Update- US & Canadian Offset Protocols

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By Point Carbon & Climate Action Reserve

Maine’s recommendations are for forest management, avoided deforestation and urban and community forestry offset types. RGGI currently allows for five types of offset projects: energy effiiency improvements; afforestation; landfill gas capture; agricultural methane capture; and reducing sulfur hexafluoride from electric transmission and distribution.

“We are working on sending final draft recommendations to the RGGI working group in the next week or two,” said Ellen Hawes, a forestry policy analyst for Environment Northeast. Project development has been slow in the RGGI region because of restrictions placed on offset use. Covered entities under RGGI can expand their use of offsets to 5 per cent of their compliance obligation from an initial 3.3 per cent if the average price of allowances over 12 months is equal to, or more than $7. If the price reaches $10, emitters can use offsets to satisfy 10 per cent of their compliance obligation. Allowances have not exceeded $7 since they started trading on the Chicago Climate Futures Exchange last August.

Canada publishes draft offset guidelines

Canada’s environment ministry released new draft documents that set out the rules for generating offsets and how to verify eligible projects. The offset system will be part of a mandatory national carbon trading programme in Canada, which is part of the government’s commitment to reduce greenhouse gas emissions by 20 per cent below 2006 levels by 2020. The carbon trading programme would allow emitters to buy and sell emissions allowances and purchase offsets to comply with their GHG emissions reduction targets. It is not yet clear how many offsets the Canadian government will allow covered entities to use. Environment Minister Jim Prentice said the government will lay out a full suite of greenhouse gas regulations by December’s UN meeting in Copenhagen. Among the government’s new guidelines for the offset system are that projects must have started on or after 1 January, 2006.

Greenhouse gas emissions reductions from offset projects must also have occurred on or after 1 January, 2011. All offsets must come from Canada-based projects. Among the eligible project types are forest sink projects, including afforestation, avoided deforestation and forest management. Eligible agricultural projects include reducing the intensity of tillage operations and soil sequestration. The ministry has listed various existing protocols that can be adapted for Canadian projects. It said protocols designed by Alberta’s environment ministry for afforestation, landfill gas and combustion, reduced or no tillage, wind and anaerobic biodigester projects can be adapted for its offsets system. California-based Climate Action Reserve’s forest sector protocol can also be adapted for its programme, it said.

Courtesy Point Carbon

Significant Improvements and Changes Included in the Updated Forest Project Protocol Version 3.0

The Climate Action Reserve is pleased to announce the completion of Version 3.0 of its Forest Project Protocol (FPP). The protocol and an accompanying Project Implementation Agreement (PIA) are now posted on the Reserve's website. Both documents will be submitted for approval by the Reserve's Board on July 1, 2009 in Sacramento.
Version 2.1 of the Forest Project Protocol was adopted in September 2007 by the Reserve Board and November 2007 by the California Air Resources Board and since those adoptions, the Reserve has worked closely with stakeholders, forest experts, environmental organizations and government agencies to update, improve and expand the protocol. Significant improvements and changes include the following:

•    Expanded applicability so that the protocol may be used with projects throughout the United States
•    Standardized requirements and improved guidance for estimating baselines for reforestation, improved forest management, and avoided conversion projects
•    An option for registering reforestation projects on lands that have recently undergone a significant natural disturbance
•    Explicit requirements and mechanisms to ensure the permanence of credited GHG reductions
•    Improved requirements for more comprehensively addressing leakage
•    Requirements and guidance for accounting for carbon in harvested wood products 
•    Refinement of the definition of "natural forest management"
•    Numerous other clarifications, revisions, and improvements

The PIA is an agreement that project developers are required to sign in order to register a forest project with the Reserve. The PIA sets forth: (i) the project developer's obligation to comply with the Forest Project Protocol, and (ii) the rights and remedies of the Reserve in the event of any failure of the project developer to comply with its obligations, including compensation for any "reversal" of greenhouse gas reductions.
Project developers may begin submitting projects under Version 3.0 of the FPP as soon as it is adopted by the Reserve's Board. All Reserve Board meetings are open to the public. Details for the July 1 Board meeting are as follows:

July 1, 2009 - 1:00 to 4:00 p.m. PDT
Byron Sher Auditorium, CalEPA Building
Sacramento, California