karbon: Juni 2009

Mohamad Rayan. Researcher.

Timber today, or climate tomorrow

By David Shukman Science correspondent, BBC News, Danum Valley, Borneo
The anatomy of a rainforest

On a muddy track in the tropical heat of Malaysian Borneo, the dilemma of how a poor nation should handle its globally-important rainforest becomes painfully clear.
Just beside the track, in a spectacular landscape of mist woven among the towering trees, a team of forestry workers is busy planting a sapling, one of thousands in a project to rehabilitate woodland ravaged by decades of logging.

A young tree is gingerly lowered into the soil amid hopes that it will grow to a majestic height, absorbing carbon dioxide as it soars and locking away the carbon for centuries to come.
Yet no sooner have the workers finished then a loud rumbling can be heard. A huge truck approaches carrying a vast load of freshly-felled timber.

It is the first in a convoy. In the space of a few minutes, I see at least twenty massive tree trunks hauled past us, each representing a tidy profit - and another loss in the rainforest's ability to soak up greenhouse gases.

It is because the rainforests are seen as key to the future course of climate change that their fate is now centre-stage in negotiations on tackling global warming.
Deforestation is estimated to be responsible for around 20% of all greenhouse gas emissions - more than all forms of transport put together.
Proposals to reward the rainforest nations for leaving their trees intact will be discussed during this week's UN climate conference in Bali.

Money for old wood
As the logging trucks thunder by, I turn to Dr Waidi Sinun, a senior official with the Sabah Foundation, a government-owned charity that manages the lands in this area of Malaysia.
The timber trade brings much-needed money to the region
For years, this organisation has funded scholarships with the proceeds of logging, while at the same time being noted for conserving large areas of forest.
"I am a product of timber," Dr Sinun tells me. He himself received a scholarship that eventually led to a doctorate in the UK.

"I wouldn't have gone to school or be here talking to you now if it wasn't for timber - but I'm also sad when I see what's happened to the forest. It's a question of balance."
And there's the dilemma: in a developing country, timber fetches a good price and, if the forest is cleared, then plantations of oil palms do very well too. But there is a cost, which is becoming more widely understood.

The tropical rainforests - running in a belt around the Equator from the Amazon, through Congo to South-East Asia - are not only a vast store of carbon, but also have a direct impact on global weather patterns.

The problem is that the "rainforests are worth more dead than alive", according to Dr Glen Reynolds, senior scientist at the Danum Valley Field Centre, a research station sponsored by the Royal Society.

The centre has pioneered the study of the so-called rainforest canopy, the interface between the trees and the atmosphere.
Carefully roped up, I make the hair-raising climb up to one tree-top 33 metres above the forest floor.

There, perched on a tiny platform, I meet Kalsum Mohammed Yusah, a young Malaysian researcher who is currently studying at the University of Cambridge.
What does she think about the loss of the rainforests? "They are storing carbon; chopping them down means less leaves to absorb it."
But stopping that process will require ingenious diplomacy and generous financing. In the meantime, the mud of the jungle tracks will continue to be churned by the crushing weight of the timber lorries.

You can watch David Shukman's report from Borneo's rainforest on the Ten O'Clock News on BBC One and this website, Monday 10 December, 2200 GMT
Norway pledges billions for rainforest preservation
Norway's left-center government coalition and the opposition parties in Parliament have agreed to fund rainforest preservation efforts, to the tune of NOK 3 billion a year.
Norway is initiating a major funding drive to save the world's rainforests.
PHOTO: REUTERS/HARDI BAKTIANTORO

"This is fantastic," said an enthusiastic Lars Haltbrekken of Norway's chapter of Friends of the Earth (Naturvernforbund). He has earlier criticized the government for failing to come up with sufficient concrete measures to halt global warming.

Rainforest preservation is viewed as an important means of reducing carbon emissions, because it can halt the burning that often comes with deforestation. Some experts claim that stopping the destruction of the world's rainforests is among the fastest, cheapest and most meaningful methods to reduce the amount of dangerous emissions into the atmosphere.

Norwegian Prime Minister Jens Stoltenberg discussed rainforest preservation just last week with his British counterpart Gordon Brown, who also promotes measures to preserve rainforests.

Opposition pushed for fundingThe proposal for Norway to fund rainforest preservation efforts came from both Friends of the Earth Norway and the Rainforest Foundation Norway (Regnskogfondet). Opposition parties in the parliament included it in their negotiations for climate change measures.

Now Haltbrekken hopes other countries will also commit to funding rainforest preservation on the same scale as Norway. "Norway must now invite the 20 other wealthiest countries in the world to do the same," he said. "Then we'll really be on the way to saving the climate."
Other environmental activists called the funding vow a "win-win situation for the climate." Norway can contribute to reduce total emissions worldwide, while also trying to reduce emissions at home, which are relatively high because of the country's oil and gas industry.
Rainforest preservation can also help build bridges between poor and rich countries at the UN's climate conference now taking place in Bali, said Lars Løvold of the Rainforest Foundation.
It remained unclear when the first funding allotment of NOK 3 billion (around USD 560 million) would be released, but opposition politicians from both the Conservative and the Liberal parties said they'd fight hard for funding to begin next year.

World Bank Launches Forest Carbon Fund NUSA DUA, Indonesia - The World Bank on Tuesday launched plans for a US$300 million fund to fend off global warming by preserving forests, but protesters said it risked turning homes of indigenous people into an asset for the rich.The new financing mechanism, launched at UN talks on tackling climate change, aims to turn better forest management into a tradeable commodity to try to halt destruction so rapid it accounts for around a fifth of annual carbon emissions."If we don't focus on retaining the world's remaining tropical forests, we drastically narrow the options for reducing greenhouse gas emissions," World Bank President Robert Zoellick told the project's launch."Deforestation and changes in land use are the second leading cause of global warming," he said, adding the project was just the start of tackling the problem.He quoted economist Nicholas Stern's estimate that more than US$5 billion a year was needed to halt deforestation.A US$100 million "readiness" fund will provide grants to around 20 countries to prepare them for large-scale forest protection under a future climate change deal, also known as reducing emissions from deforestation and degradation (REDD) in developing countries.

Grants will fund projects including surveys of current forest assets, monitoring systems and tightening governance.A second US$200 million "carbon finance mechanism" will allow some of these countries to run pilot programmes earning credits for curbing deforestation. The credits will belong to the countries or groups that put up the cash for the fund.Of the US$300 million, they already have US$160 million pledged from seven developed countries, the World Bank said.Emissions cuts from forest areas are not yet eligible for formal credits because they were excluded from the Kyoto Protocol's first round, which runs out in 2012, but they may be able to sell them on voluntary markets.The projects could include anything from straight foward reforestation and better zoning of agricultural and forest lands, to paying people for environmental services or improving management of forest areas, said the World Bank forest and climate change official Benoit Bosquet.There is interest from around 30 countries for projects that many in the carbon trading industry and developing nations fighting deforestation hope could provide a model for financing forest protection in a successor deal to Kyoto.The World Bank had previously said it was in talks with Papua New Guinea, Costa Rica and Indonesia, and regional bodies in Brazil and the Democratic Republic of Congo.

INDIGENOUS CONCERNSBut indigenous and environmental groups say they are worried deals to prioritize the carbon-retaining value of forests might exclude some of the people who have most at stake."While the facility can be a good thing, we are very apprehensive on how this will work because of our negative historical and present experiences with similar initiatives," said Victoria Tauli-Corpuz, Chair of the United Nations' Permanent Forum on Indigenous Issues.An indigenous person herself, she said the forests targeted by the initiative were home to 160 million people who were custodians of forest biodiversity and should be involved in the design and management of the projects as equal players."The success of efforts to lower carbon emissions from reduced or avoided deforestation hinges primarily on whether indigenous people throw their full support behind these mechanisms," Tauli-Corpuz said.Outside the conference centre, protesters were handing out cartoons of worried indigenous people massed outside a fenced off forest, thinking of their homes, religious sites, food and fuel that were now off limits.
For Reuters latest environment blogs click on: http://blogs.reuters.com/environment/ (Editing by David Fogarty)Story by Emma Graham-HarrisonStory Date: 12/12/2007
Voluntary Carbon Market to Boom in Asia, US
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SINGAPORE: November 8, 2007
SINGAPORE - Trading in voluntary carbon markets is booming as companies, in top customer the United States but also in Asia, rush to offset their impact on global warming outside a regulated Kyoto protocol scheme.

Trade in the voluntary carbon market, until now a tiny part of a global carbon market worth at least US$60 billion this year, occurs outside the UN's Kyoto Protocol, which sets mandatory emission limits on developed countries that ratified the pact.
"I see the voluntary carbon market dividing about 50/50 between Asia and America," Anne-Marie Warris, the head of global greenhouse gas initiatives of verification firm Lloyds Register, said on Wednesday in Singapore.

That would be a shift from the current distribution, where companies in the United States, which lacks mandatory limits on the gases and pulled out of the Kyoto Protocol, made up almost 70 percent of the unregulated carbon market's customers.
"The emissions of big organisations here are not capped because their emissions are not part of any system," Warris said.

"I can see them beginning to want to do something about their carbon footprint."
Global voluntary greenhouse trade hit 23.7 million tonnes of carbon dioxide (CO2) equivalent, worth about US$91 million, in 2006. Warris said she expected that to grow to some 1.2 billion tonnes by 2012.
CREDIBILITY GAP
Because it is a voluntary market, emission cuts outside the Kyoto trading scheme are not always verified and projects have suffered from a lack of credibility.
Many companies now "offset" their emissions by investing in projects elsewhere such as burning methane from landfills, mainly to enhance their image of environmental stewardship and corporate social responsibility, not traditionally values associated with Asian companies.
Fewer European customers participate in the voluntary market because companies there mostly trade carbon on the regulated EU emissions trading market to meet their countries' mandatory Kyoto Protocol targets.
But some have said that current uncertainty over the future of the UN-led scheme, after Kyoto obligations expire in 2012, as well as delays in the project approval process, will lead to an influx of capital into voluntary trades.
The types of projects in the voluntary market differed fundamentally from the regulated United Nations-administered market and would continue to do so.
"You'll see a lot of replacing light bulbs and those sorts of projects, which are currently very hard to deal with in the CDM (clean development mechanism). They tend to think about much bigger investment projects," Warris said on the sidelines of a carbon market conference in the city state.
Various performance standards are being developed to meet criticism that the voluntary market is plagued by investment in questionable projects that may not actually cut emissions of the gases scientists link to global warming. (Editing by Anthony Barker)
Story by Annika Breidthardt
REUTERS NEWS SERVICE

Subject: [--> Header--] - New global forest agreement depends on local support - Email has different SMTP TO: and MIME TO: fields in the email addresses

Ladies and Gentlemen, Dear friends,
please find below a recent report on an encouraging development at the UN General Assembly in New York. With this message, we would like to say good-bye to you for this year. We hope we have been able to provide you some relevant insight information into developments regarding the forest sector and the rights of indigenous communities with a focus on the Penan communities living in the rainforests of the East Malaysian state of Sarawak. We are determined to continue and improve our work in the new year and wish you all a happy and prosperous 2008.
With best wishes,
Your BMF e-news team

New Global Forest Agreement Depends on Local Support
NEW YORK, New York, December 27, 2007 (ENS) - The motivation of local people to safeguard their own forest resources is central to a new global forest protection ageement reached by the UN General Assembly last week.
Fifteen years after global discussions began on how to protect the world's forests, the General Assembly has adopted a new international forest agreement that is human-centered in its orientation. While it recognizes the role of forests in conservation of biodiversity and other environmental services, the agreement puts a strong emphasis on people and communities that depend on forests for their income and livelihoods.
"This is a paradigm shift," said Pekka Patosaari, director of the UN Forum on Forests Secretariat.
It means that through the concept of sustainable forest management "policymakers can better judge the value of their forests, in a way that ensures long-term health and sustainability of this important natural resource," he said.
Speaking at a special event held by the UN General Assembly on December 17 to adopt the agreement, Patosaari said, "Almost all recent success stories of restoring the world's forests are, in one way or another, based on better recognition of the needs and actions of local peoples, their ownership and access rights and ancient knowledge of indigenous tribes and communities."
Illegal logging in the Brazilian Amazon (Photo courtesy Greenpeace)
"Today, forests are disappearing, not only because of a lack of knowledge on how to manage and conserve them, but also because we have not been able to establish national or international regimes or support mechanisms which would directly support people's ownership and motivation to use the forest patrimony for the benefit of themselves and the rest of society," Patosaari said.
The agreement, entitled the "Non-Legally Binding Instrument on All Types of Forests," was negotiated in April within the UN Forum on Forests and transmitted to the General Assembly following its approval by the UN Economic and Social Council.
While not legally binding, the agreement approved on on December 17 sets a standard in forest management that is expected to impact efforts to reverse the loss of forest cover, reduce deforestation, prevent forest degradation, promote sustainable livelihoods and reduce poverty for people dependent on forests for their survival.
"There is much more to this instrument than just protecting trees," General Assembly President Srgjan Kerim said at a special event following the adoption of the agreement. He emphasized the growing recognition of the role of forests in stabilizing climate change, and protecting biodiversity and ecosystems.
"And let us not forget that today, over 1.6 billion people depend on forests for fuel, food, medicine and income," he said. "So protecting forests really means fostering sustainable development."
Forests need to be protected because they are disappearing at an alarming rate, said Kerim, noting that over the past 15 years, more than three percent of the planet's forests had vanished. "The instrument we have just adopted thus expresses our will to respond to this alarming trend."
In Indonesia, which has been losing forests to illegal loggers at a rapid rate, President Susilo Bambang Yudhoyono Wednesday called on his countrymen to plant trees in a effort to avoid flood and landslide disasters.
Witnessing a simulation on tsunami drill at Gunung Sugih subdistrict in Cilegon, Banten to mark the third anniversary of the deadly Asian tsunami which hit Aceh province on December 26, 2004, the president said widespread deforestation could cause floods, landslides and land erosion.
Landslides and floods triggered by heavy rain this week have left over 120 people dead or missing on Indonesia's Java island. Thousands of people have been left homeless.
Illegal logging is occurring just outside Indonesia's Bukit Tigapuluh National Park on the island of Sumatra. (Photo courtesy JATAN)
Yudhoyono called on regional governments and all public agencies to plant trees in barren areas to save the Earth from global warming and climate change.
The use of wood energy can help reduce greenhouse gas emissions and can contribute to poverty reduction, according to the latest study on global uses for wood presented by the UN Food and Agriculture Organization, FAO, in November.
But the UN agency warned that the use of wood for fuel can result in deforestation or forest degradation if sustainable forest management is not effectively practiced.
Today half of the annual global harvest of roundwood is used for energy, the FAO paper states. More than two billion people depend on wood for their daily energy demand, mainly for cooking, heating and small industrial production.
In sub-Saharan Africa, fuelwood and charcoal supply over 70 percent of the national energy demand.
Now, in addition to the traditional uses of wood for fuel, wood is seen as valuable feedstock for biofuel production.
High oil prices, the need for secure energy supplies and concerns over climate change have led to a new interest in bioenergy that could affect forests because forests occupy land which could be used for crops producing liquid biofuels.
Forests and forest residues could become even more important for the direct conversion to liquid biofuels. Some experts predict that wood will become the major source of biofuels in the future, replacing agricultural crops and residues.
"Despite the apparent benefits of biofuels, caution should be exercised when planning and implementing large-scale liquid bio-fuel projects," said Wulf Killmann, director of FAO's Forest Products and Industries Division.
"Governments should ensure that there are no serious negative impacts on the environment and society," he said.
Agro-fuel crops might expand into forests, generating land use conflicts and increasing deforestation, with implications for biological diversity, climate change and water.
The FAO called upon countries to develop their wood energy sectors in line with sustainable forest management concepts and to introduce safeguards for the production of liquid biofuels to avoid unwanted negative impacts on the environment and local populations.
At the special event at UN Headquarters, Under-Secretary-General for Economic and Social Affairs Sha Zukang spanned the gap between local and global, saying, "To enable forests to contribute to the overall development of society, we need further pro-poor, pro-nature and pro-growth actions that link trees and forests to the achievement of the internationally agreed development goals."
Copyright Environment News Service (ENS) 2007. All rights reserved.

United Nations A/C.2/62/L.5
General Assembly
Distr.: Limited
22 October 2007
Original: English
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*0755767*
Sixty-second session
Second Committee
Agenda item 54
Sustainable development
Non-legally binding instrument on all types of forests
Note by the Secretariat
By its resolution 2007/40 of 17 October 2007, the Economic and Social
Council recommended to the General Assembly the adoption of the following draft
resolution:

“Non-legally binding instrument on all types of forests
The General Assembly,
Recalling Economic and Social Council resolution 2006/49 of 28 July
2006, in which the Council requested the United Nations Forum on Forests to
conclude and adopt at its seventh session a non-legally binding instrument on
all types of forests,
1. Decides to adopt the non-legally binding instrument on all types of
forests as contained in the annex to the present resolution;
2. Invites members of the governing bodies of the member
organizations of the Collaborative Partnership on Forests to support the
implementation of the non-legally binding instrument on all types of forests,
consistent with the mandates of those organizations, and, to that end, invites
the United Nations Forum on Forests to provide guidance to the Collaborative
Partnership on Forests;
3. Also invites donor Governments and other countries in a position to
do so, financial institutions and other organizations to make voluntary
financial contributions to the Trust Fund of the United Nations Forum on
Forests for it to address, within the context of its multi-year programme of
work, the implementation of the non-legally binding instrument on all types of
forests and to provide support for participants from developing countries and
countries with economies in transition to attend meetings of the Forum;
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4. Decides that the Forum will review the effectiveness of the
non-legally binding instrument on all types of forests as part of the overall
review of the effectiveness of the international arrangement on forests decided
upon by the Economic and Social Council in its resolution 2006/49 of 28 July
2006.

Annex
Non-legally binding instrument on all types of forests
Member States,
Recognizing that forests and trees outside forests provide multiple
economic, social and environmental benefits and emphasizing that sustainable
forest management contributes significantly to sustainable development and
poverty eradication,
Recalling the Non-legally Binding Authoritative Statement of Principles
for a Global Consensus on Management, Conservation and Sustainable
Development of All Types of Forests;a chapter 11 of Agenda 21;b the
proposals for action of the Intergovernmental Panel on
Forests/Intergovernmental Forum on Forests; resolutions and decisions of the
United Nations Forum on Forests; the Johannesburg Declaration on
Sustainable Development and the Plan of Implementation of the World Summit
on Sustainable Development;c the Monterrey Consensus of the International
Conference on Financing for Development;d and the internationally agreed
development goals, including the Millennium Development Goals; the 2005
World Summit Outcome;e and existing international legally binding
instruments relevant to forests,
Welcoming the accomplishments of the international arrangement on
forests since its inception by Economic and Social Council resolution 2000/35
of 18 October 2000, and recalling the decision of the Council, in resolution
2006/49 of 28 July 2006, to strengthen the international arrangement on
forests,
Reaffirming their commitment to the Rio Declaration on Environment
and Development,f including that States have, in accordance with the Charter
of the United Nations and the principles of international law, the sovereign
__________________
a Report of the United Nations Conference on Environment and Development, Rio de Janeiro,
3-14 June 1992 (United Nations publication, Sales No. E.93.I.8 and corrigenda), vol. I:
Resolutions adopted by the Conference, resolution 1, annex III.
b Ibid., annex II.
c Report of the World Summit on Sustainable Development, Johannesburg, South Africa,
26 August-4 September 2002 (United Nations publication, Sales No. E.03.II.A.1 and
corrigendum), chap. I, resolution 1, annex 1 and resolution 2, annex.
d Report of the International Conference on Financing for Development, Monterrey, Mexico,
18-22 March 2002 (United Nations publication, Sales No. E.02.II.A.7), chap. I, resolution 1,
annex.
e Resolution 60/1.
f Report of the United Nations Conference on Environment and Development, Rio de Janeiro,
3-14 June 1992, vol. I: Resolutions adopted by the Conference (United Nations publication,
Sales No. E.93.I.8 and corrigenda), resolution 1, annex I.
A/C.2/62/L.5
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right to exploit their own resources pursuant to their own environmental and
developmental policies and the responsibility to ensure that activities within their
jurisdiction or control do not cause damage to the environment of other States or
of areas beyond the limits of national jurisdiction and to the common but
differentiated responsibilities of countries, as set out in Principle 7 of the Rio
Declaration on Environment and Development,
Recognizing that sustainable forest management, as a dynamic and evolving
concept, aims to maintain and enhance the economic, social and environmental
values of all types of forests, for the benefit of present and future generations,
Expressing their concern about continued deforestation and forest
degradation, as well as the slow rate of afforestation and forest cover recovery and
reforestation, and the resulting adverse impact on economies, the environment,
including biological diversity, and the livelihoods of at least a billion people and
their cultural heritage, and emphasizing the need for more effective
implementation of sustainable forest management at all levels to address these
critical challenges,
Recognizing the impact of climate change on forests and sustainable forest
management, as well as the contribution of forests to addressing climate change,
Reaffirming the special needs and requirements of countries with fragile
forest ecosystems, including those of low forest cover countries,
Stressing the need to strengthen political commitment and collective efforts
at all levels, to include forests in national and international development agendas,
to enhance national policy coordination and international cooperation and to
promote intersectoral coordination at all levels for the effective implementation of
sustainable management of all types of forests,
Emphasizing that effective implementation of sustainable forest management
is critically dependent upon adequate resources, including financing, capacitydevelopment
and the transfer of environmentally sound technologies, and
recognizing in particular the need to mobilize increased financial resources,
including from innovative sources, for developing countries, including least
developed countries, landlocked developing countries and small island developing
States, as well as countries with economies in transition,
Also emphasizing that implementation of sustainable forest management is
also critically dependent upon good governance at all levels,
Noting that the provisions of this instrument do not prejudice the rights and
obligations of Member States under international law,
Have committed themselves as follows:
I. Purpose
1. The purpose of this instrument is:
(a) To strengthen political commitment and action at all levels to
implement effectively sustainable management of all types of forests and to
achieve the shared global objectives on forests;
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(b) To enhance the contribution of forests to the achievement of the
internationally agreed development goals, including the Millennium
Development Goals, in particular with respect to poverty eradication and
environmental sustainability;
(c) To provide a framework for national action and international
cooperation.
II. Principles
2. Member States should respect the following principles, which build upon
the Rio Declaration on Environment and Developmentf and the Rio Forest
Principles:a
(a) The instrument is voluntary and non-legally binding;
(b) Each State is responsible for the sustainable management of its
forests and for the enforcement of its forest-related laws;
(c) Major groups as identified in Agenda 21,g local communities, forest
owners and other relevant stakeholders contribute to achieving sustainable
forest management and should be involved in a transparent and participatory
way in forest decision-making processes that affect them, as well as in
implementing sustainable forest management, in accordance with national
legislation;
(d) Achieving sustainable forest management, in particular in
developing countries as well as in countries with economies in transition,
depends on significantly increased, new and additional financial resources
from all sources;
(e) Achieving sustainable forest management also depends on good
governance at all levels;
(f) International cooperation, including financial support, technology
transfer, capacity-building and education, plays a crucial catalytic role in
supporting the efforts of all countries, particularly developing countries as well
as countries with economies in transition, to achieve sustainable forest
management.
III. Scope
3. The instrument applies to all types of forests.
4. Sustainable forest management, as a dynamic and evolving concept, aims
to maintain and enhance the economic, social and environmental values of all
types of forests, for the benefit of present and future generations.
__________________
g The major groups identified in Agenda 21 are women, children and youth, indigenous people
and their communities, non-governmental organizations, local authorities, workers and trade
unions, business and industry, scientific and technological communities, and farmers.
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IV. Global objectives on forests
5. Member States reaffirm the following shared global objectives on forests
and their commitment to work globally, regionally and nationally to achieve
progress towards their achievement by 2015:
Global objective 1
Reverse the loss of forest cover worldwide through sustainable forest
management, including protection, restoration, afforestation and reforestation,
and increase efforts to prevent forest degradation;
Global objective 2
Enhance forest-based economic, social and environmental benefits,
including by improving the livelihoods of forest dependent people;
Global objective 3
Increase significantly the area of protected forests worldwide and other
areas of sustainably managed forests, as well as the proportion of forest
products from sustainably managed forests;
Global objective 4
Reverse the decline in official development assistance for sustainable
forest management and mobilize significantly increased, new and additional
financial resources from all sources for the implementation of sustainable
forest management.
V. National policies and measures
6. To achieve the purpose of the instrument, and taking into account
national policies, priorities, conditions and available resources, Member States
should:
(a) Develop, implement, publish and, as necessary, update national
forest programmes or other strategies for sustainable forest management which
identify actions needed and contain measures, policies or specific goals, taking
into account the relevant proposals for action of the Intergovernmental Panel
on Forests/Intergovernmental Forum on Forests and resolutions of the United
Nations Forum on Forests;
(b) Consider the seven thematic elements of sustainable forest
management,h which are drawn from the criteria identified by existing criteria
and indicators processes, as a reference framework for sustainable forest
management and, in this context, identify, as appropriate, specific
__________________
h The elements are (i) extent of forest resources; (ii) forest biological diversity; (iii) forest health
and vitality; (iv) productive functions of forest resources; (v) protective functions of forest
resources; (vi) socio-economic functions of forests; and (vii) legal, policy and institutional
framework.
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environmental and other forest-related aspects within those elements for
consideration as criteria and indicators for sustainable forest management;
(c) Promote the use of management tools to assess the impact on the
environment of projects that may significantly affect forests, and promote
good environmental practices for such projects;
(d) Develop and implement policies that encourage the sustainable
management of forests to provide a wide range of goods and services, and that
also contribute to poverty reduction and the development of rural
communities;
(e) Promote efficient production and processing of forest products,
with a view inter alia to reducing waste and enhancing recycling;
(f) Support the protection and use of traditional forest-related
knowledge and practices in sustainable forest management with the approval
and involvement of the holders of such knowledge, and promote fair and
equitable sharing of benefits from their utilization, in accordance with national
legislation and relevant international agreements;
(g) Further develop and implement criteria and indicators for
sustainable forest management that are consistent with national priorities and
conditions;
(h) Create enabling environments to encourage private-sector
investment, as well as investment by and involvement of local and indigenous
communities, other forest users and forest owners and other relevant
stakeholders, in sustainable forest management, through a framework of
policies, incentives and regulations;
(i) Develop financing strategies that outline the short-, medium- and
long-term financial planning for achieving sustainable forest management,
taking into account domestic, private-sector and foreign funding sources;
(j) Encourage recognition of the range of values derived from goods
and services provided by all types of forests and trees outside forests, as well
as ways to reflect such values in the marketplace, consistent with relevant
national legislation and policies;
(k) Identify and implement measures to enhance cooperation and crosssectoral
policy and programme coordination among sectors affecting and
affected by forest policies and management, with a view to integrating the
forest sector into national decision-making processes and promoting
sustainable forest management, including by addressing the underlying causes
of deforestation and forest degradation, and by promoting forest conservation;
(l) Integrate national forest programmes, or other strategies for
sustainable forest management, as referred to in paragraph 6 (a) above, into
national strategies for sustainable development, relevant national action plans
and poverty reduction strategies;
(m) Establish or strengthen partnerships, including public-private
partnerships, and joint programmes with stakeholders to advance the
implementation of sustainable forest management;
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(n) Review and, as needed, improve forest-related legislation,
strengthen forest law enforcement, and promote good governance at all levels
in order to support sustainable forest management, to create an enabling
environment for forest investment and to combat and eradicate illegal
practices, in accordance with national legislation, in the forest and other
related sectors;
(o) Analyse the causes of and address threats to forest health and
vitality from natural disasters and human activities, including threats from fire,
pollution, pests, disease and invasive alien species;
(p) Create, develop or expand, and maintain networks of protected
forest areas, taking into account the importance of conserving representative
forests, by means of a range of conservation mechanisms, applied within and
outside protected forest areas;
(q) Assess the conditions and management effectiveness of existing
protected forest areas with a view to identifying improvements needed;
(r) Strengthen the contribution of science and research in advancing
sustainable forest management by incorporating scientific expertise into forest
policies and programmes;
(s) Promote the development and application of scientific and
technological innovations, including those that can be used by forest owners
and local and indigenous communities to advance sustainable forest
management;
(t) Promote and strengthen public understanding of the importance of
and the benefits provided by forests and sustainable forest management,
including through public awareness programmes and education;
(u) Promote and encourage access to formal and informal education,
extension and training programmes on the implementation of sustainable forest
management;
(v) Support education, training and extension programmes involving
local and indigenous communities, forest workers and forest owners, in order
to develop resource management approaches that will reduce the pressure on
forests, particularly fragile ecosystems;
(w) Promote active and effective participation by major groups, local
communities, forest owners and other relevant stakeholders in the
development, implementation and assessment of forest-related national
policies, measures and programmes;
(x) Encourage the private sector, civil society organizations and forest
owners to develop, promote and implement in a transparent manner voluntary
instruments, such as voluntary certification systems or other appropriate
mechanisms, to develop and promote forest products from sustainably
managed forests harvested in accordance with domestic legislation, and to
improve market transparency;
(y) Enhance access by households, small-scale forest owners, forestdependent
local and indigenous communities, living in and outside forest
areas, to forest resources and relevant markets in order to support livelihoods
A/C.2/62/L.5
8 07-55767
and income diversification from forest management, consistent with
sustainable forest management.
VI. International cooperation and means of implementation
7. To achieve the purpose of the instrument, Member States should:
(a) Make concerted efforts to secure sustained high-level political
commitment to strengthen the means of implementation of sustainable forest
management, including financial resources, to provide support, in particular
for developing countries and countries with economies in transition, as well as
to mobilize and provide significantly increased, new and additional financial
resources from private, public, domestic and international sources to and
within developing countries, as well as countries with economies in transition;
(b) Reverse the decline in official development assistance for
sustainable forest management and mobilize significantly increased, new and
additional financial resources from all sources for the implementation of
sustainable forest management;
(c) Take action to raise the priority of sustainable forest management in
national development plans and other plans, including poverty reduction
strategies, in order to facilitate increased allocation of official development
assistance and financial resources from other sources for sustainable forest
management;
(d) Develop and establish positive incentives, in particular for
developing countries as well as countries with economies in transition, to
reduce the loss of forests, to promote reforestation, afforestation and
rehabilitation of degraded forests, to implement sustainable forest management
and to increase the area of protected forests;
(e) Support the efforts of countries, particularly developing countries
as well as countries with economies in transition, to develop and implement
economically, socially and environmentally sound measures that act as
incentives for the sustainable management of forests;
(f) Strengthen the capacity of countries, in particular developing
countries, to significantly increase the production of forest products from
sustainably managed forests;
(g) Enhance bilateral, regional and international cooperation with a
view to promoting international trade in forest products from sustainably
managed forests harvested according to domestic legislation;
(h) Enhance bilateral, regional and international cooperation to address
illicit international trafficking in forest products through the promotion of
forest law enforcement and good governance at all levels;
(i) Strengthen, through enhanced bilateral, regional and international
cooperation, the capacity of countries to combat effectively illicit international
trafficking in forest products, including timber, wildlife and other forest
biological resources;
A/C.2/62/L.5
07-55767 9
(j) Strengthen the capacity of countries to address forest-related illegal
practices in accordance with domestic legislation, including wildlife poaching,
through enhanced public awareness, education, institutional capacity-building,
technological transfer and technical cooperation, law enforcement and
information networks;
(k) Enhance and facilitate access to and transfer of appropriate,
environmentally sound and innovative technologies and corresponding knowhow
relevant to sustainable forest management and to efficient value-added
processing of forest products, in particular to developing countries, for the
benefit of local and indigenous communities;
(l) Strengthen mechanisms that enhance sharing among countries and
the use of best practices in sustainable forest management, including through
freeware-based information and communications technology;
(m) Strengthen national and local capacity in keeping with their
conditions for the development and adaptation of forest-related technologies,
including technologies for the use of fuelwood;
(n) Promote international technical and scientific cooperation,
including South-South cooperation and triangular cooperation, in the field of
sustainable forest management, through the appropriate international, regional
and national institutions and processes;
(o) Enhance the research and scientific forest-related capacities of
developing countries and countries with economies in transition, particularly
the capacity of research organizations to generate and have access to forestrelated
data and information, and promote and support integrated and
interdisciplinary research on forest-related issues, and disseminate research
results;
(p) Strengthen forestry research and development in all regions,
particularly in developing countries and countries with economies in
transition, through relevant organizations, institutions and centres of
excellence, as well as through global, regional and subregional networks;
(q) Strengthen cooperation and partnerships at the regional and
subregional levels to promote sustainable forest management;
(r) As members of the governing bodies of the organizations that form
the Collaborative Partnership on Forests, help ensure that the forest-related
priorities and programmes of members of the Partnership are integrated and
mutually supportive, consistent with their mandates, taking into account
relevant policy recommendations of the United Nations Forum on Forests;
(s) Support the efforts of the Collaborative Partnership on Forests to
develop and implement joint initiatives.
VII. Monitoring, assessment and reporting
8. Member States should monitor and assess progress towards achieving the
purpose of this instrument.
A/C.2/62/L.5
10 07-55767
9. Member States should submit, on a voluntary basis, taking into account
the availability of resources and the requirements and conditions for the
preparation of reports for other bodies or instruments, national progress reports
as part of their regular reporting to the Forum.
VIII. Working modalities
10. The Forum should address, within the context of its multi-year
programme of work, the implementation of this instrument.”
Are Forests Like a Bag of Beans?

Conversations on REDD in Bali
by Steve Zwick
A last-minute decision to put Reduced Emissions from Deforestation and Degradation (REDD) on the roadmap for future climate change talks opens the door to innovative financing schemes to reduce deforestation. Such schemes have long been advocated by investment banks and traders – who are expected to play an ever larger role in framing future climate change mitigation mechanisms. The Ecosystem Marketplace takes a closer look. (First of two parts)When trader David Pearse says that buying emission reduction certificates should be more like buying bags of beans, environmentalist Richard Worthington cringes and forestry expert Anna Lehmann rolls her eyes. But his amoral market talk may be on the ascendant after this week's climate change talks in Bali."Practically no one here today has any understanding of financial markets or instruments, and yet they've taken it on their hands to create the most important financial market on the planet," says Pearse, a geologist by training who, as a commodity trader, set up Deutsche Bank's carbon trading desk in 2000. Today he runs an ecosystem investment group called Osmia Partners and says the mechanisms designed to promote Reduced Emissions from Deforestation and Degradation (REDD) are riddled with bad finance, perverse incentives, and market distortions.It is a problem nearly everyone in Bali was increasingly willing to acknowledge as the weeks wore on, with scores of debates focusing on how to set national baselines to determine the extent to which different parties are rewarded for reducing deforestation. Until Friday, the only mechanisms officially on the table were those basing future targets on recent rates of deforestation and other socioeconomic factors rather than on carbon already in trees (For background on the debate over determining baselines and avoided deforestation, see: Carbon and Avoided Deforestation: The Road to Bali). Countries and regions that had already reduced deforestation were haggling to get credit for early action, while scientists were coming up with ever more complex "baselining" strategies designed to mitigate the distortions.On the final day of negotiations, however, a clause was inserted into the draft of the so-called "roadmap document" which is set to outline future debate on global carbon emissions reductions, making it clear that future negotiations can explore financing mechanisms based on carbon already in trees, even if those trees aren't in immediate danger of being chopped down.
The Perverse Incentive
Just as developed nations were given targets to reduce emissions based on past pollution in the first phase of the Kyoto Protocol, developing nations are now being asked to accept targets to reduce deforestation after 2012 based on the speed with which they're chopping down forests today."That creates a perverse incentive whereby you reward the people who have been chopping down their forests and punishes the people who have been good stewards of the land," says Pearse. "If you don't compensate the largest owners of forest who haven't been cutting down their forests, their only incentive to participate is to start cutting them down."That perverse incentive hasn't been removed – it appears to be with us through 2012, and remains the favored mechanism for whatever follows the Kyoto Protocol. Pearse – and other bankers on the sidelines of this week's talks – says the only way to avoid the incentive is to abandon the entire notion of baselining, toss out the concept of additionality, and value the forests that exist now. "The UN," he says, "should limit its role to the high-level stuff like determining the caps on deforestation and industrial emissions, and then turn Goldman Sachs, Merrill Lynch, and Deutsche Bank loose on it. We'll have this whole thing fixed in a couple of years."It's an argument that echoes the "carbon stock" approach co-developed by Charlotte Streck, a former World Bank attorney who now heads up a group called Climate Focus. She's made waves over the past few years by saying we should toss the baseline-and-credit system and replace it with a cap-and-trade system that operates by giving carbon stock units (CSUs) to participating countries based on the amount of carbon in their forests during a base year. Countries could sell CSUs based on how much forest they put under protection.The new approaches that investment bankers like Pearse are feeding into the system go a step further: He advocates the promotion of sustainable land use schemes that earn money in the short-term by managing the land, with the carbon in the trees serving as an embedded option that can be cashed in years down the road. It's heady stuff – and was largely ignored in Bali until the last day of talks.
Day of the Banker
"The painful lessons learned through the CDM process could have been avoided if the financial community had been more proactive in engaging in the policy debates at an early stage," says Abyd Karmali, the former United Nations Environmental Program climate change boss who now runs Merrill Lynch's global carbon operations. "That has been a key trend over the past six to 12 months: that more and more investment banks have realized that the markets and the incentives of carbon finance are heavily policy-driven, and that's why there's been a scaling up of interest from the banks."Banks, he says, see the world a lot differently than do most scientists and others involved in these markets to date – but so do many of the old pros who have been in the carbon markets for years."The additionality concept is a curse on making a rational investment response through the flexible mechanisms of whatever follows the Kyoto protocol," says James Cameron, Vice Chairman of Climate Change Capital. "Now, with the additionality concept being extended into what could or would or should be done with forests, we're finding that strange partners have caused layers of complexity to get in the way of doing simple things that are right."Like advocates of the favored REDD regime, bankers say you need to account for emissions at both a national level and on a project-by-project basis to make sure that deforestation halted in one part of a country isn't deforestation begun in another. Their methods, however, allow the market to create a de facto baseline by trading forest-backed derivative instruments similar to bonds which can be redeemed at the end of 30 years for avoided deforestation credits. The value of the bonds would rise and fall with the market's perception of the degree to which countries are reducing deforestation. The value of credits from projects inside the country, if issued at all (in Pearse's scheme they're not), could then be indexed to the bonds – so that project developers have an incentive to make sure that the entire country is running a clean ship. The risk is then shifted to the investment banks that buy the bonds (with independent auditors acting as honest brokers) and it is up to them to determine which methodologies will pan out over the coming decades."It's like buying a bag of beans," says Pearse. "If a trader thinks he's getting a deal on a cheap bag of beans, and then finds that half are rotten – then he takes the loss" and next time does more due diligence. "We're saying that banks should be allowed to determine what bags of beans they buy, and they should suffer the consequences if they buy the wrong ones," he adds, "while the UN is telling us not just what is an acceptable quality of bean, but which bags we're allowed to buy and which not – with the result that a lot of good bags of beans may never get picked up."He concedes the scheme might make it rough for governments that have been deforesting to sell bonds at a worthwhile price, but says that's not necessarily a bad thing."In the early days, governments that had a history of deforestation would see the value of their bonds drop, because the market would need to be convinced they were serious," says Pearse. "But the market could very quickly drive up the price of those bonds if they see a change in practice."He adds that by removing the additionality requirement, you'd direct attention away from forests for their own sake to forests as a result of healthy land stewardship."We used to talk about Land Use, Land Use Change, and Forestry – LULUCF," says Pearse. "There's an awful lot of letters there, and everyone here in Bali is clustered around the F, but what causes the pressure on the F? Land use, and land use change. Pressure on land and land use. Demand for food, demand for fuel, etc. If a country correctly manages its LULUC, it relieves pressure on its F, as opposed to putting a baseline of barbed wire around its forests and a machine gun posted on every corner."Kevin Conrad, Papua New Guinea's Environmental Ambassador and a participant in the roadmap talks, agrees. "We will see the development of new mechanisms that encourage early action, and that also promote efficient land use," he says. "That's a key issue, because in Papua New Guinea, the leading driver of deforestation isn't logging, but shifting agriculture."
All Those Opposed
At this point, the anti-baseline bandwagon has plenty of empty seats. One of those taking a pass is Anna Lehmann, a forestry project leader with of German carbon shop 3C. "This stuff sounds great in theory, but once you get on the ground, you realize how complex everything is," she says. "I'm all for market solutions, but we're also trying to promote sustainable land use planning at the national level, and that means capacity building, which is why it makes sense to 'reward' the biggest offenders – if you want to phrase it that way – because they are the ones most in need. I really don't see any way around baselines."For now, she's clearly in the majority – but projects are already underway that promote sustainable land use with the aim of cashing in on forest credits and other ecosystem service payments down the road – additional or not. For instance, the Brazilian state of Amazonas (which has been a self-driven success story in the fight to reverse deforestation) has already decoupled any future biodiversity benefits generated by its forest canopy from its carbon credits – with the state keeping the biodiversity rights, and the federal government getting the carbon. And many of Pearse's arguments flow from a project he's involved with in the Indonesian state of Aceh.In the coming weeks, we'll examine both of these in more detail.Steve Zwick is a regular contributor to the Ecosystem Marketplace. He may be reached at steve.zwick at gmail.com.First published: December 14, 2007

Avoided deforestation credits head for the voluntary carbon markets
Zara Maung, editor 4 Jan 08
Two Indonesian states determined to halt deforestation are getting ready to sell their forest carbon credits on the voluntary markets.The Indonesian provinces are not prepared to wait for an international agreement on forestry, they want to start selling forestry credits on the voluntary markets now. The governors of West Papua province and Aceh signed an agreement with the governor of the Amazon region in Brazil at the UN post-Kyoto talks in Bali. They agreed to work together to preserve their rainforests and to help establish international funding to avoid deforestation.A representative from Greenpeace pointed out at the signing that forested states were some of the most vulnerable to climate change: “The Amazon has seen droughts three years running,” he said. “Even the soya baron Blairo Maggi [a previous pioneer of deforestation for agriculture], who governs Matto Grosso state, has changed his tune.”New lineThe Forestry Eight, eight nations with 80 per cent of the world’s forest cover, successfully campaigned for the inclusion of forest preservation at the Bali conference last month. The result was an international agreement to pursue a programme called REDD, the Reduction of Emissions from Deforestation in Developing Countries, was included for the first time the UNFCCC post-Kyoto draft proposal.Approximately 20 per cent of global carbon emissions derive from deforestation, according to scientific reports. “Previously, forests were never part of the Kyoto deal because climate change was seen as an issue to be dealt with by developed countries,” says Kevin Conrad, executive director for the Coalition for Rainforest Nations and environmental spokesperson for Papua New Guinea. Now that climate change has become more urgent, Conrad says, forested countries are seeing the potential to become part of the solution.Although the details of how the REDD mechanism will work are still to be discussed by the UNFCCC, there are suggestions that forestry credits will be linked to the carbon markets to generate funds for forest preservation and alternative economic development in forested areas.“The project basis of the CDM is unlikely to be adopted for REDD,” says Conrad, “because it doesn’t make sense to protect isolated parts of the forest from deforestation.” Conrad calls for allocations of carbon credits to be distributed to national governments by the UN in return for decreasing rates of deforestation.Target the loggersNational deforestation plans are still not watertight, however. There have been concerns that although Brazil’s deforestation rates have decreased year-on-year, the illegal loggers have moved to targeting Peruvian forests instead. “We will have to build incentives into the scheme to encourage all forested nations to join and keep the loggers out,” says Conrad. Details of the plan will be firmed up at this year’s UNFCCC talks in Poland.Meanwhile, Indonesia’s West Papua and Aceh have taken matters into their own hands, with governors promising to halt deforestation, only harvesting a few trees in a sustainable, and more profitable way. Governor of West Papua, Barnebus Suebu, complained that previous logging activities in West Papua province had generated only 10 dollars per log for the local people, while traders sold the logs on for thousands of dollars.Money mattersCarbon market investor Carbon Conservation Pty Ltd (http://www.carbonpool.com), led by Dorjee Sun, a 30-year-old Australian who became a millionaire by developing internet software, intends to find the funding to help Suebu’s conservation plans become a reality. Sun hopes to sell carbon credits on from avoided deforestation in West Papua and Aceh on the voluntary markets once a national deforestation baseline has been set by the Indonesian government. Sun hopes to persuade mining company Rio Tinto Ltd, a previous buyer of Carbon Conservation’s avoided deforestation credits, to invest in his new venture for West Papua and Aceh.The Indonesian states are testing the water in a new realm of voluntary carbon offsets that promise to become big business. First, however, forested nations need to convince investors that they have the power to stop illegal logging over the long term.source: http://www.climatechangecorp.com/content.asp?ContentID=5084

FTC Chair: CO2 Offset Market May Require Federal GuidanceBy Ian TalleyOf DOW JONES NEWSWIRESWASHINGTON -(Dow Jones)- Marketing of carbon offsets - company's claims that their products are reducing the greenhouse gas carbon dioxide - may require federal oversight, Federal Trade Commission Chairman Deborah Platt Majoras said Tuesday.Speaking at a workshop studying the necessity of FTC oversight, Platt Majoras said an explosion of marketing claims throughout nearly every sector of the economy and the difficulty of verifying carbon offset claims prompted the FTC to accelerate its review of environmental marketing guidelines. She also said the FTC was considering greater oversight of Renewable Energy Certificates, or RECs."We're seeking to determine whether additional FTC guidance is warranted," the FTC Chairman said. "Our efforts will focus...on deceptive and unfair practices.""Unlike tangible goods like cars or breakfast cereals, carbon offsets and RECs don't offer consumers an easy way to verify that they're receiving the product they paid for," she said."With this much uncertainty, there's a heightened potential for deception," she added.-By Ian Talley, Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com(END) Dow Jones NewswiresJanuary 08, 2008 10:15 ET (15:15 GMT)
Source: http://www.lloyds.com/CmsPhoenix/DowJonesArticle.aspx?id=377399

Insurance cover for carbon credits project announced

Date: January 09, 2008 Source: Mumbai (NEXI)

The Nippon Export and Investment Insurance company (NEXI) has decided to provide an "Overseas Untied Loan Insurance" cover for a loan extended by Sumitomo Corporation for the project for reducing greenhouse gas emissions, which has been initiated by PT. Budi Acid Jaya Tbk (BAJ), the largest tapioca starch producer in Indonesia.
The purpose of the project is to capture methane gas from tapioca starch wastes that are discharged from BAJs three tapioca plants and then to utilize it to generate power.
The project, to be implemented under the Clean Development Mechanism (CDM) scheme, will allow Japanese companies to obtain certified emission reductions (CERs) by purchasing emission credits from Sumitomo Corporation.
This is the first time that NEXI has decided to provide an insurance cover to a project from which Japanese companies which are expected to obtain CERs under the CDM scheme. NEXI will further contribute to Japan's efforts to address global warming, in a coordinated manner with Japanfs environmental policy.
Source: http://www.carbonyatra.com/news_detail.php?id=1410

15 Jan, 2008, 1534 hrs IST,MEHUL VERMA, INDIATIMES NEWS NETWORK
NEW DELHI: Global warming has been successful in creating a growing consciousness to trade carbon emission. World over experts have been analyzing the carbon markets and various studies are being held out to tap the benefits of carbon. However, there remains a huge untapped potential in the voluntary carbon markets waiting to be explored. Year 2008 could very well be the tipping point for the voluntary carbon markets. The concept of voluntary carbon markets (VCM) consists of companies, governments, organizations, organizers of international events and even individuals taking the responsibility of their carbon emissions by voluntarily purchasing the carbon offsets. In fact, the voluntary carbon markets function in a much simpler way as compared to Clean Development Mechanism (CDM), created by Kyoto Protocol. Under the voluntary carbon markets, the carbon offsets may be purchased by retailers or organizations of relatively small size. On the other hand, the CDM market is known for its voluminous trading. Being less complicated in terms of paper work and volume, the voluntary carbon markets offer an ideal platform for mid-size trading business operations.
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Carbon trade seen as lifeline for Indonesian forests

The second advantage of a voluntary carbon markets over Clean Development Mechanism (CDM), lies in the equality of treatment. Clean Development Mechanism (CDM) favors developed nations over developing nations in terms of fixing emissions norms. Voluntary carbon markets are easier to operate and stand fair chances of growth in developing economies. According to Dr Anne-Marie Warris, expert on climate change with Lloyd's Register Quality Assurance (LRQA), “The voluntary carbon market refers to any sale or purchase of emission credits or emission reductions that occur outside a regulated market. A regulated market is one set up by governments such as Clean Development Mechanism (CDM) and European Union Greenhouse Gas Emission Trading Scheme (EU ETS).” Voluntary carbon markets have historically served as sources of experimentation and innovation in the carbon markets. These markets most likely to reach poorer and smaller communities in developing countries faster. This is, in partly, because they are free from red-tapism & bureaucracy and offer a lower transaction cost compared to regulated carbon markets. No Forwards Trade In such markets, there are no widely accepted standards, processes for certification and verification, or requirements to list credits on established registries. Even then, the unorganized players of the carbon market stand a better chance to get the ticket to trade as the entry level requirements in this market are simpler. Reports suggest _ as a part of the consolidation in the market that began to take shape in 2006, various groups- non-profits and industry associations aim at creating rigorous standards and processes as a way of ensuring confidence and quality in the market. Those carbon markets that may have earned carbon credits before registration stand a fair chance of being transformed into the unorganized carbon market. These credits are normally verified by third-party accredited bodies against the voluntary carbon standard 2007.
However, “Regulated markets like CDM and EU ETS are set up by governments or the United Nations and include registry trading, which allows only regulated credits, so the registries associated with regulated markets would not allow trading of voluntary credits. “Voluntary markets need registries to track trades to eliminate double trading and also to allow forward trades. Voluntary markets must develop their own registries both because their voluntary carbon units can not be traded on the regulated market registry platform and for credibility and transparency,” according to Dr Anne-Marie Warris. “So far the voluntary carbon market has been characterized by being restricted to trading only occurring between buyers of emission units and sellers who are the projects or organizations whose activities have generated an emission reduction (there are no options, forward trades, etc., as occurs in other energy markets). The main reason for this is a lack of a formal register to track trades,” she adds. Given the Bali road map, both the regulated market (EU ETS, CDM and JI) as well as the voluntary market will grow between now and 2012. However, the voluntary market growth expectation according to studies by LRQA stresses upon the growing desire of organizations to demonstrate their CSR/sustainable credentials by going carbon neutral, which requires a combination of in-house reductions -- and final offsetting of those emissions that can not be reduced. For such organizations the voluntary markets offer an opportunity to manage their offset in a credible manner. Organizations’ emissions in this case are not subject to a regulated constraint such as EU ETS; Finally, the developing markets in USA where there are no regulated markets and where the voluntary market is the way to manage carbon portfolios. The voluntary market is not going to grow to the size of the regulated market, but it will become an important part of the market mechanisms that reduce emissions in the coming days.

Source: http://economictimes.indiatimes.com/08_could_be_the_tipping_point_for_voluntary_carbon_mkts/articleshow/2701903.cms
Exchanges to study carbon trading
01/15/2008

BY SOICHI FURUYA, THE ASAHI SHIMBUN

The Tokyo Stock Exchange Group Inc. (TSE) and the Tokyo Commodity Exchange (TOCOM) will jointly study carbon trading systems with an eye to possibly creating a domestic market, sources said.

TSE, the operator of Japan's largest stock exchange, and TOCOM, the market for futures trading in precious metals, aluminum and oil, will form a study panel by the end of this month, according to the sources.

It is part of a broad agreement to be signed by the two entities as early as Wednesday to raise Japan's international competitiveness, the sources said.

While trading in greenhouse gas emissions credits emerged as a thriving business in Europe, Japan dragged its feet in creating a market due to opposition from business circles.

Even so, the two exchanges said there is clearly a growing need for Japan to have one as it comes under stronger pressure to reduce emissions of carbon dioxide (CO2) and other greenhouse gasses.

Trading in emissions rights forms part of the mechanisms introduced under the 1997 Kyoto Protocol to fight global warming.

Countries and companies unable to meet the CO2 reduction targets are allowed to buy emissions credits from those which have cut emissions beyond their goals.

In 2005, the European Union introduced a system to set emission quotas to each company within the region that will allow those unable to meet the criteria to buy credits from those which more than met theirs.

The system is aimed at promoting CO2 reductions on the strength of market forces as successful cuts would lead to benefits while greater emissions mean higher costs.

There has been growing interest in the United States and Canada in following the EU's lead.

In Japan, however, Nippon Keidanren (Japan Business Federation) and related organizations are opposed to the introduction of such systems on grounds emission quotas would mar competitiveness.

Within the government, the Environment Ministry is studying a domestic emission credits system while the Ministry of Economy, Trade and Industry remains cautious.

The two exchanges plan to study systems abroad, such as the European Climate Exchange, to see how they function and to determine the demand for such trading in Japan.

The panel is expected to propose a system that will meet Japan's needs and circumstances as well as point to possible problems.

Under the Kyoto Protocol, Japan is obliged to cut greenhouse gas emissions by 6 percent on average between 2008 and 2012 from levels in 1990.

But meeting that goal appears to be difficult because preliminary figures show that Japan's emissions in fiscal 2006 actually rose 6.4 percent from the 1990 levels.

Against this background, the two exchanges apparently decided it is possible that the need for a domestic market will emerge naturally, according to the sources.(IHT/Asahi: January 15,2008)

Source: http://www.asahi.com/english/Herald-asahi/TKY200801150097.html

http://www.businessspectator.com.au/bs.nsf/Article/Carbon-smoke-and-mirrors-BC5AV?OpenDocument

The Australian Competition and Consumer Commission this month instituted legal proceedings against GM Holden, alleging "misleading and deceptive conduct and false representations concerning 'green' claims made in the advertising of Saab vehicles". It has also recently released an Issues Paper on carbon-offset claims as they relate to the Trade Practices Act.

This kind of intervention in the green marketing space is welcome, even if it won’t completely solve the problem. Like any market there is the full range of quality in the 'green' market. Some companies offer superior products, some are average and some really shouldn’t be allowed to be sold.

The same is true of with 'environmentally friendly' claims – some are accurate, some are stretching the truth and some are downright lies.

There is a lot of confusion when it comes to claims of carbon neutrality and carbon offsets and that is because it is complicated.

There are two key elements the ACCC is grappling with: those who are down right dodgy – fleecing the public to make an easy dollar – and those who think they are doing the right thing, but aren’t.

Dealing with dodgy characters – like those who sell credits but don’t actually do anything – is quite straightforward. The area that is more complicated and more prevalent is where companies make claims they think are correct, but aren’t.

The challenge in the voluntary carbon market is that companies have simply been able to say that they have reduced emissions, but have not been required to meet any particular standard. The Federal Government some time ago developed a program to address this – Greenhouse Friendly – but companies are not obliged to use it (although the new Government has indicated this may change).

Some companies use international standards like the Voluntary Carbon Standard, or mechanisms under the Kyoto Protocol. Some use the NSW Government’s greenhouse trading scheme, even though it wasn’t designed for the voluntary market. Some use no standard at all and do what they think is appropriate.

The ACCC can investigate whether customers are getting what they think they are buying, but it can’t demand they use any particular standard. When it comes to offset credits customers need to have confidence that a credit actually removes a tonne of carbon from the atmosphere.

The biggest area of concern here has been with the planting of trees. A number of companies provide offsets by planting a certain number of trees on behalf of customers to offset their emissions. The problem with this approach is that the trees don’t actually offset the emissions for some time – indeed they normally take up to 100 years to achieve the full environmental benefit. If customers think their emissions have been offset immediately, then in this case they have been misled. This is why internationally recognised standards don’t recognise the carbon savings until they have been achieved.

The second area the ACCC is investigating is where companies make claims that their products are carbon neutral or green. This area has even less standards, so it makes it harder to police. The key here is for companies to clearly tell their customers exactly what their green claims are. If a car is sold with offsets to compensate for the petrol used in its first year of operation, while this is a good thing, it is clearly not a green car. If a company gives its customers the impression that its products are greener than they actually are, then the ACCC has the opportunity to act against it.

Rupert Posner is director, Australia, for The Climate Group which, in conjunction with the World Economic Forum, The Emissions Trading Association and the World Business Council for Sustainable Development established the Voluntary Carbon Standard in 2007. The Climate Group is also investigating establishing a new international standard for carbon neutrality.
http://www.carbonyatra.com/news_detail.php?id=1500

California assembly member Pedro Nava has announced the introduction of Assembly Bill 1851, which will develop a certification process in California through an authorized entity for companies who market voluntary greenhouse gas emission offsets to the public. No such certification presently exists in any state in the nation.

"My legislation will protect the public and ensure that greenhouse gas emission reductions are achieved," said Nava. "We must have confidence when we purchase a carbon off-set that the company selling it is legitimate and has met clear and consistent standards. It is necessary to ensure that these companies who take the public´s money are actually investing in projects that reduce greenhouse gas emissions."

Currently there are numerous organizations that create and market offset projects. These organizations apply different standards to projects with inconsistent results. This leaves the consumer uncertain as to whether or not their offset purchase actually represents a benefit to the environment. Recently, Attorney General Jerry Brown sent a letter to the Federal Trade Commission outlining problems and offering recommendations with the carbon offset market.

"The market for carbon offsets is unregulated and rapidly expanding," said Attorney General Brown. AB 1851 will create a process to certify a company that sells carbon off-sets at the retail level in California ensuring that they meet clear standards, consistent protocols as well as have a recognizable stamp of approval by an authorized authority.

A significant number of voluntary emission reductions sold by carbon offset organizations are purchased by California residents, businesses and government agencies. The national retail market for voluntary offsets exceeds $100 million and represents an estimated reduction of over 25 million metric tons of carbon dioxide equivalent gas annually. In the next three years, the worldwide supply of retail voluntary emission reductions is expected to increase to 400 million metric tons. It is imperative that California create a certification system at an early stage in the greenhouse gas emission reduction process so that problems can be avoided as the retail market for carbon off-sets grow.

No state in the nation has an authorized entity or uniform standard for companies that market and sell carbon off-sets. Assemblymember Nava´s bill would make California the first in the nation.

http://biz.yahoo.com/prnews/080206/clwfns1.html?.v=5

Wednesday February 6, 5:20 am ET

DETROIT, Feb. 6 /PRNewswire/ -- Carbon Credit Environmental Services has applied for an Intellectual Property Patent to assist business and corporations in assessing their GHG, CO2 emissions with a certification being issued to them as a "Carbon Credit." This certification will state that their product has been offset by CCES through "Green Alternative Energy Projects" or "Carbon Sequestering Projects."

CCES has created a "cradle to grave" standard for the voluntary carbon offset market since no standard exists. The Kyoto Protocol has a mandatory standard and certification program but the United States is not part of the Kyoto Agreement. CCES will issue a certification to the voluntary offset market through multiple formulas in certain sequences that are recognized on a scientific basis. These formulas must be followed in sequence and strictly adhered to, to scientifically assess their GHG, CO2 emissions in the "cradle to grave" lifetime of their product.

CCES is working with several clothing and personal product manufacturers to assess the GHG emissions from their product, from the time it is made to the time it is disposed of. Once this has been accomplished CCES will issue the product a "GHG, CO2 Carbon Neutral" label to apply to that product for one year. This label is part of the Intellectual Property Patent and can only be utilized through CCES permission.

The advantage to the business and corporations is that they have a product that can be labeled "Green" by a scientifically based formula and utilize CCES programs for this offsetting of their product. The ability for their product to be green is that they have offset it's GHG, CO2 emissions through one of CCES programs of alternative energy solar energy, wind energy, methane recovery for energy use, or reforestation.

By adding this label and offsetting through CCES programs companies and corporations have increased their bottom line and adhered to their own green initiatives within their corporate directives and created a cleaner environment for their customers.

Please Contact below for additional information

Dona Dolkowski
Vice-President of Operations
ddolkowski@getcarboncreditco2.com
Source: http://www.forbes.com/reuters/feeds/reuters/2008/02/11/2008-02-11T050006Z_01_N08502894_RTRIDST_0_CARBON-FORESTS-US-EMBARGOED.html?partner=moreover

NY company buys first Calif. forest carbon credits
02.11.08, 12:00 AM ET

By Timothy Gardner
NEW YORK (Reuters) - U.S. carbon asset manager Natsource LLC said on Monday it has invested in the first forest-based greenhouse gas emissions reductions under California rules.

Natsource paid a private owner of a redwood forest in Humboldt County represented by nonprofit group the Pacific Forest Trust for credits representing 60,000 tonnes of carbon emissions.

The company declined to say how much it paid for the credits, but a source familiar with the deal said Natsource bought the credits for "well below" $10 per tonne.

Trees soak up the main greenhouse gas carbon dioxide as they grow, and release it when they rot or are burned.

Carbon market developers like Natsource say they can encourage land owners to make forests grow and absorb more carbon by paying them to take actions that wouldn't have happened otherwise, like slowing deforestation and harvesting timber more carefully.

The United States does not regulate greenhouse gases, but several states like California and 10 others in the Northeast are creating carbon markets of their own.

In voluntary carbon deals, payments are swapped for carbon credits that investors store in hopes the United States regulates greenhouse gases in the future, which would likely push up prices for the credits.

"From our point of view this is a statement and an investment," Jack Cogen said in a telephone interview. "We are confident we are going to make money on this over time."

Cogen said forestry will likely be included in a future greenhouse regulatory regime in the United States and in a global emissions deal.

Voluntary deals hold risk, however, because it can't be known whether any future U.S. regulatory regime would give credit to early actions, or whether prices would rise significantly in regional markets that are forming.

As global forests are lost to agriculture and urban sprawl, land owners around the world are increasingly looking to generate credits for saving trees. A U.N. climate conference in Bali late last year agreed to launch pilot projects to grant developing countries credits for slowing deforestation under a new long-term climate pact beyond 2012.

Natsource and PFT said the deal was the first under rules adopted last year by the California Air Resources Board (CARB) which set governmental accounting standards for emissions reductions through slowing deforestation.

Opponents of generating carbon credits for protecting trees say it is hard to prove that land owners would not have slowed harvesting on their own.

But Laurie Wayburn, the president of PFT, said the deal will save emissions by paying land owners to let the forest grow back more fully from the last time it was harvested and that the state's rules ensure the reductions will be verified.

Eventually that should lead to bigger forests that will grow in value, she said.

"The additional revenue stream allows forest owners to take a long-term harvesting strategy rather than a short-term strategy," she said. (Editing by Christian Wiessner)

Copyright 2008 Reuters
http://www.carbonyatra.com/news_detail.php?id=1562

Planktos Scraps Ocean Carbon Credits Project

Date: February 14, 2008
Source: Mumbai (Planktos)

The board of directors of Planktos Corp. have announced that the company has been forced to indefinitely postpone its ocean fertilization efforts once intended to restore marine plant life and generate ecological offsets for the global carbon credits market.

A highly effective disinformation campaign waged by anti-offset crusaders has provoked widespread opposition to plankton restoration in the environmental world, and has caused the company to encounter serious difficulty in raising the capital needed to fund its planned series of ocean research trials.

The company's wholly-owned research vessel Weatherbird II and crew have been called back from the Portuguese island of Madeira where the ship had been docked awaiting the resources necessary to initiate and monitor its first research plankton blooms.

Management has also radically downsized the company's staffing while the board of directors has formed a new committee to explore all options currently available. Options include a possible re-launch of planned marine operations, pending additional financing or new partnerships, as well as the possible pursuit of other promising business opportunities in the environmental sphere.

The board of directors continues to believe in the urgent ecological necessity of its ocean restoration plans and the scientific speciousness of objections voiced to date. However, ideological hostility to and misrepresentations of this work will continue to stymie progress until the true gravity of our climatic and ocean crises is more widely understood.

UK sets CO2 offset code but excludes voluntary credits
23:21 - 19/02/2008

TORONTO (Reuters) - The British government launched a Code of Best Practice for carbon emission offsets on Tuesday, but said the code will initially apply only to United Nations-approved credits.

Credits issued under the U.N.'s Kyoto Protocol, known as CERs and ERUs, allow companies in rich countries to offset their greenhouse gas emissions by purchasing offsets from clean energy projects in developing nations.

Environment Secretary Hilary Benn announced the final structure of the code, which will be backed by a quality benchmark to be announced later this year.

Benn said the code will consider reduction credits from the unregulated voluntary market, called VERs, only after an industry consensus is reached on a single standard and maintained for six months.

"We recognize that credits from the unregulated market may be innovative and of a very high standard," Benn said in a statement.

The VER market was rocked last year by allegations of fraud and double-counting, sending shock waves through the global carbon market, worth some $70 billion in 2007.

Voluntary offset companies, seeking to restore the VER market's integrity, have since created a series of strict offset standards ensuring transparency in approval procedures and permanence in emissions reductions made.

"The UK government's new code is a positive first step to build consumer confidence in offsetting, (but) the development of any new kitemark needs to endorse popular global voluntary standards," said Mark Kenber, policy director for The Climate Group, which created its own voluntary standard called the VCS.

Critics say Britain's code discriminates against clean energy projects that can't afford the steep registration fees under the U.N.'s Clean Development Mechanism or Joint Implementation schemes.

Administration costs can run up to $200,000 per project, with delays of up to a year to receive official U.N. registration.

VERs, depending on their quality standard, can trade anywhere between $2 and $30 a ton, while secondary CERs, according to Reuters CER Index, closed at 15.73 euros ($23.16) a ton on Tuesday.

UK announces voluntary offsets code

Friday, 22 February 2008

The British government has released a draft code of practice for the domestic voluntary carbon emissions offsets industry, proposing an official quality mark to be given to offsets that meet standards of environmental integrity. It will not be compulsory scheme, but offset providers who do not conform to the code will be selling unaccredited credits.

A lack of regulation of the voluntary carbon market, not just in Britain but worldwide, has put a cloud over offset credits in recent years. As awareness of global warming and the role of greenhouse gas emissions has risen, so has a desire among individuals and organisations for carbon neutrality through the purchase of credits offsetting their own emissions. But products sold to consumers offer little transparency or robust verification of the activities claimed to be producing emission reductions.
Initially, offset providers in the UK would only achieve the accreditation standard if they are selling CER carbon credits generated under the UN’s Kyoto Clean Development Mechansim (CDM). Emission reductions from the voluntary market won’t be eligible for accreditation until the industry comes up with an agreed standard of verification that addresses the criticisms, said Environment Minister Hilary Benn.

The idea is to come up with a common standard for offsets credits, termed Verified Emission Reductions, or VERs, so that consumers can have confidence they are buying real emission reductions, independently verified by a third party.

The UK Department of Environment, Food and Rural Affairs (DEFRA) says a robust standard for VERs will have to recognise the principles of additionality, dealing with leakage, avoiding double counting, permanency, independent verification, transparency, certification and a central registry.

The government has drawn some criticism over the code from some offset providers and environmental groups. They say ruling out all VERs penalises the ones that are of good quality, that credible VER accreditations schemes already exist, and that some areas of the developing world like Africa will suffer because Kyoto project developers have largely ignored them.

Benn said the voluntary market has a role to play in innovating new ways to reduce emissions, and will enjoy government support once provided the necessary standards are in place. The government says it plans to issue a final code by the end of April and have it in place by mid 2008.

A number of offset providers in the UK are reported to be negotiating the establishment of an industry association to help raise standards and act as voice for credible companies in the industry.

Reuters, The Guardian 19/2/08, BusinessGreen 21/2/08
US yields on binding emissions targets
By Fiona Harvey in Svalbard

Published: February 25 2008 22:54 Last updated: February 25 2008 22:54

The US appeared to take a step forward on the talks for a successor to the Kyoto protocol on climate change on Monday by saying it would agree to binding targets for reducing emissions.

However, other countries cautioned that while the move could be positive, it still left unanswered the most important questions on a potential successor to the treaty, the main provisions of which expire in 2012.

Daniel Price, assistant to George W. Bush, US president, for international economic affairs and one of the White House’s key climate change officials, was reported to have said in Paris that the US was prepared to enter into “binding” obligations to cut greenhouse gases “as part of a global agreement”.

Previously, the US has not agreed that international moves to cut emissions should be legally binding. Instead, it has called for nations to set their own targets, which the European Union rejects as ineffective.

Nations in favour of the Kyoto protocol told the US at a key meeting in Bali in December that it must agree to binding international targets on emissions. But they also called for several other conditions to be met, on which the US has not yet changed its stance.

Those include the principle that developed nations must bear more of the burden for cutting emissions than developing countries, and the need for medium- term targets as well as long term ones.

The US on Monday said that developing countries must be part of any international agreement on the climate, but it was not clear whether Washington wanted poor countries to take on emissions reduction targets similar to those of rich nations.

Copyright The Financial Times Limited 2008

Source: http://www.ft.com/cms/s/0/cf4cfe48-e3f3-11dc-8799-0000779fd2ac.html

LOS ANGELES, March 3 /PRNewswire/ -- The California Climate Action Registry elected new members to its Board of Directors and confirmed Gary Gero as President of the organization. Gero had been acting as interim President for the past several months.

The new board members include leaders from the environmental, governmental, and corporate sectors. Linda Adams, Secretary of the California Environmental Protection Agency, will remain the Chair of the Board; Kathleen Brown, Head of Public Finance for the Western Region, Goldman, Sachs & Company is the new Secretary; and Jeffrey Kightlinger, General Manager, Metropolitan Water District of Southern California, is the new Chief Financial Officer. New Board members also include Peter Liu, Founder and Vice Chairman of New Resources Bank; Nancy McFadden, Senior Vice President, Public Affairs, PG&E Corporation; Peter Miller, Senior Scientist, Natural Resources Defense Council; Jan Schori, General Manager Sacramento Municipal Utility District; Bill Spurgeon, Retail General Manager for the West Region, Shell Oil Products US; and Diane Wittenberg, Executive Director of The Climate Registry. Ex-officio members of the Board of Directors include: Eileen Tutt, Deputy Secretary of External Affairs, California Environmental Protection Agency and Gary Gero, President, California Climate Action Registry.

The Board of Directors and President will guide the new direction of the California Registry in assisting the state in implementing AB32; developing high quality reduction project protocols; and building a greenhouse gas reduction project registry which ensures quality and integrity in the voluntary carbon market by employing accuracy, transparency and rigor.

Linda Adams, Secretary of the California Environmental Protection Agency and Chair of the California Climate Action Registry said, "I'm looking forward to continuing with the progress of the California Registry to develop productive solutions to the challenge of climate change, and to link those solutions internationally."

"I am dedicated to the continued success of the California Registry, which includes building a world class reduction project registry that ensures environmental integrity in the offset sector and assisting the state in the implementation of AB32," said Gary Gero, President of the California Climate Action Registry.

The California Climate Action Registry is a non-profit public/private partnership that serves as a voluntary greenhouse gas (GHG) registry to protect, encourage, and promote early actions to reduce GHG emissions. http://www.climateregistry.org/

California Climate Action Registry

EU wants carbon offset link before Dec -EU official
by Reuters News on 06 March 2008, 14:58 PM

LONDON, March 6 (Reuters) - The European Union's executive Commission wants to launch before December a scheme whereby European industry can use offsets to count against their greenhouse gas emissions, a Commission official said.

Technical hitches have threatened to slow the global growth of carbon trading whereby European companies can fund emissions cuts in developing countries and count those offsets against their own output of the planet-warming gas carbon dioxide.

"We are aware of the importance of having an established connection before 1 December," the official, closely involved in making the connection work, told Reuters on Thursday.

"Market participants would get a three-month warning before the connection, as recommended by the Registries Regulation."

The uncertainty has disrupted the functioning of Europe's carbon market, which sets a cap on European industry emissions, after Britain last month said it would not issue emissions permits under the EU scheme until there was more clarity.

The uncertainty is also complicating plans for exchanges such as the European Climate Exchange and Nymex to launch this month carbon offset futures contracts which would physically settle in December 2008.

A plausible time-line might be a July announcement for an October connection to allow for last-minute glitches before December.

The EU launched its carbon market in 2005 and similar schemes are now mooted in New Zealand, Australia, Japan, Canada and various U.S. states.

Such schemes put a cap on emissions of greenhouse gases such as carbon dioxide by issuing a fixed quota of emissions permits while allowing participants such as energy-intensive industries to trade the permits among themselves.

European businesses are also supposed to be able to count offsets towards their emissions, a cheaper option compared to buying EU permits, but that has been prevented by the lack of a link with offset trading under the U.N.-led Kyoto Protocol.

EU Environment Commissioner Stavros Dimas said on Monday the issue would be resolved this year but carbon traders including investment banks want a firm deadline.

Asked whether the Commission could guarantee a date the Commission official said: "Once a date is announced the Commission will ensure that the connection does actually happen at the announced time."

The EU Commission has not launched infringement proceedings against any of the 25 out of 27 total EU member states including Britain that missed the Feb. 28 deadline to issue European emissions permits to their industry for 2008.

"We expect issuances to happen through 2008," the official said.
Tricorona, the Stockholm Environment Institute and WWF Germany have today released a joint report "A comparison of Carbon Offset Standards".

The main conclusion of the report is that Gold Standard offsets from projects within the Clean Development Mechanism (CDM) of the Kyoto Protocol are the offsets with the highest credibility and environmental integrity, but that other offset types, in particular Gold Standard offsets from non-Kyoto projects, also have an important role to play.

Looking at the volume of emission reductions achieved, the CDM is by far the most commonly applied standard. Stimulation for this standard has come from the obligatory emissions trading markets, which turned CDM into a success tool for climate protection.

This report discusses the role of the voluntary carbon market and provides an overview of the most important currently available carbon offset standards. It compares the following standards side-by-side, outlining the key aspects of each:

- Clean Development Mechanism (CDM)
- Gold Standard (GS)
- Voluntary Carbon Standard (VCS)
- VER+
- The Voluntary Offset Standard (VOS)
- Chicago Climate Exchange (CCX)
- The Climate, Community & Biodiversity Standards (CCBS)
- Plan Vivo System

In releasing the report, Juliette de Grandpré at WWF Germany commented that "The voluntary offset market is awash with competing standards. This report shows that no other standard can ensure the same environmental and social integrity as the Gold Standard".

"Our business is creating high quality emissions reductions projects, with a specific focus on Gold Standard and CDM, " says Niels von Zweigbergk at Tricorona, "and we are pleased that this joint report with WWF and SEI confirms the quality of the offset standards we apply."

Tricorona, headquartered in Stockholm, Sweden, is a global leader in developing renewable energy projects for carbon emissions reductions, including Gold Standard projects, with a total portfolio of over 68 million tons of emissions reductions from over 150 projects. Tricorona makes the best of these projects available to consumers through its retail portal at www.tricoronagreen.com.

For more information, please contact Helge Zink, Tricorona Deutschland, in Hamburg at +49 40 28 51 34 48

Press release at http://hugin.info/137853/R/1199360/244697.pdf
APX and The Gold Standard Foundation Launch International Greenhouse Gas Registry
APX Powers System to Create, Track, Manage and Retire Gold Standard Carbon Credits Worldwide

SANTA CLARA, Calif.--(BUSINESS WIRE)--APX, Inc., the leading platform provider for environmental and energy markets, and the Gold Standard Foundation today announced the creation of the Gold Standard VER Registry. The registry, which will operate on APX’s Environmental Market Depository™ technology, provides account holders with an easy-to-use, web-based system that creates, tracks, and enables trading of Gold Standard Voluntary Emissions Reductions (VER) credits around the world. The registry also will serve as the Gold Standard’s Clean Development Mechanism/Joint Implementation (CDM/JI) project database to track the certification of Certified Emission Reductions (CERs) and Emission Reduction Units (ERUs).

The Gold Standard VER Registry will manage the full lifecycle of a carbon credit, including creation, serialization, transfers, and retirement. The registry also will ensure the transparency, quality, reliability, and security of these carbon commodities for the marketplace, in accordance with the premium standards of the Foundation.

APX’s technology will provide users with comprehensive and easily accessible public reports that will allow them to monitor key information, including the status of VER and CDM/JI projects, details about the issued credits, and a listing of retired credits.

“As one of the initiators of the Gold Standard, we are fully supportive of this new tool for a credible voluntary carbon market”, said Martin Hiller, WWF International and President of the Gold Standard Board. “By ensuring the high standards of the Foundation, the registry will serve as a vehicle that can benefit greenhouse gas reduction efforts and projects worldwide.”

“APX has done a superb job of incorporating standards and processes that ensure the carbon credits in the registry are verified, unique and valid,” said Michael Schlup, Director of the Gold Standard Foundation. “The registry effectively addresses transparency issues by providing a level playing field and equal access for all market participants and stakeholders.”

“The Gold Standard Foundation is a recognized leader in the voluntary carbon market and we are pleased they have selected APX’s technology to ensure the integrity of their carbon offset program,” said Brian Storms, CEO of APX. “By providing a secure, cost-effective and transparent solution for market participants, APX’s infrastructure is enabling the rapid growth of the global environmental commodities markets.”

For more information about the Gold Standard VER Registry and to register as an account holder please visit http://goldstandard.apx.com.

About APX, Inc.

APX is the leading infrastructure provider for environmental and energy markets in renewable energy and greenhouse gases including carbon commodities. Providing a bank and mint for environmental commodities, the APX Environmental Market Depository™ is trusted to create, track, manage, and retire renewable energy certificates (RECs), energy efficiency and conservation certificates, carbon offset credits such as verified emissions reductions (VERs), and greenhouse gas emission allowances. The company is the system of choice for every major renewable energy market in North America and greenhouse gas markets worldwide.

APX also provides technology, strategic consulting, and expert operational services to assist wholesale power market participants reduce costs and improve performance in power scheduling, settlement, market operations, system operations support, and demand response programs. A privately held company, APX is headquartered in Santa Clara, CA. www.apx.com.

About Gold Standard Foundation

The Gold Standard Foundation offers a quality label to CDM/JI and voluntary offset projects, fetching premium prices. Renewable energy and energy efficiency projects with sustainable development benefits are eligible. The Gold Standard is endorsed by over 55 non-governmental organizations worldwide. Gold Standard projects are preferred by a range of government and private actors. Initiated by WWF, SSN and Helio International the Gold Standard for CDM projects was launched in 2003 after a wide-ranging stakeholder consultation among key actors of the carbon market as well as governments. A methodology for voluntary offset projects was launched in May 2006.

Contacts
APX, Inc.
Reiner Musier, 617-699-0929
Chief Marketing Officer
rmusier@apx.com
or
Sard Verbinnen & Co.
Paul Kranhold/Ron Low, 415/618-8750
Will FTC Take the Reins on Climate Change Marketing Claims?March 13, 2008 10:01 PMThe current impasse on climate change legislation may leave the Federal Trade Commission (FTC), not the Environmental Protection Agency, with the strongest hand to set policy for carbon offset projects in the United States. In response to the increasing number of carbon-related claims being placed on consumer products (e.g., “carbon neutral,” “green,” “sustainable”), the FTC initiated several proceedings in the last six months to evaluate the need for formal guidance for the voluntary carbon offset markets.FTC regulates false and deceptive advertising, including environmental marketing claims, through its oversight authority under section 5 of the Federal Trade Commission Act. FTC enforces such claims on a case-by-case basis, using environmental marketing guidelines (Green Guides) to establish presumptive safe harbors with respect to marketing practices. While the Green Guides are not enforceable regulations per se, the Commission uses them as a reference point in assessing the legality of specific marketing claims and emphasizes that “conduct inconsistent with the positions articulated in these guides may result in corrective action.”FTC recently closed the period for public comments on whether the Commission should update its Green Guides to address the growing corporate and consumer retail carbon market. In this post, we analyze FTC’s options for providing guidance on a specific aspect of carbon marketing claims: whether and how emissions reductions projects must meet the criteria for “additionality.”FTC Weighs its OptionsFTC requested comments on “the relationship between the concept of ‘‘additionality” in carbon offset markets and the FTC’s standard for deception under the FTC Act.” The concept of additionality has been central to the creation of carbon credits used in compliance markets under the Kyoto Protocol, in offset schemes proposed under pending domestic legislation, and in voluntary carbon markets in the US and abroad. Essentially, Parties must demonstrate that greenhouse gas reductions resulting from an offset project “are additional to any that would occur in the absence of the . . . project activity.”A broad range of stakeholders representing government, industry and consumers provided comments to the FTC. While most agreed that the principle behind additionality may be useful in theory, there was little consensus on whether and how the term should be addressed in FTC standards or guidance. Rather, commenters fell into a variety of camps: * Develop an FTC-Specific Standard: Some commenters, including several consumers and a coalition of states (Vermont, Arkansas, California, Connecticut, Delaware, Illinois, Maine, Mississippi, New Hampshire, New Mexico, and Oklahoma) argued for FTC to develop its own additionality standard based on the subjective perceptions of consumers rather than the preferences of market providers. * Rely on Existing Third-Party Standards: Offset retail sellers like Terrapass and Carbonfund, and offset origination and trading entities like EcoSecurities and the Carbon Offset Providers Coalition, took a middle of the road position, reiterating the importance of project additionality, but favoring reliance on one of the existing third-party standards over a new FTC-derived standard. * Stay out of the Additionality Debate: At the other end of the spectrum, a number of commenters opposed any effort to develop or endorse a specific additionality standard at this time. Commenters voicing this position included companies with interests in carbon sequestration (Anadarko); soil sequestration and agricultural projects (the Fertilizer Institute); oil rerefining (Hydrodec North America LLC ); and power marketing (Edison Electric Institute, Exelon Corp., and Renewable Energy Marketers Association). Commenters expressing this position often appeared concerned that overly narrow standards could undermine their efforts to develop new forms of offset projects or technologies.FTC’s Tricky Path ForwardThe divergence of opinion on an issue as fundamental as “additionality” illustrates the challenge FTC faces in updating its Green Guidelines to protect consumers in the carbon-constrained economy. Consumers cannot see, smell, or touch the carbon instruments they are buying or the carbon emissions they believe they are preventing. If voluntary carbon markets are to have any positive impact in reducing carbon emissions, market participants must have confidence that carbon offset “products” are more than just a gaseous form of snake-oil.At the same time, there is no more consensus among consumers than there is among carbon market experts regarding which one of many possible standards for additionality best comports with consumer expectations or with the environmental effectiveness of the voluntary market as a whole. Indeed, an overly restrictive or rigid definition may drive away offset project developers and purchasers alike, replacing the market’s current state of uncertainty with a greater problem - obsolescence.For the moment, FTC’s best option may be to take the course recommended by an unlikely combination of stakeholders ranging from Consumers Union to Walmart and Weyerhaeuser: Don’t try to create a single substantive definition of “additionality.” Rather, do what FTC has done with its Green Guides in the past: establish clear standards for information disclosure, claim substantiation, and reasonable qualification of claims. That way, consumers, and not just carbon market gurus or FTC inspectors, can decide for themselves whether the marketplace is selling what they want to buy.For further information about this topic, please contact Akin Gump (kmarkowitz@akingump.com).Source: http://climateintel.com/2008/03/13/will-ftc-take-the-reins-on-climate-change-marketing-claims/

14.03.2008 17:25

Montreal Climate Exchange announces May 30 as date for launch of trading in MCeX carbon futures
MONTREAL, March 14 /PRNewswire-FirstCall/ -- The Montreal Climate Exchange (News) (MCeX), a joint venture of the Montreal Exchange (MX) (TSX: MXX) and the Chicago Climate Exchange(R) (CCX), announced today that it plans to launch trading of futures contracts on Canada carbon dioxide equivalent (CO2e) units on May 30, 2008, subject to regulatory approval.
"MCeX is moving quickly to launch the first exchange-traded carbon futures contract in Canada," said Luc Bertrand, President and CEO of MX and chair of MCeX. "We are enthusiastic about creating this new derivatives market and about the launch of trading."
"The demand for environmental derivatives continues to grow worldwide and the time is right to build a critical mass of trading activity in Canada," said Dr. Richard Sandor, Chairman and Founder of the Chicago Climate Exchange. "MCeX products will meet demand from industrial participants to manage their emissions risks at the lowest cost while also creating continuous incentives for technological innovation that reduce carbon emissions."
The MCeX partners initially announced the plan in July 2007 based on an assessment of the federal government's air emissions policy released in April 2007 and following detailed consultations with potential market participants, including large industrial emitters. The MCeX set the launch date after the federal government announced further details of its greenhouse gas emissions regulations, including targets for intensity-based Canadian emissions reductions and offsets program terms.
"The Government of Canada has provided greater regulatory certainty regarding intensity-based emissions reduction targets and the definition of a single compliance standard for tradable credits," added Mr. Bertrand. "This will enable emitters to more accurately forecast their individual intensity-based reduction targets and exposures."
"Clear regulations are always welcome news for buyers, sellers and market operators. Our aim is to offer a market based solution that will optimize the policy guidelines set by the federal Government and support the reduction of carbon emissions in a cost effective manner."
Regulatory Filing on Market Rules
In October 2007, MX filed an application with its lead regulator, the Autorite des marches financiers (AMF), requesting approval of market rules designed to govern the trading of MCeX environmental products on its electronic trading platform, SOLA(R). A decision on the AMF application is expected in the near future.
The MX application filed for approval by the AMF describes two key benefits that will be offered by MCeX contracts:
A price discovery mechanism that generates the price signals needed by large industrial emitters to measure the "cost of a tonne of carbon".
A method of managing risk associated with price fluctuations using carbon futures contracts.
In the application, MX commits to operate a transparent, secure and liquid market that earns the confidence of traders, investors and market participants. The rules provide that Canada carbon dioxide equivalent (CO2e) units futures contracts will be traded on the MX electronic trading platform, SOLA(R). MX will settle and guarantee contracts through its clearing house, the Canadian Derivatives Clearing Corporation, which is AA rated by Standard and Poor's. This arrangement will reduce trading, settlement and counterparty risk for market participants.
The MX application cites World Bank estimates that the world market for carbon amounts to about $100 billion. Trading activity on public carbon markets has grown rapidly in recent years to reach US$30 billion in 2006.
Furthermore, recent estimated figures from market participants show that the global carbon market activity was worth over US$60 billion in 2007.
About the Montreal Climate Exchange
The Montreal Climate Exchange (MCeX), a joint venture of Montreal Exchange Inc. and the Chicago Climate Exchange(R), is aiming to establish the leading market for publicly traded environmental products in Canada.
About Montreal Exchange Inc.
The Montreal Exchange (MX) is the Canadian derivatives exchange. The MX offers trading in Canadian interest rate, index and equity derivatives. Clearing, settlement and risk management services are provided by an AA rated clearing house, the Canadian Derivatives Clearing Corporation, fully owned by the MX. Our integrated trading and clearing services are supported by a proprietary suite of exchange technologies, known as SOLA(R). The MX also has interests in: the Boston Options Exchange (BOX), a U.S. automated equity options market, for which MX is the technical operator; the Canadian Resources Exchange (CAREX), a new corporation created with NYMEX that is dedicated to developing the Canadian energy market; and the Montreal Climate Exchange (MCeX), a joint venture with the Chicago Climate Exchange(R), aiming to establish the leading market for publicly traded environmental products in Canada. For more information about the Montreal Exchange, please visit http://www.m-x.ca/.
About Chicago Climate Exchange, Inc.
CCX is a financial institution whose objectives are to apply financial innovation and incentives to advance social, environmental and economic goals. CCX, which began trading in 2003, is the world's first and North America's only legally binding rules-based greenhouse gas emissions allowance trading system, as well as the world's only global system for emissions trading based on all six greenhouse gases. CCX members are leaders in greenhouse gas management and mitigation, including offset providers and offset aggregators, and located throughout the United States. CCX members derive from all sectors of the global economy, including the public sector, and emissions reductions being achieved through CCX by major utilities, corporations, cities, states and counties, are the only reductions in North America being achieved through a legally binding compliance regime, subject to independent third party verification provided by FINRA and price transparency. The founder, Chairman and CEO of CCX is economist and financial innovator Dr. Richard L. Sandor, who was named a Hero of the Planet by Time magazine in 2005 for his founding of CCX, and in 2007 as the "father of carbon trading." For a full history of CCX, full roster of CCX members, daily prices and other Exchange information, see http://www.chicagoclimateexchange.com/.

Source: http://www.finanznachrichten.de/nachrichten-2008-03/artikel-10351070.asp

World Bank launches new carbon guarantee product
Tue 18 Mar 2008, 6:36 GMT
By Lesley Wroughton
WASHINGTON (Reuters) - The World Bank on Monday launched a new carbon credit trading guarantee that will allow private-sector firms in developing countries to tap the growing 40 billion euro global carbon market, a senior official said.
The International Finance Corp, the World Bank's private-sector lender, said it signed its first carbon delivery guarantee agreements with fertilizer producers Omnia of South Africa and Rain CII Carbon in India.
In South Africa, IFC's agreement covers up to 900,000 credits from Omnia. For Rain, one of the world's largest producers of calcined coke, the deal covers 850,000 carbon credits.
Under the guarantee, IFC will help facilitate the delivery of carbon credits from companies in developing countries to buyers in developed markets, such as Europe and Japan, said Lance Crist, head of IFC's oil, gas and chemicals division.
He said other companies in China, India, Mexico, Brazil, Egypt and Tanzania had expressed interest in the product.
Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, currently being re-negotiated before it expires in 2012, companies in developing countries can qualify to sell carbon credits, known as Certified Emission Reductions, in global commodity markets when they reduce their output of environmentally harmful substances.
However, so-called compliance buyers, the large utility companies in Europe or Japan, which are obliged to reduce their emissions under Kyoto, have been averse to paying full price for credits from developing nations because of the risk associated with doing business in these countries.
Crist told Reuters the IFC product guaranteed companies' ability to deliver the carbon credit.
"This is not yet a very efficient and completely transparent market, so sellers of the credits don't know exactly what the prices are that they're getting and they don't know if those funds are going to be around tomorrow," he said.
"So, IFC is offering a product that basically gives full transparency to carbon credit sellers by showing them what the prices are and guaranteeing their delivery to the buyers and in return we take a small spread to compensate us for that credit enhancement," Crist added.
POTENTIAL BUYERS
He said the carbon credits would be sold to potential European and Japanese buyers. Those contracts had not yet been signed in the case of Omnia and Rain, Crist added.
"We don't yet know who those buyers are but we know that it will be attractive to the market and there is a price on a daily basis that fluctuates according to supply and demand," he said.
"But we still need to work with the companies to determine what price they are willing to sell and who the buyers should be. Until we execute the second-half of the trade, we won't know what the value of the transaction is."
Crist said the guarantee gives companies in the developing world an incentive to participate in the growing global credit market and improve their profitability.
"Each of these companies are having to invest several million dollars to implement their emissions reduction projects. But in return, they have the prospect of generating significant inflows from the carbon credits," he added.
Global trade in carbon markets was up 80 percent last year at 40 billion euros, dominated by a European Union trading scheme. However, a 12 billion euro market under the Kyoto Protocol faces an uncertain future after the EU firmly linked this to international talks to agree on a Kyoto successor.
Still, Crist said once countries in the developing world join Kyoto, the global carbon market could become a trillion-dollar market.
"Participation so far from the developing world through the CDM has been limited," he said. "We believe there is immense potential for companies in the developing world to participate, which will have the benefit of both addressing climate change, which is fundamentally our concern, but also creating demonstration models to encourage other companies in the developing world to participate."

Source: http://africa.reuters.com/business/news/usnBAN823722.html

Carbon offset schemes "confusing"
Wed Mar 19, 2008 1:03pm GMT
By Jennifer Hill

LONDON (Reuters) - Carbon offsetting Web sites are inconsistent and confusing, with costs varying by up to 540 percent, according to a report.

A survey by Which? Money found huge variations in how such offsetting schemes calculate people's "carbon footprint" -- and how much they charge.

http://www.which.co.uk/reports_and_campaigns/house_and_home/Reports/Greener%20living/Getting%20started/Carbon%20offsetting/Carbon_offsetting_report_657_134684_4.jsp

A range of activities affect the carbon footprint of individuals, from driving to work and flying overseas to heating and lighting our homes and buying food from non-local sources; the higher the "food miles" before it reaches the plate, the greater the environmental impact.

But there are now hundreds of carbon offsetting schemes that aim to help individuals and businesses reduce their CO2 emissions by offsetting, reducing or displacing the CO2 in another place, typically where it is more economical to do so.

They use the money to invest in renewable energy, energy efficiency and reforestation projects around the globe.

Which Money?, a consumer magazine, compared the Web sites of 13 UK-based carbon offset companies, and found that emissions based on the same example varied from 1.15 tonnes with Carbon Footprint to 7.1 tonnes with the Carbon Neutral Company.

The government calculator (www.direct.gov.uk/ActonCO2) gave an emissions figure of 4.31 tonnes for a test home.

To add to the confusion, the cost of offsetting a tonne of carbon dioxide varied from 7 pounds with Carbon Offsets to almost 23 pounds per tonne with Carbon Responsible.

The total cost to offset the carbon produced by the test home ranged from 25 pounds to almost 160 pounds -- 540 percent more.

Which? Money also uncovered a lack of transparency.

Few of the carbon offset companies gave sufficient information on the administration fees involved or proportion of the money that reaches carbon offset projects.

Climate Care was the most transparent, with Blue Ventures Carbon Offset, PURE and the World Land Trust also highly rated.

The government plans to introduce a voluntary code of practice this spring to cover carbon offsetting projects that comply with the Kyoto treaty on climate change, but it will not apply to non Kyoto-compliant schemes.

Martyn Hocking, editor of Which? Money, said that should aid transparency.

"Carbon offsetting schemes offer to ease your conscience, but choosing which company to use can be very confusing as there's no consistency in how they calculate your 'carbon footprint' or how much they charge," he said.

"The new code of practice will help indicate which schemes meet standards of transparency and quality.

"As it doesn't cover all schemes, we'd like to see the industry develop its own code of conduct so that people can donate with confidence and know that their payment is being used for a verifiable project."

Only 7 percent of 2,645 Which? members surveyed have used carbon offsetting schemes, but 68 percent of those who have not would consider doing so in the future.

The survey of carbon offsetting Web sites was based on a typical example of a couple living in a two-bedroom semi-detached home in west London, spending 500 pounds per year on gas and 300 pounds per year on electricity, driving a petrol-engined Ford Focus 8,000 miles a year and taking one return flight each a year from London Heathrow to Barcelona.

(Editing by Stephen Addison)
Envisat makes first ever observation of regionally elevated CO2 from manmade emissions

18 March 2008

Using data from the SCIAMACHY instrument aboard ESA's Envisat environmental satellite, scientists have for the first time detected regionally elevated atmospheric carbon dioxide – the most important greenhouse gas that contributes to global warming – originating from manmade emissions.

More than 30 billion tonnes of extra carbon dioxide (CO2) is released into the atmosphere annually by human activities, mainly through the burning of fossil fuels.
According to the latest report by the Intergovernmental Panel on Climate Change (IPCC), this increase is predicted to result in a warmer climate with rising sea levels and an increase of extreme weather conditions. Predicting future atmospheric CO2 levels requires an increase in our understanding of carbon fluxes.

Dr Michael Buchwitz from the Institute of Environmental Physics (IUP) at the University of Bremen in Germany and his colleagues detected the relatively weak atmospheric CO2 signal arising from regional ‘anthropogenic’, or manmade, CO2 emissions over Europe by processing and analysing SCIAMACHY data from 2003 to 2005.

Elevated CO2 over Europe

As illustrated in the image, the findings show an extended plume over Europe’s most populated area, the region from Amsterdam in the Netherlands to Frankfurt, Germany.

Carbon dioxide emissions occur naturally as well as being created through human activities, like the burning of fossil fuels (oil, coal, gas) for power generation, industry and traffic.

"The natural CO2 fluxes between the atmosphere and the Earth’s surface are typically much larger than the CO2 fluxes arising from manmade CO2 emissions, making the detection of regional anthropogenic CO2 emission signals quite difficult," Buchwitz explained.

"This does not mean, however, that the anthropogenic fluxes are of minor importance. In fact, the opposite is true because the manmade fluxes are only going in one direction whereas the natural fluxes operate in both directions, taking up atmospheric CO2 when plants grow, but releasing most or all of it again later when the plants decay. This results in higher atmospheric CO2 concentrations in the first half of a year followed by lower CO2 during the second half of a year with a minimum around August.

"That we are able to detect regionally elevated CO2 over Europe shows the high quality of the SCIAMACHY CO2 measurements."

CO2 measurements

Buchwitz says further analysis is required in order to draw quantitative conclusions in terms of CO2 emissions. "We verified that the CO2 spatial pattern that we measure correlates well with current CO2 emission databases and population density but more studies are needed before definitive quantitative conclusions concerning CO2 emissions can be drawn."

Significant gaps remain in the knowledge of carbon dioxide’s sources, such as fires, volcanic activity and the respiration of living organisms, and its natural sinks, such as the land and ocean.

"We know that about half of the CO2 emitted by mankind each year is taken up by natural sinks on land and in the oceans. We do not know, however, where exactly these important sinks are and to what extent they take up the CO2 we are emitting, i.e., how strong they are.

"We also don’t know how these sinks will respond to a changing climate. It is even possible that some of these sinks will saturate or turn into a CO2 source in the future. With our satellite measurements we hope to be able to provide answers to questions like this in order to make reliable predictions," Buchwitz said.

By better understanding all of the parameters involved in the carbon cycle, scientists can better predict climate change as well as better monitor international treaties aimed at reducing greenhouse gas emissions, such as the Kyoto Protocol which addresses the reduction of six greenhouse gases.

Last year, European Union leaders highlighted the importance of cutting emissions from these manmade gases by endorsing binding targets to cut greenhouse gases by at least 20 percent from 1990 levels by 2020.

Black Carbon Pollution Emerges as Major Player in Global Warming

Date: March 24, 2008
Source: Scripps Institution of Oceanography, UC San Diego

Black carbon, a form of particulate air pollution most often produced from biomass burning, cooking with solid fuels and diesel exhaust, has a warming effect in the atmosphere three to four times greater than prevailing estimates, according to scientists.

Scripps Institution of Oceanography at UC San Diego atmospheric scientist V. Ramanathan and University of Iowa chemical engineer Greg Carmichael, said that soot and other forms of black carbon could have as much as 60 percent of the current global warming effect of carbon dioxide, more than that of any greenhouse gas besides CO2. The researchers also noted, however, that mitigation would have immediate societal benefits in addition to the long term effect of reducing greenhouse gas emissions.

"Observationally based studies such as ours are converging on the same large magnitude of black carbon heating as modeling studies from Stanford, Caltech and NASA. We now have to examine if black carbon is also having a large role in the retreat of arctic sea ice and Himalayan glaciers as suggested by recent studies," said Ramanathan.

In the paper, Ramanathan and Carmichael integrated observed data from satellites, aircraft and surface instruments about the warming effect of black carbon and found that its forcing, or warming effect in the atmosphere, is about 0.9 watts per meter squared. That compares to estimates of between 0.2 watts per meter squared and 0.4 watts per meter squared that were agreed upon as a consensus estimate in a report released last year by the Intergovernmental Panel on Climate Change (IPCC), a U.N.-sponsored agency that periodically synthesizes the body of climate change research.

Between 25 and 35 percent of black carbon in the global atmosphere comes from China and India, emitted from the burning of wood and cow dung in household cooking and through the use of coal to heat homes. Countries in Europe and elsewhere that rely heavily on diesel fuel for transportation also contribute large amounts.

The polluting effects of cooking using biomass like wood or cow dung in south Asia are illustrated through a measurement of aerosol optical depth, a way of measuring the quantity of pollutants in the air by the relative ability of light to penetrate through them.

"Per capita emissions of black carbon from the United States and some European countries are still comparable to those from south Asia and east Asia," Ramanathan said.

In south Asia, pollution often forms a prevalent brownish haze that has been termed the "atmospheric brown cloud."

Ramanathan's previous research has indicated that the warming effects of this smog appear to be accelerating the melt of Himalayan glaciers that provide billions of people throughout Asia with drinking water. In addition, the inhalation of smoke during indoor cooking has been linked to the deaths of an estimated 400,000 women and children in south and east Asia.

Elimination of black carbon, a contributor to global warming and a public health hazard, offers a nearly instant return on investment, the researchers said. Black carbon particles only remain airborne for weeks at most compared to carbon dioxide, which remains in the atmosphere for more than a century. In addition, technology that could substantially reduce black carbon emissions already exists in the form of commercially available products.

Ramanathan said that an observation program for which he is currently seeking corporate sponsorship could dramatically illustrate the benefits. Known as Project Surya, the proposed venture would provide some 20,000 rural Indian households with smoke-free cookers and equipped to transmit data. At the same time, a team of researchers led by Ramanathan would observe air pollution levels in the region to measure the effect of the cookers.

Source: http://www.smartplanet.com/news/business/10000966/jp-morgan-buys-into-carbon-offsetting.htm

Banks may be reluctant to lend money at the moment -- including to each other -- but there's always enough spare change for a pet project, particularly if it's green. Now it seems that emissions offset companies are the latest investment wheeze. Yesterday, venerable investment bank JP Morgan bought Oxford-based offsetting specialist ClimateCare for an undisclosed sum.
ClimateCare is one of the highest profile carbon offsetting companies, offering offsetting to both individuals and businesses. These include The Guardian, British Gas, the Co-operative Bank and British Airways. By August 2007, it had offset one million tonnes of CO2, the equivalent to taking 300,000 cars of the road a year. Most of the schemes it supports are overseas, including wind farms in China, fuel-efficient stoves in Mexico, hand pumps in India and rainforest reforestation in Uganda. Eighty percent of its investment is in renewable energy rather than planting trees.
ClimateCare hopes that its acquisition will see the funds it can invest in offsetting projects increase significantly, as the investment bank can leverage its influence over blue chip customers. When the takeover is complete, ClimateCare will be absorbed into JP Morgan's existing Environment Markets group, which will originate carbon emission reduction projects globally and trade the carbon emission reduction credits generated by the projects in the compliance and voluntary markets.
"[We] can now deliver expertise on a truly global scale, and work with hundreds of major partners around the world to facilitate the roll-out of low-carbon technologies at the scale and pace required to make a genuine difference to our environment," said Mike Mason, founder of ClimateCare.
ClimateCare was set up in 1998 as company limited by guarantee but with no shareholders. It gives a ten per cent royalty on 'sales' to an operating company that administers the trust. In 2006, sales racked up £890,000 and it forecasted a 700 per cent growth in turnover for 2007.
The global £200m voluntary carbon market, which is mostly unregulated, has been under considerable attention recently with critics warning that there are an alarming number of fraudulent schemes. The UK government announced in February that it was introducing a code of conduct for offsetting firms in the hope of ridding the market of cowboys.
But the plans were criticised for only recognising EU and UN-backed schemes and not allowing voluntary carbon credits schemes to carry the kite mark. ClimateCare, which offers both voluntary and EU/UN-recognised credits, is hoping that the code of practice will be extended to incorporate voluntary initiatives.
It is perhaps in ERU/CER credits where JP Morgan hopes to leverage most value, however. Many of its corporate customers will be obliged to cut emissions, offset them or purchase further carbon credits. A one stop shop will be able to offer offsetting and credits to multinationals that have so far been wary of small offset start-ups.
AFP - Thursday, April 10 10:28 pm

SAN JOSE (AFP) - Costa Rica plans to balance out carbon dioxide (CO2) emissions to become "carbon neutral" by 2021, through a joint government-private enterprise effort, without foresaking economic growth, the environment minister said Thursday.

Roberto Dobles outlined the ambitious plan that includes substituting petroleum and its derivatives with biofuels, thrifty and efficient use of energy and reducing agricultural burn-offs, at the two-day National Meeting for Carbon Neutrality.

With Britain and Spain participating, Dobles said the gathering of around 60 business leaders, academics, non-governmental organizations and environmental activists will share experiences in the field and help Costa Rica focus on its goal.

He said that besides reducing and compensating CO2, methane and other greenhouse gases emissions by coordinating government policy with the private sector, the plan will also continue a tree replanting campaign that last year surpassed the five million goalpost.

"For 2008, we've set the target at seven million trees in rural and urban areas, surpassing the target set by France, a country with 64 million people (Costa Rica has 4.2 million)," Dobles said.

Shipping CO2 controls to raise transport costs
Thu Apr 10, 2008 11:42am EDT

By Stefano Ambrogi - Analysis

LONDON (Reuters) - The world's shipping industry plans to limit its growing carbon dioxide emissions by taxing marine fuels and signing up to a new climate change deal in moves likely to raise transport costs for raw materials.

Experts say the measures, aired at an International Maritime Organisation (IMO) meeting on fuel pollutants in London last week and about a year away from being formally agreed, will be painful but are necessary in the fight against climate change.

"If costs go up then consumers will have to pay ... and that looks like the scenario," said Don Gregory a fellow of the Institute of Marine Engineers.

Shipping, because it operates out of sight on the oceans, has avoided the high-profile criticism for its production of CO2 as aviation, but its emissions are high and growing.

A scientific study prepared for the IMO in December found annual CO2 emissions from ships are more than twice previous estimates at 3.5 percent of the global total. That compares with 2 percent of global emissions from aviation.

The report said shipping emissions could increase by at least another third by 2020 as ocean trade, carrying 90 percent of the world's traded goods by volume, continues to rise.

"The carbon tax would clearly be an additional cost for operators who will pass it on, but you have to see it in the context of the overall transport cost which is still small," said Simon Bennett secretary at the International Chamber of Shipping (ICS).

COSTS "MINIMAL"

Gregory, who also works on the environmental side at an oil major, agreed:

"The (former World Bank chief Nicholas) Stern report suggested those costs would be minimal compared with the costs of climate change."

Some executives believe that even the IMO's latest figures may be underestimating the true scale of shipping emissions.

"We believe the IMO is grossly underestimating future growth in shipping," said Christian Eyde Moller, chief executive of Dutch-based DK Group, a marine technology firm that specializes in reducing ship emissions.

Moller says CO2 emissions could exceed 2 billion metric tonnes in 2020, rather than the IMO's 1.475 billion estimate.

The IMO's plans will be reassessed in June before a decision in 2009 ahead of a UN's climate change conference in Copenhagen.

"What is pivotal is that they have decided to do something and that they now have a timescale to do that: a legislative solution by Spring 2009," said Peter Hinchliffe, ICS marine director.

DOZENS OF PROPOSALS

Dozens of initiatives and technological solutions are being considered to try to limit shipping emissions, several of which will directly or indirectly increase costs.

One of the most talked about is a global tax on marine fuels, known in the industry as bunkers, for all ships on international voyages. The tax would establish a baseline of fuel used and calculate CO2 generated.

A levy and credits scheme to curb gases from ship exhausts would also raise the cost of using heavily emitting ships.

A CO2-Index for new ships has also been proposed, which would allow the design and construction of vessels to be measured so that firms could choose environmentally-friendly designs.

The European Union favors incorporating shipping into a global emissions trading scheme.

Many of the proposals have merits, analysts say.

"The levy (tax) sounds very simple and has some attraction but we are not convinced that it can be applied internationally," Hinchliffe said.

"Personally, I think that CO2 (trading scheme) is more attractive than any previous discussions on emissions trading on SOX and NOX (pollutants) which just seemed to us impossible," he said, pointing out that they were unlikely to run concurrently.

"My instinct is that IMO will go for a simple solution: one scheme that applies equally to all ships."

(Additional reporting by Gerard Wynn; editing by Chris Johnson)

Two carbon-market millionaires take a hit as UN clamps downEcoSecurities sees shares slide 70%; 'in the gray zone'Jeffrey Ball, Wall Street Journal14 Apr 2008 07:24
OXFORD, England -- Marc Stuart and Pedro Moura Costa have become multimillionaires in a booming new market designed to fight global warming.Now, their empire is under attack.
Their firm, United Kingdom-based EcoSecurities <http://online.wsj.com/quotes/main.html?type=djn&symbol=ECO.LN> Ltd., helps companies in the industrialized world meet their obligations to pollute less by selling them "credits" that fund clean-air projects in poorer nations. Last year, some $9.4 billion in these credits were traded, up from almost none four years earlier.
The market's anything-goes early days now appear to be ending. United Nations officials who regulate the trade have started questioning scores of proposed projects, from hydroelectric plants in China to wind farms in India. The issue: whether they provide real environmental gains, or are just padding the pockets of middlemen like EcoSecurities.EcoSecurities' woes are a prime example of how tough it is proving to be to launch a coordinated world-wide attack on global warming. The carbon-credit industry's growing pains come just as Congress is considering similar pollution-cutting rules targeting U.S. industries.EcoSecurities is one of the main players in an international market that was created as part of the Kyoto Protocol to combat global warming. A key premise of the system is that, because greenhouse gases damage the atmosphere no matter where they originate, society should attack them first where the cleanup is cheapest, in the developing world. But policing that far-flung market has proved to be tricky because it involves valuing a commodity, climate-warming emissions of gas, that is far less tangible than oil or gold.javascript:OpenG('http://online.wsj.com/public/resources/documents/info-flash08.html?project=ECOSEC08') javascript:OpenG('http://online.wsj.com/public/resources/documents/info-flash08.html?project=ECOSEC08')
The "credits" sold by EcoSecurities and its rivals are supposed to fund clean-air projects in the developing world that otherwise wouldn't get built. But the U.N. is worried that players in the market may be gaming the system by putting a green imprimatur on some projects that would have happened anyway, defeating the intent of the U.N. program.The tougher U.N. scrutiny is necessary to "ensure the environmental integrity of the system, because otherwise it's not achieving its purpose," says Kai-Uwe Barani Schmidt, the top administrator for the U.N. board that referees this trade.

See a map with photos and details on some of EcoSecurities' top credit-generating projects world-wide.
EcoSecurities is one of the largest and most aggressive of a dozen or so major firms that scour the globe for projects like these, then profit by selling credits to help fund them. The main buyers are companies in Europe and Japan, whose governments have ratified the Kyoto Protocol, a global agreement imposing pollution caps on industrialized nations. Like EcoSecurities, most of the project developers are based in Europe.That business is now in turmoil. Late last year, EcoSecurities said it would fail to deliver one-quarter of the credits it had promised. Its stock has fallen nearly 70% since that write-down -- and 80% since its peak last summer. The firm's two co-founders, Messrs. Stuart and Moura Costa, have lost about $147 million on paper due to the stock's overall decline.Mr. Stuart acknowledges that his firm, in its race to dominate the field, sometimes pushed the envelope. "The first couple of years, this business was a land grab," he says. But many projects, he says, didn't generate as many credits as originally estimated, leading to last year's big write-down.The firm's approach "was very successful at first, but it did leave a bit of a mess to clean up," says Mr. Stuart, a former Ultimate Frisbee champion at the University of Pennsylvania, who holds a master's degree in environmental law and economics from the London School of Economics. He is frank about the problems the industry faces."I guess in some ways it's akin to subprime," says Mr. Stuart, 43 years old, referring to the subprime-debt woes rattling the U.S. economy. "You keep layering on c- until you say, 'We can't do this anymore.'"Pushing Back
EcoSecurities has helped assemble about 10% of all developing-world projects approved so far by the U.N., more than any other player. Its main rivals include Camco International <http://online.wsj.com/quotes/main.html?type=djn&symbol=SLB> Ltd., which says it, too, has had projects delayed. Another rival, AgCert International PLC, says the tightening of U.N. rules has contributed to the company's filing for protection from creditors in Ireland, its home country.
EcoSecurities is pushing back. It notes that the vast majority of its projects ultimately get approved. And it argues the U.N. crackdown hurts the environment more than it helps, since it delays clean-air projects and cuts off a funding source. It says regulators have failed to set clear rules -- and now they're changing their standards midstream.One thorny issue: Who should vouch for the quality of clean-air projects? EcoSecurities says the U.N. scrutiny adds bureaucracy because it duplicates work already done by independent auditors who are hired to vet all projects. The U.N. panel should stick to an "executive and supervisory role," EcoSecurities says.U.N. officials have questioned whether the auditors have been tough enough. The concern centers on whether auditors, who are hired by project developers, are adequately staffed to police the environmental legitimacy of the swelling number of projects. The auditors strenuously defend the quality of their oversight.
While that debate rages, EcoSecurities has been busy refocusing on projects less likely to raise red flags. For instance, it is shifting to projects to curb secondary greenhouse gases, such as nitrous oxide, produced in obscure industrial processes like nylon making. The problem, as EcoSecurities executives point out, is that targeting secondary gases does nothing to combat fossil-fuel use, which according to the U.N. is the primary man-made contributor to global warming.The situation is "extraordinarily frustrating," Mr. Stuart says.
The trade in developing-world credits results from a provision of the Kyoto Protocol called the Clean Development Mechanism. A 10-member U.N. board vets proposed projects to ensure their environmental legitimacy. The independent auditors accredited by the U.N. act as the board's field inspectors, traveling the globe to certify whether a project is up to snuff.
Each credit is essentially a permission slip to emit one ton of carbon dioxide into the atmosphere. Currently these credits sell for $16 to $24 apiece.EcoSecurities went public in late 2005 and was an immediate market darling. Mr. Moura Costa, 44, a Brazilian forestry expert living in Oxford, recalls that by early 2006 he was telling the firm's lawyers to ink contracts for new projects at the rate of one per working day. "It was a madhouse," he says.Permissive Board
Over the next 18 months, EcoSecurities contracted more than 200 additional projects around the world -- from Nicaragua to Inner Mongolia -- promising tens of millions of emission credits. Its stock price nearly tripled. Messrs. Stuart and Moura Costa became multimillionaires on paper.EcoSecurities' rise coincided with a permissive U.N. board. In 2004 and 2005, the board automatically approved 95% of the projects proposed to it, according to U.N. statistics. Mr. Schmidt of the U.N. says the board was thinly staffed at the time. By its current standards, he says, some proposals "probably went through without" proper scrutiny.In mid-2006, there was an early hint that regulators were toughening their stance. The issue: manure.
Decomposing manure at farms emits methane, a greenhouse gas. The projects involve placing a tarp over the manure to capture and dispose of the rising gas. EcoSecurities expected at least 10% of its credits to come from projects like these.But in 2006 the U.N. tightened its rules, requiring animal farms to measure the amount of methane they were capturing rather than simply estimating the number based on a formula -- and use the lower number. That move slashed by more than one-third the number of credits a typical animal-waste project would produce for sale.Suddenly, the projects no longer made economic sense, Mr. Moura Costa says. EcoSecurities canceled most of them, erasing about $100 million in potential profit.
Still, investors remained impressed with the company, because it continued to grow. Last July, with the stock near its peak, Mr. Stuart sold 2.2 million shares for about £8 million, or about $16 million, and Mr. Moura Costa sold 1.3 million shares for about £5 million as part of a secondary offering, according to financial filings. The two men remain the biggest shareholders with a 20% stake between them.Having money was a big change for the two men, Mr. Stuart says, recalling that when EcoSecurities was young he routinely charged up thousands of dollars of debt on his credit card to help keep it operating. After the stock sale, Mr. Stuart traded his 1994 Mercury Sable for a $55,000 black Lexus hybrid sedan.
Around then, the U.N.'s crackdown started in earnest. The U.N. staff zeroed in on projects they had reason to believe might be financially viable even without revenue from the sale of credits. Last year, the U.N. board gave automatic approval to only 57% of proposed projects, down from 95% in 2004 and 2005. Overall, it rejected 9% of proposed projects last year, more than double its rejection rate in 2006.
One of the proposals blocked was an EcoSecurities project at a grain-processing plant in Uberlandia, Brazil, to replace oil-fired boilers with one using renewable energy like scrap wood. The U.N. said EcoSecurities hadn't proved that it needed revenue from selling credits to make economic sense.EcoSecurities wasn't surprised the project got shot down: The company's own calculations showed that replacing the boilers made marginal economic sense even without the sale of credits.
The project "was in the gray zone" of the rules, Mr. Stuart says. He likens the U.N. panel to the Internal Revenue Service: "You push things as hard as you can, within what you think are reasonable guidelines. But every now and then the IRS will push you back."Value Judgment
The U.N.'s Mr. Schmidt says it doesn't surprise him that borderline projects like these get submitted. "If I were not to expect such behavior, I would be living in the wrong world," he says. Nevertheless, he says, "I don't see this particular case as trying to cheat."Determining whether or not a project needs carbon-credit revenue is "a value judgment," he says. "It is one of the biggest challenges" of the carbon trade.Mr. Schmidt, who has known Messrs. Stuart and Moura Costa for more than a decade, says he respects the company. "We have a very good relationship," he says. "We also know we have certain roles to play."
U.N. officials acknowledge that calculating whether a project can be economically viable without carbon-credit revenue is subjective. For instance, the calculus can swing widely based on whether oil prices surge, or fall. Similarly, it involves guesstimates of how long a project -- whether a hydroelectric generator or methane-recapture effort -- will remain operable.
EcoSecurities has more than 100 projects approved by the U.N., and only a handful rejected. But many of its proposed projects now are being held up by the U.N. for review. That's bad news for EcoSecurities because it delays its ability to start selling credits. The company originally operated on the assumption that U.N. approvals would take two months, on average. But now they're taking an average of nine months.Obsessed with Detail
Starting last year, the regulators were "getting more and more obsessed with detail," raising questions that weren't relevant to projects' environmental integrity, Mr. Moura Costa recalls. He and other EcoSecurities executives expressed frustration to U.N. officials. The company's message, he says: "This is ridiculous."Last fall, concern about the U.N.'s more activist role boiled over at EcoSecurities' headquarters here in Oxford. The company uses a computer database it calls "Carbo" to monitor the rate at which its projects produce credits. As the U.N. clamped down, Carbo's "siren was going off," Mr. Stuart recalls.
In October, EcoSecurities executives gathered in the boardroom to confront a striking reality: In the space of months, the entire landscape of their industry had changed. Poring over their biggest projects, they debated how much of their business would need to be simply written off.
A big write-down "would have significant consequences to the company," Mr. Moura Costa recalls warning.
Ultimately, on Nov. 6, the company announced its write-off of 23% of the credits it had promised to deliver. Its stock fell 47% that day.
Since then, the stock has fallen further. It closed Friday on the London Stock Exchange's AIM at 84 pence, giving it a market capitalization of £94.9 million.Last month, EcoSecurities, which has 300 employees in 30 offices world-wide, reported a widened loss for last year of €45 million on revenue of €7.2 million.EcoSecurities' largest shareholder, other than the two founders, is banking giant Credit Suisse <http://online.wsj.com/quotes/main.html?type=djn&symbol=cs> , which bought an approximately 9% stake last summer when the stock was near its peak. Since then, Credit Suisse has lost two-thirds of its $60 million investment.
"We don't believe the market is valuing the stock fairly," says Paul Ezekiel, who heads Credit Suisse's carbon business and who sits on EcoSecurities' board.Given the lack of clarity in the U.N.'s rules, it's not fair to fault EcoSecurities for trying to maximize the number of credits it produces, he says. "It's like saying the speed limit's going to be between 50 and 90. So do you drive 55 or do you drive 85?"
Wall Street Journal

Climate Action Reserve Brings Order to Voluntary Carbon Market

Posted : Mon, 14 Apr 2008 17:13:00 GMT
Author : California Climate Action Registry
Category : Press Release

Focus on Integrity, Transparency & Accountability

LOS ANGELES, April 14 /PRNewswire/ -- The California Climate Action Registry announces the launch of the national Climate Action Reserve, a new division of the respected non-profit Registry designed to assure a high degree of environmental integrity, transparency, accuracy, and accountability in the voluntary carbon market.

The Climate Action Reserve works on several levels to bring order and credibility to carbon reduction projects and their associated inventories of greenhouse gas emissions reduction tons.

To begin with, the Registry develops standardized greenhouse gas emissions reduction project protocols, which are guidelines for the development of national reduction projects. These protocols are based on internationally recognized best practices which assure projects are real, permanent, verifiable, and additional. The protocols are developed with stakeholder workgroups representing the business, government, science and environmental sectors; fine tuned through a formal public review and comment process; and published on the California Climate Action Registry website for the public to view and utilize.

"The Registry's Forest Protocols are among the world's most accurate and environmentally sound, which led the State of California to adopt them," said Mary Nichols, Chair of the California Air Resources Board, the state agency charged with implementing AB32, California's landmark Global Warming Solutions Act.

Crucial information about carbon reduction projects, and their associated inventories of emissions reduction tons, is made publicly available on the Climate Action Reserve website. This includes project location, ownership; the name of the project developer; the third party verification firm and the verification report; the specific protocol utilized to develop a project; and additional detailed information.
Greenhouse gas emissions reductions are measured in Carbon Reduction Tons (CRTs, pronounced carrots). Every CRT registered with the Climate Action Reserve has been verified by an independent third party and assigned a unique serial number that is used to track its sales and confirm when it has been retired. This system prevents the possibility of double selling and allows buyers to confirm that tons purchased have in fact been used as an offset. The serial numbers can be used to research detailed project information publicly available on the Reserve website.

"The Climate Action Reserve raises the bar in the voluntary carbon market from an environmental point of view," said Frances Beinecke, President, Natural Resources Defense Council. "We support the work of the Climate Action Reserve and agree with its goals of bringing transparency, accuracy, and consistency nationwide.

"We recognize there is a need in the voluntary carbon market for additional consistency and credibility and created the Climate Action Reserve in response to that need," said Linda Adams, Secretary, California Environmental Protection Agency and Chair of the California Climate Action Registry.

"We are enthusiastic about the work the Reserve is doing because it provides increased certainty about investing in this sector," said Ken Newcombe, Managing Director and Head of U.S. Carbon Desk, Goldman Sachs.

The Climate Action Reserve is a division of the California Climate Action Registry that provides accurate and transparent measurement, verification, and tracking of greenhouse gas reduction projects and their inventories of greenhouse gas reduction tons assuring a high degree of environmental integrity in the voluntary carbon reduction market. http://www.climateregistry.org/offsets

The California Climate Action Registry is a non-profit public organization started by the State of California to serve as a voluntary greenhouse gas registry to encourage and protect early actions to reduce greenhouse gas emissions. The Registry assists organizations to calculate, verify, and publicly report their greenhouse gas emissions. Over 300 leading companies, cities, government agencies, environmental organizations, educational institutions, and non-profits measure publicly report their emissions through the Registry. http://www.climateregistry.org/

California Climate Action Registry
EPA says CO2 emissions declined in 2006
15 April 2008 --

The U.S. Environmental Protection Agency (EPA) has released the national greenhouse gas inventory, which found that overall emissions during 2006 decreased by 1.1 percent from the previous year.

The report, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006, is the latest in an annual set of reports that the United States submits to the Secretariat of the United Nations Framework Convention on Climate Change, which sets an overall framework for intergovernmental efforts to tackle the challenge posed by climate change.

Total emissions of the six main greenhouse gases in 2006 were equivalent to 7,054.2 million metric tons of CO2. These gases include CO2, methane, NOX, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.

The report indicates that overall emissions have grown by 14.7 percent from 1990 to 2006, while the U.S. economy has grown by 59 percent over the same period.

The decrease in emissions in 2006 was due primarily to a decrease in CO2 emissions associated with fuel and electricity consumption. The following factors were primary contributors to this decrease:

· compared to 2005, 2006 had warmer winter conditions, which decreased consumption of heating fuels, as well as cooler summer conditions, which reduced demand for electricity;
· restraint on fuel consumption caused by rising fuel prices, primarily in the transportation sector; and
· increased use of natural gas and renewables in the electric power sector.

EPA prepares the annual report in collaboration with experts from multiple federal agencies and after gathering comments from a broad range of stakeholders across the country.

The inventory tracks annual greenhouse gas emissions at the national level and presents historical emissions from 1990 to 2006. The inventory also calculates CO2 emissions that are removed from the atmosphere by "sinks," e.g., through the uptake of carbon by forests, vegetation and soils.

Information on the greenhouse gas inventory report: http://www.epa.gov/climatechange/emissions/usinventoryreport.html

California to serve as climate model for China

Tue Apr 22, 2008 1:52pm EDT

LOS ANGELES (Reuters) - California on Tuesday said it reached a deal with the United Nations to share research, policy initiatives and technological innovations aimed at reducing greenhouse gas emissions with Chinese provincial governments.

In a statement, the California Environmental Protection Agency said the U.N. Development Program asked California to serve as a model in its work with the Chinese government on climate change.

As part of the agreement, California will share best practices from its climate change strategy and coordinate activities that support the development of strategies to address global warming in China.

China's emergence as a global economic power has heightened concerns about its role as a polluter, with some studies saying it has already overtaken the United States as the world's No. 1 carbon dioxide emitter.

California, meanwhile, has long been a leader in the United States on matters of climate change. The state has aggressive targets to reduce its greenhouse gas emissions by using more renewable energy sources and fuel-efficient cars.

"California is not waiting for the federal government to take action but instead we are forming agreements and building relationships with countries like China to fight climate change," California Gov. Arnold Schwarzenegger said in a statement.

(Reporting by Nichola Groom; Editing by Cynthia Osterman)
China to tie up with Chicago carbon emissions bourse

China will join up with the US Chicago Climate Exchange to establish a carbon emission market in the city of Tianjin near Beijing, state media reported Friday.
Tianjin authorities, oil giant PetroChina and the Chicago Climate Exchange will sign an agreement for the exchange, the first in the nation, as early as this month, the 21st Century Business Herald reported, citing unnamed sources.

The exchange, part of government plan to develop the Binhai New Area in Tianjin, will trade permits for emissions of greenhouse gas like carbon dioxide and sulphur dioxide, a source told the newspaper.

Some developing nations like India and China, among the world's biggest emitters of carbon dioxide, do not have exchanges to trade carbon permits, as they are not bound to slash emissions under the UN climate change framework.

Yvo de Boer, the UN's top official on climate change said in Beijing Thursday that developed nations must put forward more equitable positions if talks for a new pact to replace the Kyoto Protocol can be finalised by next year

http://www.breitbart.com/article.php?id=080425101958.wbdshtpi&show_article=1&catnum=7

Belgian-Dutch financial group Fortis expects the global carbon market to expand to about $100 billion in 2008, up two-thirds from last year, an executive at the leading carbon market player said on Thursday.

Shane Spurway, director of Fortis carbon banking in Asia, forecast it could become a $400 billion market as early as 2012, or by 2015, based on the expectation that the United States, alone among major industrialized nations in not ratifying the Kyoto Protocol, would join some form of global carbon market in the next couple of years.

“We expect the American market to be around four times the size of Europe,” Spurway told Reuters in an interview in Shanghai, adding that European trades currently account for about 90% of the global market.

“(The United States) will join an emissions trading agreement, where carbon will be a global commodity currency.” said Mr. Spurway, whose bank traded 300 million tons of carbon in 2007.

Total traded volume in the global carbon market reached 2.7 billion tons of greenhouse emissions reductions in 2007, a 64% jump from the prior year, while the value of trade ballooned to $60 billion, according to Point Carbon, a greenhouse gas analysts and consultants.

Mr. Spurway expects to see carbon traded as early as 2009 on an exchange in Asia, home to most of the projects registered under the United Nations’ Clean Development Mechanism (CDM).

Under the CDM scheme, rich nation polluters can meet their greenhouse gas quotas by funding emissions cutting projects in developing countries that earn them credits they can use at home.

Singapore, Hong Kong and Tokyo could all be potential locations, although development may be held up by a more limited market than in Europe.

“In Asia, apart from Japan, no country has compliance targets, so it’s very hard to set up a trading system here until you have a good range of buyers and sellers,” said Mr. Spurway.

He added that the global carbon market would become a 24-hour operation, to suit traders around the world.

Mr. Spurway was sceptical, however, about the potential of the voluntary carbon market, where companies or individuals with no obligations to cut emission invest in carbon-reduction projects that are not accredited under the rigorous U.N. system.

“Because it’s hard to verify, because it’s not very transparent, because there’s no neutral or independent measuring authority involved in it, the quality of these projects is risky,” said Mr. Spurway.

Prices are also lower because the less commoditized credits are harder to sell on to third parties.

One Certified Emission Reduction, or CER, a credit equivalent to one ton of carbon dioxide reduced under the U.N.’s CDM mechanism, trades between $15.80-23.80, in markets with greenhouse gas emission caps. By comparison, a ton from voluntary projects is only trading between $2 and $3 on exchanges in the U.S. and elsewhere.

by Reuters News on 06 May 2008, 09:52 AM 0 comments , 295 views Categories: Reuters News
UPDATE 1- LONDON, May 6 (Reuters) - European and Japanese investors have bought slightly more than half of London-based Climate Change Capital for 56 million pounds ($110.1 million), the specialist investor and consulting firm said on Tuesday.
Climate Change Capital (CCC) manages funds which invest in projects to cut greenhouse gas emissions in the developing world, to accrue carbon offsets under a U.N.-led scheme.
Founded in 2003, CCC was one of the first companies to exploit that growing carbon market, worth about 12 billion euros ($18.54 billion) last year, where rich countries can buy offsets to help them meet emissions caps under the Kyoto Protocol, by funding carbon cuts in developing nations.
CCC has now branched out into broader low-carbon fund management, consulting and advisory work.
The new money could be used to drive more aggressive expansion, including acquisitions, a company spokesman said.
The new investors are: Alliance Trust PLC, a UK investment trust, the Universities Superannuation Scheme, a UK pension fund, SNS REAAL N.V., the Dutch-based banking and insurance business and Japanese trading house, Mitsui & Co Ltd.
Alliance Trust and USS were already investors in CCC funds. U.S.-based hedge fund Och-Ziff has sold its stake in CCC as a part of Tuesday's deal, while RMF -- a sub-group of Man Group PLC -- has reduced its stake, the spokesman added.
The four new investors are also providing 20 million pounds to kick-start a new CCC fund of funds investing in low carbon-emitting technologies or assets.
Climate Change Capital manages some 800 million euros funds invested in carbon-cutting projects under the Kyoto Protocol.
The company also has over 250 million euros under management for investing in clean technology, clean fuels and renewable energy, much of which is invested in UK-based wind farms.
A Reuters estimate based on U.N. data suggests CCC ranks third worldwide in holdings of carbon offsets, at 91 million tonnes of carbon dioxide (CO2) equivalent, behind the Paris-based chemical company Rhodia and the Italian utility ENEL .
Those offsets trade at over 16 euros per tonne in a secondary market where delivery is guaranteed.
(Reporting by Gerard Wynn; editing by James Jukwey)
SANTA CLARA, Calif. - (Business Wire) APX, Inc., the leading infrastructure provider for environmental and energy markets, today announced the first Gold Standard exchange-traded carbon offset transaction was completed on Climex, a leading carbon spot and auction exchange. In the transaction, Rabobank purchased Gold Standard Verified Emissions Reductions (VERs) from Tricorona.

APX serves as the registry provider and administrator of The Gold Standard VER RegistryTM. The APX platform allows participants to originate, track, manage and retire carbon commodities. Climex, an environmental commodities and energy contracting exchange, recently launched a continuous electronic trading platform for VERs, which is now linked to the Gold Standard Registry. The APX registry system makes it possible to transfer VERs in a quick, transparent and reliable way from one owner to the next in a transaction.

“Tricorona is very active in acquiring and selling Gold Standard CERs and VERs and the fact that we now have a VER Registry and Trading Platform to further support and standardise the market is a good step forward,” said Frank Larsgard, Senior Trader with Tricorona, a Swedish-based investment and trading company in environmental instruments.

“For Rabobank, this is a very efficient way to purchase the VERs that we need,” said Daan Dijkof with Rabobank’s Corporate Social Responsibility Department. “With the availability of both the Gold Standard Registry and the Climex Trading Platform, we can assure even further reliability and transparency to the stakeholders involved.”

“We are enthusiastic about the launch of Gold Standard trading on Climex,” said Axel Posthumus, CEO of Climex. “This is an important step in stimulating market development and helping it mature, and we anticipate the growth in volume and transactions on the Climex Voluntary Platform. We have an important role to play in making spot trading of VERs available to the marketplace.”

“The integration of the Gold Standard Registry with Climex creates an important link between voluntary programs and the financial markets, which will speed the flow of investment, provide greater price transparency, and allow for faster attainment of environmental goals,” said John Melby, President of APX. “APX’s high-quality and transparent data infrastructure plays a critical role in the management of environmental commodities and we look forward to supporting the growth of this rapidly emerging market.”

The Gold Standard Foundation is a recognized leader in the VER arena and has established the world’s leading independent standard for the voluntary carbon market. The Gold Standard label distinguishes renewable energy and energy efficiency projects under the Clean Development Mechanism (CDM), Joint Implementation (JI) and in the voluntary offset market.

About APX Inc.

APX is the leading infrastructure provider for environmental and energy markets in renewable energy and greenhouse gases including carbon commodities. Providing a bank and mint for environmental commodities, the APX Environmental Market Depository™ is trusted to create, track, manage, and retire renewable energy certificates (RECs), energy efficiency and conservation certificates, carbon offset credits such as verified emissions reductions (VERs), and greenhouse gas emission allowances. The company is the system of choice for all major renewable energy markets in North America and greenhouse gas markets worldwide. APX also provides technology, strategic consulting, and expert operational services to assist wholesale power market participants reduce costs and improve performance in power scheduling, settlement, market operations, system operations support, and demand response programs. A privately held company, APX is headquartered in Santa Clara, CA. www.apx.com.

About Climex

Climex is a leading, Netherlands based, exchange for environmental commodities and energy contracting, owned by New Values B.V. Established in 2003, Climex provides continuous Spot Trading in EUAs and CERs for the entire market with APX Group as Central counterparty, auctioning of all carbon products (EUAs, CERs, ERUs and VERs) and Energy contracting and auctioning for Electricity, Gas and Guaranties of Origin/ Renewable Energy Certificates. Climex is unique because of its easy to use secure internet based trading platforms, with APX Group as its central counterparty. Climex, targets small & large, experienced & inexperienced traders and offers low trading fees with no annual fees and high liquidity. Climex was the first to execute a cleared CER spot trade in Europe, the first to organise online EUA, CER and VER auctions and organised all public governmental online EUA auctions so far. Over 16 TWh, worth € 450 million of energy contracts have been auctioned on Climex Energy Auction, with contracts ranging from € 10,000 to € 120 million. www.climex.com

Reiner Musier
APX Inc.
Chief Marketing Officer
617.699.0929
rmusier@apx.com
or
Sascha Bloemhoff
Commercial Director of Climex
New Values BV
Tel: +31 (0)30 291 9940
Mob: +31 (0)6 20015064
sascha.bloemhoff@climex.com
Should the carbon market worry about biodiversity?
by Friedel Sehlleier on 19 May 2008, 09:46 AM
Not quite Bali-size, but still tremendous: 5000 delegates are expected to attend the 9th Conference of the Parties to the UN Convention on Biological Diversity (CBD) from 19 to 30 May in Bonn. Let’s broaden our carbon horizon towards what the German host has labelled “the meeting for all life on earth” and explore linkages between biodiversity and climate change.
The CBD is the key international instrument for the protection of biodiversity. It shares its origin with the UNFCCC, as both were hammered out at the 1992 UN Earth Summit in Rio de Janeiro (together with the Convention to Combat Desertification, UNCCD). But the loss of biological diversity has not captured as much international and popular attention as climate change in recent years. However, its significance as a global environmental problem is by no means inferior.
The current rate of global extinction of species is 100 to 1000 times faster than the assumed natural extinction rate. According to the World Conservation Union IUCN around 15.500 species worldwide are critically endangered, including 23% of all mammals, 12% of birds and 31% of amphibians. But also entire ecosystems are under pressure. Around 1% of tropical forests, where 80% of the world’s biodiversity can be found, are lost each year.
Climate change is the second greatest threat to biodiversity (after habitat loss) according to the Millennium Ecosystem Assessment which, like the IPCC, assessed current knowledge, scientific literature, and data. Climate change adds pressure to ecosystems that are already under threat by land-use change, pollution, over-harvesting and the introduction of alien species.
Another link between biodiversity and climate change exists on the implementation level. The climate regime provides incentives to conserve existing carbon pools (e.g. avoided deforestation, forest management) to increase the size of carbon pools (e.g. afforestation, reforestation) and to substitute fossil fuel energy (e.g. biomass and biofuels). These activities can have beneficial or adverse impacts on biodiversity. For example, avoiding deforestation clearly serves biodiversity conservation. In contrast, clearing native forests and replacing them with faster-growing monocultures, or afforestation of natural grasslands and other native habitat types would have negative effects on biodiversity.
Conversely, efforts to conserve biodiversity can contribute to climate change mitigation. The CBD parties have set themselves the target to achieve a significant reduction in the rate of biodiversity loss by 2010. The EU even wants to halt the loss of biodiversity within the EU by 2010. To contribute to achieving the target, a global, representative network of protected areas by 2010 on land (and by 2012 at sea) is to be established. As forests are extremely rich in species diversity they play a key role in this context. A complementary ambitious work programme on conservation and sustainable use of forests is in place as well. Note that forest conservation under the CBD does not have to deal with tricky concepts such as additionality, leakage, permanence, and uncertainties resulting from a lack of information and knowledge.
Efforts to establish cooperation and enhance synergies between the two regimes have mainly come from the CBD so far. It has integrated climate change aspects into most of its work programmes and a technical expert group on biodiversity and climate change exists since 2001. The mandate of the technical expert group is likely to be updated at the Bonn meeting to provide biodiversity-relevant information to complement the Bali Action Plan process and the work of the UNFCCC SBSTA in the context of the Nairobi work programme on impacts, vulnerability and adaptation to climate change. The CBD is particularly keen to provide input into future technical discussions on the design of any emerging REDD and LULUCF schemes under the climate regime.
The Bonn meeting is the last COP before 2010, which is why the implementation status of the 2010 target will be a key topic here. But preparatory talks in 2007 and 2008 have provided a gloomy outlook for further progress. Key developing countries like Brazil opposed international rules on forest conservation and illegal logging, and refused to accept critical references on unsustainable agricultural policies and the promotion of biofuels. They emphasize their national sovereignty rights and call for improved financial support from industrialized countries.
Extremely insufficient funds are seen as one of the main reasons for insufficient implementation of the CBD. Observers fear that COP9 could even fail without substantial further pledges by industrialized countries or agreement on innovative financing mechanisms, another key topic in Bonn. This would render the 2010 target unachievable and hamper the success of the forest work programme.
The CBD has not endorsed market mechanisms to the same degree as the UNFCCC. This may partly explain the much lower interest by private investors. However, a failure in Bonn would not only be to the detriment of biodiversity. It would also impede co-benefits for climate change mitigation. This is all the more concerning as it will take a few years until a REDD scheme is in place that could substantially reduce the rate of tropical forest destruction. Large forest areas might have vanished when the billions start to flow through the climate regime. The market ignores biodiversity issues at its peril.
Friedel Sehlleier is a Research Analyst at IDEAcarbon

Carbon market begins: $19 a tonne
By Cathy Alexander
May 20, 2008 06:03pm

FYI: 19 AUD = 11.67 EUR = 18.20 USD

AUSTRALIA'S emissions trading market has been unofficially born – and the all-important carbon price has started at $19 a tonne.

Energy giant AGL has sold banking giant Westpac 10,000 tonnes of "permits to pollute".

AGL released a statement saying the sale to Westpac would take effect in 2012, and would create liquidity in energy markets beyond 2010.

The official emissions trading scheme, which puts a cap and a price on greenhouse gas emissions to help ward off climate change, is due to start in 2010.

The Federal Government will not finalise the scheme - which is likely to see emissions permits auctioned - until the end of the year at the earliest.

But emissions trading expert Tony Beck said the first permit sales showed the market was already taking shape.

"It really marks the beginning of trading directly linked to an Australian emissions trading scheme," said Dr Beck, chairman of the information and business networking firm Asia-Pacific Emissions Trading Forum.

"It's demonstrating confidence that the scheme will be established."

Dr Beck said most companies would wait to buy emissions permits, but some would pre-empt the scheme to minimise risk and establish prices.

"There will be a growing trade in anticipation of the scheme being established," he said.

Dr Beck said buying or selling permits in advance was a case of "learning by doing".

The $19 a tonne paid by Westpac was a reasonable estimate of what the carbon price would be, he said, although it was lower than the European price of about €20 a tonne.

It was likely the price would increase over time, Dr Beck said.

Meanwhile, draft federal laws allowing the burial of greenhouse gases deep beneath the seabed are being pored over by oil and coal companies.

The controversial process, called carbon capture and storage (CCS), is held by some to be a central part of Australia's efforts to tackle climate change.

The laws would only allow CCS at sea. Burying emissions underground on land would be covered by state laws.

Peter Cook, chief executive of the CO2 Cooperative Research Centre, said a key issue with undersea CCS was that oil and petroleum companies wanted sites for exploration and extraction, while coal companies wanted sites to fill with greenhouse gases.

The draft laws tried to strike a balance between the two competing interests, Dr Cook said.

"It's a real balancing act," he told AAP.

"There's going to be some fairly delicate discussions.

"We've really got to arrive at a win-win situation."

The Australian Coal Association welcomed the release of the draft laws saying it would be examining the 400 pages of legislation to ensure transparent, competitive arrangements were in place for access to storage sites.

But Greens climate change spokeswoman Christine Milne said the laws opened a "Pandora's box" around who would be liable for leakage of greenhouse gases from undersea storage sites, an issue she said could never be satisfactorily resolved.

Source: http://www.news.com.au/business/story/0,23636,23730759-31037,00.html

CO2 indexes attracting interest but not much cash
Tue May 20, 2008 8:36 AM BST
By Michael Szabo

LONDON (Reuters) - A series of new carbon indexes launched by investment banks, allowing investors to cash in on the booming carbon market, are attracting some interest but not much actual money, the banks said.

In the past six months, Merrill Lynch (MER.L: Quote, Profile , Research), Societe Generale (SOGN.PA: Quote, Profile , Research), UBS (UBSN.VX: Quote, Profile , Research) and Barclays Capital (BARC.L: Quote, Profile , Research) have all launched commodity indexes linked to the global carbon emissions market, worth some $64 billion (33 billion pounds) last year.

Although the indexes, which are priced based on credits issued under emissions trading schemes run by the United Nations and the European Union, are all up more than 10 percent this year, many institutional investors are still waiting on the sidelines.

"We had a lot of initial interest in the run-up to our index launch, but it's died down since the slowdown," said one bank analyst who declined to be named, referring to the global credit crisis.

Pension funds, asset management firms, insurance companies and wealthy investors are amongst those who have shown interest in the indexes, but few have bought due also to concerns over the precarious carbon market, which crashed in Europe due to an surplus of credits allocated in its first phase (2005-2007).

Transactions made in carbon indexes so far account for less than a quarter of a percent of the overall carbon market.

Only Barclays Capital (BARC.L: Quote, Profile , Research) has seen any significant money from European investors, while Societe Generale has had healthy interest from Asia.

"We've seen 50 million euros invested in our CER-linked sub-index and 10 million euros in our EUA-linked sub-index," Chris Leeds, a director at Barclays Capital, told Reuters.

The EUA-linked sub-index under Societe Generale's SGI-orbeo Carbon Credit Index has attracted "tens of millions of euros more" than the CER-linked sub-index, according to Societe Generale Carbon Analyst Emmanuel Fages.

Most of that interest is coming from investors in China and Hong Kong, he added.

UBS and Merrill Lynch are still in preparational stages and have not yet completed trades on their indexes.

"We have started marketing our carbon indices and are currently gathering orders worldwide with an expected closure in June," said Ilija Murisic of UBS.

PERFORMANCE

The main portion of three of the four indexes is made up of European Union Allowances (EUAs), the credits issued under the European Union's emissions trading scheme, which was worth $50 billion last year.

Benchmark EUAs for December 2008 delivery , currently trading around 25.20 euros a tonne, are up almost 13 percent this year.

Since they bottomed-out in late January at 18.60 euros a tonne, the futures have rallied some 35 percent, mostly on the back of higher energy prices, and now sit close to their 2-year high of 26.00 euros a tonne.

The balance of the indexes is made up of Certified Emissions Reductions (CERs), the offset credits issued under the Kyoto Protocol's Clean Development Mechanism, which have only risen marginally since December.

The four indexes' respective EUA and CER weightings vary from 50 percent each to 80 percent and 20 percent.

Other banks are also eyeing the carbon index market, but are exercising caution before jumping in.

"We're looking to develop a more sophisticated index, but we're waiting for liquidity to arrive in the market," Bruce Tozer, a managing director at JP Morgan (JPM.N: Quote, Profile , Research), told Reuters.

Source: http://today.reuters.co.uk/news/articleinvesting.aspx?type=fundsNews&storyID=2008-05-20T083922Z_01_NOA030904_RTRUKOC_0_CARBON-INDEXES.xml

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