27 February 2015 | Though everyone here at Ecosystem Marketplace is complaining about the bitterly cold winds sweeping through (from Siberia!), at least the gales aren’t stronger. Hurricane season causes even more grief something that Gulf of Mexico-based energy utility Entergy has not forgotten.
The company just funded a two-year assessment of the potential to develop blue carbon projects on Louisiana’s coast. The findings from the report, scheduled to be shared in a free webinar on March 5, estimate that carbon finance revenue can provide up to $1.6 billion in critical funding to assist with wetland restoration over the next 50 years. Restoration efforts in Louisiana could potentially produce more than 1.8 million offsets per year and almost 92 million offsets over 50 years — the equivalent of taking about 350,000 cars off the road each year or 20 million cars off the road over 50 years.
New Orleans-based developer Tierra Resources and Portland-based nonprofit The Climate Trust did most of the legwork for this report, examining existing wetland restoration techniquesââ‚¬â€river diversions, hydrologic restoration, wetland assimilation, and mangrove plantingsââ‚¬â€and identifying areas for future scientific investigation to support carbon offset programs. Of the restoration techniques studied, forested wetlands that receive treated municipal waste have the highest net offset yield per acre.
However, the high cost of wetland restoration is the primary barrier to wetland carbon commercialization identified in the report. Carbon finance will likely lead to new public-private partnerships that leverage carbon funds with government restoration dollars to stimulate investment into wetland projects.
Ecosystem Marketplace will continue to cover critical developments related to wetlands projects on our website and in our annual State of the Voluntary Carbon Markets report. We would like to remind all of you that our annual carbon markets survey closes on March 4th!
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The shorter data collection period will allow us to produce more reports, including a new report specially focused on exploring the North American carbon markets. Contingent on receiving sufficient data, we’ll break down North American demand for carbon offsets in 2014 according to price, project type, voluntary versus compliance, and by state or province.
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More news from the voluntary carbon marketplace is summarized below, so keep reading!
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Chevrolet was one of sixteen organizations presented with the U.S. Environmental Protection Agency’s (EPA) Climate Leadership Award. The automotive company received the Innovative Partnerships Certificate, a new category, in response to its Chevrolet Clean Energy Campus Campaign to purchase offsets from participating universities engaged in energy efficiency and renewable energy projects. Not only is Chevrolet buying the offsets, but the company financed the development of a new methodology that made their creation possible under the Verified Carbon Standard (VCS). The campaign is part of the company’s voluntary initiative to reduce eight million metric tonnes of carbon emissions the equivalent of the annual carbon reduction benefit of a mature forest the size of Yellowstone.
Californian cattleman John Wick has developed a protocol that if implemented in just 5% of the state could offset all of the state’s annual agriculture and forestry emissions. The protocol, Compost Additions to Grazed Grasslands, has been approved by the American Carbon Registry (ACR). It requires a one-time addition of compost to pasture that then helps the soil accrete 0.4 tons of carbon per acre, with the gains continuing without additional compost. Although these offsets are not eligible for sale in the California cap-and-trade program, the California Air Pollution Control Officers Association has approved the protocol, which means California counties can let emitters purchase offsets from ranchers.
The European Parliament’s Environment Committee has potentially resolved a long-standing issue with the European Union Emissions Trading System (EU ETS) by introducing a market stability reserve. Historically, the EU ETS has seen prices drop and allowances flood the market due to the economic recession stifling demand and too many allowances handed out in the first place. The EU’s so-called backloading solution meant regulators temporarily withheld 900 million permits from 2014-2016 in an effort to raise prices. Now those allowances will go into a reserve to be established in 2018 a compromise plan that would prevent these allowances from inundating the market at the end of 2020.
The European Environmental Markets (EEM), a new spot trading platform for EU ETS participants, is betting the problems that have plagued the granddaddy of carbon trading programs are a thing of the past. These problem outright fraud, a phishing scam, an excess of allowances and a global recession led to the demise of several European exchanges. But EEM CEO Adrian Rimmer hopes the launch of the platform marks a new wave of investing and interest in the European market.
The country of great leaps forward is planning another one, this time for its carbon markets. China’s National Market Plan outlines development of the country’s expected nationwide carbon market. The plan has three stages. For 2015, it will focus on issuing technical standards, determining accounting methods and standards, and defining the total quota and allocation methods. The second phase, from 2016-2020, focuses on gradually incorporating all 31 provinces and other regions into the system and commencing, adjusting and perfecting the trading system’s operations.
Lawmakers in the U.S. state of New Hampshire voted 201-154 to remain in the Regional Greenhouse Gas Initiative (RGGI), but decided to halt investments in energy efficiency projects. New Hampshire receives about $15 million to $18 million annually by selling carbon allowances to energy generators in the carbon trading program of nine Northeastern US states. Prior to this vote, 80% of this income was returned to ratepayers and the remaining 20% was invested in energy efficiency. Now, more of the revenue will be directed back to ratepayers, a move advocates say is needed to counter high energy prices in New Hampshire.
The Cement Association of Canada has announced its support of British Columbia’s (B.C.) efforts to improve the province’s carbon tax. The B.C. government announced transitional incentives in the 2015 Budget to encourage the cement industry to adopt cleaner fuels and lower emissions, which supporters say will help the province’s cement sector remain competitive despite tax exemptions for imported cement. The change will help reduce greenhouse gas (GHG) emissions by both decreasing emissions caused by transporting cement from distant locations and encouraging additional domestic production of low-carbon cement, according to Pat Heale of cement manufacturer Lehigh Hanson.
Forestry investors are voting with their wallets and they aren’t impressed with the New Zealand government’s policies for climate change. The annual survey of forestry seedlings indicates that the total trees planted fell 6% from 2013 levels, after a dramatic 30% fall in 2012. This continued aversion to forestry results from the government’s decision to allow emitters to purchase imported carbon offsets rather than New Zealand Units (NZUs) issued to forest owners and from the more recent move to stop re-registration arbitrage. Forest owners used to register and collect their NZUs, but then surrendered emission reduction units (ERUs) and pocketed the cash difference. The new policy requires post-1989 forest owners to use only NZUs while emitters like oil companies can use ERUs for compliance.
With European parliamentarians examining the amount of carbon pollution allowed in upcoming years, it’s worth taking a look at what has recently occurred in the EU ETS. In 2013, 40% of power plants, airlines and other polluters had to pay for pollution allowances up from less than 5% the year before. From the $4.8 billion now raised under the EU ETS, 80% of the revenue has been invested back into clean energy or other climate-friendly initiatives. Emil Dimantchey, a Thomson Reuters Point Carbon analyst, said: “In this economic environment, it would have been tempting to use EU ETS money to plug national budget holes.” Across the pond, the two U.S. carbon trading systems, RGGI and California’s cap-and-trade program, re-invest 77% and 100% in climate initiatives, respectively.
Standards & Methodology
At the Clean Development Mechanism’s (CDM) 82nd meeting, the CDM Board decided to develop several new methodologies, including a new emissions baseline and monitoring methodology for the aviation sector and new methodologies in renewable energy, electrification and household energy supply. The CDM Board also adopted a baseline for methane emissions reductions from rice cultivation in the Philippines, which could open the door for further projects in the underrepresented agricultural sector.
Mexico’s Ozone Depleting Substances (ODS) Project Protocol is now open for public comment. The protocol is being developed under the Climate Action Reserve (CAR), with support from the Instituto para la Proteccií³n Ambiental and state of Nuevo Leí³n in Mexico. CAR will host an online public workshop on February 26 to discuss and answer questions on the draft protocol. CAR’s Board of Directors will review it on April 28.
Science & Technology
A team of researchers from Deakin University believe that carbon stored in swamps or freshwater wetlands could be 50 times more effective than rainforest carbon storage. The researchers are currently quantifying the level of carbon stocks in Australian wetlands and measuring the impact of restoration activities. Next up is figuring out methods to measure these changes with a quicker, more affordable assessment. Preliminary results suggest that wetlands can sequester up to 33% more carbon than terrestrial soils, even though they only cover 4% of the earth’s land surface.
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