California Dream 2.0

Ruling gives bright green light for investment in pollution reduction projects in California

California’s landmark clean energy bill AB 32 received a big boost today from the San Francisco California Superior Court in the case Citizen’s Climate Lobby et. al., v. California Air Resources Board.

The Court’s decision offered unequivocal support for the legality of the offsets portion of AB 32’s cap-and-trade program, a huge shot in the arm for momentum going into the second greenhouse gas allowance auction on  February 19th.  Similarly, by finding that the state’s offset program is in alignment with AB 32, a bright green light has been given for further investment in projects aimed to reduce pollution both in California and outside our borders.

In this suit, EDF joined as an official party to assist the State of California’s defense.  Also joining in the defense was a collection of entities including The Nature Conservancy, the Climate Action Reserve and a collection of business interests. This broad spectrum of support for AB 32 shows that offset investments can deliver on multiple levels for the state.

First, offsets create new opportunities to fund upgrades and pollution reduction in sectors, including agriculture, forestry and industrial gases, that may not otherwise be covered under mandatory emissions limits.  Pollution reduction in these sectors enables a greater overall response to climate change, which means positive impacts on the climate and human health.

Second, allowing high quality offsets ensures that a diversity of cost-effective pollution reduction projects can qualify for cap-and-trade compliance.  This reduces overall program costs while maintaining the environmental integrity of the program.

As more projects and ideas develop under the AB 32 offsets program, California will be better able to transition to a low-carbon economy.  In short, the decision of the Superior Court has authorized the continuation of a program that will be an integral part of California’s climate change goals, spur investment in a clean economy, and maintain California’s position as a leader in the fight to combat climate change.

Also posted in Climate, Global Warming Solutions Act: AB 32 / Comments are closed

California’s Carbon Market: A Potential Game-Changer in Slowing the Amazon’s Deforestation

California moved into the fast lane on the low-carbon development highway when it launched its carbon market this month. Now it has the opportunity to do even more to stop dangerous climate change while cutting the costs of controlling global warming pollution.  Recommendations from a group of experts on how Reducing Emissions from tropical Deforestation and forest Degradation (REDD+) can come into California’s market show how.

In the world of greenhouse gas emissions, tropical deforestation is huge. Accounting for about 15% of these emissions globally, deforestation emits more than all cars, trucks, buses, trains and airplanes on the planet — combined.

When California launched its cap-and-trade program Jan.1, it created the second largest carbon market in the world. With REDD+, the Golden State now has another golden opportunity to expand its global environmental leadership even further.

The REDD+ Offsets Working Group (ROW) convened by California, the Brazilian state of Acre, and the Mexican state of Chiapas, has released recommendations for how California can bring REDD+ into its carbon market.  The ROW, in accordance with California’s Global Warming Solutions Act’s (AB32) guidance, recommends that California allow states or countries that reduce their total emissions from deforestation below an historical average, while maintaining or increasing the output of commodities like cattle and soy that drive deforestation, to generate compliance credit in California.

This “jurisdictional” approach is much like what California is doing – reducing state-wide emissions below a clearly measurable historical level.

The ROW also recommends requiring states to show that they have made their own efforts to reduce deforestation, beyond any reductions that they seek credit for and ensuring that local –particularly indigenous — communities participate in policy design, have a choice about whether or not to participate in programs, and benefit directly if they do.

Tropical states such as Acre and Chiapas that are moving forward on their own to reduce deforestation know that California’s market for international offsets is very limited, and don’t expect to get paid for most of the reductions they’ve made or can make.

But they need a signal, and California’s carbon market may now hold the key to the future of the forest.

Until recently, rampant deforestation in the Amazon was a big part of the global warming problem – and a disaster for the millions of species of plants and animals and thousands of indigenous groups that live in the forests.  But when Brazil and Amazon states adopted new policies in 2005, all that began to change.

They ramped up law enforcement and started making large-scale reductions in Amazon deforestation, reducing their deforestation about 76% below the 1996 – 2005 average by 2012 (about 2.2 billion tons CO2) while increasing agricultural production and cattle herd. This came very close to the national target Brazil adopted — 80% reduction by 2020 — making it the world leader in emissions reductions.

Despite that progress – or maybe because of it – the Agriculture Caucus of the Brazilian Congress recently pushed for and won legislation weakening forest protection laws. The result? Although 2012 recorded the lowest deforestation on record, reports now say deforestation in the last five months has actually gone up in relation to 2011.

Creating demand for real, verifiable, additional REDD+ from jurisdictions that have solid social and environmental safeguards could be the sign the Amazon – and tropical jurisdictions around the world – need to know that REDD+ is real. Bringing it into California’s carbon market is an effective path to making that happen.

This blog is also cross-posted on the EDF Talks Global Climate Blog

Also posted in Climate, Global Warming Solutions Act: AB 32 / Read 1 Response

California policy makers must hear variety of indigenous voices on protecting tropical forests

This week, some U.S. NGOs are bringing a group of indigenous people from South America to talk with California policy makers about their opposition to REDD+, the idea that countries, states and communities that reduce carbon emissions from tropical deforestation should be eligible for compensation through carbon markets and public funds.

It’s good for policy makers to hear this perspective, but it’s critically important for these policy makers to hear the great diversity of indigenous voices on the REDD+ issue.

Having worked with indigenous peoples and minorities in the Amazon for over 20 years, in particular on helping indigenous peoples win the struggle for their lands, I’m glad that EDF actively supports indigenous and minority participation in international policy processes, whether or not given organizations or individuals agree with us.

Some NGOs have argued that REDD+ threatens indigenous land rights, that governments and NGOs are inducing indigenous communities to sign carbon contracts, that REDD+ will only benefit rich industrial polluters.

Earlier this year in the Amazon state of Acre, the Catholic Church missionary/indigenous rights organization, CIMI, made these arguments in an affidavit it sent to the Federal Prosecutors’ office, asking for the prosecutor to take legal action against the state System of Incentives for Environmental Services (SISA), under which Acre is formulating its REDD+ program.

Most of Acre’s indigenous peoples, however, do not agree with CIMI, as evidenced by this letter that leaders of the indigenous movement in the state sent to CIMI in response.

Indigenous leaders were dismayed to hear CIMI claimed that they were being manipulated into accepting carbon projects by the government and international NGOs, and pointed out that no one was forcing the indigenous organizations to do anything.

To the contrary, they noted that they are in the process of informing themselves and their communities so they can decide whether they want to participate in REDD+.  The letter makes an interesting contrast between the pros and cons:

“Both those in favor of and those against REDD must be serious and ethical in conveying correct information and establishing continued dialogue. Those in favor of REDD should not promote it as something that can resolve all the problems of our communities; those against it should not terrorize our peoples using western capitalism as a backdrop and creating a climate of distrust and fear based in suppositions and untruths.”

Beyond the borders of Acre, the Coordination of the Indigenous Organizations of the Amazon basin (COICA) comprises the Amazon regional indigenous organizations of the nine Amazon nations. COICA has participated in the international climate negotiations since 2008.

The indigenous peoples’ caucus (including COICA) made this statement to the UNFCCC conference in Durban this year, covering a wide variety of issues including REDD+.

There are some 385 indigenous peoples, speaking about 300 languages, living in 2,344 territories that cover about 2.1 million km2 – an area four times the size of California – in the Amazon, as well as some 71 isolated groups. These peoples have maintained their distinct cultures and identities for thousands of years in the face of enormous, often violent, pressures – their difference unites them. Even the level of awareness of the idea of REDD+ varies enormously amongst them.

The NGOs and indigenous peoples visiting California this week offer one set of perspectives on REDD+, but their views should be considered in the context of the spectrum of indigenous organizations currently engaged on these issues, many of whom view REDD+ quite differently.

Also posted in Climate, Global Warming Solutions Act: AB 32, Politics / Read 1 Response

California Will not Repeat UN Offset Design Flaw

Last week, the New York Times highlighted a specific design flaw in the UN carbon offsets program that the EU has allowed entities subject to its emissions trading system to utilize. In particular, the article highlighted a poorly designed offset that encouraged select companies to increase pollution – only to reduce it and then sell the offset credits.  (EDF’s response to this article was recently published in a Letter to the Editor.)

While the article does acknowledge that the EU has taken significant measures to resolve this problem – including the already planned ban of such bogus credits from entering its carbon trading system in the future – it fails on two critical points.

First, the article fails to point out that while Europe’s carbon reduction program — the first ever regulatory program of its kind– has encountered challenges, it has also significantly reduced pollution, independent of the recession and with negligible impact on the economy, a point further substantiated in an upcoming EDF report.

Second, the article fails to note that this issue, which EDF and others have been warning about since the development of the offset program, can easily be addressed through proper program design.  In fact, California, which is working to implement a similar system of its own, has put in place three mechanisms to guard against problems of this nature:

  • First, instead of taking a project-by-project approach (as Europe has), California has adopted strict protocols with performance standards to guide approval of carbon-offset credits within designated activity areas, like forestry. The performance standards approach used in CA is more transparent, more administrable, more enforceable, and has greater objectivity and environmental integrity than the ad hoc approach used in Europe.
  • Second, California will not award offset credits to projects in other states that reduce emissions of gases that California state law already restricts. For example, California law mandates that methane gas be captured from large landfills, so California will not be awarding offset credits to projects that reduce methane emissions in states that do not already regulate landfill emissions. Without this safeguard, other states might have a perverse incentive to not pass regulation restricting methane emissions.
  • Finally, California has put in place a program to address the very challenge highlighted in the NTY article: offsets that reward the destruction of coolants and other high warming potential gases.  Unlike Europe’s program, California only allows destruction of gases that have already been used and are slated for recycling (destroying these gases is actually better than recycling them because newer materials with lower GHG potential are available),or were from a domestic source stockpiles originating before the U.S. production phase-out.  And California will only accept these offsets from domestic sources.

It is critical that we not allow learning opportunities to be squandered in the name of poor excuses to avoid or delay action to address climate change, especially as dangerous emissions of greenhouse gases continue to rise. Instead, it’s crucial that we examine – and address – specific policy flaws with the overall goal of strengthening already successful programs.

Such will be the subject of a forthcoming report by EDF. We hope the report (expected for release in the next month) will spark discussion needed to propel effective, market-based solutions forward – not backward.

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Taking a stand to secure the benefits of greenhouse gas offsets in California

Yesterday, EDF filed a legal brief to help defend a core component of California’s landmark cap-and-trade program.  Similar briefs were also filed by other environmental, non-profit, and business groups. These briefs, filed to the San Francisco Superior Court – (Case number 519554), support the California Air Resources Board’s (CARB’s) decision to allow pollution reductions achieved by verified, voluntary projects — known as offsets to count under the program. The suit, first filed in March, seeks to prevent California’s program from harnessing these projects.

 

Here’s our perspective:

 

Offsets present an important opportunity to support environmentally beneficial projects throughout California’s economy. Offsets help to incentivize projects that reduce pollution in sectors – such as agriculture – that are not covered by the state’s cap-and-trade program. Under current rules, a variety of projects – including projects to grow and maintain urban forests in the metropolitan LA area, to capture greenhouse gas pollution from animal waste lagoons in the Central Valley, and to manage forests in Northern California – may be eligible to receive tradable carbon permits. Those permits can then be sold to power plants and other companies that are required to reduce pollution under the state’s cap-and-trade program.

 

CARB has adopted a stringent, category-specific approach to ensure measurable pollution reductions. Not just any old offset project can qualify for carbon credits under the program.  Only projects that are developed according to pre-approved protocols adopted by CARB and that meet stringent accounting, verification and longevity standards can earn credits.  These stringent requirements ensure that only verified projects representing real emissions reductions in specific project areas can receive credits that can be sold into the cap-and-trade program.

 

Over the past two years, EDF, along with other groups, has been working to introduce new types of projects that can sell credits into the program, as long as they meet CARB’s stringent criteria.  Three such types of projects include: projects to reduce pollution from agricultural operations in California’s rice farming industry; projects to upgrade equipment in oil fields; and projects that ensure efficient use of fertilizers throughout the agricultural sector. All of these projects can lead to significant greenhouse gas reductions across the state.

 

California has a long way to go before meeting its ambitious climate change targets.  Offsets present one important opportunity to realize that goal because of the incentive for new projects and ideas to be developed throughout the state.  Our brief in the California Superior Court filed yesterday is but one part – albeit an important part – of the effort to ensure innovative project developers can participate in California’s long-term transition to a lower carbon economy.

Also posted in Climate, Global Warming Solutions Act: AB 32 / Comments are closed

EDF and rice partners granted $1.1 million to expand rice GHG offsets effort

The next exciting phase of developing greenhouse gas (GHG) offsets from rice production in the United States is now possible thanks to a $1.1 million grant from the U.S. Department of Agriculture’s Natural Resource Conservation Service.  EDF’s second Conservation Innovation Grant project for rice GHG offsets will expand the first grant’s scope from California, the second leading rice-producing state (550,000 planted acres in 2010), to include Arkansas, the leading rice-producing state (1.8 million planted acres in 2010), as a model for other mid-southern states and will develop innovative technology to enable easier access to carbon markets. 

The new grant includes previous partners involved in the development of the rice methodology—California Rice Commission, Applied Geosolutions, LLC, and TerraGlobal Capital, LLC—as well as new partners—Winrock International, PRBO Conservation Science, USA Rice Federation and other leading rice industry associations and rice producers in each region. 

A Foundation: The first grant resulted in a methodology that provides a foundation for work to continue in California and begin in Arkansas.  California has been a successful testing ground for assessing offset potential because of its groundbreaking climate law co-authored by EDF, The Global Warming Solutions Act (AB 32), which establishes a cap-and-trade system in 2012.  However, including other rice-producing states will greatly increase the opportunity for GHG reductions and offset credits from rice production.  If the California Air Resource Board adopts a rice carbon protocol, California rice growers stand to benefit in the state’s cap and trade program by selling GHG offsets to capped sectors, and other rice growers outside of California also will be able to participate in the compliance market to help meet California’s demand. 

Phase Two: The methodology is awaiting approval by two leading carbon registries — the Verified Carbon Standard and the American Carbon Registry (where it is now open for public comment)—and it will be adapted as needed for use in two pilot projects, one in California’s Sacramento Valley and the other led by Winrock International in the Delta Region of Eastern Arkansas. These initiatives will demonstrate the process of producing and selling offset credits generated by rice farmers to voluntary and potentially to compliance carbon markets, with particular focus on California’s cap-and-trade program.  Each project will field-test a subset of GHG-reducing practices suitable to the region, such as straw removal or altered water management.  The pilot projects will help determine which additional practices can be added to the methodology. 

In addition to pilot project results, we will analyze rice GHG reduction practices in other states using the De-Nitrification De-Composition (DNDC) model.  DNDC is a computer simulation model of carbon and nitrogen biogeochemistry in agro-ecosystems that can be used for predicting crop growth, soil temperature and moisture regimes, soil carbon dynamics, nitrogen leaching, and emissions of trace gases including nitrous oxide (N2O), nitric oxide (NO), dinitrogen (N2), ammonia (NH3), methane (CH4) and carbon dioxide (CO2).  Used to analyze California rice’s GHG reduction potential, DNDC will be applied in other rice-producing states, including Louisiana, Mississippi, Missouri, and Texas.  Practices such as mid-season drainage, which is currently not a feasible practice in California, may be more appropriate in other rice-growing states. 

Concurrently, a user-friendly technology will be developed for growers and aggregators to enable more accurate and cost-efficient quantification of GHG reductions.  Growers will test a tool that is accessible by personal computers and mobile devices, and they will also provide feedback on cost feasibility and process of the overall project.  Lessons learned will be widely distributed to other interested growers and Natural Resources Conservation Service.

Since both rice-growing regions in California and Arkansas (known as a critical stretch of the Pacific Flyway and the rice and duck capital of the world, respectively) are key areas of habitat for waterfowl, shorebirds and other species of wildlife, the project will also strive to understand how rice management practices can minimize GHG emissions and maximize benefit to waterbirds.  PRBO Conservation Science, a bird conservation non-profit, will lead the analysis of potential impacts of selected growing practices in California using habitat quality indicators and optimization models, which can be adapted to other regions. 

Benefit to Farmers: Economic benefit estimates are based on California modeling of potential GHG reductions and cost studies. The three practices currently in the methodology and their potential for GHG reduction are: dry seeding (4%), removal of straw before flooding (8%), and reduced winter flooding (16%).  The break-even costs for these practices range from $3 to $79 per ton of carbon dioxide equivalent. However, though the break-even cost for straw removal, for example, is around $79, this cost can be reduced through sale of the straw, and as carbon prices increase once the compliance market begins, there may be a business advantage for some farmers.  Carbon markets could provide the additional value that enables a rice farmer to access these straw markets. Other practices yet to be analyzed may produce greater GHG savings, such as mid-season drainage in the mid-southern states, in which case economic return could be higher. 

A final goal of the project is to seek out regulatory approval of a rice carbon protocol, so that the GHG emission reductions achieved will have compliance value under a cap-and-trade program.

The project is expected to start in August and will conclude in 2014.

Also posted in Climate, Ecosystem Restoration, Global Warming Solutions Act: AB 32 / Tagged , | Comments are closed