations, generating 37% of transacted OTC volume – 94% of which was made in the USA. Over half of credits transacted OTC that reported a project location were sourced from developing economies (58%) – 5% from least developed countries (LDCs) – where forestry dominated their expanding portfolios of project types.

Standards: The Verified Carbon Standard (VCS) retained its top billing among third-party standards in 2010 with 34% market share, largely attributable to its recent progress on REDD methodologies. Trailing the VCS were the Climate, Community and Biodiversity (CCB) Standards, which were stacked with carbon accounting standards to transact 15.5 MtCO2e. The market also saw several new forest carbon-specific standards in 2010.

Registries: More than ever before, suppliers and standards turned to registries for clarity of ownership and transparency – with 63% of transacted credits reported to be registry issued in 2010. Users reported transacting 21.6 MtCO2e issued by Markit Environmental Registry, the top-grossing registry in 2010.

Projections: Respondents were “cautiously optimistic” about the outlook for the voluntary carbon market. Suppliers predicted substantial growth for 2011, expecting to see 213 MtCO2e transacted over the next year – 82 MtCO2e more than in 2010.
—The Editors

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

V-Carbon News

Voluntary Carbon

Two Carbon Market Associations Tie the Knot

In yet another show of emerging camaraderie between the voluntary and compliance-based carbon markets, the International Emissions Trading Association (IETA) and the International Carbon Reduction and Offset Alliance (ICROA) have announced the integration of their two market-facing associations. IETA, a carbon trade association with 160+ members from industrial and carbon market sectors, will incorporate the ICROA program – which focuses on standard-setting and best practice among voluntary carbon offset retailers – into its activities. According to IETA, its aim is to “get back into the voluntary market space in a major way.” IETA President and CEO Henry Derwent said he hopes the integration will bring together players from both associations to provide an even stronger base for the already expanding voluntary carbon market.

   – Read the Ecosystem Marketplace Article
   – Read the press release


Tag, you’re it

Two Kenyan forest carbon projects have reached verification status against the Climate, Community & Biodiversity (CCB) Standards, and will now sport the CCB tag alongside their carbon accounting standard. The CCB tag indicates that both projects – a sub-project under the International Small Group and Tree Planting Program (TIST) managed by Clean Air Action Corporation and the Kasigau project run by Wildlife Works – used best practices for community engagement and generating benefits for local communities, biodiversity and the climate. Dr. Joanna Durbin, Director of the CCBA, acknowledged that this is a significant milestone. “Over the next few years we expect to see dozens of similar projects achieve verification, demonstrating the importance of effectively addressing biodiversity and community interests for a successful and sustainable project,” she commented.

   – Read more from the CCBA


The issuance at hand

Following closely on the heels of the CCBA’s REDD project verification announcement, 1 MtCO2e credits from Wildlife Works’ Kenyan Kasigau Corridor Phase II project were issued on the Markit registry – along with the additional CCBA Gold Level certification. The “Kasigau Corridor REDD Project, Phase II – The Community Ranches” is the first project classified by the Verified Carbon Standard (VCS) as a “mega project” for its potential large-scale emissions avoidance of >1MtCO2e/year over the next 30 years. Likewise, the project’s projected revenue is US$300 million over the same period. Wildlife Works announced the project’s validation and verification last week as a larger follow-up to its REDD project that generated the first VCS REDD credits earlier this year.      

   – View press release
   – View Phase II Description in VCS Registry System


Proof’s in the pudding
The American Carbon Registry (ACR) today announced a public comment period for its Methodology for Voluntary Emission Reductions in Rice Management Systems, developed by Environmental Defense Fund (EDF) with the California Rice Commission (CRC), Applied Geosolutions LLC and Terra Global Capital. According to ACR, the methodology is California-facing in response to the emerging compliance program’s desire to adopt additional compliance-grade protocols from the agriculture sector (specifically rice cultivation). ACR’s Nick Martin says the methodology also enables additional modules applicable to other states like Arkansas, the nation’s largest rice producing state. EDF intends to expand the methodology to other rice producing states and work with local farmers on pilot projects enabled by its recently awarded Conservation Innovation Grant from the USDA. The current methodology utilizes the DeNitrification-DeComposition (DNDC) model also seen in ACR’s recent fertilizer management methodology and addresses reducing the duration of off-season flooding, post-harvest straw removal and dry seeding to reduce methane emissions.  

   – Read about the ACR rice sector methodology (pdf)
   – Read about the USDA grant for voluntary GHG reductions
   – Read about all USDA CIG grants


REDD hot Chile partners

Carbonica Limited recently announced its partnership with REDDMontt Forestry – a UK based private equity venture of forestry assets – to gain exclusive rights to generate carbon offsets from its forestry assets in Chile. According to the press release, REDDMontt has carried out a number of land acquisitions in Chile. Carbonica intends to use VCS methodologies to generate REDD, afforestation/reforestation (A/R) and improved land management credits.

   – Read the press release


End of an ERA

ERA Carbon Offsets Ltd. (ERA) has announced the resignation of Chief Executive Officer Dr. Robert Falls – co-founder of the Canadian forest carbon project developer and Chief Executive of the company since 2004. Dr. Falls will continue to act as Director and Chairman of the Board of Directors of ERA and will remain involved in the activities of the company. ERA’s Denman Island Land Conservation Project was recently recognized with the British Columbia (BC) Premier’s Award for Innovation and Excellence, honoring the best in BC’s Public Service. The project marks the first time in history that the Ministry of Environment accommodated and used carbon offsets as a means to raise the capital needed to protect land under the provincial park system.

   – Read more from ERA
   – Read the press release


Vida for Vivo

The Plan Vivo Foundation is celebrating the issuance of one million Plan Vivo Certificates into the Markit Environmental Registry – a major milestone achieved in May 2011. Plan vivos – land management plans drawn up by rural smallholders and community groups – have now been implemented to collectively sequester or reduce over 1 MtCO2e through a range of land-based activities and complementary livelihood activities. The Plan Vivo Foundation is inviting stakeholders, organizations and individuals with an interest in pro-poor, community carbon management to celebrate this event on June 30th in London. If you would like to attend, please contact [email protected].



On the breit side…
A new program spearheaded by the German Ministry of Environment (Bundesministerium fí¼r Umwelt, BMU) enables the Gold Standard Foundation to develop tools to lower entry barriers and allow for the scale-up of carbon market activities in under-represented regions, particularly Sub-Saharan Africa. Under the program, the Gold Standard aims to deliver a range of activities, including a capacity building program with African DNAs; the development of four new VER methodologies that it hopes could be adopted by the CDM and other compliance schemes; and, working with consultancy Perspectives, a guide to the concept of ‘Suppressed Demand.’ Gold Standard CEO Adrian Rimmer says of the program, “The German government, along with many other EU governments are very keen to see the scaling up of carbon markets in Africa and we’re delighted that the government sees using Gold Standard as the best way to achieve its policy goal.”

   – Read the article on Ecosystem Marketplace
   – Read the Gold Standard announcement


Do you know Green-e 2.0?

Following a 60-day open stakeholder comment period, the Green-e Governance Board adopted on June 2nd Version 2.0 of the Green-e Climate Standard. Important changes include the new requirement that credits should not be issued for reductions that have not been verified and addresses project specifications around hydropower and biomass. The new version also explicitly denies eligibility for HFC-23 destruction projects. Green-e Climate Manager Todd Jones told Ecosystem Marketplace that while the standard is intended to describe the programs that put project-specific requirements in place, “as the market has developed an idea of what constitutes reasonable crediting and reporting periods and addresses other project issues, the standard has been updated to include some project specific criteria around project types where there are specific challenges.”

   – Read Green-e Climate Standard V 2.0 (pdf)
   – Read about significant changes to the standard (pdf)


Getting over the GHG reductions hump

The Australian government has released draft legislation for its Carbon Farming Initiative (CFI), a scheme that would allow farmers and indigenous landowners to earn carbon credits for steps that cut GHG emissions. According to parliamentary secretary for climate change Mark Dreyfus, the regulations are designed to streamline the application process for projects while ensuring there are no adverse consequences for communities and the environment.  Among the methodologies being generated under the CFI is a camel culling program that could see up to 18 million carbon credits generated. Camels – introduced in the 19th century – have become a major pest in Australia, generating large amounts of methane, trampling large areas of vegetation, damaging water holes and competing with native species for food.

   – Read more from Reuters
   – Read more from Reuters
   – Read more from Environmental Leader


Shining light in the Darkwoods

The Nature Conservancy of Canada (NCC) has announced the largest forest carbon project validated and verified to date in North America – the 55,000 ha Darkwoods project in southeastern BC. NCC worked closely with ERA and 3GreenTree Ecosystem Services to develop the Improved Forest Management (IFM) project under the VCS. “By harnessing the power of the carbon market, the Darkwoods Carbon pilot project represents an innovative new avenue for helping to fund great conservation projects,” says John Lounds, President and CEO of NCC. The Pacific Carbon Trust – the BC Crown corporation set up to deliver BC-based credits to its clients – has purchased 450,000 credits, while ERA has purchased 250,000 credits that will flow into to the European voluntary market through their German partners, the Forest Carbon Group AG.

   – Read more from ERA
   – Read the press release
   – Read more from the Globe and Mail


Philip-pining away for forestry credits

The Quirino Forest Carbon Project (QFCP) has become the first forest carbon project in the Philippines to be recognized under VCS program. Recognized under the CCB Standards last year, the project is now expected to become the first forest carbon project to achieve both VCS and CCBA accreditation in Asia, a region otherwise still dominated by renewable energy projects. A collaboration between Conservation International-Philippines and carbon offset provider MoreTrees, the 177 ha project will see agroforestry and reforestation parcels set up within Integrated Social Forestry (ISF) farms to be managed by volunteers from the local community. The project is expected to remove 31,771 tCO2e. According to Romeo Trono, country executive director of Conservation International-Philippines, the project will provide communities with an alternative income source and also ensure that a steady supply of water is available by maintaining the watershed.

   – Read the Inquirer article


VCS raising a new crop…

…of AFOLU experts, that is. The Verified Carbon Standard Association (VCSA) has issued an open call for members to join its expanding Agriculture, Forestry and Other Land Use (AFOLU) Steering Committee. Established in 2009, the Steering Committee provides support and input to the VCS on AFOLU related issues to support the effective use of the standard; to broaden the scope of the standard, including the development of new guidance and tools; and provides input on the strategic goals of the program. The VCSA now seeks members with technical expertise in the new project types that have been added to the VCS or are under consideration (such as Peat Rewetting and Conservation), and to increase its geographic diversity. The terms of reference and the application procedure are available on the VCS website. Applications are invited by 7 July 2011 and should be sent to [email protected].

   – Read more from the VCS


Offsetting goes postal

Following trends set by other shipping industry giants (like UPS), the US Postal Service is preparing to launch a carbon accounting system later this month that could pave the way for a full-fledged offsetting program by early 2012. Initially available only to business customers using the Electronic Verification System (eVS), the pilot service will take the form of an online calculator and reporting function for packages – hopefully expanding to an offsetting program which would allow customers to purchase verified offsets through USPS.  “It would be a premium offering, but if you are going to offset, you might as well do it through the Postal Service,” says chief sustainability officer Emil Dzuray.

   – Read the Post & Parcel article


Trucking in credits

Bison Transport has charged onto the carbon scene, becoming the first Canadian transportation company to sell carbon credits according to the CSA CleanProjects Registry. The Manitoba company sold 10,737 tCO2e generated through fuel efficiency strategies – including aerodynamic improvements, speed and driver management, truck idling control strategies, intermodal transportation, long combination vehicles strategy and tire efficient technology – to L2I Financial Solutions, who in turn sold the offsets to Canadian carbon offset provider LivClean. LivClean purchased the carbon offsets corresponding to the transportation taking place within the province of Alberta.

   – Read the press release


Climate North America

Sit down, stay awhile

Experts at last week’s Carbon Expo in sunny Barcelona did not have such a sunny outlook for the California carbon market, predicting that a recent court ruling requiring the state to analyze other ways to cut emissions would delay the implementation of the cap-and-trade program for up to 12 months. “I don’t know anyone who thinks this will go live on January 1,” said Brian Storms, chief executive of NYSE Blue. But analysts at Legal Planet have shed a more positive light on the situation, revealing that the 1st Appellate District of the California Court of Appeal has temporarily stayed the trial court’s injunction preventing the California Air Resources Board (ARB) from implementing the program. Although there still appears to be much confusion surrounding the case, some say the court of appeals’ ruling makes the outlook for a 2012 start date a bit brighter.

   – Read more from Reuters
   – Read more from GreenBiz


So long, and thanks for all the carbon savings

New Jersey is bidding farewell to the Regional Greenhouse Gas Initiative (RGGI) following a May 26th announcement by Governor Chris Christie that the state will be withdrawing from the cap and trade scheme. The announcement was made at a press conference, where Christie branded RGGI “a failure,” adding “this programme is not effective in reducing greenhouse gases and is unlikely to be in the future”. In a further blow, the Republican-led New Hampshire legislature has cleared a bill to withdraw the state from the initiative. A shoreland protection bill with an amendment pulling New Hampshire out of the program was passed in the House of Representatives on June 1st and in a 14-9 vote by the Senate on Wednesday, though the proposal may be vetoed by Governor John Lynch.

   – Read more from BusinessGreen
   – Read more from the New York Times
   – Read more from Bloomberg


Meanwhile, back at the ranch…

… farmers may soon get busy scoping VER projects thanks to the US Department of Agriculture (USDA). Agriculture Secretary Tom Vilsack approved on Wednesday US$7.4 million to fund nine large-scale greenhouse gas mitigation projects in 24 states through USDA’s Conservation Innovation Grants (CIG). USDA’s Natural Resources Conservation Service (NRCS), which administers CIG, will also provide US$10 million through its regular Environmental Quality Incentives Program (EQIP) to eligible producers to implement conservation practices that reduce greenhouse gas emissions. “We want to help farmers and ranchers make important and innovative contributions to reducing greenhouse gas emissions,” commented Vilsack. “These grants are designed to test and verify exciting new approaches to greenhouse gas reduction that other conservation-minded producers will want to put to work on their operations.”

   – Read the press release


Kyoto & Beyond

Trading places

Although 2010 was a hot year for both temperatures and the voluntary carbon market, the global carbon market showed signs of cooling. A World Bank report launched at Carbon Expo revealed that the global carbon market declined in 2010 following 5 years of growth, shrinking to US$141.9 billion from US$143.7 billion in 2009. The fall was attributed to various factors, including a lack of clarity about the post-2012 market, the loss of political momentum, the lingering effects of the recession and the double-digit decline of the Certified Emission Reductions (CER) market. “The global carbon market is at a crossroads,” said Andrew Steer, World Bank special envoy for climate change. “This report sends a message of the need to ensure a stronger, more robust carbon market with clear signals.”

   – Read more from Environmental Leader
   – Read more from Bloomberg


From Sud to South

It’s a small market after all – South Pole has announced the addition of Sandeep Kanda to its team as Global Technical Director of its New Delhi office. Sandeep joins South Pole from Tí¼V Sud, where he was responsible for South Asian carbon markets – managing a portfolio of roughly 90 CDM projects and Programmes of Activities (PoAs) worldwide. “It’s a great achievement to have him with us,” said Thomas Camerata, South Pole Carbon’s COO based in New Delhi. “Sandeep’s deep experience in validation and verification is impressive and will keep South Pole’s position at the forefront of project development, particularly when it comes to PoAs.” Sandeep will focus primarily on the implementation of CDM and PoA projects with South Pole, one of the world’s leading carbon offsetting companies.

   – Read the press release


Frontier going soft on carbon…

… and pushing hard for increased access to the carbon markets. London-based green asset developer Frontier Carbon has announced the formation of CarbonSoft Corporation – a carbon trading platform designed to put the carbon market in the hands of entrepreneurs, NGOs and companies in Africa and Asia. Focused primarily on solar lamp micro-projects, the company will provide access to carbon credit revenues for project developers who face challenges in accessing the benefits that the carbon markets have created. Under an agreement signed on May 31st, Standard Bank Group will provide access to the carbon markets, while CarbonSoft will provide distributors of solar lamps and the means to participate in the CDM.

   – Read the AllAfrica article


Global Policy Update

Tie me carbon tax down, sport

The debate over Australia’s planned carbon tax is intensifying as politicians, angry industry groups and even Oscar-winning actress Cate Blanchett sound off on the pricing mechanism. Last week top climate change adviser Ross Garnaut presented his final report on how to reduce emissions, calling for the introduction of a carbon tax next year that would transition into a cap-and-trade scheme by 2015. The report recommends that the initial carbon tax be set at A$26/t, raising up to A$11.5bn a year. But despite a pro-carbon price TV ad campaign featuring the newly dubbed “Carbon Cate” Blanchett, the battle is escalating – with a number of the country’s leading climate scientists being moved into safer accommodations after receiving death threats.

   – Read more from BusinessGreen
   – Read more from Reuters
   – Read more from the Guardian


Shake your Bonn-Bonn

The latest round of international climate talks kicked off in Bonn last week – and things are already off to a rocky start. Developing nations are becoming increasingly frustrated that money promised 18 months ago to help them adapt to climate change has not been made available. New research by the World Resources Institute shows that only around US$12bn of the US$30bn promised for the 2010-2012 period has actually been budgeted for by countries and as little as 30% has been delivered in some cases. The debate over the future of the Kyoto Protocol also remains controversial. Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC), warned on Monday that without some form of agreement there was a risk that a “regulatory gap” could result post-2012, undermining the viability of Kyoto-backed mechanisms.

   – Read more from the Guardian
   – Read more from BusinessGreen


Incubating emissions trading

The World Bank has high hopes for the future of the carbon markets – predicting that as emerging nations increasingly turn to market-based mechanisms to combat climate change they may become an “incubator” for a network of emissions trading programs. According to Andrew Steer, World Bank special envoy for climate change, there are as many as 20 countries worldwide are considering the introduction of programs that would reduce emissions and create tradable permits. “This is the make-or-break decade,” said Steer. “Emerging markets are becoming the incubators for some of the most exciting ideas with regard to climate change. One could envisage a sort of organic development of networked carbon markets.” Last week the World Bank approved the first grants to developing nations to help them analyze and design emissions reduction plans.

   – Read the Bloomberg article


Science & Technology

Turning up the heat on forests

Scientists at the Marine Biological Laboratory (MBL) have reportedly demonstrated for the first time that global warming could increase the carbon storing potential of trees by speeding up the nitrogen cycling in the forest. MBL researchers artificially warmed a mini-forest by 9 degrees Fahrenheit for 7 years, simulating the warming expected by the end of this century. According to project lead Jerry Milillo, the increased carbon storage capacity of the trees was enough to outpace atmospheric CO2 gain resulting from the warmer soil. “We found that warming causes nitrogen compounds locked up in soil organic matter to be released as inorganic forms of nitrogen… When trees take up this inorganic nitrogen, they grow faster and store more carbon,” said Milillo.

   – Read more from Science Daily
   – Read more from Digital Journal


Go with the Carbonflow

Last week Carbonflow Corp. announced the release of a new module in its suite of hosted software designed to manage, monitor, and monetize emission reduction projects. The new CarbonContracts tool not only manages the complete life cycle of emission reduction purchase agreements (ERPAs) and other carbon offset contracts for both sellers and buyers, but reportedly spans due diligence, contract negotiation, portfolio management, reporting, and renewal. “Many Sellers of emission reductions focus too much on price in a contract negotiation and forget other important contractual conditions they later have to comply with… A tool like CarbonContracts, with automatic notifications will enable buyers and sellers to meet their obligations in time,” commented Charlotte Streck, Director of carbon advisory firm Climate Focus.

   – Read the SFGate article


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