IETA NETWORK CONNECTION
In touch with global carbon markets
Ahead of last week’s Climate Action Summit, a new report was published reviewing progress towards the goals of the New York Declaration on Forests (NYDF). The declaration commits signatories – comprising more than 200 governments, companies, NGOs and indigenous groups – to end natural forest loss by 2030, with a 50% reduction by 2020. But the report highlights the world’s failure to prevent deforestation: in the five years since the NYDF was signed, deforestation rates have surged 43%. In turn this has a huge impact on emissions; on average, annual tropical forest loss since 2014 has emitted 4.7 billion tonnes of CO2 per year – more than all the EU’s GHG emissions in 2017.
Part of the reason for this failure to tackle global deforestation is the lack of finance directed towards the problem. Since 2010, less than 1.5% of the $256 billion of climate finance committed by multilateral institutions and countries has been spent on addressing deforestation and protecting forests. In contrast, one estimate suggests that $200 billion per year is needed to halt global deforestation.
While it’s clear that more public finance is needed to tackle the problem, the sums of money required indicate that the private sector must play a significant role. In the last 12 months we have seen progress in this direction with companies including BP, Shell, Equinor, Eni and Total making major announcements to invest in forestry protection. Shell and Total have together pledged $200 million per year for forest protection and restoration. To put that in context, only five national governments provide annual contributions to forest finance at or exceeding this level.
One way to significantly increase the amount of private sector money for forest protection is to include nature-based carbon credits in emission trading systems. Doing so places a direct value on ecosystems which help reduce emissions and remove carbon from the atmosphere. And if that value is greater than the opportunity costs – for instance chopping down a forest to sell the timber and convert the land to agriculture – these vital ecosystems will be protected, recovered and restored.
In the week before the Climate Action Summit, the California Air Resources Board endorsed the Tropical Forest Standard. This sets out requirements for states and countries seeking to have their large-scale forest protection programmes recognised in carbon markets. In the future, this may lead to international forest carbon credits being accepted in emission trading systems, like California’s.
New research by IETA, co-sponsored by the Carbon Pricing Leadership Coalition and with the help of researchers and modellers from the University of Maryland, shows that international carbon market cooperation through Article 6 can reduce the cost of climate change mitigation by as much as $250 billion per year by 2030. If those savings are reinvested in further mitigation and coupled with natural climate solutions in lands and forests, an extra 5 billion tCO2 per year could be reduced. This is 50% more than what existing pledges will deliver, meaning an effective Article 6 could double the effectiveness of the Paris Agreement.
Each year, the world is losing an area of forest equivalent to the size of the UK and the emissions gap grows larger. This new research from IETA presents compelling data to show that market cooperation can play a huge role in tackling these two issues. That’s why getting agreement on a strong Article 6 rulebook in Santiago is so important, and why it is something IETA is pushing strongly for.
Director, Carbon Market Development
For more information on IETA and our work, see www.ieta.org
How is Enviro-Mark involved in the carbon market?
Enviro-Mark Solutions Ltd is involved in the carbon market for the purposes of offsetting emissions for our clients seeking to gain certification under our carboNZeroCertTM programme.
We are focussed on sourcing credible carbon credits for our clients seeking carboNZero certification, and ensure the credits being used for offsetting are cancelled on an appropriate, recognised, third party registry. We do not develop our own projects, verify credit projects or issue credits to project owners.
Enviro-Mark Solutions prides itself on sourcing credits from projects that meet our best practice expectations for a credible and robust credit claim. We maintain a position paper and associated due diligence assessment criteria that meets the ICROA Code of Best Practice, in order to ensure suitable quality of the credits being used under our programme.
As part of our programme support to carboNZero certified clients, we add value through communicating the co-benefits and rigour behind the carbon credits we supply. This ensures our clients have the confidence to tell meaningful stories in the market place about the projects they support.
Why did you join IETA?
We are delighted to be part of the international IETA membership. We want our carboNZero programme to be a platform for environmental credibility and integrity, and becoming a member of IETA endorses the robustness of the carbon market component of our business. Our membership, also gives us access to the latest in market developments essential to keep up to date with international best practice, which adds value to our varied client base.
IETA Insights 2019 #5: Piloting for post 2020 carbon markets
The article, written by VK Duggal from the Asian Development Bank, looks at an initiative to prepare nations in the region for the next wave of carbon markets under Article 6 of the Paris Agreement.