This Week In V-Carbon: Taking Stock of California's Progress

n the two years since the implementation of California's carbon market, the state's Gross Domestic Product grew 2% while emissions in capped sectors dropped 3.8%. Across the pond, China has taken note. The nation is working closely with the Golden State through a number of partnerships-perhaps the most prominent being between the Air Resources Board and its Chinese counterpart known as the National Development and Reform Commission (NDRC). 

All eyes have been on the West Coast of the United States, with the recent completion of California's second joint auction with trading partner Québec and the launch of two reports about the state's cap-and-trade program.

The latest auction sold out its 73.6 million allowances, at an average $12.2 per allowance, for more than $1 billion total. However, another aspect of the cap-and-trade program – carbon offsets – have so far been underutilized. Under California's AB 32, the state law mandating greenhouse gas (GHG) emissions reductions, regulated companies may purchase up to 8% of their compliance obligations through offsets. As of last November, companies turned in only 1.7 million offsets out of a theoretical 11.6 million that could have been purchased.

Sales from the allowances will be reinvested in alternative energy sources, public transportation and other carbon-lowering activities through the state's Greenhouse Gas Reduction Fund. Additionally, 25% of the fund's money will be spent on reducing pollution in disadvantaged communities that are disproportionately affected by bad air quality.

Aside from the lackluster offsetting, a recent assessment of California's carbon market regarded the system as a tentative success. In the two years since implementation, the state's Gross Domestic Product grew 2% while emissions in capped sectors dropped 3.8%.

Across the (other) pond, China has taken note. According to the recent Asia Society report, A Vital Partnership, China is working closely with the Golden State through a number of partnerships. Perhaps the most prominent exists between the California Air Resources Board (ARB) and its Chinese counterpart known as the National Development and Reform Commission (NDRC).

Before signing the agreement, California Governor Jerry Brown said: "I see the partnership between China, between provinces in China, and the state of California as a catalyst and as a lever to change policies in the United States and ultimately change policies throughout the world."

Additional pilot projects have occurred at Chinese jurisdictional or province levels with U.S. civil society organizations like The Energy Foundation and The Environmental Defense Fund (EDF). EDF's Mobile Source Emissions Trading System Integration project is a five-year project launched last year with the Shenzhen Low Carbon Development Foundation that will focus on reducing air pollution from "mobile" transportation sources such as cars and buses. Currently, such sources account for nearly 30% of the city's total emissions.

Read more about those projects here.

Ecosystem Marketplace is closely tracking these and other developments in California in preparation for our brand-new North America carbon markets report. But this latest report is still missing a vital ingredient – your support! The North America and State of the Voluntary Carbon Market reports are contingent on receiving sufficient support.

To sponsor one of these exciting Ecosystem Marketplace products, contact Gloria Gonzalez.

Sponsors benefit from exposure – logo placement on reports that are downloaded tens of thousands of times and shout-outs in this news brief – as well as further insight into our findings through tailored briefings. And that's not to mention influence: Ecosystem Marketplace's reports have been cited in the development of emerging carbon pricing programs from South Africa to South Korea, and supporting our research is a good opportunity to influence these discussions.

More news from the voluntary carbon marketplace is summarized below, so keep reading!

—The Editors

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ANNOUNCEMENTS Supply Change project launch Forest Trends and Host Sustainable Brands will launch a new project called Supply Change during a webinar on March 25. The project, resulting from a partnership by the CDP, World Wildlife Fund and Ecosystem Marketplace, will provide up-to-the-minute accounting of corporate actions on deforestation relative to public pledges via the new Supply-Change.Org website. An inaugural report, Commodities, Corporations, and Commitments that Count, will also profile nearly 250 companies with more than 300 specific commitments to sustainable production or use of major forest-risk commodities (palm oil, soy, timber & pulp, cattle). Register here to attend the live web-launch of Supply Change hosted by Sustainable Brands VOLUNTARY CARBON Ascending to new (environmental) heights Asendia, the joint venture between European shippers La Poste and Swiss Post, has invested in a carbon offsets project in India to compensate for the carbon emissions it cannot reduce. The project in question has a combined 113 wind turbines across three Indian states that generate 470,000 megawatt-hours of renewable electricity, which equates to more than more than 41,000 tons equivalent of carbon dioxide emissions in offsets. The project was verified under a Verified Carbon Standard methodology. – Read more here Super Animals are ready to save the world Taronga Conservation Society Australia and Woolworths have teamed up to offset their Super Animals Wildlife Collectibles album and card series. The Urisino Ecosystem Regeneration Project, Australia’s first carbon project to focus on regenerating degraded land, will offset the carbon emissions from the paper manufacture of the collectible cards by saving 4,761 tonnes of carbon. Taronga Zoo Executive Director Cameron Kerr said: “The collectables campaign have been one of the most successful education initiatives, bringing Australian and international wildlife to hundreds of thousands of primary students... This offset program is the next important step in our commitment to the environment in support of wildlife.” – Read more here The straw that broke the carbon’s back LifeStraw, a water filtration device developed in 2005 by Mikkel Vestergaard, has been widely distributed throughout Kenya as an alternative to the traditional methods of purifying water by boiling dirty water over a fire. Working with the Gold Standard Foundation, Vestergaard determined emissions avoided per LifeStraw and sold carbon offsets to large corporations to fund the distribution of the straws. Despite local support, experts have questioned the data for calculating the emissions reductions and overall efficacy of the filters. In addition to external criticism, the original funding model has been economically challenged by the drop in price for carbon offsets from $30 per metric ton (tCO2e) in 2008 to $6/tCO2e in 2013. – Read more here 30 shades of green The World Wide Fund for Nature’s Project Luki works with external and local stakeholders to reduce deforestation and degradation in the Mayombe forest, located in the southwestern Democratic Republic of Congo (DRC). At the midpoint of the project, 165 hectares of 400 planned hectares of Acacia auriculiformis plantations have been developed, natural regeneration of 3,000 hectares of grazing savannah have been accomplished, and 30 pilot farms have been installed. The project aims to bring the DRC into the carbon market by sequestering the maximum amount of carbon, and to demonstrate community-based development. – Read more here Last lemurs standing Offsets from the Wildlife Conservation Society's Makira Natural Park project in Madagascar are now up for sale through the Stand for Trees campaign, which allows individuals to purchase offsets from avoided deforestation projects. The 1,438-square-mile park is home to more than 20 species of lemur. Half of the revenue from offset sales goes to local communities to support initiatives such as ecotourism, improved rice cultivation, and sustainable vanilla and clove production. The project joins 10 other REDD (reducing emissions from deforestation and forest degradation) projects that are part of the Stand for Trees campaign, with two more coming soon. – Read more here Winning the race from the middle Developer Green Assets has completed the first avoided conversion compliance offset project in the United States. The company's Middleton Place project has been issued more than 250,000 offsets by the California Air Resources Board, allowing the offsets to be used for compliance with the state's cap-and-trade program. The offsets would have a total value of more than $2 million based on current prices if sold at once, said Colby Hollifield, Middleton's woodlands manager. The project conserves more than 3,700 acres of southern coastal habitat near Charleston, South Carolina. – Read more here COMPLIANCE CARBON Trading places Korean trading firms Korea Carbon, Ecoeye and other companies are cancelling their Certified Emission Reductions (CERs) to register their projects in Korea's emissions trading system. There is little value for the 91 South Korean-based projects registered on the Clean Development Mechanism (CDM) as CER prices have dropped 98% from four years ago. Conversely, the new Korean compliance market lacks supply and has currently bid permits at 10,100 won ($8.96 USD) – a sharp cry from the below $1 prices on the CDM. To make the switch, a project must secure government approval before gaining the equivalent number of Korean Credit Units. – Read more here The market is cleaner... in China Dutch-based project developer China Carbon announced it wants to move nearly a third of its projects out of the CDM and into Chinese markets. Of the company's 64 projects, 20 will likely be switched to produce China Certified Emissions Reductions (CCERs). Jelena Stankovic, senior project manager at the company, explained that price is the main driver for this switch. The new Chinese pilot emissions trading systems (ETS) average $1.28 per tonne, while CDM offsets sold on the compliance exchange ICE Futures Europe average only $0.44 per tonne. – Read more here Agreeing to disagree As European Union countries, including Germany, Britain and France, have handed out around 500 million carbon permits to 2015 emitters, those same countries have debated the date to withdraw excess carbon allowances from the market. The Market Stability Reserve, an initiative to temporarily reduce the market supply of carbon allowances, was agreed upon last month by a European Parliament committee. Despite this initial consensus by the committee, political disagreement remains as countries argue over the timeframe. Some countries are pushing for a 2017 start while others such as coal-reliant Poland are calling for 2021. A senior European Commission official said he believes an agreement will be reached by late June. – Read more from Reuters India here – Read more from Reuters Africa here Burning out of (carbon) control As the Australian compliance market effectively ended in February, carbon project developers are now entering an uncertain future - and an uncertain market. Indigenous Land Corporation (ILC), one of the Northern Territory's longest running carbon farming projects, will soon begin its controlled burning 2015 program to reduce the frequency of late-season wildfires. Through the compliance market, the project sold some of its offsets for $500,000 Australian dollars. Now, ILC is exploring its options by looking into the voluntary carbon market and awaiting more details about the government's Emissions Reduction Fund (ERF). The first ERF auction, which still hasn’t disclosed the benchmark price, will open on April 15. – Read more here We’ll always have Paris Last week, Switzerland took the lead in carbon commitments as the first country to officially submit its post-2020 climate action plan. These plans, known officially as Intended Nationally Determined Contributions (INDCs), are instrumental to progress in this year's climate negotiations held in Paris. In an analysis of the plan, the World Resources Institute (WRI) says the Swiss proposal is clear and comprehensive, but also said the country may be relying too heavily on international offsets instead of domestic reductions. Yesterday, the European Union followed up with its own INDC submission. Despite its inclusion in the draft version, the final submission left out land use. – Read more from Ecosystem Marketplace here – Read more from Ecosystem Marketplace here Finance Manager, The Gold Standard Foundation Based in Geneva, Switzerland, the Finance Manager will be responsible for financial management, specific pieces of financial analyses to support management. Successful candidates will have experience designing and implementing financial processes, a deep interest in financial modelling, and a passion for sustainable development. A bachelor's degree in business, finance or accounting with a minimum of four years of experience is required, and a second language (French) is preferred. – Read more about the position here Pathway to Paris Climate Adaptation Associate, World Resources Institute Based in Washington, D.C., the Associate will be responsible for policy-relevant research, analysis and writing on adaptation-related elements of the United Nations Framework Convention on Climate Change and lead technical assistance and capacity development activities for developing country governments. Successful candidates will have five to seven years of professional work experience related to climate change, development, or international climate policy. A degree in environmental studies, international relations, economics or similar field is necessary, and a master’s or PhD is preferred. – Read more about the position here Senior Consultant Climate Finance, Energy research Centre of the Netherlands (ECN) Based in The Netherlands, the Senior Consultant will support developing country governments in policy development such as INDCs, Low-Carbon Development Strategies, and National Appropriate Mitigation Actions, and funding proposals to multilateral agencies. The successful candidate will have at least 10 years of experience in climate or development finance, an advanced degree in economics, international development/relations, governance and institutional analysis, environmental economics, or a related field is desired. – Read more about the position here Program Intern, Regional Greenhouse Gas Initiative (RGGI) Incorporated Based in New York, New York, the Intern will support tracking energy sector and RGGI compliance developments, performing research on GHG emissions reduction programs policy mechanisms, and supporting implementation of offsets protocols. The internship is scheduled from June to August 2015 and features a commitment of 15-20 hours per week. – Read more about the position here Communications Officer, The World Bank Based in Washington, D.C., the Communications Officer will help conceptualize, develop and deliver communications for the Forest and Landscapes Green Team at the World Bank. A master's in communications, international relations, public affairs, journalism, marketing, information management or other related disciplines, with a minimum of five years of experience is required. – Read more about the position here Carbon Finance Methodology Specialist, The World Bank Based in Washington, D.C., the Carbon Finance Methodology Specialist will assist the implementation of large-scale REDD+ programs, focusing primarily on methodological aspects associated with measuring, reporting and verification of results of emission reduction programs. An advanced degree in environmental science, natural resource management/forestry, geography, environmental policy or environmental economics, and at least five years of experience in relevant sectors is desirable. – Read more about the position here Source: http://www.ecosystemmarketplace.com/pages/dynamic/article.page.php?page_id=10854&section=news_articles&eod=1