V-Carbon News: Carbon Controversies’ Eternal Return

What would Walt Disney’s favorite Lost Boy say about recent regulatory challenges to emissions trading? "All of this has happened before…" and will continue to confront regulators shaping and retooling carbon controls. So be prepared – follow market trends in the latest issue of V-Carbon News.

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.

25 March 2011 |   “All of this has happened before…” “…and it will all happen again,” said a Peter Pan wise beyond his I’ll-never-grow-up years. The carbon markets are similarly experiencing what is sure to be an eternal return to uncertainty, as buyers and sellers brace for the worst and hope for the best in California and abroad.

California regulators are no strangers to political and legal challenges to their environmental efforts – perhaps why they’re taking on the chin this week’s Superior Court request to revisit their environmental analysis.

The state’s Air Resources Board is reportedly working with the plaintiffs to moderate the scope and impact of the court’s decision. Says Jon Costantino, who helped craft the California program, “If they can quickly get this analysis out in front of the public and back to the judge, they can get back online.”

If not, the Board could find itself back at square one if it can’t finalize its 2010 rule in October of this year. In the Board’s favor, ARB Chairman Mary Nichols isn’t going to give up without a fight, saying that overcoming the present challenges – both to California and EPA regulations – is “not just a matter of not giving up hope, but not giving up working.”

The determination in this triple negative might prove necessary to overcome wilting sentiments about climate change in the US (and the UK, too) where a growing proportion of poll respondents voice suspicions about climate science, carbon neutral claims and the impact of anthropogenic emissions.

But for every to there is a fro, bad news and good. Like the Walt Disney Company’s US$15 million offset investments in 2010 (in honor of which this issue is unabashedly riddled with Disney references) and New Mexico’s failure to roll back GHG rules in its recently concluded session.
Or the most recent auction results from the US Regional Greenhouse Gas Initiative (RGGI), which auctioned all of its current control period CO2 allowances, returning $83 million to participating states. Or the most local of local efforts to offset community emissions in Australia in the face of national policy turmoil.

Keep reading for more on this and other news in this issue, which is brought to you free of charge thanks to our latest news brief sponsor Evolution Markets.

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V-Carbon News

Voluntary Carbon

California administrator talks offset protocols

On the sidelines of IETA’s Carbon Forum North America conference in Washington, California Air Resources Board (ARB) Chairman Mary Nichols gave reporters the lowdown on her expectations for additional offset protocols to be considered by the board (think agriculture!), as well as expected offset supply in the first compliance period and the Golden State’s willingness to forge ahead with emissions trading – with or without regional partners. Nichols acknowledged that “a lot of states are, I think, holding back to see if California actually starts our program.” Additional conference coverage also points to Nichols’ dismissal of a potential legal setback to AB32 implementation: “The lawsuit is not a factor in terms of delay. It’s just part of what you have to go through to implement a program.” Read additional California coverage in our Climate North America section.

Read the Ecosystem Marketplace article
Read more from Reuters

CAR’s biggest losers

The Climate Action Reserve (CAR) recently marked some landmark abatement projects through two of its current protocols. Last week, Green Holdings publicly announced the listing of a coal mine methane project hosted by CONSOL Energy, which will abate ventilation air methane (“VAM”) emissions from Pennsylvania’s Enlow Fork operation – the largest underground coal mine in the U.S. The project is expected to destroy around 190,000 tCO2e annually. Green Holdings says the Enlow Fork project is the first of many CMM projects it will undertake. In other news, word has it that EOS Climate has generated 1 million carbon credits from the destruction of ozone depleting substances under the CAR ODS Protocol. The company’s stakeholder announcement references its “unique integrated system for ODS destruction that has delivered verified CRTs to within 99.99% accuracy in production cycles of less than 3 months.”

Read the press release

Camco wind’s up on CTX

Ever since the deal between the Gold Standard and the Carbon Trade Exchange (CTX) was hashed out in December 2010, stakeholders have been waiting to see who would be the first to list Gold Standard credits on the trading platform. Well the wait is now over – with project developer Camco taking the prize. Camco chose credits from its Anxi Jiuquan project – a 100 MW grid-connected wind farm in Gansu Province, China. “It is with immense pleasure that we are able to start the process of Electronic Trading for Gold Standard using Chinese wind credits developed by Camco,” said CTX CEO Wayne Sharpe. “Camco is a global leader in projects of all types and we are proud to support the commercialization of credits from their many quality emission reduction projects.”

Read more from Commodities Now
Read the press release

SCC takes America

Well, maybe that’s an exaggeration. But with its recent acquisition of Verdeo Group Inc. – a North American methane and emissions management firm – Sindicatum Carbon Capital Group (SCC) is stepping up its game in the U.S. carbon and clean energy markets. Verdeo is set to become a wholly-owned subsidiary of the global sustainable resources company, operating as SCC’s North American business unit. “The combined portfolio of Verdeo’s emission reduction projects plus SCC’s existing U.S. asset base, including several landfill gas-to-energy projects and a pipeline of additional methane projects, positions the company to be a leader in what we expect will be a rapidly growing North American market for clean energy and environmental commodities,” said Josh Green, Verdeo’s CEO.

Read the press release

An acquired taste

Marex Financial – the London-based metals and agricultural commodities brokerage – will get a taste of over-the-counter energy derivatives trading when it acquires Spectron Group, a top energy broker. Spectron Environmental is engaged in sourcing carbon finance for a variety of project types, locations and standards in the voluntary carbon markets. Marex, owned by ex-Lehman Brothers operation JRJ Group, will buy Spectron for £94.5 million from its Norway-based parent company Imarex. Marex’s press release states that the acquisition is based on its belief that deregulation will drive a surger in trading activity in the EU gas and power markets.

Read the FT article

Let your carbon conscience be your guide

While the Walt Disney Company saw a 0.5 percent increase in direct GHG emissions from 2009 to 2010, hakuna matata! Alongside other waste and emissions-reducing efforts, the entertainment industry megalith also invested heavily in voluntary carbon offsets, to the tune of US$15.5 million in 2010. This included US$7 million in Conservation International projects in the DRC and Peru; US$2 million in the Mississippi Delta and US$2 million in Inner Mongolia via the Nature Conservancy; US$1 million in NoCal IFM projects; and another US$3.5 million in various industrial projects. Most of Disney’s 2010 forestry investments – through standards like the Verified Carbon Standard (VCS) and CAR – are expected to deliver credits beginning in 2012.

Read the Environmental Leader article

Who’s the greenest of them all?

TreeHugger is enabling readers to rank carbon offset providers in their third annual Best of Green Awards – a roundup of the year’s best people, ideas, projects and more. The Readers’ Choice Awards include over 50 awards spread over eight main categories, including best-looking endangered species, best celebrity activist, best twitter feeds and – our favorite – best carbon offset provider. In the running are Carbonfund.org, Native Energy, the Climate Trust, Clear Offset, ClimateCare and – currently leading the pack – TerraPass. Visit TreeHugger.com to vote for your favorites by Friday, April 1.

Read more from TreeHugger

Give offsets a fighting chance

Who knew that carbon offsets and combat training could go hand in hand? A new conservation initiative will see the British Army collaborating with the Woodland Trust to plant new native woodland on 160 ha of Defence Estates land set to be used for military training – and carbon sequestration. The agreement will offer businesses the opportunity to offset their emissions for £10 a ton compared to the usual £25. “The price of carbon sequestration has previously been an obstacle to many companies in the UK because of the high cost of land here,” said Nick Atkinson, Woodland Trust carbon manager.”However, our partnership with Defence Estates has enabled us to remove land costs from the equation and so reduce the cost to our corporate partners.”

Read more from BusinessGreen
Read more from GreenWise

Vitol vital to market growth

… at least when it comes to carbon offset volumes! Vitol Group – better known as the world’s largest independent oil trader – was recently named 2010’s top carbon credit generating project developer. According to the ranking – based on a survey by Bloomberg New Energy Finance (BNEF) – Vitol Group’s Carbon Resource Management sought credits last year for projects yielding up to 11.1 million Certified Emission Reductions (CERs) through 2020. Climate Change Capital Ltd. and JPMorgan’s EcoSecurities tied for runner-up, with up to 8.7 and 8.6 million tCO2 respectively. According to BNEF analyst Marisa Beck, energy traders and banks have been buying up project developers rather than starting from scratch. “Bigger players are better placed to manage these projects because they can diversify the risks and achieve economies of scale,” said Beck.

Read the Bloomberg article

May the Force10 be with you

It may not be Star Wars, but Force10 Networks’ newly expanded Carbon-Balanced Switch/Router Initiative still sounds pretty far out. The global technology company recently announced that customers who buy their ExaScale virtualized core switch/routers – and now the S4810 top-of-rack switch – will automatically offset the GHG emissions associated with their energy consumption. For every unit of the S4810 sold, Force10 will retire verified carbon credits provided by TerraPass to balance the emissions resulting from the electricity consumption over the switch’s lifetime or up to five years – whichever comes first. The offsets will be used to fund U.S. carbon reduction projects such as wind power, farm power and landfill gas capture.

Read the press release

Reduce & Retire: The Latest on Carbon Neutral

PUMA protecting lions?

We’re not sure if that’s how the jungle hierarchy normally works – but you won’t hear the wildlife complaining. A deal announced this week will see sporting goods brand PUMA and its parent company PPR offset their 2010 CO2 emissions with carbon credits generated through conservation of wildlife habitat in Kenya – and make PPR the first luxury products company to offset emissions by buying VCS REDD credits. The 98,729 tCO2 will come from Wildlife Works Carbon’s Kasigau Corridor REDD project, which will create a wildlife corridor that links two of Kenya’s largest protected areas — Tsavo East and Tsavo West, previously under threat from overgrazing, poaching and deforestation. Last month, the project became was first ever to be issued REDD credits under the VCS.

Read the Mongabay article

You can find me in da (carbon neutral) club

Want to party like it’s your birthday, but concerned about the environmental impact? Try the Sustainable Dance Club, a venture by Rotterdam based companies ENVIU and Doll designed to turn clubs into sources of clean, renewable energy. It might not be what 50 Cent had in mind – but then again, he may not have known that the lights, speakers, fridges and A/C units in the average club generate roughly 100 tCO2 every year. The scheme centers on the Sustainable Dance Floor – designed to use dancers’ steps to activate small internal generators, each producing up to 35 W of electricity. An interactive display system even lets club-goers see how much energy they’re producing – the harder they party, the more the floor lights up.

Read the Ecologist article

On an Eco Island in the sun

Well, more likely in the rain… it is England after all. Eco Island is the sustainable community strategy for Britain’s Isle of Wight – a small island off the south coast known for its scenery and slow pace. The initiative aims to create a social, economic and environmentally sustainable community – and achieve carbon neutrality (or at least the lowest carbon footprint in England) by 2020. According to organizers, the Isle of Wight is a microcosm of mainland Britain – making it a perfect place to demonstrate sustainability. “We want the Isle of Wight to become a world renowned Eco-Island, with a thriving economy, a real sense of pride and where residents and visitors enjoy healthy lives, feel safe and are treated with respect,” says the Eco Island website.

Read the Click Green article

Climate North America

Super Cali Fragile-istic

The Association of Irritated Residents can rest assuaged, as a California Superior Court this week ordered the state’s ARB to take a closer look at policy alternatives to its chosen cap-and-trade program. Mary Nichols, ARB Chairman, said in an interview last week that she doesn’t expect a dramatic setback to AB32 implementation: “Even if they were successful ultimately in demanding more environmental analysis, this would not have any impact on the implementation of the cap and trade plan.” This week, ARB spokesman Stanley Young informed the LA Times that ARB staff will meet with the offended parties in hopes of narrowing the court injunction’s scope. “We hope the judge’s final order will be focused only on the cap-and-trade dispute,” said Young. “We will oppose a broadly written writ.” On an encouraging note, west coast market participants are currently discussing potential setbacks to the AB32 program start date in terms of months, not years.

Read more from the Los Angeles Times
Read more from the Baltimore Sun
Read the court order

Suit, countersuit

Despite the legal stumbling block in California, another lawsuit is seeing states fight back to retain their rights to sue power companies over their excessive GHG emissions. According to New York attorney general Eric Schneiderman, the companies are causing a “public nuisance” by releasing harmful CO2 into the air – and can therefore be held accountable in court. The case started in 2004 with New York City, New York State and several other states and environmental groups suing five electric power companies in federal court to force them to reduce their emissions. Although the U.S. Court of Appeals for the Second Circuit upheld the states’ right to bring the lawsuit in 2009, the power companies have appealed to the Supreme Court – which is expected to decide the case by July.

Read the Environmental Leader article

All in favor of science say “aye”

Last week the House Energy and Commerce Committee approved legislation that would prohibit the EPA’s regulation of GHGs. The Energy Tax Prevention Act of 2011 – which passed with the support of all Republicans and three Democrats – would repeal the agency’s finding that GHGs are pollutants that endanger public health. Republicans also unanimously rejected Democrats’ amendments asking congress to confirm the science behind climate change. Scientists have now fired back with a scathing opinion piece in the respected scientific journal Nature, describing the legislation as anti-science. “It is hard to escape the conclusion that the U.S. Congress has entered the intellectual wilderness, a sad state of affairs in a country that has led the world in many scientific arenas for so long,” concluded the editors.

Read more from GreenBiz
Read more from Mongabay
Read more from Nature

EPA playing for time

The EPA has issued a final rule extending the reporting deadline for large emitters and fuel suppliers under its GHG Reporting Program to September 30, 2011 – a move intended to give the agency more time to test and receive feedback on the electronic GHG reporting tool (e-GGRT). The announcement that the deadline would be extended from its original March 31 start date was made earlier this month, following conversations with industry and other stakeholders. “This extension will allow EPA to further test the system that facilities will use to submit data and give industry the opportunity to test the tool, provide feedback, and have sufficient time to become familiar with the tool prior to reporting,” the agency said in a release.

Read more from Reuters
Read more from BusinessGreen
Read the press release

Kyoto & Beyond

Munden Calling

A new Munden Project report argues that achieving the goals of REDD+ (think forest and biodiversity conservation, enhancement of livelihoods, and efficient emissions reductions) would be very unlikely if a market for REDD+ offset credits develops using a centralized derivatives trading framework. Estimating that less than 5 percent of REDD+ credit value will flow to local agents in a position to secure REDD+ goals, a $500 billion/yr market would be required to offset opportunity costs on the ground (of which a vast majority would flow to intermediaries). Additionally, the report raises several commodities-trading-based critiques of the underlying process for creating and estimating supply of the credits themselves.

Access the report here

Size matters

Big things are happening at the Gold Standard, where Tricorona recently announced the approval of what will be the world’s largest ever Gold Standard Clean Development Mechanism (CDM) project. The 201 MW Huadian Kulun wind farm in China will generate an estimated 500,000 Gold Standard CERs per year while contributing to long-term sustainable development in the region. “The demand for Gold Standard carbon credits has increased remarkably in recent years, and this newly approved project will enable us to continue delivering what the customers are demanding: the highest quality of carbon offsets that can be found,” says Per Egstam CEO of Tricorona Climate Partner, Sweden.

Read more from Triconora

I pledge allegiance to the climate

The United Nations (UN) has released a list of voluntary pledges by dozens of developing countries to curb climate change. The pledges – most of which were announced previously, but have now been published by the UN Climate Secretariat – range from the vague and brief to the incredibly detailed. While China and India pledged to lower their emissions by 40-45 percent and 20-25 percent respectively, Ethiopia provided an extensive list of 75 projects, detailing new rail lines that will run by renewable energy. Poorer countries agreed to join the richer nations in submitting climate action plans after the most recent climate conference in Cancun; however, many are conditional on financial and technical support from the industrial world.

Read more from the Associated Press

It’s a small world after all

The effects of the nuclear crisis in Japan are being felt worldwide – and not just as a global fear of meltdown. Not only has the crisis undermined public support for nuclear power, it is predictably resonating in the carbon markets and highlighting their sensitivity to energy supply shocks. EU carbon prices jumped almost 10 percent following the recent Japanese earthquake, to which the German government responded by shutting down seven older nuclear power plants for review. The carbon price spike also affected New Zealand’s carbon market, where buyer demand was shifted away from international CERs and back to local permits. According to BNEF, EU carbon prices may rise as much as 15 percent for the eight years through 2020 if Germany decides to permanently cancel extended use of its nuclear fleet.

Read more from Carbon Positive
Read more from Reuters
Read more from Bloomberg

Global Policy Update

Asia’s carbon platform dive

Taiwan’s Environmental Protection Administration Minister Stephen Shu-hung Shen announced earlier this month that Taiwan has begun work on a national offset-based carbon neutrality management platform. The idea for the platform emerged from the government’s current assistance with product-based neutrality efforts in Taiwan’s private sector. West of the former Formosa, India also launched a national consultation on a market-friendly emissions control scheme. Says Indian Environment Minister Jairam Ramesh, “…we had to find a way of regulating without regulators,” concluding that the consultation is “the first step that India is taking to enforce environmental regulations in a market-friendly manner.” Currently, India’s three leading industrial states – Gujarat, Tamil Nadu and Maharashtra – are piloting market-based mechanisms to address carbon pollution.

Read more from the Times of India
Read more from Eco-Business.com

No country for offsets…

… at least not after 2013, if the UK’s Committee on Climate Change (CCC) has its way. The committee has urged the government to meet its second carbon budget, which runs from 2013 to 2017, solely through domestic actions – not through the use of offset credits. “It is possible to meet these budgets at low cost and through domestic action alone,” said David Kennedy, chief executive of the CCC. “Reducing our own emissions now is necessary if we are to be on track to the deep domestic cuts required through the 2020s, and to developing new green industries including energy efficiency and renewable energy.” The government has until June to respond to the CCC’s recommendations, which include tightening the nation’s emissions reductions targets.

Read more from the Independent
Read more from BusinessGreen
Read more from Bloomberg

AU carbon price: not unlike the last time

Australia’s Labor government is facing backlash over its contentious carbon tax/slow start ETS – with public support for Julia Gillard’s administration collapsing to an all-time low last week. “The new carbon tax is the most likely explanation for the change in attitudes towards her,” said John Stirton from Nielson, who conducted the poll. “It’s being portrayed very much as something [that] will hit the hip pocket and also as a broken promise, so it’s a double negative.” Gillard wants to see a carbon tax in place from 2012, which – according to climate change adviser Ross Garnaut – should be set at between AUD$20 and AUD$30 a ton. The government is also moving forward with its Carbon Farming Initiative (CFI), with the Domestic Offsets Integrity Committee now accepting methodologies.

Read more from the Guardian
Read more from News4us.com
Read more from Bloomberg

Kenya believe it?

Yesterday marked the opening of Africa’s very first climate exchange platform – an event expected to unlock trade in carbon credits on the continent and benefit the growing number of small scale climate projects. The Africa Carbon Exchange (ACX) – based in Kenya, east Africa’s biggest economy – will provide improved access to global markets, information and foreign investment. “The exchange will pull a lot of foreign direct investments through development of more carbon projects. We will start with a futures market in May and progress to spot once more projects are registered,” said ACX CEO Tsuma Charo. According to Charo, Kenya has 17 projects awaiting registration by the executive board of the CDM, with three already approved.

Read more from Ecosystem Marketplace article
Read more from Reuters

Carbon Finance

Pricelocking in investors

These are volatile times for fuel and carbon prices, which might explain why Pricelock – an online service that helps businesses buy fuel and carbon credits at guaranteed prices – is on the up and up. The organization revealed last week that it has raised US$12 million in Series B financing, acquiring several new investors including RenaissanceRe Ventures, Travelers Insurance and carbon market heavy-hitter Barclays. “This new round of funding is especially timely given the current volatility of the oil market, and we have exciting plans for these funds,” said Pricelock CEO and founder Robert Fell.

Read more from Xconomy
Read more from VentureBeat

Green begets green

Although it’s hard to imagine that a budget speech could be exciting, this week’s announcements by the UK government revealed some interesting news for its new Green Investment Bank. Chancellor of the Exchequer George Osborne unveiled plans to triple the funding to the bank – pledging an additional £2 billion – and introduced a £16 price floor for carbon emissions permits from 2013. Osborne hopes the commitment “will leverage an additional 15 billion pounds of private sector investment in green projects” by the next election, which is scheduled in 2015 at the latest. It was also announced that bank will commence operations in 2012-2013 – a year earlier than planned.

Read more from Carbonica
Read more from Reuters
Read more from Bloomberg

Waste is the mother of Foresight

Sustainable asset manager Foresight Group has secured a whopping £70 million for waste investment to support the London Green Fund – designed to finance low-carbon waste and recycling infrastructure in the capital. Launched earlier this week by Mayor Boris Johnson at a Low Carbon Capital event, the Foresight E

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