Back in 2006, when California was passing the Global Warming Solutions Act (AB32), some in industry pushed back hard, claiming that California couldn’t stop climate change by itself and that all AB32 would do was compromise the competitiveness of the state’s economy. California has proved the naysayers wrong – its economy is booming, and emissions are falling. Far from going at it alone, the Golden State is increasingly leading a global trend.
Now, California has an opportunity to build on its international leadership. By setting the gold standard for carbon market credit for international sectoral offsets – the subject of the California Air Resources Board’s (CARB) upcoming workshops – it can send a powerful signal to communities and governments that are fighting to stop tropical deforestation: carbon markets will help support their struggle.
California’s climate change program has prompted a plethora of bottom up climate action programs around the world, some of which are already achieving large-scale emissions reductions. Last December in Paris, California hosted a meeting of the “Under 2 MOU”, a group of 127 sub-national jurisdictions started by California and Baden-Wurttenburg in Germany, accounting for over a quarter of the global economy that have committed to reducing emissions below 2Mt per capita or 80% – 95% by 2050. Since the national commitments made at the Paris UN climate conference represent about half of what the science tells us is needed to keep warming below the critical threshold of 2°C, the Under 2 MOU could contribute significantly to closing the gap.
California has an opportunity to build on its international leadership by setting the gold standard for carbon market credit for international sectoral offsets.
California was also a founder of the Governor’s Climate and Forest Task Force (GCF), with Amazonian states and Indonesian provinces, in 2008. The GCF now includes 29 states and provinces from four continents, covering over a quarter of the world’s remaining tropical forests and collaborates on low-carbon rural development and creating incentives for reducing emissions from tropical deforestation and forest degradation – and GCF members have become global leaders in reducing CO₂ emissions.
Between 2006 and 2013, the states of the Brazilian Amazon, supported by national policy, reduced Amazon deforestation about 75% below the 1996 – 2005 annual average, reducing emissions by about 4.2 billion tons of CO₂ — far more than any other country or region in the world — while simultaneously increasing agricultural output and improving social indicators. Regional leader, Acre, is developing a market-based system to reward landowners and forest communities financially for conserving forest, and dedicated 70% of the proceeds of the first international transaction for forest carbon credits to indigenous and forest communities. Overall, reduced deforestation resulted from both state and federal policy, law enforcement, and signals from major consumer goods companies that deforestation-based soy and beef would be denied market access. California and the GCF’s work on carbon market credit for reducing deforestation gave communities and producers the prospect of economic incentives – for the first time – for protecting rather than destroying forests.
Around the world, some 50 states and countries are moving ahead with either cap-and-trade emissions reductions regime or carbon taxes – most of which began well before the Paris Agreement and President Obama’s Clean Power Plan. Meanwhile, 188 nations have made reduction commitments covering about 90% of global emissions through the UN Paris Agreement. Increasingly countries and states are recognizing – as California and the Amazon have demonstrated – that they can stop Greenhouse Gas pollution and grow their economies at the same time, and that learning how will make them more competitive and prosperous in a carbon-constrained global economy. California, Acre, and other GCF members’ innovative development of international sector-based credits will ultimately give all of these carbon pricing initiatives more options and make them stronger.
Moving ahead with allowing international sector-based offsets into California’s carbon market will take the process to the next level, signaling to tropical jurisdictions globally currently responsible for more Greenhouse Gas pollution than all the cars and trucks in the world that living forests can become worth as much as dead ones.