Despite the cold start here in D.C., January is blooming with carbon news. Quebec and California started off the year by officially linking markets, while a sustainable agriculture project in Kenya became the first to verify credits from carbon sequestration in soils under VCS in mid-January. These new developments only enhance 2013’s top stories, also featured in this Special 2014 New Year Edition.
This article was originally published in the V-Carbon newsletter. Click here to read the original.
28 January 2014 | NY Times contributor Mark Bittman began the New Year by looking at all the good, bad, and ugly that has happened in
- California officially launches cap-and-trade program, issues first carbon offsets: After a one-year delay, California’s cap-and-trade program for greenhouse gas (GHG) emissions reductions got underway in January, spurring project development and offset purchases state-side. California regulators finally started to
issue ozone-depleting substances offsets in Septemberand forestry offsets in November, paving the way for more development activity in 2014.
- Voluntary demand for carbon offsetting grew 4% in 2012: In June, Ecosystem Marketplace released its
2013 State of the Voluntary Carbon Markets report, which found that purchases of voluntary carbon offsets rose 4% in 2012 to 101 million tonnes of carbon offsets (MtCO2e), but market value decreased 11% to $523 million as offset prices fell slightly for several popular project types.
- UN climate negotiators reach agreement on REDD+ rulebook, defer several decisions to next COP: At the United Nations climate change negotiations in Warsaw,
agreement on the so-called “REDD Rulebook”established guidelines for determining national deforestation baselines, a key step for allowing compliance-based REDD finance to flow.
- China launches domestic pilot carbon trading programs: China spent 2013 launching four of its seven planned subnational carbon markets. Trading in Shenzhen started in June,
Shanghai and Beijing’smarkets launched in November , and Guangdong commenced trading in mid-December. China could offer a lifeline to Clean Development Mechanism (CDM) project developers by allowing them to re-register their credits as China Certified Emission Reductions, which would fetch higher prices on the domestic markets.
- Disney, Microsoft use carbon tax revenues to propel offset purchases: Some of the biggest names in the energy sector, including ExxonMobil, BP and Royal Dutch Shell, are using
double-digit carbon price projections to guide their business planning decisions. Disney and Microsoft have gone a step farther by using the revenues generated from their internal carbon fee programsto invest in a wide range of offset projects, showing a particular affinity for REDD projects in Asia, Africa and Latin America.
- Clean cookstoves become all the rage, more than half use carbon finance: Carbon offsets contributed funding to half of the eight million clean or efficient stoves distributed in 2012, as high offset prices and corporate demand for the projects drove $167.3 million into the sector, according to a
new report by Ecosystem Marketplace on behalf of the Global Alliance for Clean Cookstoves. Former US Secretary of State Hillary Clinton spoke about the report’s findingsin New York in September.
- Costa Rica launches domestic carbon trading program: In support of domestic reforestation and conservation efforts, Costa Rica officially launched a domestic carbon market in September. Ecosystem Marketplace’s earlier coverage explores
how the country’s independent carbon standard is helping it get REDD-ready.
- CDM market collapses, remains in limbo: Negotiators at the Conference of Parties (COP19) in Warsaw in November failed to lock in a concrete solution for the CDM market. Proposals to set a price floor and to have financial institutions such as the Green Climate Fund bail out the oversupplied market by buying up the very cheap credits both fell through. But key players such as United Nations Framework Convention on Climate Change Executive Secretary Christiana Figueres
still see a role for market-based mechanismssuch as the CDM in a future climate agreement.
- President Obama pushes power plant carbon regulations via EPA: The
US Environmental Protection Agency’s upcoming rules to control carbon emissions from existing power plantsis a landmark move to regulate climate pollutants in the United States. The Regional Greenhouse Gas Initiative is already making the federal casethat its cap-and-trade program should be eligible for compliance, and many experts believe jumping on board the existing programs in California and the Northeast may be a much easier path for states than starting a new regulatory regime from scratch.
- EU ETS crashes to record lows, countries step in with backloading fix: EU ETS prices
slumped to $2.81 euros per tonne in Januaryand set a new record low of $2.63 euros per tonne in April after the European Parliament rejected an emergency fix for the beleaguered compliance market. After months of intense negotiations, however, EU countries finally agreed to the so-called “backloading” proposal, in which the sale of up to 900 million allowances will be postponed, a move that participants hope will prop up the market until a more permanent solution is reached.
Carbon Crystal Ball 2014
Our readers can’t exactly forecast the future, but they often come close. Last year, they (correctly) predicted that 2013 would be a year for innovation in methodologies and project development; that cookstove and water filtration projects would gain in popularity; that voluntary market players would begin to diversify their attention to compliance markets; and that buyers would continue to seek out quantifiable co-benefits to differentiate their offsetting efforts.
Roberto L. Gí³mez of
Martin Clermont of
On the compliance side, Harold Buchanan of
Even as climate negotiators gear up for the 20th Conference of the Parties in Lima, Peru in December, our readers predict that jurisdictional approaches to limiting carbon emissions will continue to move forward throughout the year.
“Jurisdictional carbon markets will continue to grow in North America,” said David Rokoss of
David Antonioli of the Verified Carbon Standard (
Here at Ecosystem Marketplace, we’re getting ready to begin data collection for our 2014 State of the Voluntary Carbon Market and State of the Forest Carbon Market reports, and we’ll also be launching a revamped survey of clean cookstoves projects in collaboration with the
We look forward to again providing reliable and transparent market information in the New Year, with many thanks going to those organizations that support our research. Most recently, this includes
May this Year Ending in 4 bring you much happiness and fewer emissions. Best wishes from all of us here at Forest Trends’ Ecosystem Marketplace.
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