This Week in V-Carbon: Governments Trying on the Voluntary Carbon Hat

In the latest move by a national government entity to engage with the voluntary carbon market, Thailand’s Greenhouse Gas Management Organization today announced that it has established a mechanism for “tagging” VCS credits with the agency’s Crown Standard for domestic projects. The Crown Standard was intended to designate Thai-originated CDM credits that provide additional domestic social and environmental benefits. Says VCS CEO David Antonioli. “This is a straightforward way for VCS projects to demonstrate they are meeting additional standards set out in their local context.” Up to now, VCS has allowed project developers to additionally tag VCUs with certification under the Climate, Community and Biodiversity Standards and Social Carbon Standard.

– Read more from VCS

We asked V-Carbon readers which emerging market for voluntary carbon could be the big story in 2012. You chose China as the marketplace to watch in the new year (30 percent of readers), with Brazil and Turkey tied for second. Of course, developed county markets remain at the forefront of sellers’ 2012 expectations. “The USA and Europe will keep being the most attractive market for offsets, specially those from REDD and REDD+,” came the response from Andra Brasil Florestal, “and not only because of carbon, but also looking into international competition for agriculture commodities.”

Next up, let’s talk about sub-national government-led voluntary offset programs. See the Oklahoma Carbon Program, the Colorado Carbon Fund, Italy’s CARBOMARK, and this issue’s news about Louisiana’s and Napa County’s CO2 intentions. Are states and regions effective partners in driving voluntary climate action? Why or why not? Tell us in this reader survey, and stay tuned for an upcoming report from Ecosystem Marketplace exploring the presence and of government-led voluntary carbon programs.

– Read more

By now it’s well understood that many of the losses from Hurricane Katrina – of lives, homes and infrastructure – could have been prevented with greater attention to New Orleans’ aging infrastructure and emergency management. But what about shoring up the “disappearing coastline” itself – where now-degraded wetlands were once the region’s first line of defense against storm surge and flooding? Enter the American Carbon Registry’s (ACR) proposed methodology for the Restoration of Degraded Deltaic Wetlands of the Mississippi Delta, written by Tierra Resources and contributors, and released Wednesday for public comment. Assuming it passes technical muster, the methodology could guide the United States’ first approaches to coastal wetlands restoration. The methodology development was supported by Entergy, which is in the process of writing its next 5-year environmental goals – which may include further project support.

– Read more from Ecosystem Marketplace

The above news from American Carbon Registry isn’t the only carbon news born in the bayou. The State of Louisiana itself released its Comprehensive Master Plan for a Sustainable Coast – that includes carbon offsets as a possible funding source for coastal restoration. Louisiana is no stranger to the concept of carbon finance. After several years of research into environmental markets, the report includes carbon sequestration in its Wetlands Predictive Modeling Group and cites carbon and nutrient credits among possible funding sources – alongside the Deepwater Horizon Clean Water Act Penalties and various state and federal funds. According to the report, “The projects in the draft plan will provide 97 per cent of the current carbon levels and realize 91% of the potential for the coastal landscape to uptake nitrogen.”

– See Louisiana’s master plan (PDF)

Napa County residents could soon become connoisseurs of another variety – prepping their palettes for CO2 reductions with a plan that requires developers that cut down trees to plant vineyards to offset their CO2 impacts. More specifically, the county envisions a bank in which vineyard and commercial developers could pay in and fund local projects or programs that reduce emissions. The Planning Commission’s proposal has already received blow back from some environmental groups. Earth Defense for the Environment Now manager Chris Malan says, “If you’re losing a forest, you should replace it with a forest.” The plan will go before the Board of Supervisors for a vote in late March.

– Read more

Three UK carbon firms – Sandbag, Carbon Retirement and Palmetto Climate – have announced a decision to team up to consolidate their EUA Allowance retirement services. Their aim is to improve consultancy, offsetting and campaigning activity – and of course move more EUAs towards retirement. Under the new arrangement, Sandbag will cover research work and focus more on environmental campaigning, while Carbon Retirement and Palmetto Climate will handle carbon retirement services. More than two billion EUAs are currently in circulation, meaning the new partnership will have their work cut out for them. They may be aided by a vote by the EU parliament on a “withholding” measure that would set aside and potentially retire a large amount of EUAs, hopefully resuscitating the weakened market.

– Read more about the partnership

Needs more offsets! That’s the message from environmentalists looking at Japanese firm Inpex’s latest CSR plan to address impacts from projects like the $33 billion Icthys project. In the next five years, the project will include construction of a liquefied natural gas plant on the fringe of Darwin Harbour – and is expected to generate 280 MtCO2e over 40 years. When the deal was announced on Friday, Inpex chairman Naoki Kuroda repeated a promise to spend more than $90 million on a social responsibility package, including $37 million on a carbon offset scheme. Critics say this amount will help offset 16.5 per cent of the emissions over 20 years, but that Inpex can afford to spend up to $90 million a year.

– Read more

NZX, the domestic stock exchange operator in New Zealand, has sold off the last of its stake in the TZ1 carbon registry to the UK financial information services provider Markit Group. Markit operates the Markit Environmental Registry which in 2010 tracked the largest volume of transacted carbon credits in the voluntary market. NZX was originally issued shares in Markit under a 2009 deal in which Markit bought the registry. The sale netted NZ$33.7 million for NZX, a figure NZ$19.9 million lower than originally announced in 2009, due to TZ1 earnings falling short of expectations over the deal’s two and a half year lifetime.

– Read about the sale

Carbon offset suppliers to Australia’s compliance carbon offset program – the Carbon Farming Initiative – say the country’s looming carbon tax is slow to kick start action on climate change. But Climate Friendly CEO Freddy Sharpe say the climate is better for voluntary action in the country, where offset suppliers are now able to source credits from the country’s domestic actions. Buyers in developed countries like the US and Australia have traditionally looked to credits domestically, as opposed to the kinds of international credits that the Aussie market has been relegated to since AU took on a Kyoto commitment. “”At the moment we have to source most of our credits in Asia and South America, but if there’s a scheme of carbon trading in Australia, we can look to our own backyard, which is always important in environmental terms,” Sharp says.

– Read more from the Australian

It’s true that consumers often are in the dark when it comes to the carbon neutral credentials of their everyday purchases. Not for long – SGS Consumer Testing Services is touting its new service as the first international carbon labeling program, which will show that a product’s carbon credentials have been verified by an independent organization. In addition to measuring and validating carbon claims of manufacturers, SGS will also advise those manufacturers on strategies to help them achieve “SGS Carbon Reduction and SGS Carbon Neutral” marks. A widely adopted global carbon labelling and verification program has been somewhat elusive, but others have attempted the complex task. The Carbon Trust became a certifier of the Product Life Cycle standard developed by the World Resources Institute and the World Business Council for Sustainable Development, late last year.

– Read the press release
– Read more from Environmental Leader

After raising $5.1 million from the sale of credits from the massive Canadian Darkwoods forest project, The Nature Conservancy Canada may rely more heavily on the carbon markets to address its current financial uncertainty. About two-thirds of the credits were sold to the Pacific Carbon Trust, a provincial Crown agency in British Columbia, and the remainder were sold offshore. “This could become really big in the future,” said TNC board member Bill Freedman. The program previously received federal funds for its Natural Areas Conservation Program, which is soon winding up. Freedman says TNC is currently speaking to the federal government about maintaining support for that program or one like it.

– Read more

OneEnergy Renewables has obtained $1.3 million in private equity funding, according to a new filing with the SEC. One Energy Renewable produces both renewable energy credits (RECs) and carbon offsets through their renewable energy projects such as solar, wind, and biogas projects. OneEnergy’s RECs and carbon offsets are third-party tracked and verified by the Climate Action Reserve. OneEnergy Renewables is actively developing projects in seven states, including Oregon, New Mexico, Ohio, New Jersey, Idaho, California, and Maryland.

– Read more about the equity funding

Dairy farmers are being encouraged to add more vegetable oil to cattle feed, because a diet higher in oil can reduce methane emissions from cow burping during the summertime. According to Dairy Australia, a reduction in cow burping could reduce methane emissions by as much as 14 percent. The cow burping methodology is now in the process of being developed and submitted to the Carbon Farming Initiative, after which dairy farmers could gain up to $700 in carbon credits from the Federal Government. In addition to the carbon credits earned, another main benefit to adding oil to cows’ diets is that of increased milk production. Since its inception, the Carbon Farming Intuitive has been the source of a number of amusing – and hopefully effective – proposed methodologies, including culling camels to reduce methane emissions from feral animal flatulence.

– Read about the methodology

The International Emission Trading Association’s (IETA) annual Carbon Forum North America, which is usually held in March, has been moved to October.The annual event, which will still be located in Washington D.C, focuses on developments in the North American carbon market. An IETA update said that the event was moved “In order to better align with an exciting political and market schedule this Fall,” referring largely to the first round of auctions in California, which are scheduled to take place in August.

– Read more at the Carbon Forum web site

For its fourth year purchasing offsets, Crédit Agricole S.A. has chosen the Kaigau Corridor REDD+ project in Kenya to compensate for its 2,655 tonnes of CO2 emissions. As the first REDD+ project to have its carbon credits validated by VCS, the Kaigau Corridor programme will provide the company 2,655 VERs to offset emissions from its operations in the Greater Paris area. Crédit Agricole S.A. purchased its credits through the CarbonNeutral Company after company employees voted to select the project from among several others.

– Read more

The London-based Barclays Bank has closed its US emissions trading desk in New York. Kedin Kilgore, the former head of US Emissions Trading at Barclays, explaines, “… current economic conditions and the uncertain regulatory environment make highly specialized, bespoke businesses like emissions very difficult for banks to maintain.” The closure of the US trading desk removes one of the primary traders of California carbon allowances (CCAs) out of that emerging market. One broker active that nascent market didn’t see the desk closure “unwinding positions” in California, while another was more pessimistic, saying, “Clearly, if they though California was going to be a liquid, viable program anytime soon they wouldn’t be shutting down.” Back in London, project developer Camco sold its UK advisory business to Baxi Partnership to focus on its core business of clean energy project development and carbon.

– Read about the Barclays closure
– Read about Camco’s sale

Anticipation of AB 32, the California carbon trading scheme set to begin in 2013, is already driving up demand for carbon credits. As evidence, Camco international, the clean energy and GHG reduction project developer, last week reported a 27 percent increase in the number of California carbon credits issued in the second half of last year, as California buyers begin preparing for compliance. Camco has increased its carbon credits under management to accommodate for increasing demand. Camco’s California credits under management increased from 281,061 to 356,061 between July 2011 and January 2012.

– Read more from Reuters

California and Quebec have announced that they will host a joint auction for CO2 allowances, as Quebec moves to link its cap-and-trade program to California’s program before the first auction, which is set to take place in August. Both states are members of the Western Climate Initiative (WCI), which saw its numbers shrink when 6 US states withdrew, leaving California and 4 Canadian provinces, including Quebec. It is unclear if or when the remaining Canadian provinces will link up to California and Quebec, creating the kind of regional trading program the WCI envisions.

– Read more from Platts

– Read more from Reuters

– Read about “grey credit” fears
– Read about the EIB supply cut
– Read about the new platform

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