HEREâ€™S THE DEAL
American rock bank Pearl Jam has spent nearly $500,000 on carbon offsets since it began tracking its tour emissions in 2003. Its most recent investments are in REDD+ projects: Conservation Internationalâ€™s Alto Mayo project in Peru and Carbonfund.orgâ€™s Valparaiso Amazon Rainforest project in Brazil. Pearl Jamâ€™s investments in these two project will offset emissions from the bandâ€™s upcoming Latin America tour this November. Past offset purchases have focused in on the bandâ€™s home state of Washington, with a $210,000 payment for 7,000 offsets from an urban forestry project in the Puget Sound.
Through its GoGreen service, Deutsche Post DHL customers have mailed more than 11 billion items â€œcarbon neutralâ€, resulting in 650,000 tonnes offset. The company purchases offsets from nine different carbon projects, including a water purification project in Cambodia, an efficient cookstoves project in Lesotho, a wind power project in Nicaragua, and a reforestation project in Panama. In a new pilot initiative in the Ruhr region of Germany, DHL is reinvesting earnings from its GoGreen products into electric vehicles, with a goal of deploying 30 vehicles in Duisburg and Essen over the next few months. The company hopes the â€œlocalâ€ component will engage its German customers.
Costs less than a coffee
Alberta, Canada-based hotel company MasterBUILT recently added a seventh hotel to the EcoStay program, which helps hotels across North America neutralize the carbon emissions of guests through energy efficiency measures and carbon offset purchases. To date, EcoStay has offset more than eight million hotel stays, purchasing 230,000 tonnes in offsets through retailer LivClean. Their portfolio includes an urban forestry project in Montreal, a landfill gas project in New York, and an energy efficiency project at the University of Alberta, among others. Hotel guests pay an extra $2 per night to opt-in to the carbon neutral program.
The myth of Sun Cocoa
Yaw Kwakye, head of Ghanaâ€™s national REDD+ Secretariat, says chocolate farmers in his country often believe â€“ incorrectly â€“ that new hybrids of cocoa thrive better in the sun. As a result, farmers are cutting deeper and deeper into the countryâ€™s forests to expand areas of cocoa cultivation. The government created a Climate-Smart Cocoa Working Group that last year submitted an emissions reductions plan to the World Bankâ€™s Forest Carbon Partnership Facility (FCPF). Over 20 years, the REDD+ Secretariat aims to work with 800,000 small farmers as well as the countryâ€™s 25 major cocoa buyers to avoid deforestation across 5.9 million hectares. If an official agreement is signed with FCPFâ€™s Carbon Fund, Ghana could earn roughly $50 million for the effort.
Do it for the bushbabies
The MJUMITA Community Forest REDD+ Project in Tanzania achieved third-party verification for 1,350,000 carbon offsets (over the 30-year life of project) under the Verified Carbon Standard and the Climate Community and Biodiversity (CCB) Standards, according to a press release by auditor SCS Global Services. Almost 10,000 people in eight villages have received REDD+ payments worth a collective 200 million Tanzanian shillings (about USD$93,000). The project was the first to achieve verification under the third edition of the CCB, a revision that aims to facilitate smallholdersâ€™ access to carbon finance. Biodiversity benefits include the protection of the endangered Rondo dwarf galago, a species of bushbaby, as well as three endangered plant species.
California market regulators have issued more than one million tonnes to project developers over the past two weeks ahead of November 2â€™s end-date for the first compliance period. The bulk of the offsets went to five early action forest projects, while 25% went to ozone depleting substance projects. This brings the total number of offsets issued by the state to 30.4 million to date. Meanwhile, Quebec granted the approval of 11,205 offsets to a landfill gas project, marking the second issuance of offsets in the Canadian province.
The United Nations says that if implemented, the climate pledges attributed to all NDMCs (Nationally Determined Mitigation Contributions/Commitments/Components â€“ the newest acronym, replacing â€œINDCsâ€) submitted before October 1 represent four gigatonnes in emissions reductions. Thatâ€™s enough to keep global temperature rise to 2.7 degrees Celsius â€“ an improvement over the 4-5 degree Celsius business-as-usual scenario but less than the 2-degree target of the climate convention. Remarking on this projection, Christiana Figueres, the head of the UNFCCC, said â€œit is a remarkable step, but it is not enough.â€ A total of 158 countries representing 90% of global emissions have now submitted NDMCs.
Trees back in, markets maybe
Last monthâ€™s newsletter covered the reinsertion of REDD+ into the UNFCCC negotiating text, meaning forest carbon finance is officially part of the discussions in Paris. However, negotiators never got to talking about whether REDD+ finance can flow through market mechanisms, which Bolivia opposes and Brazil has been strategically silent on. Experts have been trying to figure out how much that matters. â€œItâ€™s not a deal-breaker if markets arenâ€™t explicitly mentioned, because most of the finance will be direct transfers from A to B instead of via a marketplace,â€ said Fred Stolle of the World Resources Institute (WRI). But Gustavo Silva-ChÃ¡vez of Forest Trends said that private finance is more likely to flow if the final text is more supportive of markets.
Setting the stage
Chinaâ€™s National Development and Reform Commission released a draft law of its national emissions trading program set to begin in 2017. Key takeaways from the draft include: the final Emissions Trading System will use free allocation as well as auctioned credits; emitters will be allowed to use domestic offsets (called CCERs), although for what percentage of their compliance obligation is unspecified; and market regulators will establish a price stability reserve to avoid oversupply. South Africa also released its draft carbon tax bill last week, which says its Department of Energy is working on the administrative aspects of its offset program.
Governments around the world are estimated to raise $22 billion through various carbon pricing mechanisms in 2015, up 46% from 2014 levels, a Climate Markets and Investment Association report showed. The bulk of the funds came from the European Unionâ€™s Emissions Trading System (EU ETS), where credit prices have gone up 22% in the past year. Domestic programs in Britain, France, Quebec and California accounted for most of the remaining non-EU ETS revenue. â€œRevenues from carbon pricing appear likely to continue to increase around the world, and continuing debate will be needed about how these funds should be best used,â€ the report stated.
With peace comes pressure
The Democratic Republic of Congoâ€™s forests store 24 billion tonnes of carbon, making the country the second largest land-based carbon sink in the world after Brazil â€“ and tied with Indonesia. Now that the region has emerged from civil war, the forests are under threat, with several industrial-scale palm oil plantations in development. Wildlife Worksâ€™ 300,000-hectare Mai Ndombe REDD+ project, located on a former logging concession, aims to combat deforestation pressures through carbon finance. At REDD+ Talks in Stockholm last week, project manager Jean-Robert Bwangoy spoke about the transition. â€œI was taught that if you are a strong man, your value is the number of hectares you can cut down,â€ he said. Now that people can earn money through forest carbon sales, heâ€™s changed his tune.
Securing land rights for communities in Brazil and Guatemala reaps financial benefits about 200 times the costs, according to research by WRI, released last week. WRI believes it is the first working paper to develop a cost-benefit analysis around community land tenure. Over a 20-year period, investing $19 per hectare in Brazil to secure land rights reaps nearly $1,500 in benefits, while in Guatemala, investing $205 per hectare to secure tenure results in almost $2,000 in benefits. For the carbon mitigation benefits, WRI used the U.S. governmentâ€™s figure for the social cost of carbon: $41 per tonne.