Forest Carbon Offsets: A scorecard for evaluating project quality

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Presentation by John Gunn, Senior Program Leader, Manomet CCenter for Conservation Sciences, at the Blandin Foundation sponsored Forest Values and Carbon Markets: Opportunities for Minnesota conference. February 25-26, 2009 at the Cloquet Forestry Center, Cloquet MN

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  • I think you are arguing on different topics and therefore, will never make perfect sense, even if you spend the next 4 Saturday. After all, MTV Exiled: Carbon Offsets is about carbon offset. Just my 0.02$.
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  • I respectfully disagree with a couple of the ideas on MTV Exiled: Carbon Offsets especially as it has to do with carbon offsets but will research this further externally on Saturday to see how I feel about this.
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  • Forest Carbon Offsets: A scorecard for evaluating project quality

    1. 1. John Gunn, Ph.D. Senior Program Leader Manomet Center for Conservation Sciences Brunswick, Maine 26 February 2008 06/08/09 Forest Carbon Offsets: A Scorecard for Evaluating Project Quality
    2. 2. Click here to offset your carbon footprint … <ul><li>Forest carbon is clearly an important part of mitigating GHG emissions </li></ul><ul><li>What qualifies as a legitimate carbon offset? </li></ul><ul><li>The carbon market could be abused </li></ul><ul><li>Rigor and transparency are critical to ensure that the buyer, and atmosphere, are getting the offsets expected. </li></ul>06/08/09
    3. 3. Outline <ul><li>Overview of forest carbon offsets and affiliated jargon </li></ul><ul><li>The Manomet Forest Carbon Offsets Scorecard as a tool for evaluating offset projects </li></ul>06/08/09
    4. 4. WHAT ROLE WILL MANAGED FORESTS PLAY IN FOREST CARBON OFFSET MARKETS AND GHG MITIGATION? 06/08/09
    5. 5. Volatility in CO2e markets now – drop in price related to concerns over “additionality and permanence” Carbon Equivalent ($/MTCO2e) Trading on the Chicago Climate Exchange (CCX) from May 2008 – February 2009 06/08/09
    6. 6. When gas is expensive, energy producers rely more on coal, which emits higher levels of CO 2 and boosts demand for carbon permits.
    7. 7. Global Voluntary and Regulatory Carbon Offset Market Value OTC forest offset market with huge variation in price: $1.80/tCO2e to one transaction at $300/tCO2e.
    8. 9. How forests play a role in markets <ul><li>Afforestation </li></ul><ul><li>Reforestation/restoration </li></ul><ul><li>Avoided deforestation or conversion </li></ul><ul><li>Forest management </li></ul><ul><li>Enduring wood products/product substitution </li></ul>06/08/09
    9. 10. Forests and Carbon – Market Entry Requirements Emerging: <ul><li>Demonstrate that entity-wide forest holdings are sustainably managed. </li></ul><ul><li>Demonstrate long-term commitment to maintain carbon stocks. </li></ul><ul><li>Use of approved methods to quantify carbon stocks. </li></ul><ul><li>Independent third-party verification of carbon stocks. </li></ul>06/08/09
    10. 11. Some key concepts that will define available carbon markets for managed forests (voluntary vs. regulatory) <ul><li>Baselines </li></ul><ul><li>Additionality </li></ul><ul><li>Leakage </li></ul><ul><li>Permanence </li></ul>06/08/09
    11. 12. Baselines <ul><li>The bar you are measured against </li></ul><ul><li>Base Year </li></ul><ul><li>Practices (project level) </li></ul><ul><ul><li>“Business-as-Usual”, or BAU </li></ul></ul><ul><ul><li>Regulatory </li></ul></ul><ul><li>Stocking (e.g., FIA mean) </li></ul>06/08/09
    12. 13. Baseline Examples BAU: Practices or Regulatory
    13. 14. Additionality (real & measurable) <ul><li>Is CO 2 really being sequestered “additionally”? </li></ul><ul><li>More than what would have happened in absence of project or payment </li></ul><ul><li>Offsets for actual carbon emissions </li></ul>06/08/09
    14. 15. Additionality
    15. 16. Leakage <ul><li>Internal </li></ul><ul><ul><li>Owner shifts activities within ownership </li></ul></ul><ul><li>External </li></ul><ul><ul><li>Carbon practices displace activities to other forests (local, global) </li></ul></ul><ul><li>Difficult to measure </li></ul>06/08/09
    16. 17. Permanence (enforceable) <ul><li>Intentional Conversion or Natural Disturbance </li></ul><ul><li>Insurance/Reserves </li></ul><ul><li>Legal enforcement </li></ul><ul><li>How long? </li></ul>06/08/09
    17. 18. Basic Elements of the Major Forest Carbon Offset Standards 06/08/09 Standard Baseline Additionality Permanence CCX Base Year =Growth – Harvest 15 years VCS 5-10 Years Prior Practices Permanent CCAR Regulatory Practices Perm. Easement RGGI Proposed FIA mean > FIA mean 99 years
    18. 20. What Is the Scorecard? <ul><li>An easy-to-use tool for evaluating quality of forest projects. </li></ul><ul><li>43 questions addressing: </li></ul><ul><li>Contract structure </li></ul><ul><li>Baselines </li></ul><ul><li>Additionality </li></ul><ul><li>Monitoring, measurement, reporting, and verification </li></ul><ul><li>Permanence </li></ul><ul><li>Leakage </li></ul><ul><li>Transparency </li></ul><ul><li>Co-benefits/costs </li></ul>
    19. 21. How Can It Help You? <ul><li>Guides users in understanding and addressing key quality components of offsets. </li></ul><ul><li>Provides a standardized reference point in an unstandardized marketplace. </li></ul>
    20. 22. Who Should Use It? <ul><li>Project developers, offset buyers and sellers, anyone interested in understanding what creates high-quality forest offsets. </li></ul>
    21. 23. How Was It Developed? <ul><li>Extensive reviewed of GHG registries, GHG accounting protocols, program requirements, project design and certification standards, and reports analyzing carbon markets and offset providers. </li></ul><ul><li>We distilled and synthesized carbon offset “best practices.” </li></ul>
    22. 24. 3. Additionality Yes No 3.1 Will the project exceed regulatory requirements or other legal mandates? ___ ___ 3.2 Can it be demonstrated that carbon credits will not be generated retroactively from activities that have already occurred? ___ ___ 3.3 Can it be demonstrated that the project will result in a net reduction of GHG levels in the atmosphere relative to the baseline? ___ ___ 3.4 Can it be demonstrated that none of the project’s credits have been sold more than once? ___ ___ 3.5 Can it be demonstrated that the project’s credits will be permanently retired once they are sold? ___ ___ Subtotal (out of 5)=
    23. 25. 5. Permanence Yes No 5.1 Is maintenance of additional carbon stocks contractually required for: At least 20 years? At least 50 years? At least 100 years? In perpetuity? ___ ___ ___ ___ ___ ___ ___ ___ 5.2 Have all the project’s carbon risks been identified and risk management strategies been enacted to guard against carbon loss during the project’s contractual obligation? ___ ___ 5.3 Must carbon stocks be restored or replaced if lost before the end of the project’s contractual obligation? ___ ___ Subtotal (out of 6)=
    24. 26. Uncertainty around these key concepts will define available carbon markets (voluntary vs. regulatory) <ul><li>In particular : </li></ul><ul><li>Baselines </li></ul><ul><li>Additionality </li></ul><ul><li>Leakage </li></ul><ul><li>Permanence </li></ul>06/08/09
    25. 27. <ul><li>For more information: www.manomet.org </li></ul><ul><li>Funded by: </li></ul><ul><li>Merck Family Fund </li></ul><ul><li>Roy A. Hunt Foundation </li></ul><ul><li>Davis Conservation Foundation </li></ul><ul><li>Henry P. Kendall Foundation </li></ul><ul><li>Authors: Julie Beane, John Hagan, Andy Whitman, & John Gunn </li></ul>

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