From the Editors
This week in V-Carbon...
Australia's Emissions Reduction Fund (ERF) underwent its first test last week when it held its inaugural reverse auction to purchase carbon offsets. Did it pass or fail? We don't know yet since the auction results are not currently available. But participants were holding their breath to find out what benchmark price the government would submit as the maximum amount it would pay per tonne of emissions reductions. Their sense was that offset prices might plummet after the repeal of the AU$23 carbon tax last year.
Forest and agriculture projects developed under the Carbon Farming Initiative (CFI) will be automatically registered under the ERF, which will also accept offsets from energy efficiency improvements in the commercial building sector, according to the Clean Energy Regulator. While offset project developers are thankful that the ERF may accept more, not fewer, project types than were eligible under the carbon tax, they fear that the AU$2.6 billion ERF may be quickly exhausted, and that potentially lower offset prices may not incentivize new project development. Only 21% of Australian businesses engaged in the carbon market believed that the ERF would provide opportunities to fund their emissions abatement projects, according to a poll by the Carbon Markets Institute.
"The way Australia has implemented the Emissions Reduction Fund is not using markets so much as just using government money, which can provide support to some projects, but is not fully harnessing the market and directing private capital into markets," said Jerry Seager, Chief Program Officer for the Verified Carbon Standard (VCS).
Australia has committed to a 5% cut in emissions below 2000 levels by 2020 – a target that a spokesperson for the Department of the Environment called "ambitious and comparable to other developed countries' targets." However, some advocacy groups disagree. Oxfam Australia has calculated that a fair contribution for Australia would cut domestic emissions by at least 40% by 2025, based on the country's share of the global carbon budget.
Australia is expected to officially submit its climate plan – known as an Intended Nationally Determined Contribution, or INDC – to the United Nations (UN) Framework Convention on Climate Change mid-year, but a spokesperson said the government has no plans to revisit a carbon tax.
"Australia, for reasons we may never understand, is swimming against international trends," said Simon Bradshaw, Climate Change Advocacy Coordinator for Oxfam Australia. "They really did paint themselves into a corner with this and they may regret that" as the need to reduce emissions becomes clear. "It's hard to see how that's not going to involve carbon pricing."
More stories from the voluntary carbon market are summarized below, so keep reading!
Call for reviewers
Ecosystem Marketplace is seeking a panel of expert reviewers to offer insight for our upcoming State of the Voluntary Carbon Markets 2015 report. The review entails two rounds of feedback: one on the draft figures for the report and one on the draft text. Reviewers must be active in the voluntary carbon market, have responded to our annual survey, agree to maintain confidentiality, and offer comments in a timely manner. Please send expressions of interest to Allie Goldstein (firstname.lastname@example.org) by Thursday, April 23.
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