Climate 411

New analysis shows that, in a decisive decade for climate action, Oregon must aim higher

Last legislative session, Oregon’s lawmakers had the opportunity to update Oregon’s statutory climate targets. This would have been the first time that Oregon updated its outdated climate targets in 15 years and would have brought Oregon’s climate goals in line with the level of ambition of President Biden’s national climate targets and from other climate leadership states.

But then, Oregon’s legislative session was stalled by a small group of state Senators who fled the Capitol instead of fulfilling their core responsibility as elected officials: to represent their constituents by casting votes in the legislative process. This walkout tactic has been used time and time again and has prevented climate action supported by a majority of Oregonians. This year’s walkouts — the longest in Oregon’s history — prevented Oregon from updating its climate goals.

Without updated climate goals in place, Oregon risks falling short of securing the greenhouse gas (GHG) emission reductions that are needed to avoid the most dangerous, irreversible impacts of climate change. Oregon has made important progress in regulating emissions, as one of the states leading the way on cutting pollution from the power sector, the transportation sector, and natural gas fuels — but new analysis by EDF has found that without additional action, Oregon is projected to fall short of achieving its climate commitments.

Here’s what to know about the analysis and next steps Oregon can take to raise the bar for climate action.

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Also posted in Cities and states, Energy, Greenhouse Gas Emissions, Health, Policy / Read 1 Response

What a carbon credit buyer wants: New survey from BCG shows higher demand for high quality in the voluntary carbon market

The voluntary carbon market has been in a flurry in the past year to define integrity and quality for carbon credits. Between the recently released Core Carbon Principles from the Integrity Council for the Voluntary Carbon Market, to the Claims Code of Practice from the Voluntary Carbon Market Initiative, we now have more guidance and insight than ever before to guide carbon crediting programs and project developers toward high quality and integrity.  

But the question remains: are companies willing to spend more for higher-quality carbon credits, as they seek to credibly achieve their climate goals? Little research exists to quantify the preferences of carbon credit buyers themselves—which credit attributes they prefer, how much they are willing to pay for them, and which qualities they consider must-haves. Understanding these preferences – and what shapes them – can help reveal pathways to a higher-quality voluntary carbon market, including by better directing carbon credit suppliers’ investments, as well as guiding interventions by standard setters and civil society organizations to where they are most needed. 

To better understand carbon credit buyer preferences, Boston Consulting Group (BCG), with contributions from EDF, surveyed nearly 500 company leaders in charge of voluntary carbon credit purchases for their companies. The results are now in: the new study found that buyers across market segments are willing to pay significantly more for credits with demonstrably high quality. 

Specifically, the study found that buyers prioritize the following attributes of carbon credit quality: 

  • GHG impact: Buyers want to be sure that the credits they purchase are actually reducing greenhouse gas emissions. Survey respondents across all market segments showed the highest willingness-to-pay for credits with higher GHG impact scores, representing higher levels of confidence in the GHG impact of the credit. Buyers in almost all segments were unwilling to buy credits with low GHG impact scores, even at very low prices. Both robust project transparency and MRV can provide more confidence in GHG impact:  
    • Project transparency: Buyers want to be able to trust that the projects or programs they are supporting are legitimate and effective. They want to see clear and transparent information about the projects or programs, including how they are designed, implemented, and monitored. 
    • Measurement, reporting, and verification (MRV): Buyers want to be sure that the credits they purchase are based on accurate measurement and verification of their underlying emissions reductions. They want to see independent verification of the projects’ emissions reductions. 
  • Project or program type: Buyers have different preferences for different types of projects or programs. For example, most respondents preferred and were willing to pay more for higher-quality nature-based reduction credits, especially jurisdictional REDD+ (JREDD+) credits, showing the potential value of programs that use jurisdictional-level approaches. 
  • Co-benefits: Buyers prefer projects that provide other benefits in addition to emissions reductions. These co-benefits can include things like biodiversity conservation, local job creation, and air or water quality improvement. 
  • Location: Buyers may have preferences for projects that are located in certain regions or countries. 
  • Benefits sharing: Survey results revealed buyers don’t value benefits sharing as highly as other attributes. This reveals the need for more transparency by projects and programs on benefit sharing, as well as increased buyer education on the importance of benefit sharing to credit quality. As one survey respondent said: “We’re so busy worrying about credibility that we’re not as focused on benefit sharing. But if it could be more transparent, then for sure we’d look at it more.” 

The 500 companies surveyed include a range of companies across the globe and from diverse industries—from major multinational Fortune 500 firms to small and medium enterprises. 

Buyers across market segments are willing to pay significantly more for credits with demonstrably high quality. 

The study’s findings have several important implications for stakeholders in the voluntary carbon market (VCM).  

  • First, project and program developers should tailor their strategies and product portfolios to meet the expressed quality needs of buyers. They should focus on projects that have high GHG impact, are transparent, and have strong MRV. They should also carefully consider the co-benefits of their activities and the location of their projects or programs.  
  • Second, buyers should be aware of the importance of carbon credit quality and should be willing to pay more for high-quality credits that can deliver actual climate benefits with confidence and transparency. They should also educate themselves about the different types of carbon credits and the different attributes of credit quality. 
  • Third, third-party organizations, such as NGOs, standard setters, and rating agencies, should continue to educate buyers about credit quality and to develop standards and guidelines for high-quality credits. That’s what EDF’s Carbon Credit Quality Initiative, in partnership with Oeko-Institut and World Wildlife Fund (US), aims to achieve.  
  • Finally, the study’s finding that “low prices are not a primary motivator of credit purchase decisions” suggests that project and program developers, buyers, and third parties seeking to improve the quality of the voluntary carbon market should not base their decision-making on an assumed “race to the bottom” in the voluntary carbon market. Rather, they should use buyers’ willingness to pay for demonstrated quality to guide them in designing practical interventions that strengthen the integrity and impact of the voluntary carbon market. 

The voluntary carbon market is a growing market, and the survey results show that companies’ demand for high-quality credits is clear. By understanding the most important attributes of carbon credit quality, buyers, project developers, and third-party organizations can all contribute to ensuring that the VCM can live up to its potential in addressing the climate crisis. We all want to see a transformation of the market toward high quality and integrity—and it’s up to all of us to achieve it.  

Find the report here.

Posted in Carbon Markets / Comments are closed

New Mexico is off course for reaching its climate goals, but there’s enormous opportunity for action

New Mexico communities know the stakes for climate change are high — hotter and drier conditions threaten public health, livelihoods, and cultural and recreational resources, as they lead to increased drought, extended and more extreme wildfire seasons, and extreme heat. Those impacts are projected to get much worse in the coming decades, without serious and urgent action to slash climate pollution. It’s why polls underscore that the majority of New Mexico voters support strong action on climate change.

Governor Lujan Grisham has made bold, science-based climate commitments and both the legislature and regulators have adopted a number of important policies, but a new EDF analysis finds that with existing state and federal policies in place, New Mexico is projected to fall well short of achieving its 2025 and 2030 climate goals unless it takes aggressive climate policy action as soon as possible. The analysis also finds that the state’s current course will lead to far more cumulative emissions through the end of the decade — a critical metric that ultimately determines the severity of climate damages that our kids and grandkids may face.

While New Mexico is projected to face a glaring “emissions gap” — the distance between emission reductions the state has committed to and those it is projected to achieve — the opportunity to correct course with bold action has never been greater. With historic federal investments lowering the cost of clean energy, New Mexico can leverage this momentum to put in place strong limits on pollution that secure a safer climate future and grow a prosperous, equitable clean energy economy.

Here’s what you need to know about this analysis:

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Also posted in Cities and states, Greenhouse Gas Emissions, News, Policy / Comments are closed

Washington state’s carbon market continues to raise major investments, as state leaders consider linking to California-Quebec market

Results were released today for Washington’s third quarterly cap-and-invest auction, which was held on August 30th. The results from this sold-out auction continue to demonstrate strong demand for allowances in this program, which has brought in significant revenue for the state of Washington to reinvest in its communities. These results follow on two previous sold-out quarterly auctions, as well as an auction from the Allowance Price Containment Reserve last month which raised an additional $62,491,660 while functioning as a market stabilizing feature. In total, these auctions have generated $919,564,777 for Washington communities.

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Also posted in California, Cities and states, Economics, Energy, Greenhouse Gas Emissions, Health, Policy / Read 1 Response

Washington state’s cap-and-invest program demonstrates cost containment features with special August auction

Yesterday, the Washington State Department of Ecology (Ecology) released the results from Washington’s first Allowance Price Containment Reserve (APCR) auction, held on August 9th. At this auction, all 1,054,000 of the available APCR allowances were sold at the two APCR tier prices of $51.90 and $66.68, with 527,000 allowances available at each price tier. This auction, along with two previous sold-out cap-and-invest auctions, shows continued strong demand for allowances under Washington’s cap-and-invest program and demonstrates the important role that an APCR can play in building predictability and stability into allowances prices.

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Also posted in California, Cities and states, Economics, Energy, Greenhouse Gas Emissions, Health, News, Policy / Comments are closed

To make nature financing more equitable, we must understand how NCS credits are used

This blog was authored by Julia Ilhardt, former High Meadows Fellow, Global Climate Cooperation. 

At the end of last year, 196 nations agreed to the historic Global Biodiversity Framework, which includes the goal to protect 30% of land and sea area by 2030. Still, nature is woefully underfinanced, with investments in nature-based solutions needing to double to USD 384 billion per year by 2025, according to UNEP. 

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Also posted in Economics, Forest protection, News, REDD+ / Comments are closed