- 1. Voluntary Carbon Market Stephen Garnett School for
Environmental Research Charles Darwin University Darwin Northern
Territory Australia
2. Voluntary Carbon Market
- Different types of carbon market
- What is the voluntary market
- Features of the voluntary market
- Voluntary carbon market products
- Benefits, costs and future of the market
3. Different types of carbon market
- Regulated emissions trading schemes (ETS) also called
cap-and-trade systems
-
- Kyoto compliance:Clean Development Mechanism (CDM), Joint
Implementation (JI) under the United Nations Framework Convention
on Climate Change
-
- Others projected (e.g. Australia)
- Voluntary schemes beyond formal regulation
4. Size of total carbon market 5. What is the voluntary
market
- The seller undertakes actions that will result in less
greenhouse gas being emitted to the atmosphere (CO 2 , methane,
nitrous oxide etc.)
- The vendor quantifies and verifies the amount of CO
2equivalents to be saved. Verification is often by a third
party
- The buyer purchases the CO 2equivalents, usually to offset
emissions and become carbon neutral
- All players act voluntarily, but the final contract is usually
binding
6. Features of the voluntary market
- Innovative and experimental
- Sometimes difficult to verify or wilfully dishonest
7. Voluntary carbon market products
- Renewable energy (wind farms, hydropower, solar)
- Methane capture from landfills
- Energy efficiency/fuel switching
8. Standards and validation
- Gold standard:Renewable energy and energy efficiency projects
with sustainable development benefits
- Started by World Wide Fund for Nature, South South North and
HELIO International
- Choice of offsets makes them easy to validate
- Prices high but hard to track down. Vendor prices in Feb 2009
were:
- myclimate.org - $31/tonne
- climatefriendly.com - $29/tonne
9. Standards and validation
- California Climate Change registry/Climate registry (US
projects only): high level validation.
- Started by California State Government at request of
business
- Has strong validation techniques for Cement, Forest Sector,
Local Government or Power/Utility
- About $8.20/tonne CO 2equivalents in February 2009.
10. Standards and validation
- Voluntary Carbon Standard (VCS) dealing in Voluntary Carbon
Units (VCU)
- Started by the Climate Group, the International Emissions
Trading Association and the World Economic Forum, World Business
Council for Sustainable Development
- Accepts accreditation byUnited Nations Framework Convention on
Climate Change andCalifornia Climate Change registry
- Price February 2009 of about $6.20/tonne CO 2equivalents
11. Standards and validation
- Started by Dr. Richard L. Sandor who remains CEO
- Has products for all six greenhouse gases, including soil
carbon
- Validation for legally binding compliance regime by the US
Financial Industry Regulatory Authority
- Price February 2009 of about $1.70/tonne CO 2equivalents
12. Price trends
- Formal market has collapsed at least temporarily. Allowance
used as source of quick credit plus some European countries
recently released free allowances
13. Price trends
- Voluntary market has also declined though top end products like
Gold Standard remain at 2007 prices
14. Performance Voluntary Carbon Index of all products has
usually outcompeted CCX 15. Benefits, costs and future of the
market
- Benefits distributes wealth to less polluting industries and
countries
- Costs does not reduce greenhouse gas emissions may even
increase them if distributed money invested in greenhouse gas
producing activities
- Future buoyant as economies recover since climate will continue
to change and drastic change will be needed
16. Action in Vietnam
- Voluntary Carbon Market workshop held in Hanoi 2008.
- It helped ICRAF share initial concepts and discuss future
collaboration with companies trading carbon in a voluntary
market.
- Should help next phase of RUPES project in Vietnam,
particularly in Bac Kan province
- AlsoLike Minded Donor Group (LMDG) planned to produce a
Voluntary Carbon Markets Action Plan in October 2008
- Potential reasonably high if validation reliable
- Renewable energy and fuel changes offer highest premiums
through Gold Standard if combined with social benefits
17. Potential in Vietnam
- Potential reasonably high if validation reliable
- Renewable energy and fuel changes offer highest premiums
through Gold Standard if combined with social benefits
- Forestry and lower value activities also possible but need
strong and reliable validation