HEREâ€™S THE DEAL
Singing offsetsâ€™ praises
A new carbon offsetting platform targeting individuals launched in Austin, Texas at the music festival South by Southwest. Buzzing around in Priuses, The Cool Effectâ€™s â€œbrand ambassadorsâ€ â€“ young people in shirts saying â€œEarth, Weâ€™re Hereâ€ â€“ are offering free rides to concert goers in exchange for discussions about carbon offsets. The initiative hopes to spur demand for select carbon offset projects, which have been vetted by Global Offsets Research, an organization that screens projects for what they call â€œabsolute additionality.â€ Cool Effect worked with an advertising agency to design its highly visual offsetting platform, and it is one of several initiatives that has emerged to sell offsets directly to individuals and small businesses. Another is Stand for Trees.
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A reservation for two (million) please
In PetÃ©n, Guatemala, the GuateCarbÃ³n REDD+ (Reducing Emissions from Deforestation and Degradation of forests) project covers about a third of the massive Maya Biosphere Reserve, the largest uninterrupted tropical forest north of the Amazon. The project is estimated to avoid almost two million tonnes of carbon dioxide emissions annually but is still undergoing validation with the Verified Carbon Standard and has not sold any offsets yet. Instead, the project has recently relied on subsidies from partner organizations and the government. â€œNo one has bought [the offsets] because we donâ€™t have them yet; the process that guarantees them is long and strict, and we havenâ€™t wanted to make any advance commitments,â€ Sergio GuzmÃ¡n, the project manager, told Mongabay.
- Read more from Mongabay
Grasping for buyers
A final gasp, or a breath of fresh air? The Clean Development Mechanismâ€™s (CDM) future role post-Paris remains uncertain. While the Paris Agreement made in December included a role for markets in Article 6, it did not clarify whether a new international carbon market would incorporate the CDMâ€™s existing certified emissions reductions. As a result, the CDMâ€™s Executive Board is looking at a range of options for future demand and has shortlisted a number of potential sources. Among them: South Koreaâ€™s emissions trading scheme; other existing and planned carbon markets in the European Union, Mexico, and South Africa; non-carbon-market sources such as green bonds or the Green Climate Fund; and the aviation sector.
- Read more from Carbon Pulse
A look at REDD+ finance committed to Papua New Guinea (PNG) and Tanzania between 2009 and 2014 reveals two contrasting trajectories, as documented by Forest Trendsâ€™ REDDX initiative. Donor governments, multilateral institutions, and others committed $45.2 million to PNG, with a steady increase in financing over time. Tanzania received an early injection of finance from Norway in 2009 but little since. A spokesperson from Norwayâ€™s ministry of climate and environment told Climate Change News that the program had a â€œplanned end,â€ but Isilda Nhantumbo, an analyst at IIED, was critical. â€œFor Norway to pull out without the security of others coming in and supporting that process is actually a waste of Norwegian effort as well as disillusioning local communities,â€ she said.
- Read more from Climate Change News
Putting risk in the rearview
Private sector finance for conservation is on the rise, according to EKO Asset Partners and NatureVest, but are environmental markets truly investable? In a recent GreenBiz column, Peter Weisberg of The Climate Trust argues that public money could be well spent to mitigate risk on the carbon markets. He points to the World Bankâ€™s Pilot Auction Facility, which is providing â€œput optionsâ€ for methane projects so that developers have the option to sell their carbon offsets to the Bank at a fixed price if they cannot find another buyer. The Climate Trust is also offering a put option for the offsets produced by its investment fund.
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A no deforestation diet
Ecosystem Marketplace Senior Associate Allie Goldstein just spent a month purging products traced to the major drivers of deforestation â€“ palm oil, soy, cattle, and pulp & paper â€“ out of her life. The mission (nearly) impossible was chronicled in The Washington Post and led Goldstein to conclude that, though consumer pressure never hurts, companies should be the ones pushing to cut deforestation out of their supply chains. Scott Poynton, founder of The Forest Trust (TFT), works with major brands to do just that. He says that companies are changing the way they buy palm oil so that they can trace it to its source â€“ and, once they know the source, they can start putting their buying power behind responsible suppliers.
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Passing the check to consumers
Many capped companies under the European Unionâ€™s Emissions Trading Scheme (EU ETS) profited from the over-allocation of free allowances between 2008 and 2014, a recent study by Dutch consultancy CE Delft and commissioned by Carbon Market Watch found. Industry made 8 billion euros from selling over-allocated allowances and up to 26 billion euros in windfall profits from passing the (non-existent) costs of credits off to customers. The study acknowledges that the over-allocation problem has been addressed in Phase 3 of the EU ETS, but pass-through costs could still be an issue, the authors write. Some industry groups called the report unhelpful, saying that over-allocation was a historical problem that will be more than corrected by 2020.
- Read the report from CE Delft
Sharing the airspace
A new JIKO policy brief overviews the state of play in the International Civil Aviation Organization (ICAO). With international emissions from air travel on a path to triple or quadruple by 2040, ICAO has committed to cap emissions at 2020 levels. Working groups within ICAO are currently looking at the criteria used to verify offsets within current market-based mechanisms, as they plan to create their own. The JIKO paper argues that ICAO should work closely with the United Nations Framework Convention on Climate Change to ensure there is no double counting and that offsets used by airlines are credible under the market-based mechanism(s) likely to emerge out of the Paris Agreement.
- Read the JIKO paper
Act globally, offset locally
Energy efficiency activities and carbon farming in Australia could supply up to 500 million Australian Carbon Credit Units (ACCUs) at under AU$20/tonne, according to a new market analysis by RepuTex. More than 300 million ACCUs could be generated for AU$4/tonne or less, a significant discount from the AU$12.3/tonne that the governmentâ€™s Emissions Reduction Fund (ERF) paid at the most recent auction. This favorable pricing could keep ERF money within Australia, the research finds. â€œThe lack of urgency to use international credits may help local policymakers by providing time for the local market to learn by doing before any international linkage is established, while enabling investment to flow into local activities, particularly for carbon farmers,â€ RepuTex wrote in a blog post.
- Read the analysis from RepuTex