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Vol. 2, No. 18: November 19, 2007
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The Ecosystem Marketplace's V-Carbon News
Carbon beyond Kyoto... Carbon for the Rest of us
When most people think of the benefits of carbon markets, they think of the cost-efficiencies that markets are supposed to bring to emissions reductions. They think about economies of scale, where the bigger the market, the greater the efficiencies. In other words, they think "global." However, a seemingly growing trend in the voluntary carbon marketplace may be turning this "global-think" on its head and heeding that classic environmental mantra to "think globally" but "act locally." For example, this month Enterprise Community Partners, a non- profit based in Baltimore, announced the creation of a new fund that finances the development of environmentally friendly affordable housing, particularly for low-income families. In a similarly local vein, the state of Colorado is in the midst of creating a voluntary carbon offset program, the Colorado Carbon Fund. Also in Colorado, the City of Aspen recently created a "Canary Tag" voluntary offset program, which "invests in local, state and regional carbon offset projects that would not otherwise be possible and will help reduce greenhouse gases."
The price of each Aspen- based "Canary Tag" CO2e offset is about $20.00. And, while this may seem expensive when compared to global carbon markets (and even to some CDM credits), for many buyers, keeping the offsets local has numerous advantages, not the least of which are maintaining the co-benefits close to home and making it easier to ensure project quality. But the question remains: Are these higher costs justified? Some have argued that if the primary goal is mitigating global warming, then the most ethical choice would be to reduce as many emissions of greenhouse gases as possible, rather than focus on more costly local reductions. But then again, how does this ‘efficiency ethic’ balance with an organizations’ responsibility to encourage emission reductions at the community level?
In many ways, it is these seemingly contradictory dynamics–and these real and hard questions—that make the voluntary carbon markets so exciting. Unlike the strictly regulated carbon markets like the EU ETS and the Kyoto Protocol’s CDM, the voluntary markets are not content to let governments and UN bodies make all the decisions, they allow each one of us to answer these questions for ourselves. They implicitly acknowledge the strength that may come from a diversity of approaches and a range of interests. As we wrote in our book on the voluntary market, it is likely that buyers in the voluntary markets will follow one of two roads: either they will look to buy "commodity carbon" where the source of the credits makes little difference, or they will seek out the more "gourmet" or "charismatic" side of the market; a market where how and where a credit comes from makes all the difference.
While this diversity scares some people, we firmly believe it is a key source of the voluntary market’s strength. Having said that, strides are also being made this week in the more "commodity" side of the carbon market. Today (November 19), the Voluntary Carbon Standard, the standard that many believe could come to dominate the "commodity" side of the voluntary market, is being launched in London.
Read on to get the latest on these initiatives, as well as other new standards, the new World Bank Forest Carbon Partnership Facility, and predictions of voluntary market demand in Asia.
—The Editors
For comments or questions, please email: vcarbonnews@ecosystemmarketplace.com
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VOLUNTARY CARBON
The Voluntary Carbon Standard (VCS) Launches in London
At an event that took place at the London Stock Exchange today (Nov. 19) the Climate Group, the International Emissions Trading Association (IETA), and the World Business Council for Sustainable Development (WBCSD) announced the official launch of the Voluntary Carbon Standard. According to the press release, "The rigor and transparency of the new VCS will boost market confidence for many companies and individuals keen to take a lead on tackling climate change by going carbon-neutral. The robust international standard will drive greater investment into credible offset projects certain to result in real and additional emissions reductions around the world." Two years in the making, the VCS is expected by many to become the leading offset standard in the voluntary market.
– Read the press release (pdf)
– VCS website
Stakeholders Discuss World Bank’s Forest Carbon Partnership Facility (FCPF)
Over the past two weeks, the World Bank has hosted several stakeholder meetings in Washington DC to obtain input on its new Forest Carbon Partnership Facility, which will be officially launched at the upcoming UNFCCC meeting in Bali Indonesia. According to the Bank, the Facility is aimed at "preventing deforestation by compensating developing countries for carbon dioxide reductions realized by maintaining their forests... Already almost 20 countries from Latin America, the Congo Basin, and East Asia and the Pacific have requested an opportunity to take part in the FCPF." Because the Clean Development Mechanism does not currently have an accepted methodology for avoided deforestation, or Reducing Emissions from Deforestation and forest Degradation (REDD), any credits generated by FCPF projects could only be sold in the voluntary carbon markets.
– FCPC website
– Read the World Bank Press Release
The Gold Standard Foundation selects APX, Inc. to Develop and Manage The Gold Standard VER Registry
After requesting proposals from companies to host a registry for Gold Standard Verified Emissions Reductions (VERs) in August, the Gold Standard Foundation has now announced the selection of APX, Inc. to design and manage The Gold Standard’s Registry for VERs. APX is a major provider of infrastructure for the environmental market, particularly concerning renewable energy and greenhouse gas services and commodities. The Registry will provide stakeholders with real-time reporting on an online platform that creates, tracks, and facilitates trades of serialized Gold Standard VERs. Explaining the need for a Registry, The Gold Standard (GS) Foundation noted, "Currently, demand for GS CERs and GS VERs outweighs supply, with over 85 GS projects in the pipeline and companies buying credits off the shelf and/or providing large sums of upfront finance to project developers to ensure that the estimated credits come to fruition. Business opportunities for a Registry provider are therefore significant, given the 50% increased projection of Gold Standard certification of credits within the next year alone."
– Read the APX Press Release
– View the original Gold Standard RFP (pdf)
A Fixation on Standards: Another New Standard for Forestry Credits
CarbonFix, a non-profit German foundation, recently announced the latest standard for the voluntary carbon markets designed specifically to certify afforestation and reforestation projects generating carbon credits. CarbonFix claims it will fill a void in the voluntary market by providing an accreditation service that accounts for issues such as tree permanence and accurate calculation of credits. The standard was open for public review until November 15, 2007.
– CarbonFix website
EcoSecurities Plans More Sales to VER Market
The UK-based EcoSecurities, a major provider of carbon offsets, cut its product pipeline by 20% on November 6. This initiated a 47% collapse in the value of its shares. Ecosecurities points to the bureaucratic holdups associated with the UN’s process of approving projects, warning that revenue and profit will fall short of expectations. Ecosecurities Chief Executive Bruce Usher says the company plans on selling off credits from existing projects in the less lucrative voluntary market to make up for the lower than expected returns.
– Read the Reuters article
Offsets, A New Trend for Asia?
A New Zealand online article highlighted the buzz around fortuitous growth prospects of the voluntary carbon markets in Asia. The article quoted Marie Warris, the head of global greenhouse gas initiatives of verification firm Lloyds Register who predicted the voluntary market will shift toward about a 50/50 division between Asia in the US. This week plans for The Korea Exchange (KRX) were also announced. "The government will set the limit for greenhouse gas emissions for businesses, which can then sell carbon credits they have or buy ones they need on the exchange," the KRX said. "Financial institutions will also be able to engage in futures trading based on carbon credits."
– Read the Stuff.co.nz article
– Read the Biz/ Tech article
Green Communities Offset Fund launched in Baltimore
Enterprise Community Partners announced the creation of a new fund that finances the development of environmentally friendly affordable housing, particularly for low-income families. Financial donors to the Green Communities Offset Fund will receive carbon credits and the money collected will provide community groups with funding and technical assistance to develop energy-efficient homes for low-income earners. The fund will support emission reduction activities in the new developments called Green Communities. Enterprise says it will measure and verify emission reductions in the Green Communities.
– Read the Baltimore Business Journal story
Colorado Governor’s Office Establishing a Voluntary Offset Fund
The Colorado Carbon Fund, a voluntary carbon offset program, is being established by the Governor's Energy Office with the goal of creating a funding source for greenhouse gas reduction projects in the state and providing "high quality, credible offsets for individuals, businesses and government agencies interested in mitigating their carbon footprint." The Governor’s office plans to partner with local communities, developers and financiers of offset projects, and organizations and individuals seeking to purchase offsets. The office has currently released a, "Request for Information (RFI) to gain an understanding about the market for voluntary carbon offsets, service providers, and consumer and environmental protection standards currently used in the market."
– Colorado Governor's office website
IBM Number Crunching May Feed into Carbon Markets
IBM announced a program that allows customers to record computer server energy savings. According to Computer World, "How it works: If you take distributed systems -- for instance, x86 servers -- and consolidate them on a mainframe, the move will result in an energy savings. Those savings can be calculated based on reference data, a task that will fall to Neuwing Energy Ventures, an independent firm verifying and trading in energy efficiency certificates." Initially this program will only be available to IBM mainframes. Rick Lechner IBM's vice president of IT optimization explains that while this could generate emission reduction credits, "The value of these certificates is minute to the real energy savings and the real operational savings that you're going to realize."
– Read the Computer World article
REDUCE & RETIRE: THE LATEST ON CARBON NEUTRAL
An Enterprising Offer
Starting in 2008 Enterprise Rent- A- Car, National Car Rental and Alamo Rent- A- Car will offer customers the option to purchase carbon offsets during the reservation process. Customers choosing to do so will be charged an $1.25 per rental and Enterprise will match that amount dollar-for-dollar up to $1 million. The carbon credits will come from the carbon offset provider Terrapass. In addition, the company has committed to planting a million trees a year, purchase more cars that run on ethanol and other alternative fuels, and print its corporate magazine on recycled paper.
– Read the Inc.com article
– Read the Environmental Leader article
An Island in the Eco- Gray Zone
As awareness of the negative environmental impacts of bottled water has increased, Fiji Water has been a target of criticism. The company recently announced that it will go beyond carbon neutral and offset more than its own emissions to become carbon negative. Fiji Water’s carbon offset plan will exceed the emissions associated with production, shipping, and retail of its products. Fiji has several plans for increasing energy efficiency, such as installing a windmill to provide energy for its plant in Fiji, altering shipping routes, using bodiesel and other alternative fuels in its trucks, and decreasing the amount of plastic and paper used for products. "The Fijians are poor people, and without this money, logging would be their only economic alternative," said Glenn Prickett, a senior vice president of Conservation International. "Maybe it would be morally preferable to carry a bottle I filled at the tap, but bottled water is a consumer reality...so rather than operate in a moralistic framework, we'll use the economy as it exists to make a difference."
– Read the International Herald Tribune article
Flexographic Printing (who knew?) Goes Carbon Neutral
Label Impressions, Inc., a provider of quality custom labels, tags, and flexible film packaging has become the first flexographic printer (Yes, we had to look that up too...) in the North America to obtain FSC (Forest Stewardship Council) certification, as well as Carbon Neutral status through a partnership with Carbonfund.org. CarbonFund’s Michael Steward noted that in addition to purchasing offsets "Label Impressions has taken a leadership role to reduce the climate impact of its offerings to customers through greener materials including corn based (PLA) plastics, recycled papers, eco-friendly inks and compostable adhesives."
– Read the Carbon Fund press release
New Zealand Aims to be World’s First Carbon Neutral Nation
New Zealand announced ambitious plans for reducing the greenhouse gas impacts of its electrical, stationary manufacturing, and transport energy by 2025, 2030, and 2040. New Zealand initially declared it intentions in September in the release of its Emissions Trading Scheme. The following month New Zealand detailed its plans by launching its "Energy Strategy to 2050." New Zealand plans on increasing its national forest area by 250,000 hectares by 2020, as well as using renewable energy sources for 90% of its electricity by 2025.
– Read the International Herald Tribune article
Google’s new project to let UK users see how they’re reducing their carbon footprint.
Google’s UK Carbon Footprint Project will provide users with access to readily available information about calculating and reducing one’s carbon footprint. The program allows users to update a checklist of their carbon reducing activities on a map that details every other program member in the country and the collective amount of energy saved. The program was started in conjunction with the Energy Saving Trust and RSA, and draws its data from the UK based Defra’s ‘Act on CO2’ calculator.
– Read the Digital Trends article
CLIMATE NORTH AMERICA
A Climate Pact for the Heartland
Six Midwestern governors (Illinois, Iowa, Kansas, Minnesota, Michigan, Wisconsin) and the premier of Manitoba have signed on to a regional climate agreement to reduce carbon emissions and set up a greenhouse gas cap and trade system. Indiana, Ohio, and South Dakota signed on to the agreement as observers. The group plans to develop targets for the carbon cap and trade program in a year and implemented them by mid-2010.
– Read the Detroit Free Press article
– Read the Reuters article
A Commercial (big) Break for Climate Legislation
Beginning this week, three Western governors will promote climate change legislation in a nationwide television advertising campaign sponsored by Environmental Defense. The 30-second ad features Arnold Schwarzenegger (California), Jon Huntsman Jr., (Utah); and Brian Schweitzer (Montana) explaining the dangers of global warming. The governors, are promoting the fact that like state leaders are moving to reduce climate-affecting emissions, the current Congress must also pass significant greenhouse gas reduction legislation.
– Read the New York Times article
Two Canadian Provinces join the Climate Registry
The Canadian Provinces of Quebec and Saskatchewan have now joined the Climate Registry. The registry is an inventory based in North America that tracks and records greenhouse gas emissions. Currently, the majority of U.S. states, several Canadian provinces, and one Mexican state are members of the registry.
– Climate Registry website
Colorado governor releases Climate Change Action and Agricultural Offset Plan
Colorado Governor Bill Ritter released a climate action plan that institutes a state-wide reduction target for greenhouse gas emissions. The reduction target is set at 20% below 2005 levels by the year 2020 and 80% below 2005 levels by 2050. The Governor will issue the climate action plan by executive order. The policy will also include an agricultural carbon offset plan that calls on the participation of farmers and ranchers.
– Read the Washington Times article
Bloomberg Calls for Carbon Tax
New York City Mayor Michael R. Bloomberg proposed a national carbon tax in what his aides describe as one of the most significant policy speeches of his final term. Mayor Bloomberg claims that a national carbon tax would quell global warming, encourage economic growth, and stimulate technological advances--- as well as increase gasoline prices. He says politicians must make unpopular policy choices with regards to global warming, citing a congestion-pricing plan he once promoted in Manhattan that taxes vehicle traffic.
– New York Times City Room blog
A TOUCH OF KYOTO
New website to focus on African carbon market
Carbon Finance Africa is a new website with the goal of fostering carbon markets in Africa. The website is the result of a non-profit initiative by Africapractice and Marbek Resource Consulting and supported by the Royal Netherlands Embassy and South Africa. A group of associates from the non-profit will post details about CDM projects with the expectation of increased competition among carbon credit buyers in developed nations. Registered users can browse through the list of investors and project developers up for selection. The website is currently focused on South Africa, the biggest carbon market in Africa to date, but aims to include other high-potential countries in Africa
– Carbon Finance Africa website
International Carbon Action Partnership (ICAP) launched
The International Carbon Action Partnership (ICAP) was created by a coalition of European countries, New Zealand, U.S. states, and Canadian provinces. The U.S. and Canadian member states and provinces are part of the Western Climate Initiative and the Regional Greenhouse Gas Initiative. The organization will provide a forum where ideas and experiences regarding cap-and-trade systems can be exchanged, particularly regarding best practices and scheme design. ICAP will also foster compatibility between national carbon markets, laying the foundation for a global carbon market.
– Read the EnvironBusiness article
SCIENCE AND TECHNOLOGY
Experts Completing Final Climate Report
The UN’s Intergovernmental Panel on Climate Change (IPCC), co-winner of the Nobel Peace Prize, will release its fourth report on global warming on November 17. The IPCC has already recognized that the world’s climate is changing due to greenhouse gases emitted by humans. The approximately 25 page summary will be hammered out "line-by-line" to detail a scientific consensus on global warming, the rate of warming, its potential impact, and possible solutions.
– Read Associated Press article
– Read IPCC website
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