August 9, 2013
via Carbon Market North America, A Reuters Point Carbon News publication
SAN FRANCISCO/SAO PAULO – California regulators may offer new insight in October about how the state may let firms offset emissions using CO2 credits from projects that prevent deforestation, a move some say could trigger investment in such schemes.
The California Air Resources Board (ARB), the market regulator, is due as early as October to publish its first recommendations and observations on importing offsets from regional programs in Brazil and Mexico that reduce emissions from deforestation and degradation (REDD), spokesman Dave Clegern said last week.
The ARB will draw upon recommendations made in a report by a working group of REDD experts earlier this summer.
“It is difficult to speculate on if and when California might accept REDD (reducing emissions from deforestation and degradation) so I won’t try,” said Gary Gero, president of the Climate Action Reserve, which registers projects and credits for the state market.
“But I do think California is serious about considering REDD as this is another way of building the big tent of players addressing climate change, which is one of the state’s goals,” he said.
The proposal comes three years after lawmakers in California, Brazil’s Acre state and Mexico’s Chiapas state signed a memorandum of understanding to outline how such a system would work.
The move is likely to draw global attention and some lobby groups hope it will spur a wave of investment in REDD projects by encouraging regulators in other markets to allow the use of offsets that some see as lacking credibility.
“There are different markets in Asia such as Korea exploring that possibility (of accepting REDD offsets),” said Karin Burns, executive director, Code REDD, a California-based nonprofit organization that rallies support for the adoption of REDD offsets by corporations and in emissions markets. “So if that happens in California, if they show it could be done, it could make it easier to other markets like Japan, South Korea,” Burns said.
Highlighted by the U.N.’s main scientific panel as a major cause of climate change, deforestation accounts for more than 15 percent of global greenhouse gas emissions – more than the entire global transportation sector and second only to burning coal, gas and oil combined.
Yet the United Nations climate body has refused to recognize REDD credits under its main offsetting market – the Clean Development Mechanism – over concerns about verification of emission cuts and fears projects may lead to logging elsewhere.
Still, California regulators have come under increasing pressure from big emitters who want to be able to use the credits as a cheaper alternative to meeting emissions law. Supply of offsets is thin and some regulated businesses, including utilities Pacific Gas & Electric and the Sacramento Municipal Utility District, recently voiced strong support to allow REDD credits.
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