SPC /GTZ
Fiji National REDD Policy & Scoping Workshop
Suva, 27 August – 1 September 2009
Dr Sean Weaver, Principal, Carbon Partnership Ltd
www.carbon-partnership.com
[email protected]
© Text and illustrations Sean Weaver, Carbon Partnership Ltd
Monday 31 August 2009
Monday 31 August 2009
Scope
What activities are
eligible?
Reference Level
Financing
Distribution
How are emission
reductions
measured?
Where does the
money come from?
Where do the
money & benefits
go to?
Carbon & Climate Related Finance
Financing
Where does the
money come from?
Carbon & Climate Related Finance
Compliance Carbon Market
Voluntary Carbon Market
Driver = Binding Obligations
Driver = Carbon Neutrality & CSR
Kyoto – CDM
Copenhagen – REDD+
USA Domestic ETS
Payment for Ecosystem
Services Market
Driver = Corporate Social
Responsibility (CSR)
Corporate Sponsorship
Direct Barter
Various voluntary standards
Carbon Exchange
OTC
Grant Finance
Driver = Strategic & Philanthropy
Capacity Building
Buy credits
Project Development
Carbon & Climate Related Finance
Compliance Carbon Market
Voluntary Carbon Market
Emissions Trading
Unconstrained emissions
Collective Cap
CDM
Emissions Trading
Collective target is an
allowed emission volume
1 Unit (AAU)
1 tCO2e
This volume is divided into
units (tCO2e)
Units are allocated to POs
pursuant to their individual
target (Assigned Amount
Units – AAUs)
LULUCF
NZ
310 million
AAUs
Units are allocated to POs
pursuant to their individual
target (Assigned Amount
Units – AAUs)
NZ
310 million
AAUs
Units are allocated to POs
pursuant to their individual
target (Assigned Amount
Units – AAUs)
To achieve compliance a country
must demonstrate that its actual
emissions over the management
period match their number of
allowances
NZ
310 million
AAUs
NZ
310 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
What if a country under-complies
with their binding target by
overshooting their allowance?
NZ
310 million
AAUs
NZ
310 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
What if a country under-complies
with their binding target by
overshooting their allowance?
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Country B over-complies
with their target generating
surplus Allowances
Surplus
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Wanna sell
them?
Got any spare
Allowances?
Yep
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Yep
Surplus
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Surplus
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Surplus
Allowances
2008-2012
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
In Compliance
In Compliance
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
2008-2012
Actual
Country B
310 million
AAUs
Country B
210 million
tCO2e
Emissions
Allowances
Actual
2008-2012
2008-2012
Emissions
2008-2012
Country A
Country B
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
No
emissions
cap
Developing Country
Clean Development
Mechanism (CDM)
Future REDD+ (?)
Demand
If REDD Market
Mechanism
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
Supply
No
emissions
cap
Developing Country
Clean Development
Only Points of
Mechanism (CDM)
Obligation can play
compliance
trading
Future
REDD+ (?)
You can play in the
voluntary market
NZ
310 million
AAUs
NZ
410 million
tCO2e
Allowances
Actual
2008-2012
Emissions
2008-2012
Developed Country
I’m not a Point of
Obligation but I want
to play carbon trading
No
emissions
cap
Developing Country
Voluntary Carbon Market
Demand
Entities seeking Carbon Neutrality or
Corporate Social Responsibility (CSR)
This is a different
league with different
rules – but anyone
can play
Voluntary Carbon Market
Demand
Entities seeking Carbon Neutrality or
Corporate Social Responsibility (CSR)
This may be for brand differentiation
– e.g. “Our wine is carbon neutral”
Grove Mill winery in Marlborough
produced the world’s first carbon
neutral wine
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Energy
efficiency
Clean
technology
Behaviour
change
Someone
else’s
emission
reduction
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
Energy
efficiency
Clean
technology
Behaviour
change
Someone
else’s
emission
reduction
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Carbon Neutral
Voluntary Carbon Market
Demand
How
does Carbon Neutrality or
work?
Entities
seeking
Corporate
Responsibility (CSR)
ThreeSocial
Steps:
1. Measure carbon footprint
2. Reduce carbon footprint
Energy
efficiency
Clean
technology
Behaviour
change
Someone
else’s
emission
reduction
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Carbon Neutral
Voluntary Carbon Market
Supply
Voluntary carbon projects
seeking financial support for
voluntary climate friendly
projects
e.g. REDD projects
3. Buy carbon offsets (carbon
units) for residual emissions
you were unable to eliminate
Someone
else’s
emission
reduction
Voluntary Carbon Market
Supply
Voluntary carbon projects
seeking financial support for
voluntary climate friendly
projects
e.g. REDD projects
Tropical rainforest carbon
is the most popular in the
voluntary carbon market
When you protect a rainforest
carbon reservoir you also
protect offsets
biological
diversity and
3. Buy carbon
(carbon
other ecosystem
services
units) for residual
emissions
you were unable to eliminate
Someone
else’s
emission
reduction
Why Voluntary Carbon Market Standards?
Transaction Volumes by Standard Used 2007
There are many different
voluntary carbon market
standards
CCB – Climate Community
and Biodiversity Standard
Well suited to REDD
Projects that simultaneously address
climate change, support local communities
and conserve biodiversity.
Why Voluntary Carbon Market Standards?
We need standards to
safeguard against
carbon cowboys
Wanna buy some
carbon credits real
cheap?
Why Voluntary Carbon Market Standards?
A robust quality
assurance process will
prevent me from selling
junk carbon
Take a look at my
voluntary carbon
forestry project
Quality Assurance Standards
Market Instruments
Voluntary Market
Various Voluntary
Standards
Compliance Market
UNFCCC CDM Executive Board
UNFCCC REDD Executive Board ?
These standards issue
carbon credits only when
the carbon is Measurable,
Verifiable, and Additional
Necessity for Measuring
Reporting & Verification
(MRV) capability
Quality Assurance Standards
Market Instruments
Quality Assurance Standards
Fund Instruments
1. World Bank Forest Carbon
Partnership Facility
Strategy, Policy, Planning
(FCPF)
Capacity Building (e.g. MRV)
2. Asian Development Bank
Build Reference Scenario
3. Bilateral Grants (e.g. EC,
Buy REDD units
UK, Norway, GTZ,
Australia)
4. UNFCCC REDD Fund (?)
REDD Readiness