The so-so Voluntary Carbon Standard

New standard for carbon offsets is unimpressive

Posted by Joseph Romm (Guest Contributor) at 2:07 AM on 21 Nov 2007

Read more about: climate | energy | climate change mitigation | carbon offsets

As E&E News (subs. req'd)reports today:

An industry group released standards yesterday for carbon dioxide offsets in the hopes of attracting existing and still-forming emission-trading markets.

The Voluntary Carbon Standards (VCS) are aimed at evaluating clean-energy projects in developing countries that are used to offset industrialized nations' emissions of greenhouse gases under the Kyoto Protocol's Clean Development Mechanism.

You can read all about the new standard on their website. I am not terribly impressed with this new standard. Among other things, it allows tree projects (no, and no!). They also didn't consult with a lot of environmental groups, and as I pointed out to E&E News and WWF, their website has this bizarre and I think inappropriate listing under board members:

James Leape, WWF International (invited)

Seriously. How do you list an invited -- but not accepted -- board member on your website? Especially from an organization that seriously criticized the previous draft of your offset standard.

The rest of the E&E article, with quotes from me and WWF, is below:

The standards were written by the Climate Group, the International Emissions Trading Association and the World Business Council for Sustainable Development. The association comprises about 170 companies, including Shell Oil Co., Statoil, the New York Mercantile Exchange, BP, Chicago Climate Exchange and General Electric Co. The Climate Group includes Duke Energy, Alcan, News Corp. and others.

A distinction between the standards unveiled yesterday and others currently in use is in how they calculate "additionality," or an offset project's emission reductions compared to baseline emissions.

The new standard offers three tests: a project must face technological, financial or institutional barriers; it must generate fewer emissions than comparable "business-as-usual" projects; or it must fall under a pre-approved list of projects determined by the system.

Jonathan Shopley, executive director of British offset purveyor CarbonNeutral, said in an interview the new guidelines would "allow carbon trading to reach into a number of countries in Africa, Asia and Latin America that have not yet set up the Kyoto mechanism."

The total value of CO2 emissions trading markets will likely double to at least $60 billion this year, the International Emissions Trading Association said last month. Offsets are valued at about $5.8 billion per year, according to CarbonNeutral.

Other guidelines

The new standards are entering a marketplace with several other offset guidelines.

For example, the Gold Standard -- hatched by the advocacy group World Wildlife Fund (WWF) -- gives credit for renewable energy and energy efficiency projects, while the standards released yesterday would cover reductions in all six gases regulated by Kyoto. And the Gold Standard uses the U.N. Framework Convention on Climate Change's definition of additionality, which entails gauging the cost-effectiveness of a given project against various alternatives.

Gold Standard spokeswoman Caitlin Sparks said the industry group's method of measuring projects' effectiveness and its inclusion of offsets for planting trees or restoring damaged forests risks "opening the doors to additional credits" that do not promote "clean energy" technologies. Kyoto's CDM has also been criticized for rewarding one-time emissions cuts rather than long-term efficiency gains.

In stakeholder comments on a draft version of the standards, WWF said the proposed guidelines would "certainly verify non-additional [emissions reductions] and legitimize false claims of carbon neutrality from buyers."

[Ouch!]

Joe Romm, a former Energy Department assistant secretary and currently of the liberal Center for American Progress, said advocacy groups wield considerable power in approving voluntary compliance schemes.

"The single most important players in the offset market from a perspective of credibility are the environmental groups," Romm said.

With that in mind, the Voluntary Carbon Standard site lists WWF international director general James Leape as having been "invited" to its board of directors.

Matt Banks, a senior officer with WWF's climate program, said he had not been aware of Leape's inclusion. "I don't particularly appreciate them putting it on their Web site if he hasn't confirmed it," he said. "So far, they did not reach out a whole lot to us environmental NGOs."

U.S. prospects

VCS is set to approve the California Climate Action Registry as compatible with its criteria. The California registry was established by state laws as a nonprofit voluntary registry for greenhouse gas emissions. But VCS's prospects look hazy elsewhere in the United States.

The eight-state Regional Greenhouse Gas Initiative has its own standards for offsets, which it limits to no more than 3.3 percent of a company's total obligation under normal trading conditions. And the California Air Resources Board last month adopted an in-house standard for forestry offsets, which state officials had been working on for four years.

Air board spokesman Stanley Young said California is researching standards for other offsets to accompany its global warming law, which is set to take effect in 2009.

In stakeholder comments on the draft VCS, California Climate Action Registry -- which came up with the forestry standards -- warned: "The goal of a single global standard and concomitant currency for the voluntary carbon market, while ultimately worthy of pursuit, may not be realistic in the short term."

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.

For story: The so-so Voluntary Carbon Standard
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Carbon Exchange Can Tip Our Future

Climate change and carbon exchange are revving up toward tipping the direction of our future. The up-coming Bali talks about the successor to Kyoto are absolutely critical. The angels and the devils will be in the details of how carbon sequestration will be defined. This will determine the flows of 100s of millions (maybe billions) of dollars of carbon credits for years to come.

There is hope that this is the year that rainforest countries might finally (and deservingly) receive some economic rewards for avoiding or reducing deforestation. There is also hope that carbon credits may be offered for long-term soil amendments that promise to save rainforests, feed people and reduce global warming. The new definitions could produce a new kind of tipping point.

Technology and economy have always driven the relationship between humans and nature. But now, with so many people, the relationship between technology and economy also holds the future of the human race and the planet. There can be much much good -- what we view as progress. And there can be problems -- terrible ones. Much depends on the positive feedback loops. Global warming means there will be more food grown in Canada and it's thawing permafrost will release even more greenhouse gases.

The question is not really about having technology or profits or progress (or not), but whether a particular techno-economic approach gives us new and larger problems or new and larger solutions? A positive feedback loop for solutions? Hmmmm, I hope that got your attention. Is such a thing possible? I believe the answer is YES and it takes the form of an ancient-future soil technology called Terra Preta do Indio (Portuguese for Indian Black Earth).

Recent research emerging from the Amazon basin is locating large deposits of an extremely fertile and resilent soil called terra preta. It appears to be human-made, ancient indians adding charcoal to the soil to produce the result -- carbon dating says much of it is 2500 to 4000 years old. Terra preta soil is so productive -- up to 800% increased plant growth -- that it could have easily supported an agriculture capable of feeding millions of people living in great cities in the central Amazon basin. Hmmmm (again). This is the legend of El Dorado.

But do we have to embrace a mythic vision, a conquistador's dream of gold? Is there some solid science involved? Might there actually be a modern soil technolgy whereby faster growing plants would draw more CO2 out of the atmosphere and the unused plant waste turned into charcoal to be returned to the soil -- resulting in increased crop yields, more carbon capture and long term sequestration, more food and fuel for increasing populations, and a new era of abundance. In other words, might there be a positive feedback loop for healing ourselves and the earth? A technologically and economically supported relationship for bringing human beings and nature into a mutually supportive marriage? A sustainable relationship of abundance?

The data are not in but the soil research is being conducted and the hopes are great. But we will need more than new agricultural technology. Right now the overwhelming economic opportunities are located in creating fuel. What can incentivize devoting a portion of the charcoal that can be produced from agricultural waste to amendments for renewing the soil?

THE CARBON EXCHANGE CAN PRODUCE THE NEEDED ECONOMIC TIPPING POINT.

Those who have no choice about polluting ways can fund those who have a choice but incur lost opportunities for short-term profits if they do the right thing. We can leave the blame-game and help each other. What a concept!

Please check out the following links to discover more about this exciting possibility.

The ABC 11 minute video about the the modern version of terra preta called "Agrichar". http://www.abc.net.au/catalyst/stories/s2012892.htm

Kelpie Wilson's lay person's introduction to terra preta. http://www.biochar-international.org/images/Joyful_Liivin ...

Research confirms that char added to soil boosts crop productivity. http://biopact.com/2007/06/research-confirms-biochar-in-s ...

The BBC documentary, "The Secret of El Dorado". http://www.bbc.co.uk/science/horizon/2002/eldorado.shtml

Ken Salazar has introduced a bill in the US Senate that would fund research on agrichar. http://biopact.com/2007/10/towards-carbon-negative-bioene ...

I report the story unfolding from Brazil here. http://lougold.blogspot.com/

Lou Gold
An American in Brazil

by lougold at 9:49 AM on 22 Nov 2007

Voluntary Carbon Standard

Joseph Romm's article has usefully pointed out our clerical mistake on the published list of Voluntary Carbon Standard (VCS) board members but fails to land a punch on the robust environmental integrity of this important new standard (we have apologized personally to James Leape of WWF for this oversight).

Contrary to Joseph's belief, the VCS team has always taken a broad consultative approach with NGOs, and other stakeholders throughout the process. Approximately 1000 stakeholders were consulted over last 2 years including over 20 environmental NGOs and we received 150 written submissions. WWF were originally invited to contribute to VCS development in 2005. They were also invited to join the Steering Committee and the Board subsequently but no response to either invitation was received.

I would urge the author to read the newly published VCS version (this can be found at www.v-c-s.org) launched on Monday 19 November as his article focuses on responses to previous drafts which have already informed VCS (2007). The current VCS (2007) will provide a vital benchmark for users of the voluntary carbon marketand I am glad that Joseph's blog has given us the opportunity to put straight some common misconceptions about the the standard and how it works:

1) New VCS additionality is as rigorous as the CDM:
The VCS additionality test is based on exactly the same requirements as the CDM - namely, demonstrating that the project is beyond regulation, is not common practice and faces a barrier that prevents its implementation. Any future VCS additionality test will have to be equivalent in rigor to this test.

2) New VCS has the highest verification standards that will increase scrutiny of project developers
The VCS verification standards and accreditation process are based on ISO GHG standards. Verifiers must be accredited against ISO 14065 by an International Accreditation Forum Accreditation Body or accredited under the CDM or JI. This ensures that project developers are scrutinized against the highest standards, by the highest qualified validators and verifiers.

3) The new VCS guarantees greater transparency and disclosure
All project information (validation and verification reports and project descriptions) will be publicly available on the VCS central project database. Stakeholders will be able to scrutinize and comment on projects and provide comments to the VCS Association.

4) Why trees can be included under the new VCS
No methodologies are a priori ruled out of the VCS. The benefits of this are that it provides a stimulus for new green technologies and encourages low cost reductions across all sectors of the economy. For example, it will provide a stimulus for large scale energy saving light rollouts which are currently not occurring under the CDM.

The debate over whether land-use and forestry projects should be allowed as offsets is over. The latest IPPCC report shows that emissions from agriculture and forestry contribute over 30% of global GHG emissions. These projects also have very positive non-GHG environmental benefits. The debate is now focused on how to ensure permanence of these projects which the VCS addresses through the most conservative approach of any international standard. Project owners must place in buffers a portion of a project's credits based on the non-permanence risk profile of the project. This model has been developed by the leading world experts in this field (contributor bios are at http://v-c-s.org/docs/VCS%20AFOLU%20Expert%20Bios.pdf).

5) Significant prospects for the new VCS in the US
Market analysts estimate that annual transactions in the voluntary carbon market could reach US$4billion in the next five years and that the VCS - already popular with buyers - will be instrumental to this future growth. The VCS is forecast to provide the single most traded offset currency in the US over the next two years (the US represents 60 per cent of the global market by volume). The systems and policies used in the VCS will provide a critical input into future US policy discussion. Terry Tamminen, Former Chief Advisor to Governor Schwarzenegger has said, "The combination of rigour and flexibility of the VCS will prove irresistible to U.S. businesses, consumers, and policy makers."

We are delighted with the widespread endorsement that the new carbon standard has already received and are confident that it makes a huge advance in ensuring environmental integrity, mitigating previous buyer risk, and ensuring the market solutions remain affordable and popular. We will continue to make improvements to this new standard based on market performance and welcome all contributions and comments direct to secretariat@v-c-s.org

by Mark Kenber at 11:15 PM on 22 Nov 2007

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