State of the Voluntary and Forest Carbon Markets 2013 Survey Now Available

Today, project developer Hestian issued the first Gold Standard VERs (72,972 MtCO2e) from a clean cookstove project based on a suppressed demand approach. All cookstoves were manufactured in Malawi by production groups of woman using local materials, and contribute to Malawi’s broader target of producing and distributing 2 million cookstoves by 2020.  

For many, this issuance is great news. But what key barriers must be overcome before we can see clean cookstove projects access carbon finance at a larger scale (and robustly for that matter)? A new working paper from the Stockholm Environment Institute reviews existing carbon market methodologies for clean cookstove projects, pointing to key knowledge gaps and areas for future research that can help bolster project development efforts in this space.

For stove-enthusiasts looking to enter the carbon markets, the US Environmental Protection Agency and Winrock International invite project developers to apply to participate in field stove performance training and testing, where they will learn to produce fuel consumption estimates.

    – Read press release
   – Read SEI paper
   – Apply for training

Chevy continues to invest in the carbon markets, announcing last week its commitment to buy up to 75,000 tCO2e worth of carbon credits generated through the IdleAir truck stop electrification project. IdleAir allows truck drivers to turn off their engines while maintaining a comfortable cabin temperature and use of electronics, reducing emissions from engine idling and allowing truck drivers to sleep better. To date, IdleAir has secured commitments to cover nearly 7 MtCO2e in avoided emissions of its 8-MtCO2e target. Chevy hopes to help expand the reach of IdleAir service, currently available at over 25 locations in 12 states. The underlying methodology was developed jointly by IdleAir and the American Carbon Registry. Chevy’s other recent investments include carbon credits from forest management in Pennsylvania, a wind farm in Oklahoma, and improved forest management in California.

   – Read press release
   – Read methodology
   – Read more from Environmental Leader

ERA Carbon Offsets Ltd recently announced the first sale and delivery of 300,000 offsets from its Mai Ndombe REDD+ project in the DRC to Germany-based Forest Carbon Group AG. The two parties signed a three-year sale agreement with quarter-year deliveries of 100,000 offsets following, amounting to the release of 1.1 million offsets through the end of 2014. Throughout its 30-year lifetime, the project – developed by ERA and Wildlife Works and dually validated and verified by the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity Alliance (CCB) – is slated to generate around 175 million offsets.

   – Read press release

After Latin American countries Costa Rica and Chile signed formal agreements with VCS to collaborate on the design of their jurisdictional and nested REDD+ (JNR) framework, the two countries report on their progress thus far in these partnerships and other forest carbon initiatives they are working on. On the one hand, Chile is moving forward with a forestry NAMA in collaboration with Switzerland and the development of a national emissions trading scheme under the World Bank’s Partnership for Market Readiness. Meanwhile, Costa Rica works on their strategy for generating carbon credits to feed both the voluntary and regulatory market.

   – Read Ecosystem Marketplace article

Yesterday, the Center for Resource Solutions (CRS) opened up a 30-day public commenting period for potential revisions to the Green-e Climate Standard. Comments will be accepted through February 18. In addition, CRS invites stakeholders to comment on the proposed Green-e Climate endorsement of the American Carbon Registry (ACR). As the first private voluntary GHG registry in the United States, ACR has issued over 37.5 million VERs. Comments are due by March 18. As the first and only consumer protection and certification program for retail carbon offsets, Green-e Climate (an initiative of CRS) aims through to bolster the credibility of retail carbon offsets in the voluntary carbon market.

   – Provide feedback on Green-e Climate Standard v.2.1
   – Provide feedback on proposed ACR endorsement

The Gold Standard Foundation has announced an open call for feedback on how to improve the readability and structure of the Gold Standard (based on the current V2.2 version) prior to launching V3.0 in mid-2013. V3.0 is slated to expand the standard’s scope beyond its current focus on renewable energy and energy efficiency projects to include forestry and land use. An advisory panel of NGOs and market experts are working closely with The Gold Standard Secretariat and Technical Advisory Committee to provide technical, scientific and strategic input and support on this new scope. Comments regarding readability are due on March 4.

   – Provide feedback

DC-based Entergy donated carbon credits to offset the estimated 1,724 tCO2e in estimated energy impact attributed to the Super Bowl in New Orleans this past Sunday – reportedly the greenest game in Super Bowl history. NFL fans themselves were able to purchase carbon offsets for $5+ through the New Orleans Host Committee’s Geaux Green initiative, with Entergy matching every offset purchased on a 1:1 basis. Offset projects supported include a landfill gas project in Denton, TX, an improved forest management project in the Garcia River Forest, and a biogas project in Elsie, Michigan – all of which are registered with the Climate Action Reserve.

   – Read press release
   – Read about projects

The Multilateral Investment Guarantee Agency (MIGA), the World Bank Group’s political risk insurance arm, recently announced its support for a project in Nicaragua validated by VCS and CCB. The agribusiness project entails buying and converting degraded land into commercial bamboo plantations and has proven to have a positive impact in the region’s economy. MIGA’s investment guarantees of $27 million support the equity investment by EcoPlanet Bamboo Group (EPBG) for up to 15 years against the risks of expropriation, war and civil disturbances. EPBG has received dual VCS/CCB validation for an initial 816,000-tCO2e reduction.

   – Read press release

This week, DHL Express introduced GoGreen, a new carbon neutral feature, to its DHL Express Envelope shipping option. DHL calculates the carbon emissions associated with the handling and transport of every shipment, which it offsets through investments in carbon offset projects. Most projects are CDM, but upon request, DHL offers carbon credits from VCS projects for B2B logistics. One DHL-supported project is the “Save80” clean cookstove project in Lesotho seeking CDM Gold Standard certification, expected to offset around 20,000 tCO2e annually under the GoGreen service. GoGreen is available to DHL Express customers in over 40 countries.

   – Read about new initiative
   – Read about GoGreen offsets

Today, the Regional Greenhouse Gas Initiative (RGGI) released a proposal outlining key improvements it hopes to introduce to its program. To remedy what many have criticized as an inflated cap, RGGI aims to lower its regional carbon emissions cap by 45% to 91 MtCO2e effective January 1, 2014, with the cap to decline by 2.5% each following year through 2020. In addition, RGGI proposes a cost containment reserve of allowances that would be available for sale in the event that allowance prices exceed certain levels. Other key proposed changes include a new forestry protocol for the RGGI offsets program, and the closing off of offerings for unsold 2012 and 2013 allowances. The proposal will guide RGGI’s nine participating states as they follow state-specific processes to propose updates to their respective cap-and-trade programs.

   – Read press release
   – Read more from Bloomberg

After two years of observation and analysis, the REDD+ Offset Working (ROW) Group and its panel of scientists, environmental experts and conservationists bring forth their draft recommendations on how to include REDD+ credits – from Brazil’s Acre and Mexico’s Chiapas – in California’s cap-and-trade scheme. The group’s suggestions are three-fold, covering program architecture, social and environmental safeguards, and legal and institutional matters. “The issues we tackled… are meant to provide clear guidance in creating quality jurisdictional programs that are ready for linkage with California today,” said panelist Gregory Asner. The recommendations will now undergo a comment period until the end of April, after which the finalized recommendations will be provided to the governors of California, Acre and Chiapas to await feedback.

   – Read ROW recommendations
   – Read more from Mongabay
   – Read more from Steve Schwartzman

The California Air Resources Board (ARB) has survived yet another trial. The San Francisco Superior Court recently upheld the use of carbon offsets in California’s cap-and-trade scheme by denying a challenge to the ARB’s cap-and-trade regulation that sought to invalidate the use of a standardized approach to determine projects’ offset eligibility. Judge Ernest Goldsmith said the plaintiffs had “failed to demonstrate that the legislature foreclosed the use of standardized additionality mechanisms or demonstrate that [ARB] acted arbitrarily or capriciously in promulgating additionality standards.” The ARB has carbon offset projects in the pipeline undergoing review but has not yet issued any California Carbon Offsets to date.

   – Read more from Mondaq
   – Read more from Argus
   – Read more on new scheme

Experts involved in climate finance, climate assurance, and voluntary carbon markets discussed next steps for climate finance at a post-Doha panel hosted by Ecosystem Marketplace, McGuire Woods, and the International Emissions Trading Association. The panelists shed light on the need for stronger leveraging of limited public funds and heavier private sector engagement. The panel highlighted the potential of the Green Climate Fund to provide mitigation and adaptation funding, while recognizing prevailing risks for carbon market participants. To aid in project-level risks, the panel mentioned an array of tools that could be used, including pay-for-performance instruments and political risk insurance.

   – Read Ecosystem Marketplace article

The EU proposal to backload 900 million future permits allowances remains in limbo. Germany, Europe’s biggest economy, Germany, has yet to take a stance. Portugal, Hungary and Malta remain undecided. Greece, Cyprus, and the Czech Republic have voiced concerns about the draft measure but have yet to vote against or abstain from voting on the proposal. Poland has objected to the backloading proposal, with its environment minister decrying backloading as tantamount to market manipulation.

   – Read more from The Age

A University of East Anglia report states that consumers who avoid taking flights are not actually helping to lower the overall amount of GHG emissions under the EU Emissions Trading Scheme. Insofar as such emissions are regulated, avoiding flights simply “makes it cheaper for someone else to pollute.” The study says that for individuals to make a dent in emissions, they should focus their efforts on currently unregulated sectors like agriculture, domestic heating, and road transport. Alternatively, they can buy and retire EU ETS permits; lobby to reduce the total number of permits available under the EU ETS; or lobby to transform the EU ETS into a carbon tax. In the background, the International Civil Aviation Organization is set to discuss a proposal in March for a market-based mechanism to regulate international aviation bodies.

   – Read more from The Telegraph
   – Read report author’s response
   – Read more about aviation emissions deal

China Shenzhen Emission Exchange (CERX) is set to launch its cap-and-trade scheme this year in Shenzhen, the city in China with the highest population density. Shenzhen predicts over 800 firms will participate in its emissions scheme once trading begins. Ge Xingan, vice president at CERX, notes that companies may move out of Shenzhen as the cost of their carbon emissions undercuts profitability, but that their departure should be offset by new firms that can benefit as emitters try to curb carbon emissions. Aside from China’s seven official pilot cap-and-trade schemes, over 100 entities across the country are working to launch their own regional carbon emissions trading platforms, including Shaanxi at the provincial level and Dalian at the city level.

   – Read more from Bloomberg
   – Read more from Reuters

In FY2011 – its second year of operation – Tokyo’s cap-and-trade program saw total emissions from its 934 regulated facilities fall to 9.38 MtCO2e, down 23% from 7.22 MtCO2e the year prior, according to a recent report published by the Tokyo Metropolitan Government (TMG). This reduction achieved an additional 10% reduction compared to that achieved between 2009 and 2010, when Tokyo saw a 13% reduction from base-year emissions. TMG says that much of 2011’s reduction can be attributed to the earthquake, which shut off power to numerous businesses. Regulated emitters are required to report their emissions to TMG by the end of November every year.

   – Read more from Environmental Leader

New Zealand forest owners who previously sold carbon credits when they were in the $18-24 price range are now contemplating to leave the country’s emissions trading scheme. Starting in 2010, two years after the forestry sector entered the scheme, the price of New Zealand Units began to drop, ending in current prices around $2.50. The amount of international units used to meet domestic emitters’ obligations is now reportedly four times the number of domestic units used. Top officials from eight New Zealand-based forestry companies – representing close to 70% of the nation’s plantation forests – have futilely urged Prime Minister John Key to halt the flow of cheap international credits into the country.

   – Read more from Scoop

Climate finance has ramped up in the short weeks of this year and last, seeing unprecedented developments in developing countries like China and Costa Rica. China announced its China Power Sector Transformer Efficiency Program, a Programme of Activity under the CDM, issued CERs, along with its Facilitating Reforestation for Guangxi Watershed Management in Pearl River Basin Project, which was the first reforestation project worldwide to be CDM-registered. Meanwhile, Costa Rica became the first country to receive approval to access performance-based payments through the World Bank’s Carbon Fund under the Forest Carbon Partnership Facility (FCPF), and was guaranteed continued financial support with Norway, Germany and Finland’s recent announcement of a $180 million contribution to the FCPF.

   – Read Ecosystem Marketplace article

Climate Focus recently released the first two papers in a series that surveys forest carbon standards for their insights relevant to results-based payments for REDD+. The first piece, Standards for Results-based REDD+ Finance: Overview and Design Parameters, provides an overview of the most important standards that funnel results-based payments to REDD+. The second, Reference Levels: Concepts, Functions, and Application in REDD+ and Forest Carbon Standards, assesses how various results-based initiatives cope with reference level design problems in order to inform REDD+ negotiations and policymakers.

   – Read paper on standards and design parameters
   – Read paper on reference levels

Based in Sacramento, California, the associate will help the American Carbon Registry review and register voluntary carbon offset projects, provide support on client interface and operations of ACR’s APX registry platform, coordinate ACR’s review of methodologies, support ACR’s role as an offset project registry for the California’s cap-and-trade scheme, and support workshops and webinars aimed at project developers and regulated industries. Candidates should have a Bachelor’s or advanced degree related to sustainable business, environmental management, or related field, and experience with market-based environmental solutions and/or knowledge of carbon markets.

   – Read more about the position here

VCS seeks a Brazil Director for a six-month position that will culminate in producing a proposal to the VCS Board of Directors for developing a long-term VCS presence in Brazil. VCS is also accepting applications for a Chief Operations Officer/Chief Financial Officer to oversee day-to-day operations and manage the organization’s financial administration. Finally, VCS is seeking a program manager to oversee the work of validation/verification bodies and VCS registries working under the VCS program, manage a growing staff of program officers and play an important role in the on-going development of the program.

   – Read more about the Brazil Director position
   – Read more about the COO/CFO position
   – Read more about the program manager position

Based in Turkey, the expert will contribute to the Quality Assurance process with the review of project activities submitted to the Standard for certification. S/he will also help further develop the Standard’s rules and procedures, new methodologies, and capacity building activities. Candidates should have a Bachelor’s in engineering, science, or related field, ideally with 4-5 years’ experience in the carbon markets, and fluency in Turkish.

   – Read more about the position here

Based in Zurich, Switzerland, the manager will manage South Pole’s pipeline of emissions reduction projects in Iran, ensure timely verification and issuance of CERs from the Iranian project portfolio, and source further emissions reduction projects in Iran. Candidates should have 1-5 years’ experience with the CDM, a Master’s in industrial engineering, management or economics, and native fluency in Farsi.

   – Read more about the position here

Based in Amsterdam, Netherlands, the manager will coordinate forest carbon projects through the validation and registration process, manage project budgets, develop new projects, and perform due diligence activities on new projects. Candidates should have an MSc in forestry or similar field, multiple years’ experience in international carbon and/or forestry projects, and fluency in Spanish or French.

   – Read more about the position here

Based in Ebene, Mauritius, the analyst will identify new CDM opportunities, assess the eligibility and potential of projects under the CDM, elaborate drafts of PINs and PDDs, untake validation processes with DOEs, follow up on projects through UNFCCC registration, and undertake verification and monitoring processes. Candidates should be fluent in French and have experience in PDD drafting.

   – Read more about the position here

Based in Bangkok, Thailand, the director will lead the development of curriculum, resources, and delivery of programs, establishing partnerships, new funding sources, and operational systems. The director will work under the USA-based executive director of GHGMI, and collaborate with the program’s Bangkok-based partners. Candidates should have a Bachelor’s at minimum, experience working in Asia, and a track record working with international donors.

   – Read more about the position here