Empty rhetoric. That’s the verdict on the recently established New Zealand Emissions Trading Scheme (ETS) from Geoff Bertram and Simon Terry in their searching book The Carbon Challenge: New Zealand’s Emissions Trading Scheme. It is something of a cautionary tale for others contemplating such schemes.
With the recent presidential push for climate change legislation, it is now more important than ever to understand the underlying fundamentals of a key aspect common across all climate bills – the issue of carbon offsets. The most recent bill, the American Power Act (APA), proposed by Senator John Kerry and Senator Joe Lieberman, specifically provides for up to 2 billion offsets/annum spread across international and domestic projects. That’s a significant volume, considering that it translates into almost 40% of the total cap and trade expected until 2020. It will be one of the largest and most intensely scrutinized markets of all time apart from being one of the key mechanisms by which emission reductions are actually achieved. The sheer variety of project types, locations and, standards frequently make carbon trading appear to be as complex as astrophysics for most of us on the ground.
Fortunately though, the last few years of carbon trading and project development in voluntary markets and as part of the Kyoto Protocol have clarified the essential characteristics of good projects. These common principles define good and reliable emission reduction projects from not-so-desirable ones. Faced with a multitude of carbon offset standards (administered by as many independent certification bodies that certify carbon offsets according to a list of predefined criteria), it is important to keep one’s eyes on the prize – real, verifiable emission reductions. In other words, a carbon offset must represent a verified actual ton of CO2 reduced uniquely, without adverse effect on the socio-economic environment, and in addition to any emissions that may have been reduced as a matter of course.
While many environmentalists were disappointed after the Copenhagen Accord , one positive development was a renewed focus on forestry. Over the past several months there has been a growing commitment from countries including the United States, Norway, Britain, and Japan, to make significant financial contributions to forests, carbon offsets, and climate change.
Eighty percent of people polled held positive opinions about forestry offset projects, up from 58 percent in 2009, according to the second Forest Carbon Offsetting Report. It focuses on corporations’ attitudes regarding forest offsets from forestry projects.
EcoSecurities, Conservation International, the Climate, Community & Biodiversity Alliance, the Norton Rose Group and ClimateBiz produced the report, which gathered in-depth responses from more than 200 organizations around the world.
Among the report’s findings:
Process improvements can reduce carbon dioxide (CO2) air emissions. When that is done there can be left over, permitted CO2 air emissions that can be sold to other users. In doing so, a certain percentage of the original CO2 emissions are eliminated and cannot be sold. Hence a reduction in permitted CO2 air emissions overall.
Hungary last week carried out the first sale of certified emissions reductions (CERs) which Hungarian companies had already used to offset against their emissions in the European Union’s emissions trading scheme. These emission offsets are sold internationally to other companies.
Under the Kyoto Protocol, countries were granted a certain number of permits to release greenhouse gases into the atmosphere, called Assigned Amount Units (AAUs), which are equivalent to one ton of CO2 and are roughly equivalent to a CER.
The Protocol was originally signed in 1997 and went into full effect in 2005. The Protocol is intended to help reduce greenhouse gas emissions, such as CO2, and stabilize any potential climate change effects. Currently there are 187 countries that have ratified the Protocol.
Certain countries have a surplus of these AAU’s, partially due to much older or obsolete technology that was retired.