Voluntary Market and VER Standards. The Gold Standard Foundation Panama City, June 2009

Transcription

1 Voluntary Market and VER Standards The Gold Standard Foundation Panama City, June 2009

2 The many different standards

3 The Global Offsetting Market Overall the market doubled between 2007 and % growth from MT to 123 MT Source: New Carbon Finance and World Bank

4 Size of the Voluntary & the Compliance market Source: New Carbon Finance

5 Information taken from ENDS report and New Carbon Finance Overview of voluntary market price demand impacts of recession Tripled growth from , doubled growth in 2008, 2009 volumes look constant though general prices fell market activity continues However, prices dropped 25% from mid-2008 (still higher than early 2007). VERs at 6 USD. Overall, demand growth will probably be about 25% over the next two years, rather than 250% experienced during the past 2 years EU and the US creating 92% of demand

6 Has the recession had an impact? Information taken from ENDS report

7 Source: ENDS report Types of credits bought in 2008

8 Source: New Carbon Finance Winners in the battle

9 Voluntary Programs Name of Program Regional Scope Type of program Start of Program Voluntary Cap and Trade Systems Chicago Climate Exchange (CCX) Voluntary GHG Reduction Programs International (originally US) Voluntary cap-and-trade with offsets as unlimited compliance mechanism Launched in 2002 California Climate Action Reserve (CCAR) US (originally CA) Non-profit GHG registry created by CA state legislation in 2001; Full carbon offset standard for VERs Active since 2002 Voluntary Standards for Offset Projects & Retailers Gold Standard (GS) International Full carbon offset standard for CERs and VERs with focus on co-benefits Launched in 2003 Voluntary Carbon Standard 2007 (VCS) International Full carbon offset standard for VERs Launched in 2007 VER+ International Full carbon offset standard for VERs Launched in 2007 Climate, Community and Biodiversity Standards (CCBS) International Project Development Standard for bio-sequestration projects with focus on co-benefits Launched in 2005 Green-e Climate US focus Voluntary certification program for offset retailers Launched in 2008 * Stockholm Environmental Institute

10 WHAT TO LOOK FOR IN A VOLUNTARY STANDARD? Criteria Real Permanent Verifiable Enforceable Traceable Market Independent GS yes yes GS Foundation, GS Technical Advisory Committee, GS NGO Supporters GS TAC, GS Secretariat, GS NGO Supporters APX NGO owned VCS yes Yes/ NA VCS Association Accredited VCS auditors Multi-Registry IETA/Climate Group, WEF, WBCSD CCX yes NA CCX Committee on Offsets. CCAR yes NA Board of Directors, CCAR Registry Staff CCX Committee on Offsets State of CA and CCAR Closed internal registry They are a registry VER+ yes NA TÜV SÜD DOE mostly TÜV SÜD Internal. First in market CCB yes NA CCB Alliance CCB Working Groups Green-E N/A NA Center for Resources Solutions (CRS) FSC accredited or DOE (no quantification of ERs) US corporations, leadership of R. Sandor State owned Validator owned? NGO owned NA NA Center for Resource Solutions (US NGO) * Stockholm Environmental Institute

11 * Stockholm Environmental Institute

12 Source: New Carbon Finance and World Bank

13 Registries in a nutshell Registries are transparent information centers that tell you which projects exist, how many credits they generate, and which credits have been retired or sold. Registries guarantee that offsets are third party validated, have a unique serial number, tracked across their life cycle, traded securely and retired permenantly APX the leading registry, with TZ1 and Caisse depots also in the game. GS uses APX. Include our registry website. Public list all listed (i.e. formal applicant) and registered projects Source: New Carbon Finance and World Bank

14 VALID: What buyers want Verifiable, Additional, Leakage-Free, Not Impermanent, not Double-counted The recession has made buyers more discerning, spelling trouble for poor-quality offset providers. Higher quality offsets with a minimum level of 3 rd party verification VCS, VER+, and the Gold Standard credits faring best Information taken from ENDS report

15 Who is buying? Not the green goodytwo shoes like we thought. Organic consumers, Fairtrade etc only make up 3% of the market. 80% of buyers are institutions for private carbon reduction targets! They want quality over price. Verification of carbon offset quality considered critical by 41% of respondents. Price was critical to only 12% (Ends report, pg 21) Information taken from ENDS report

16 Source: ENDS report Why do people buy offsets?

17 Source: New Carbon Finance Prices around standards

18 VER Prices Pricing: 2008 Average price: OTC = $7.34/t CCX = $4.43/t Anecdotally; CCX at 3-4 USD, VCS at 6 USD and GS VER at least a premium of 10%, often much more. With recession, the CER price has dropped leading to more inter-exchange between CERs and VERs. Notably, GS CER prices have remained with a strong premium, as have GS VERs. GS VERs from recent project going at 50% premium from VCS! Source: New Carbon Finance and ENDS Report

19 The Gold Standard Premium Gold Standard demand continues to exceed supply and prices more stabilized than VERs or other voluntary standards. Gold Standard 9% market share in 2007 to 12% in 2008 GS VER prices are the same as CDM prices, if not higher for certain charismatic projects Source: New Carbon Finance and ENDS Report

20 Perception of offset credits Carbon offsetting s biggest Achilles heel continues to be its reputation Source: New Carbon Finance

21 Source: ENDS report Importance of Quality Criteria

22 Source: ENDS report Attributes of Offset Providers

23 Source: ENDS report and New Carbon Finance Perception of Project Types 51% renewable energy in 2008 up from 27% in 2007 with solar fetching highest price at $22 a ton geological sequestration/agri soil sequestration got lowest prices, around $3

24 According to ENDS report 2009 Carbon neutrality: most important offsetting objective Environmental Strategy and CSR are the most frequent reasons for buying Independent Regulation and Gold Standard are magic ingredients Offsetting is made in parallel with local ER measures Location less important than quality, but developing countries are preferred Wind and solar are top runners, AD coming up Buyers want Quality Offsetting will survive recession and steady purchase rates are expected

25 According to ENDS report 2009 The Gold Standard remains the most respected and indemand standard, with demand often exceeding supply, due to the high quality requirements it imposes on selected projects. But these requirements have limited the number of projects and market share remains at about 15%...Credits only became readily available in 2007 and in 2008 the scheme s projects exploded to more than 200, representing more than 15 milion metric tonnes of Co2 These will continue to be the most well-respected and indemand credits in the market

26 Thank you! Mauro Fadda The Gold Standard Foundation 79 Avenue Louis-Casaï CH-1216 Geneva-Cointrin Switzerland Tel: Mobile: mauro@cdmgoldstandard.org