By Erica Morehouse

Setting a 2030 greenhouse gas target for California could benefit the state’s economy; environment; and future of California’s global climate leadership. Image credit: Flickr/ Jeff Turner

It’s summer recess for the California Legislature which means we have some time to reflect before the race to the end of the legislative session on August 31. A big question is whether the Legislature will pass a climate bill package that would cement ambitious 2030 carbon reduction targets into statute. With the climate spotlight shining brightly on Sacramento – as usual – it’s worth considering why legislative action and leadership is so critical now.

Here are six ways setting a 2030 greenhouse gas target for California could benefit the state’s economy; environment; and future of California’s global climate leadership, especially the groundbreaking cap-and-trade market we forged three years ago with Quebec.

1. Cap-and-trade allowance values will more accurately reflect the long-term cost of hitting emissions reductions targets – This is the classic impact that we consider. A 2030 target means that a carbon allowance sold in 2017, for example, will be a valuable asset not just through 2020 but through 2030 as well. This could translate into higher allowance prices, but if it doesn’t, there could be good news reasons for that too, such as the market anticipating a low cost of reducing emissions.

1. Regulated polluters will value emission reduction opportunities more highly, potentially leading to lower direct emissions – This relates back to the first point. Imagine that a business needs to buy a new boiler that they expect to last 20 years. They have the option to pay more now for a more efficient boiler or pay less now for a less efficient boiler. They are more likely to invest in the more efficient boiler if they know there will be a price on carbon catalyzing ambitious reductions for at least 15 more years rather than just five more years.

1. Allowance banking could increase, creating more incentives for faster emission reductions – This creates an important, but more subtle, environmental benefit. If carbon prices are expected to increase in the future as the cap gets tighter, regulated and non-regulated participants alike will have an incentive to “bank” allowances for future use. (Note that an important California design feature allows a “current vintage allowance”, say 2016, to be used for emissions that occur in 2016 or in any future year.) This banking is equivalent to a reduction that occurs earlier than expected and provides a net benefit to the atmosphere. The concept of banking promotes innovative solutions that cut pollution more quickly, and makes the overall program more flexible for California companies.

1. Demand for allowances could increase – If banking increases, the uptick in demand for allowances may mean that all or most allowances offered at the quarterly auctions sell out, even if emissions remain below the cap through 2020. Out-performing the 2020 cap would be a great outcome, meaning that the long-term price signal is likely incentivizing emissions reductions (as in the boiler example above) or that complementary measures (like the Renewable Portfolio Standard) are succeeding.

1. Offsets developers will have a stronger incentive to reduce emissions where possible and bring projects to market – Offsets provide an opportunity for all sectors of the economy, like the agricultural sector, to be rewarded for high-quality, innovative emissions reductions. Because robust actions that cut pollution take time and investment, a longer-term commitment by the state is essential. This means that, for example, a rice farmer would be much more likely to transform their growing practices to cut methane emissions if those actions reaped a payoff for 15 instead of just five years.

1. Communities, the California work force, and the economy will continue to benefit from Greenhouse Gas Reduction Fund (GRRF) investments – The cap-and-trade program is first and foremost about reducing emissions not raising revenue. While the program’s purpose isn’t to maximize revenue, auctioning is an integral part of California’s well-functioning system and the undeniable benefits of the investments through the GGRF, especially for disadvantaged communities, are an important aspect of program success now and beyond 2020. California’s investments so far have furthered and enhanced the purposes of AB 32 which emphasize reducing carbon pollution in a way that maximizes benefits to the economy and environment, promotes social equity, and transforms the state into a low carbon economy. By sticking to these principles, California is creating benefits that far outweigh the initial investments. And these benefits need to continue!

A process not an event

Setting a 2030 target has been a gradual process in California. And the market may already be operating with some expectation that the cap-and-trade program will continue beyond 2020.

The market has received increasingly specific indications since 2014 that ambitious reductions will continue beyond 2020. For example, before AB 32 was ever passed, Governor Schwarzenegger signed an executive order calling for 1990 levels of emissions by 2020 and an 80% reduction below 1990 levels by 2050. In 2014, the Office of Planning and Research and the Air Resources Board (ARB) started calling for an ambitious mid-term 2030 target, foreshadowing Governor Brown’s 2015 executive order setting that target at 40% below 1990 levels by 2030. Since then, ARB has reopened the Scoping Plan process to meet that 2030 target and begun the regulatory process to amend the cap-and-trade program to extend it to 2030.

With a decade of world-leading, successful climate action behind it, California is on the verge of another momentous step forward. The market will gain even more certainty, and California communities and the economy will score a huge win if the Legislature does the right thing and passes a climate package this year that places a 2030 target in statute.

By Nat Keohane

When President Obama joined Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto in Ottawa last month at the North American Leaders’ Summit to announce ambitious goals on climate and clean energy, EDF President Fred Krupp said that “implementing them will be the true measure of success.”

Today, the United States and Mexico took important next steps towards successful implementation, announcing new details on how the two countries will work together to:

• curb emissions of methane, a potent greenhouse gas responsible for a quarter of today’s warming, by reducing emissions from the oil and gas sector by 40-45% by 2025;
• expand clean energy to meet the goal of 50% electricity generation from zero-carbon sources by 2025;
• promote residential, commercial, and industrial energy efficiency; and
• align methodologies for estimating the social cost of carbon, a key input into understanding the benefits of reducing carbon pollution.

If the June announcements were the poetry, today’s announcements were the prose — but they are no less important for it. The work plans, workshops, technical dialogues, and regulatory processes laid out in today’s announcement are the nuts and bolts of effective governing. Just as important, the concreteness and specificity of these plans give a clear signal of the countries’ strong commitment to getting these things done.

The two countries also reaffirmed their commitment to work together in the International Civil Aviation Organization (ICAO) for the adoption of a robust market-based measure to limit emissions from international aviation, and to join the Paris Agreement and support its entry into force this year.

Today’s announcement provides yet another illustration of the growing importance of North American leadership on climate and clean energy — one of many recent bright spots in climate action.

The concreteness and specificity of these plans give a clear signal of the countries’ strong commitment to getting these things done.

And it’s not hard to see why. Canada and Mexico are two of the U.S.’s top three trading partners. By advancing together, the three countries can reap the full economic and environmental benefits of a clean energy economy, creating opportunities for clean energy entrepreneurs, low-carbon investment, and sustainable economic development across the continent.

Today’s announcement is a particularly strong signal from Mexico, which — with a well-earned reputation for climate leadership on the international stage — must still demonstrate how domestic policy will match those ambitious targets. Indeed, Mexico itself has much to gain from following through. With a historically oil-dependent economy, the country is already feeling the fiscal pinch of rock-bottom global oil prices. Combine that with the enormous untapped potential and newly opened market for renewable energy generation, and pathway is clear to major opportunities for economic growth through low carbon energy and efficient production.

The path to shared global prosperity is a low-carbon path. By moving from the bold type of headline announcements to the finer print of detailed workplans, the U.S. and Mexico just took a meaningful step in that direction.

By Steve Schwartzman

Indigenous groups and law enforcement in Brazil are working together to reduce illegal mining and logging in the Amazon. About 80% of Amazon timber is produced through illegal extraction, which degrades biodiversity and carbon stocks. Photo: © Brasil2 / istockphoto.com

A new operation against land grabbers and illegal loggers in Brazil’s state of Pará is showing how collaboration between indigenous and forest communities and law enforcement can take on the biggest ongoing threats to the Amazon forest: illegal logging and illegal deforestation for land grabbing.

Launched June 30th, the operation started with an investigation two years ago after leaders from the Kayapô indigenous group reported clandestine deforestation on the western border of their territory to the Brazilian federal environmental enforcement agency, IBAMA. 

Guided by the Indians, IBAMA agents discovered encampments of workers who were clearing the forest in the indigenous territory and on adjacent public land, while leaving the tallest trees; this hid the illegal deforestation from satellite monitoring. The workers, who according to police labored under semi-slave conditions, would then burn the understory and plant pasture grass. Meanwhile, another part of the gang surveyed and forged land registry documents to sell the land. IBAMA agents shut down the camps, detained personnel and issued fines – and brought in the Prosecutor's Office and Federal Police to investigate.

We can protect the Amazon from degradation and deforestation. Both problems have the same solution.

That investigation led to an impressive 24 arrest warrants, nine subpoenas, and 18 orders for search and seizure, in five states, in what Federal Police, Prosecutor’s Office, Internal Revenue Service and IBAMA call the biggest illegal deforestation and landgrabbing mafia in the Amazon. Several of the gang’s leaders have already been imprisoned and face tens of millions of dollars in fines – as well as, potentially, stiff jail sentences.

The gang’s operation shows how the illegal value chains work.

First, the operators deploy semi-slave labor to invade reserves or occupy public land not designated for any particular use. They extract the highest-value hardwoods, then slash and burn the forest, and plant pasture. Meanwhile higher-up gang members draw up fraudulent documentation and sell the land to investors. The bosses of this high-tech organized crime enterprise run the “ranches,” coordinate a marketing group, hire surveyors and remote sensing specialists, and use family networks to launder illegal revenue. Prosecutors estimate that the group had revenues of almost $600 million between 2012—2015.

Organized criminal enterprises like this one are behind most if not all of the high-value illegal activities in the Amazon frontier zone – illegal logging, use of semi-slave labor, illegal deforestation for land grabbing and fraudulent sales, and tax evasion in the approximately 30% of the region under near-term threat of destruction or degradation.

Taking down a gang like the western Pará outfit is better than a two-for-one deal.

Operation Flying Rivers

The now-formalized program that just launched – a joint effort of Brazil’s Federal Police and the Federal Prosecutor’s Office – is called “Operation Flying Rivers,” after the huge quantities of water vapor the Amazon forest releases into the air, responsible for rainfall regimes as far away as California, which by some estimates approximates the volume of water flowing in the Amazon river.

The program is a good example of how effective collaboration between local forest communities and government authorities can be. And “Flying Rivers” goes way beyond stopping a particular invasion here, or apprehending some timber there; it aims to take apart the command structure of an entire criminal enterprise with multiple illegal value chains extending over much of western Pará.

This kind of persistent, integrated, multi-agency, enforcement campaign is central to addressing the real causes of continuing illegal deforestation and forest degradation, as well as land fraud – and critical to establishing the forest governance needed for long-term sustainable use of forests, including at-scale economic incentives for stopping legal deforestation and finance for eliminating illegal forest clearing through carbon markets and other sources.

Deforestation in Brazil

Brazil has made huge progress in reducing deforestation – but momentum has stalled. Since 2011, deforestation has been hovering around 5,000 km²/yr – not heading for zero, as an increasingly solid scientific consensus advises. This is way less than the 19,500 km²/yr average from 1996—2005, but still much too much. And, in lawless frontier regions, like southwestern Pará, illegal logging is degrading biodiversity and carbon stocks over vast areas.

It is generally held that about 80% of Amazon timber is illegally extracted, with the lion’s share sold in Brazil. That is about the same proportion of the Amazon’s current deforestation estimated to be illegal.

But you only have to look at the satellite photos to see why indigenous territories and other kinds of protected forest areas have been so important to Brazil’s success in reducing Amazon deforestation over 70% in the last decade, making it the world leader in reducing greenhouse gas pollution.

Kayapô, Panará indigenous territories and Xingu Indigenous Park (dark green), with fires and smoke plumes on their borders. Indigenous territories and protected areas are effective barriers to deforestation and fires. Photo: NOAA satellite.

EDF’s partners in the Xingu River basin – indigenous and traditional forest communities, including the Kayapô and 17 other indigenous peoples – monitor and defend a continuous area of protected forest more than twice the size of New York state. They have mobilized a lot of successful enforcement operations to stop illegal logging and land grabbing, including the “Flying Rivers” program.

This is why the law enforcement operation launched in Pará is so important and promising.

We can look at it as a version of “bad money drives out good” – no legitimate forestry or agricultural enterprise can compete with unrestrained organized crime. “Flying Rivers” is an excellent example of what’s needed to level the playing field. We can protect the Amazon both from degradation and from deforestation. Both problems have the same solution.

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You might also be interested in:

• 3 ways the marketplace could end Amazon deforestation
• Guardians of the Amazon
• Tragedy and transformation in Brazil's Xingu River Basin
• Protecting indigenous lands in the Amazon Basin
• SLIDESHOW: Amazon Warriors turned Eco-Activists

By Nat Keohane

A new era of climate leadership: Mexico, Canada, and the U.S. announced major joint commitments on climate and clean energy on June 29, 2016. Image Source: Presidencia de la República Mexicana

Last week’s vote by the British to leave the European Union has triggered a crisis in political leadership, thrown financial markets into turmoil and prompted eulogies for the European project – even as the ultimate consequences of the vote remain uncertain.

Against that backdrop, a bit of good news may be welcome. And it comes from an unlikely quarter: climate action.

That may sound surprising at first since climate change was hardly a high-profile issue in the Brexit campaign. Voting on the referendum reflected concerns about inequality, immigration, globalization, multiculturalism and an out-of-touch political elite.

Even so, the prospect of the United Kingdom’s departure has raised concerns about impacts on climate and energy policy, including possible delays in finalizing the EU’s 2030 emissions target.

But whatever the implications may be for Britain and the EU, one thing is clear: Brexit can’t derail the overwhelming global momentum on climate action that produced the Paris Agreement.

The Paris Agreement: Strength in numbers
A British exit from the EU would not have any effect on the formal architecture of the agreement, which was approved last December by more than 190 countries and has been signed by 177 – including each of the EU member states.

Given that overwhelming support, the agreement may very well enter into force this year – something that will happen once at least 55 countries representing 55 percent of global emissions formally join the agreement.

To date, 50 countries representing more than 53 percent of global emissions have formally joined or committed to join the agreement this year — closing in on the threshold of 55 countries and 55 percent of emissions needed for the agreement to enter into force. As a result, the agreement may well enter into force as soon as this year, even without the EU (which was not expected to join the agreement this year in any case).

This signals a remarkable shift. A decade ago, Europe was the world’s indispensable leader on climate action – and even temporary uncertainty about the pace of progress in the EU would have had repercussions around the globe.

The Paris Agreement, however, was the culmination of a paradigm shift away from a model of “top-down” climate action concentrated in a handful of countries, and toward more a more decentralized and inclusive approach.

As climate action has become much more broad-based, it has also become more resilient.

Climate leadership beyond the EU
That is not to say that leadership on climate from both the U.K. and the EU is not vital; it is, and will continue to be. Taken as a whole, Europe is still the world’s third-largest emitter. It remains a powerful and valuable voice for ambition.

Fortunately, political support for climate action in the region remains high, with 60 percent of Europeans saying global warming is already harming people around the world.

But we are long past the days when climate progress depended on one bloc of countries. Just consider this:

• The leaders of the three North American countries met today to announce greater cooperation on climate change – including major new commitments on clean energy and on methane emissions from oil and gas.
• Under the leadership of President Obama, the United States is now a global leader on climate action, with U.S. emissions in 2014 at 9 percent below their 2005 level, and an ambitious target of reducing emissions between 26 and 28 percent by 2025, relative to 2005.
• President Xi Jinping of China has made tackling climate change a priority, with a commitment to ratify the Paris Agreement this year, a pledge to peak China’s emissions by 2030, if not before; and a plan to institute a nationwide emission trading program as early as next year.
• The unprecedented bilateral cooperation between the U.S. and China, culminating in the joint announcements on climate change made by Presidents Xi and Obama in November 2014 and again in September 2015, were a crucial step in laying the foundation for success in Paris.
• Brazil – although currently engulfed in political turmoil of its own – has reduced emissions over the past decade more than any other country, thanks to the enormous success of its Amazon states in curbing tropical deforestation.
• India, where the moral imperative of poverty alleviation remains paramount, is committing to renewable energy and experimenting with new models of low-carbon development.

Other factors driving momentum
Underlying these country-level shifts are more fundamental drivers. The impacts of climate change are becoming increasingly more visible, in record temperatures and extreme weather events.

A clean energy revolution is underway: Wind power is competitive with coal in much of the world even without subsidies, the cost of solar panels has dropped 75 percent in less than a decade and new technologies for how we use and store energy more efficiently are transforming markets.

Meanwhile, leading companies are stepping up by reducing their carbon footprints, greening their supply chains and calling for policies such as a price on carbon.

In short, leaders around the world have come to the realization that the path to shared global prosperity is a low-carbon path.

That makes the politics of climate action more resilient now than they ever have been before. And that is good news to keep in mind in these uncertain days.

By Steve Schwartzman

The corruption and political crisis in Brazil could threaten global progress on climate change — but there are reasons for optimism. Above: Demonstration in Copacabana, Rio de Janeiro. Image Source: Tânia Rêgo/Agência Brasil

This post originally appeared on Grist.org. By André Guimarães, executive director of the Amazon Environmental Research Institute (IPAM), and Stephan Schwartzman, senior director of tropical forest policy at the Environmental Defense Fund.

It may be hard to recall amid all the bad news coming from Brazil these days — the country’s worst recession in 30 years, its unprecedented corruption crisis, and above all the May 12 Senate vote to suspend President Dilma Rousseff and begin an impeachment trial against her — but this country has in recent years occupied a position of critical global leadership on climate change. Brazil is the world’s biggest reducer of greenhouse gas emissions, having slashed Amazon deforestation about 80 percent over the last decade. Brazil also contributed to the success of the Paris climate agreement last December by adopting an absolute, economy-wide emission-reduction commitment — one far more ambitious than those put forward by most developing countries.

The current crisis puts these commitments at risk, threatening a major blow to global climate progress.

Cutting and burning down trees accounts for about 15 percent of the world’s global greenhouse gas emissions, and deforestation in the Amazon has ripple effects on weather patterns around the world, including rainfall as far away as California. While Brazil deserves credit for large-scale reductions in Amazon deforestation, progress has stalled in recent years. Since 2011, deforestation has been oscillating around 1,900 square miles a year rather than continuing toward zero — the goal an increasingly solid scientific consensus says is needed to guard against the risk of forest dieback. Inadequate government investment and a lack of positive incentives for forest protection are largely to blame.

The government is unlikely to allocate these needed resources during the circus of impeachment, which could last up to six months. Furthermore, for Brazil’s international climate commitments to come into force, Congress needs to make them into law — also unlikely to happen soon.

Yet we also see reasons for optimism amid the chaos and corruption.

Continue reading on Grist.org: Brazil’s impeachment crisis is bad news for climate change.

In Portuguese:  Impeachment, o ponto da virada

By Erica Morehouse

May 2016 auction results show an ongoing lawsuit challenging California's cap-and-trade program’s allowance auctions is likely impacting market dynamics, but the market is proving resilient. Image Source: Wikipedia

The results of California and Quebec’s latest carbon auction show that an ongoing lawsuit challenging the cap-and-trade program’s allowance auctions is likely impacting market dynamics, but that California’s market is proving resilient, in part due to the strength of its design.

The May 18 auction, the second of 2016, offered 67,675,951 current vintage allowances (available for 2016 compliance) and sold only 7,260,000. Just under one million of the just over ten million future vintage allowances (available for use in 2019 and after) were sold. The unsold California state allowances will go back to the auction holding account and will not be available for sale until the auction clears above the floor price for two consecutive auctions, a critical regulatory feature that removes unexpected, excess supply from the market and provides further price support. Utility allowances that were consigned to auction and did not sell will be offered again for sale at the next auction.

Increased attention to the litigation brought by the California Chamber of Commerce and the Morning Star Packing Co. et al., as well as higher participation in the secondary market, caused lower demand for allowances in the May auction. Secondary market prices have traded as low as 44 cents below the floor price in the last couple of months. But the real story is the positive and stabilizing impact of the floor price itself.

Other markets without such a strong floor price have seen price drops that are much more dramatic when the market receives a disturbance. But in California, the volume of trades on the secondary market has been higher than usual, showing that some entities are taking the opportunity to buy allowances at a discount.

It's worth noting that these results in no way impact the overall performance of California's program, which will continue to incentivize carbon pollution reductions.

EDF’s take on the litigation of the cap-and-trade auction program’s legality

At this critical juncture, opponents continue to litigate and challenge carbon auctions, an integral component of the cap-and-trade program that promotes equity and a healthy carbon market.

We are confident, however, that California courts will ultimately confirm the Legislature’s broad grant of authority to the California Air Resources Board (ARB) to design effective programs to address the imminent threat of climate change, and will reject the claim that auctioning valuable, marketable emission allowance constitutes an unconstitutional “tax.”

In supplemental briefings submitted May 23 to the California court, ARB argued persuasively that, even if the intermediate appellate court were to find a legal flaw in the auction, there would be no valid legal justification for disrupting the cap-and-trade program including its auction components while the state Supreme Court considers the case or ARB develops a suitable solution. This outcome is well-grounded in legal precedent affirming courts’ obligation to avoid remedies that imperil public health and welfare or cause needless disruption to public and private interests that rely on the current status quo.

California’s ability to continue utilizing a cap-and-trade program designed to meet its needs through 2020 and beyond is essential to California and to global climate momentum.

While EDF has a high degree of confidence that the lower court decision rejecting the challengers’ claims will be upheld, even if it is not, settled judicial procedures should help to ensure that the environmentally and economically important cap-and-trade program continues with minimal disruption.

California’s ability to continue utilizing a cap-and-trade program that is designed to best meet the state’s needs through 2020 and beyond is essential not just to California itself, but also to global climate momentum.

We’re at a watershed moment for climate action, and California is at the forefront. The U.S., China, and 173 other countries signed the Paris Agreement last month, and a group of leaders convened by the World Bank and the International Monetary Fund expressed a goal of moving from 12% to 50% of global carbon emissions covered by carbon pricing by 2030. All the while, California is providing one of the most successful examples of economy-wide carbon pricing that is reducing emissions and promoting equity while the state’s economy is thriving.

There is every reason for confidence both in the legality of CARB’s choice to auction allowances and in the commitment of California’s leaders to deliver on California’s climate goals. We expect that a resilient cap-and-trade program will remain at the heart of the state’s increasingly ambitious and effective climate strategy long into the future.

By Alex Hanafi

International cooperation is essential to achieve the Paris Agreement’s long-term goal of keeping warming “well below” 2 degrees Celsius. While the Paris Agreement provides several market- and transparency-related tools that can help spur international cooperation, countries must now create the coalitions needed to move forward with implementation. Image Source: Jorge Royan

As countries gather here in Bonn, Germany to begin the work of translating the historic Paris Agreement into action, there is widespread recognition that individual countries’ carbon-cutting pledges must be strengthened in the coming years to deliver the ambitious long term goal agreed in Paris: keep warming “well below” 2 degrees Celsius (3.6 degrees Fahrenheit), and achieve global net zero emissions before 2100.

The Paris Agreement provides several market- and transparency-related tools that can help spur the international cooperation necessary to achieve its long term goal, including provisions that facilitate high-integrity, “bottom-up” linkages of domestic carbon markets to cut carbon pollution. These linkages (described in Article 6 of the Paris Agreement as “cooperative approaches”) promise to reduce costs, and unlock the finance needed to drive deeper global emissions reductions. The agreement on cooperative approaches in Paris reflects the widespread recognition among nations that carbon markets, accompanied by a clear, comprehensive transparency framework, will help drive the deep emissions reductions needed to prevent the most severe impacts of climate change.

With the urgency of climate action clear, the key challenge now becomes: how can we accelerate the international cooperation needed to solve the Paris equation?

One concrete step, drawing on the cooperative approaches provisions of the Paris Agreement, would be to establish a coalition of carbon market jurisdictions to catalyze the development and increase the ambition of domestic carbon markets.   Much as the General Agreement on Tariffs and Trade (GATT) helped broaden participation and ambition in trade, a voluntary coalition of carbon market jurisdictions (CCM) could expand the scope and maximize the cost-effectiveness of ambitious climate action around the globe.

Why coordinate on carbon markets?

As carbon markets continue to expand, coordination among jurisdictions using or considering carbon markets – especially on the rules and standards needed to ensure environmental integrity and maximize cost-effectiveness – will give governments and the private sector the confidence to go faster and farther in reducing their climate-warming pollution.

A coalition of carbon markets can help deliver on the promise of the Paris Agreement and catalyze the deep global emissions reductions that climate science demands.

Although the Paris Agreement provides a framework for international cooperation on carbon markets, it is ultimately up to countries to work together to agree the detailed rules necessary for international carbon markets to drive emissions down and investment up.

The good news is that groups of countries can make substantial, early progress, ultimately informing and complementing the longer-term UNFCCC process.

 

“Minilateral” efforts can stimulate faster, deeper emissions cuts and strengthen international cooperation

Rapid and early emissions cuts are the single most important determinant of whether the global community is likely to meet the Paris Agreement’s goal to limit warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit). And delaying necessary action to reduce global warming pollution dramatically increases costs to the global economy.

For both the climate and our economies, not all emissions reductions are the same:  the earlier, the better.

That’s why it is so important that Article 6 of the Paris Agreement affirmed that cooperative emissions trading between countries can continue and expand while multilateral accounting guidelines are developed. Transactions will need to be “consistent with” any multilateral guidance developed by Parties to the Paris Agreement over the coming years – particularly to ensure that the same emission reductions are not claimed toward more than one mitigation pledge (“double counted”).

A “minilateral” coalition of carbon markets could complement efforts under the UNFCCC by fostering agreement on detailed standards for the accounting, transparency, and environmental integrity of internationally transferred emissions units. These “nuts and bolts” standards, which will help avoid errors in tallying up total emissions and traded units, form the bedrock of high-integrity emissions trading. Early agreement would give countries the confidence to move forward quickly in implementing their Paris pledges and a basis for increasing their ambition over time.

Practically speaking, future UNFCCC guidance on cooperative approaches will likely be influenced by working examples of international emissions trading, making the success of a carbon markets coalition an important precedent for broader cooperation on markets in the UNFCCC. This process could mirror recent progress on standards for reducing emissions from deforestation and degradation (REDD+), where technical advances made by countries in the Forest Carbon Partnership Facility contributed to greater progress in the UNFCCC.

What’s next?

In Paris, a diverse group of 18 developed and developing countries led by New Zealand announced that they will work quickly together to develop standards and guidelines to ensure the environmental integrity of international market mechanisms.

This group – or another similar coalition – could “set the bar” for market-based climate action by developing robust accounting and transparency standards for environmental and market integrity. Coordinated leadership by forward-looking jurisdictions would help ensure that the growth of international emissions trading is accompanied by enhanced ambition and real, permanent, additional, and verifiable emissions reductions.

Over a longer period, these same guidelines could support the establishment of a common trading framework among a coalition of carbon market jurisdictions. A framework might include mutual recognition of emission units, harmonized approaches to verifying emissions reductions and generating offset credits, and a shared trading infrastructure, which together could ensure environmental integrity and encourage more countries, states, and provinces to cap and price carbon.

Paris began a new, more ambitious chapter in the history of climate action, but much of the chapter is yet to be written. We’re in the race of our lives to finish the work of protecting future generations and building prosperous low-carbon economies. A coalition of carbon markets can help deliver on the promise of the Paris Agreement and catalyze the deep global emissions reductions that climate science demands.

By Chris Meyer

The global airline industry could become an ally in combating deforestation, as countries are set to vote at the September 2016 meeting of the International Civil Aviation Organization (ICAO) on whether airlines can use REDD+ credits to offset their emissions. Image Source: Flickr, Marinelson Almeida

A window of opportunity may be opening to secure sustainable financing – from an unusual source – to support national, state, and provincial-level efforts to Reduce Emissions from Deforestation and forest Degradation (REDD+).

The global airline industry is seeking international agreement on a program to cap the carbon dioxide emissions of flights between countries, and let airlines use a Market-Based Measure (MBM) to offset emissions above the cap. When the 191 governments that comprise the UN’s International Civil Aviation Organization (ICAO) vote on the MBM at the end of September, that may decide whether airlines can use REDD+ to offset their emissions above 2020 levels.

Why does ICAO need REDD+?

In 2013, ICAO member states adopted a goal of “carbon neutral growth from 2020” – i.e., capping the net emissions of international flights at 2020 levels. International aviation’s emissions, however, are forecasted to rise dramatically, as tens of thousands of new large aircraft take to the skies in coming decades.

Even after international aviation makes improvements in operational and technological efficiency, the sector will still likely face an “emissions gap” of 7.8 billion tonnes (or 7.8 Gt CO2) over the period of 2020-2040. National and jurisdictional level REDD+ projects that meet the environmental and social safeguards agreed under the United Nations Framework Convention on Climate Change (UNFCCC) are anticipated to be able to supply offsets enabling aviation to cover a significant portion of the expected gap, even while ensuring that these reductions are not also claimed against national emission reduction commitments.

The international aviation sector will still likely face an “emissions gap” of 7.8 billion tonnes over the period of 2020-2040 between their goal of carbon-neutral growth from 2020 and their projected emissions – even after international aviation makes improvements in operational and technological efficiency.

Getting the right REDD+ into ICAO: REDD+ programs that meet UNFCCC requirements

The December 2015 Paris Agreement on climate change, adopted by the 197 Parties to the UNFCCC, gave special recognition to the key role that REDD+ can play in mitigating climate change.

The Paris Agreement, the UNFCCC’s 2013 Warsaw Framework on REDD+, and related UNFCCC Decisions provide that REDD+ programs must be created at national, or – temporarily – subnational (e.g. state and province) level. This is important because national and subnational REDD+ programs (collectively known as jurisdictional REDD+ or “JREDD+” programs) can create and enforce policies to address deforestation at a large scale.

For example, without jurisdictional REDD+, there’s a risk that forest protection in one project area could displace deforestation to other areas; this is avoided when REDD+ projects are “nested” in a national or jurisdictional-level program. According to guidance by the UNFCCC, JREDD+ programs’ results must be recognized by national REDD+ Focal Points and submitted to the REDD Information hub in order to ensure that emissions reductions are not claimed more than once.

ICAO’s timeline

In March and April, ICAO convened a set of regional dialogues to give governments, industry, and civil society stakeholders the opportunity to discuss MBM design options and potential sources of offsets. ICAO will convene a high-level ministerial meeting May 11-13 at ICAO headquarters in Montreal, Canada, to review a draft text. Additional meetings will be held throughout the summer and the final, and most important ICAO Assembly, where the MBM will be finalized, is to be held in Montreal from 27 September to 7 October 2016.

Seizing the opportunity

REDD+ countries interested in sustainable financing for their national and jurisdictional REDD+ programs should be aware of the potential for a new ICAO market based mechanism to provide such financing. In order to seize this opportunity, REDD+ policy makers and aviation counterparts need to collaborate to ensure an ICAO market based mechanism inclusive of REDD+ and with environmental integrity.

By Alex Hanafi

United States and more than 160 other countries set to formally sign the Paris Agreement on Earth Day 2016. Photo: Secretary Kerry Sits With UN Secretary-General Ban Before a Bilateral Meeting at COP21 in Paris.
Image Source: U.S. Department of State

UN Secretary General Ban Ki-Moon has invited countries to sign the Paris Agreement at the UN headquarters in New York on April 22, the first day the Agreement is open for signature. Here are seven reasons why the Earth Day ceremony is important.

1) The April 22 signing ceremony for the Paris Agreement is expected to shatter the record for the most countries to formally sign an international agreement in a single day.

Representatives from more than 160 countries (and counting – see the latest at the UN site), including sixty heads of state, will be in New York to signal their commitment to the Agreement struck in Paris last December. This would surpass the previous record of 119 signatures, set by the UN Convention on the Law of the Sea in 1982.

The Paris Agreement aims to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels, and to pursue efforts to limit the temperature increase to 1.5 °C. This record-breaking signing ceremony demonstrates the political momentum behind the Agreement’s global plan to tackle climate change.

2) Signing is the next step for countries to join the agreement, but is not the end of the story.

Signing the Agreement in New York sends a strong and early signal of a country’s intention to launch its domestic processes necessary to join the Agreement. Once those processes are concluded, Governments will formally deposit with the United Nations Secretary-General, who is the depositary of the Paris Agreement, their “instrument of ratification, approval, acceptance or accession,” by which they formally join – and consent to be bound by – the Agreement.

Some nations will sign and join the Agreement on the same day, since they have already completed the necessary domestic procedures back home. States that don’t sign on April 22 still retain the ability to join the Agreement later.

3) The content and structure of the Paris Agreement means the U.S. can join quickly.

Like the vast majority of international agreements that the U.S. joins, the Paris Agreement does not require Senate action. Presidents from Washington onward — including Ronald Reagan, who did it 14 times in his second term — concluded agreements like this as “executive agreements,” based on existing executive authorities.

These executive agreements have the same binding force domestically as any other international treaty or agreement the U.S. joins. As long as the U.S. president has authority under existing U.S. law to implement the Paris Agreement’s provisions, the pathway to U.S. participation in the Paris Agreement is open, and does not need to include a stop in the Senate.

As it did with the Minamata Convention on Mercury, the U.S. can join the Agreement by simply depositing a brief formal document (called an “instrument of acceptance”) with the UN.

4) Early implementation of the Paris Agreement is now more likely.

Language in the draft agreement preventing it from taking effect until 2020 was dropped during the final stages of negotiations in Paris, so the Agreement will enter into force 30 days after at least 55 countries representing at least 55% of global emissions join.

Together with important statements from the U.S. and China (which together represent almost 38% of the world’s emissions) indicating they will sign the Agreement on April 22, and formally join the Agreement this year, the record-breaking signing ceremony means that many countries are on the path to joining the Agreement soon.

The Paris Agreement is likely to enter into force well before 2020, and possibly by 2017, making the provisions of the Agreement legally binding on those countries that have joined. Early entry into force offers the opportunity to accelerate a global transition to the prosperous, carbon-neutral economies of the future, and better address the needs of those communities in the U.S. and abroad that are most vulnerable to the impacts of climate change.

5) Momentum is building for markets to play a central role in meeting the ambitious climate goals agreed in Paris, and called for by science.

The groundswell of international support for the Paris Agreement contributes to confidence that countries can achieve the Paris Agreement’s vision of international cooperation on carbon markets to reduce emissions. Only by harnessing the ingenuity and creativity of business, entrepreneurs, and innovators will we be able to drive down emissions fast enough and far enough to achieve the reductions that the science demands. An April 14 report by EDF and the International Emissions Trading Association (IETA) found countries can surpass their Paris pledges by pricing carbon through carbon markets.

By affirming a role for carbon markets, the Paris Agreement recognizes the realities already on the ground, where emission trading systems are at work in over 50 jurisdictions home to nearly 1 billion people. When China adopts a national carbon trading system, beginning in 2017, that number will rise to 2 billion – almost a third of the world’s population.

The Paris Agreement provides a framework for cooperation among jurisdictions, but nations still must step up with effective and transparent domestic carbon markets. Almost half of all countries have already either stated their intention to use international carbon markets to cut their carbon pollution, or are already employing them domestically, at the national or subnational level.

6) Accelerated action on forest protection is a key to global and national efforts to reduce emissions.

Many of the countries participating in the New York signing ceremony are taking important steps to protect their forests, under an agreed international framework for Reducing Emissions from Deforestation and forest Degradation (REDD+). Forests are the only sector specifically mentioned in the Paris Agreement, signaling political recognition of the urgent need for better protections as well as financial incentives that confirm that forests are more valuable alive than dead. Outside of the climate negotiations, Germany, Norway and the UK confirmed their support by pledging $5 billion in REDD+ funding between 2015-2020, while developing countries presented their progress on creating and implementing REDD+ programs.

7) Clear and growing momentum to implement the Paris Agreement shines a spotlight on the next big climate win the world needs: adoption of a global market-based measure in the International Civil Aviation Organization (ICAO).

Aviation wasn’t covered in the Paris Agreement, due in part to these emissions falling outside national emissions accounts. However, the UN’s aviation arm is working on a deal this fall that would limit emissions from this rapidly growing sector. ICAO is developing a proposal for airlines to offset all emissions above 2020 levels through high-quality, rigorously verified emissions reductions in other sectors – such as through reductions in emissions from deforestation, achieved under the UNFCCC's "REDD+ Framework". A cap on aviation at 2020 levels could achieve 8 billion tons of emissions reductions in the next two decades – reductions that would otherwise not be obtained under the Paris Agreement.

By Erica Morehouse

Recent study by American Lung Association finds that 80% of Californians are still at risk from unhealthy air. Opponents to clean air claim the "right" to pollute in ongoing litigation. Image Source: iStockphoto.com

It’s pretty clear we have to limit pollution. This week the American Lung Association released their “State of the Air Report” finding that 80% of Californians are still at risk from unhealthy air, despite decades of effort and significant progress. Climate-destabilizing air pollution is harming our state in countless ways, from the Sierra to the Central Valley to the coastline. Given the high cost of pollution, who should pay and take responsibility when it occurs? Should the responsibility primarily be with polluting companies, or should the costs be borne by society at large?

California has been regulating conventional air pollutants for decades, but has only recently started regulating climate pollutants that not only warm our planet but also worsen and are otherwise directly linked to sources of local air pollution.

Many businesses in California are good corporate citizens on this issue. They accept that pollution imposes a cost on society. They even appreciate the flexible, cost-effective approach California regulators have adopted of capping carbon pollution and allowing regulated businesses to trade “allowances,” so pollution can be reduced in the least expensive way possible.

This support is most often demonstrated quietly, through actions like consistently meeting obligations under the cap-and-trade program, engaging constructively at workshops to strengthen the program, and most importantly by not obstructing progress in the courts and the halls of government.

Groups seeking free allowances or to avoid regulation altogether have spent millions on campaigns and lobbying.

But others, like those represented by the California Chamber of Commerce and the Pacific Legal Foundation, are delaying efforts to clean up our air — seemingly arguing that they have a right to pollute for free. They are challenging California’s practice of auctioning some carbon allowances and using the revenue to further reduce carbon pollution.

This litigation has been dragging on for years, ever since the CalChamber filed its suit on the eve of the first cap-and-trade auction in 2012. The Pacific Legal Foundation didn’t file until the next spring. Both lawsuits were filed too late to stop the auctions from taking place, but were just in time to insert doubt and opponent’s views about their right to pollute for free into California’s historic effort to regulate carbon pollution. Back in 2013, a trial court rejected claims that auctions were illegal. But these challengers were not dissuaded, they appealed and the case is still pending.

Failing so far in court, those seeking to pollute for free are attempting to take their case to the court of public opinion after the appellate court asked for supplemental briefing in the case. The appellate court has asked both parties to answer several questions. While the court is giving careful attention to this important issue, opponents are cynically using op-eds and other media stories to plead their case for why polluting should be free.

Groups seeking free allowances or to avoid regulation altogether have spent millions on campaigns and lobbying. The California Legislature is likely the ultimate audience for this effort. Bills to provide free allowances or exempt some polluters have been proposed before but have never gotten any traction.

California has been successfully regulating harmful climate pollutants for over three years now. And holding polluters accountable for some of the cost that society bears is an integral part of the state’s strategy. Hopefully legislators will continue to see this current round of rhetoric for the self-serving ploy that it is.

By Joe Rudek

Co-authored by Joe Rudek, Lead Senior Scientist and Trần Thu Hà, VLCRP Director

Example of Vietnam Low Carbon Rice Project (VLCRP) sampling site. Greenhouse gas was sampled using a static chamber placed in the rice paddy. Note water depth sampling tube in foreground, left of center, and square quadrat marker, just above center, where rice plant characteristics were measured over the course of the crop season. Image Source: Environmental Defense Fund, Joe Rudek

Rice production in Vietnam has increased significantly over the last few decades such that enough rice is produced there not only to supply Vietnam’s needs but also to support a major export industry.

About half the rice in Vietnam is grown in the Mekong Delta, at the southern end of the country; The water-rich Mekong Delta with its tropical climate is well suited to rice production in flooded paddies. However, flooded rice paddies also result in substantial emissions of methane, a potent greenhouse gas. Rice grown in the Mekong Delta alone is responsible for about 8 to 9% of the Vietnam’s total GHG emissions, according to the Vietnam 2014 Biennial Report to the UNFCCC and this is a conservative estimate.

For the past several years, EDF has been working with agricultural experts from Can Tho University, Department of Agriculture and Rural Development (DARD), Extension System officials, and farmers in two provinces (Ag Giang and Kien Giang) to pilot a sustainable low carbon rice farming system known as 1 Must, 6 Reductions (1M6R) which is a modification and advancement of a Vietnamese government recommendation. The 1 Must factor in this system is the use of certified rice seed. The 6 Reduction factors are water use, fertilizer, pesticides, seed density, harvest loss and greenhouse gas emissions.

The Vietnam Low Carbon Rice Project (VLCRP) partners developed the specifics for the 1M6R package of practices and piloted them over a two-year period in the two provinces. The pilots showed that 1M6R reduced input costs, increased yield, increased plant vitality (important to survival during late season storms) and reduced greenhouse gas emissions. Net revenue was increased by as much as 60% as a result. Not surprisingly, farmers are readily adopting the new set of practices.

The sustainable farming system reduced input costs, increased yield, increased plant vitality, and reduced greenhouse gas emissions.

An important part of VLCRP was interaction with farmers, organization of farmer groups and efforts to improve opportunities for women. Adult learning techniques were employed and agricultural experts in the partnership met with farmers, organized into groups, throughout the crop seasons to train them in the 1M6R techniques and in record keeping via daily diaries.  Farmer leaders were trained so they could teach their peers. This approach has allowed the proliferation of the 1M6R techniques beyond the project boundaries.

One of the most challenging scientific aspects of VLCRP was the measurement of GHG emissions. Gas samples were drawn from static chambers placed in the rice paddies and transported to a lab at Can Tho University for analysis. Most important to the reduction of greenhouse gas emissions is the use of alternative wetting and drying (AWD) of the soils and reductions in nitrogen fertilizer. The interruption of flooding to allow the soil to dry and become re-oxygenated is key to the reduction of methane emissions. However, this practice can increase nitrous oxide emissions, an even more potent greenhouse gas than methane. The reduction in nitrogen fertilizer (among other factors) is key to minimizing nitrous oxide emissions.

The completion of the 1M6R pilot research which was funded by the Australian Department of Foreign Affairs and Trade (formerly known as Australian AID), has been documented in a project summary and a set of project proceedings, which are being prepared for submission to peer reviewed journals. The findings offer Vietnamese farmers a means to increase revenue while greatly reducing the environmental footprint and GHG emissions of their rice production.

By Steve Schwartzman

Source: Environmental Defense Fund, Steve Schwartzman

Back in 2006, when California was passing the Global Warming Solutions Act (AB32), some in the industry pushed back hard, claiming that California couldn’t stop climate change by itself and that all AB32 would do was compromise the competitiveness of the state’s economy. California has proved the naysayers wrong – its economy is booming, and emissions are falling. And, far from going it alone, the Golden State is increasingly leading a global trend.

Now, California has an opportunity to build on its international leadership. By setting the gold standard for carbon market credit for international sectoral offsets – the subject of the California Air Resources Board’s (CARB) upcoming workshops – it can send a powerful signal to communities and governments that are fighting to stop tropical deforestation: carbon markets will help support their struggle.

California’s climate change program has prompted a plethora of bottom up climate action programs around the world, some of which are already achieving large-scale emissions reductions. Last December in Paris, California hosted a meeting of the “Under 2 MOU”, a group of 127 sub-national jurisdictions started by California and Baden-Wurttenburg in Germany, accounting for over a quarter of the global economy that have committed to reducing emissions below 2Mt per capita or 80% – 95% by 2050. Since the national commitments made at the Paris UN climate conference represent about half of what the science tells us is needed to keep warming below the critical threshold of 2°C, the Under 2 MOU could contribute significantly to closing the gap.

California was also a founder of the Governor’s Climate and Forest Task Force (GCF), with Amazonian states and Indonesian provinces, in 2008. The GCF now includes 29 states and provinces from four continents, covering over a quarter of the world’s remaining tropical forests and collaborates on low-carbon rural development and creating incentives for reducing emissions from tropical deforestation and forest degradation – and GCF members have become global leaders in reducing CO₂ emissions.

Between 2006 and 2013, the states of the Brazilian Amazon, supported by national policy, reduced Amazon deforestation about 75% below the 1996 – 2005 annual average, reducing emissions by about 4.2 billion tons of CO₂ — far more than any other country or region in the world — while simultaneously increasing agricultural output. These reductions resulted from both state and federal policy, law enforcement, and signals from major consumer goods companies that deforestation-based soy and beef would be denied market access.   California and the GCF’s work on carbon market credit for reducing deforestation gave communities and producers the prospect of economic incentives – for the first time – for protecting rather than destroying forests.

The Brazilian state of Acre, home of world-renowned rubber tapper and environmental leader Chico Mendes, is developing a market-based system to reward landowners and forest communities financially for conserving forest. This and other policies resulted in a 70-percent reduction in deforestation between 2005 and 2014, keeping  177 million tons of carbon dioxide out of the atmosphere.  At the same time, Acre significantly improved incomes and social indicators.The state recently did the first-ever international REDD+ credit transaction with the German development bank, and 70 percent of the proceeds were invested in projects in indigenous and forest communities.

Moving ahead with allowing international sector-based offsets into California’s carbon market will take the process to the next level, signaling to tropical jurisdictions globally currently responsible for more Greenhouse Gas pollution than all the cars and trucks in the world that living forests can become worth as much as dead ones.

By Alex Hanafi

Source: Flickr, UN Photo/Mark Garten

As nations around the world consider the results of the historic climate agreement reached at the 21st annual climate talks in Paris last December, one thing is clear: the Paris Agreement is contributing to – and a sign of – growing momentum around the world to address climate change. For the first time in history, nearly all the countries of the world have put forward concrete pledges to cut pollution and address the impacts of climate change on local communities.

Two significant outcomes of the Paris Agreement reflect that momentum:

1. A more ambitious global goal, in which nations agreed to hold warming to “well below” 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, and “pursue efforts” to limit warming to no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit).
2. A requirement that nations come back to the table every five years to strengthen their individual pledges, in order to achieve their collective goal over time.

While the pathway necessary to limit warming to 2.7 or even 3.6 degrees Fahrenheit is not specified by the Paris Agreement, nations did agree that they would achieve a “balance” between anthropogenic emissions of greenhouse gases (GHGs) and removals by so-called carbon sinks, such as carbon-absorbing forests, “in the second half of this century.” That translates to the following simple equation, which nations agreed to solve no later than 2100:

(Emissions of GHGs) – (removal of GHGs by forests and other sinks) = 0

Notably, nations also provided several market- and transparency-related tools that could help solve this “Paris equation”:

• Provisions that facilitate high-integrity, “bottom-up” linkages of domestic carbon markets to cut carbon pollution. These linkages (described in the Agreement as “cooperative approaches”) promise to reduce costs, and unlock the finance needed to drive deeper global emissions reductions;
• A new, centralized market mechanism, governed by the UN Framework Convention on Climate Change (UNFCCC), to reduce GHG emissions and contribute to sustainable development; and
• An enhanced transparency framework, requiring regular reporting and review of all nations’ climate efforts.

These three elements of the Paris Agreement reflect the widespread recognition among nations that carbon markets accompanied by a clear, comprehensive transparency framework will help drive the deep emissions reductions called for by science.

 

What the Paris Agreement means for carbon markets

By affirming a role for carbon markets in international climate cooperation, the Paris Agreement recognizes the realities already on the ground, where emission trading systems are at work in over 50 jurisdictions home to nearly 1 billion people. When China adopts a national carbon trading system, beginning in 2017, that number will rise to 2 billion – almost a third of the world’s population.

Figure 1:  Existing, Emerging, and Potential Carbon Pricing Jurisdictions

Source: World Bank 2015

And more than half of the world’s countries are using, or plan to use, carbon markets to stimulate the innovation and investment needed to meet their Paris climate pledges.

With the UN now blessing the growing use of bottom-up cooperation between jurisdictions to link their markets and spur greater efficiency, as California and Quebec have done, the challenge now becomes how to accelerate the transparent, high-integrity international cooperation needed to solve the Paris equation.  That cooperation – needed both inside and outside the UNFCCC – is the subject of my next post.

By Chris Meyer

By: Chris Meyer, Environmental Defense Fund, and Estebancio Castro, Independent Indigenous Leader

The Paris Agreement makes five explicit references to indigenous peoples, their rights, and their traditional knowledge. Above: A report launched at a December 2015 press conference in Paris found indigenous territories hold one-fifth of the world’s tropical forest carbon. Credit: Environmental Defense Fund

Indigenous peoples are particularly vulnerable to the effects of climate change, but they can also play a crucial role in stabilizing the climate. Though the 1997 Kyoto Protocol didn’t include a single reference to indigenous peoples, the Paris Agreement– though not perfect – made some great strides.

The Paris Agreement and implementing decisions include:

• five explicit references to indigenous peoples, their rights, and their traditional knowledge. These appear in the preambles of both the Paris Agreement and the Decision text, and in specific topic areas of the exchange of experiences and adaptation.
• a reference to a topic important to indigenous peoples, non-carbon benefits in relation to Reducing Emissions from Deforestation and Degradation (REDD+).

Importantly, the references to indigenous peoples in the preamble to the Paris Agreement, and repeated in the preamble to the Decision text, say that countries need to respect indigenous peoples’ rights when taking action to address climate change. It’s significant that this rights language is included in the preambles, as it ensures these rights will be part of the framing of the whole agreement and implementing decisions.

The Paris Agreement and its Decision texts contain important references to indigenous peoples' rights that can help drive change at the country levels, where it is most needed.

The other references to indigenous peoples discuss the need to include them in the exchange of knowledge, especially considering the topic of adaptation. As they are one of the more vulnerable groups, they will need access to more western knowledge to support their own indigenous knowledge about how to adapt to climate change and protect their livelihoods. Additionally, the Paris Agreement recognizes indigenous peoples' “traditional knowledge” as an asset for helping themselves – and their neighbors – adapt.

Indigenous peoples for many years advocated strongly for the consideration of non-carbon benefits as a part of REDD+, including through a number of formal submissions to the process. The inclusion of explicit language in the REDD+ article to promote non-carbon benefits reflects their efforts and the importance of the topic.

The Paris Agreement and its Decision text aren’t perfect, and though some may have wished to see a greater number of specific references to these rights in the text, the Paris outcome was kept intentionally broad so it could be applicable to nearly 200 countries.

Regardless, we see important references to indigenous peoples' rights in the Paris Agreement and its Decision texts that, together with other international human rights instruments, can now be leveraged to drive change at the country levels, where it is most needed. That is the challenge in the years to come – to ensure indigenous peoples and their rights are adequately represented and respected in countries’ policies and actions they take to implement the Paris Agreement.

Additional resources:

• Summary of indigenous rights references

By Erica Morehouse

The results of California and Quebec’s carbon market auction released today show that the market can operate as designed and continue sailing along.

Participants in the Feb. 17th auction, California and Quebec’s 6th joint auction, had an opportunity to bid on over 81 million carbon allowances. Of those:

• 71.5 million of those allowances were current vintage allowances (2016 and earlier), which regulated businesses can use this year or in any future year for compliance. 95% of current vintage allowances sold at the minimum floor price of $12.73. In the November 2015 auction, prices anticipated the 2016 floor price and sold at $12.73 although the floor price was about 60 cents less.
• Just over 10 million of those allowances are only available for use in 2019 and after. 93% of the 2019 vintage allowances sold at the floor price of $12.73.

These results show steady prices and average participation by regulated businesses. It is somewhat unusual that some current allowances did not sell at this auction. However, these auction results demonstrate an important feature of the California-Quebec market that safeguards against large price swings like those seen in other commodity markets: a minimum price floor in every auction that increases steadily each year. Therefore, although not all allowances sold, the price for allowances sold at this auction was exactly the same as that paid for allowances in November 2015, no price dip. The unsold allowances will be recycled back into the state auction account and will be offered for sale next time prices rise above the floor price. In other words, the carbon market’s design is working.

There is every reason to believe that California’s market will continue to see mostly smooth sailing ahead.

In the early days of the California market steady prices and solid demand for allowances indicated that businesses were ready to comply with their new obligations. Those early indications proved accurate when close to 100% of businesses met their allowance surrender obligations in 2014 and 2015 for the first compliance period.

Now with the carbon market maturing, steady prices and solid demand are important indicators about the long-term outlook for the carbon market. California’s cap-and-trade program only has a carbon budget set through 2020, although the Air Resources Board has indicated they plan to extend that this year. The demand for allowances and prices we’ve seen today is not remarkably low, but we could see an uptick – when ARB extends the cap-and-trade regulation beyond 2020 and the market gains certainty about future reductions.

As California’s auctions settle into a mature pattern, EDF will be watching how the market continues to react to California’s efforts to reduce emissions post-2020 and to how auction proceed investments are benefiting Californians.

By Erica Morehouse

Photo Source: Flickr / JoeBehr

The joint carbon market in California and Quebec holds its first carbon market allowance auction of 2016 today.

The auction offers a good opportunity to reflect on some of the notable successes of the market in 2015.

The California-Quebec market is one of the prime examples of a successful carbon market that many countries will look to as they consider how to meet the commitments made in Paris, where countries successfully negotiated an ambitious climate deal that outlines multiple pathways for nations to use markets to meet their long-term goals.

Here are the top six successes of California and Quebec’s carbon market in 2015, in no particular order.

1. After implementing the most aggressive climate program in the nation, California was rewarded with a thriving economy and significant declines in emissions regulated by the cap-and-trade program.

California saw GDP and jobs grow faster than the national average in 2015. This growth set California up as the eighth largest economy in the world, slightly smaller than Brazil. Meanwhile, as EDF reported in November, California is ahead of schedule to meet its 2020 goal, with emissions covered by cap-and-trade nine percent below required levels in 2014. Capped emissions saw a three percent decline in the 2013-2014 period although overall emissions increased slightly from 2013 to 2014. These figures suggest that California is positioned to continue demonstrating that economic growth and emissions reductions can coexist.

2. 2015 saw California’s cap-and-trade program more than double in size as transportation fuels and natural gas are now regulated under the cap.

The transportation sector contributes 38% of California’s emissions and the decision to regulate it is a pioneering move that other major trading programs like those in New England and Europe haven’t taken yet. Some oil interests had warned for years that regulating fossil fuels would be disastrous for the economy, but California saw healthy job growth that was more than double the rate in oil-friendly Texas.

3. North America, like the rest of the world, is getting serious about addressing climate change and California’s market-based system is looking like a go-to tool for action.

The link between California and Quebec’s carbon markets is now two years old and is a success by all accounts. Ontario and Manitoba have begun designing similar cap-and-trade programs with the intent to join California and Quebec by 2018. Mexico is also seriously working towards a carbon market and has an active memorandum of understanding with California to collaborate on best practices.

4. The carbon market remained strong and steady and businesses showed they were ready and able to comply with the program.

Over the life of California’s cap-and-trade program we have looked to the quarterly auctions to provide indicators on the health of California and Quebec’s overall carbon market. Strong demand for allowances and steady prices are indicators of good health, and that’s just what California and Quebec saw in 2015. Almost all businesses regulated in California and Quebec met their requirement to surrender sufficient allowances to cover their 2013 and 2014 emissions last November. The program is built on a platform of transparency and strong enforcement, and the two entities that did not meet their obligation face a steep penalty: surrendering four allowances for every allowance they failed to surrender in November.

5. California auction proceeds are now making a difference in the lives of real Californians.

In 2013-2015 cap-and-trade auctions raised just over $3.5 billion for state-run programs that further reduce carbon pollution and close to $900 million of that money is earmarked for disadvantaged communities. 2015 was the first year we saw climate investments actually enter communities through programs that provide a range of benefits—especially to low-income households—such as free solar panels or an opportunity to swap out a dirty car for an electric one. Also, approximately $2 billion in utility auction revenue has been returned to households through a progressive, on-bill climate dividend that preserves an incentive for lower energy use.

6. California played a high-profile role at the Paris climate negotiations as a proven implementer of successful climate policies, as an ambitious climate leader, and as an aggregator of subnational commitments.

In 2015, the Brown administration set a strong foundation for continuing successful programs like cap and trade by issuing an executive order that committed to reducing greenhouse gas emissions to 40% below 1990 levels by 2030. Governor Brown then parleyed California’s own ambitious commitment into an “Under2MOU” signed by well over 100 states, provinces, and cities, representing over ¼ of the globe’s GDP. Signatories committed to reducing emissions 80-95% or to less than 2 metric tons per capita by 2050, setting mid-term targets, and collaborating on a range of climate-related policies. California and other founding partners showcased their commitment at the Paris climate talks where subnationals received important recognition for being able to push the envelope on climate issues.

Tune in next Wednesday, February 24, as we report on the results from today’s auction and explore further how cap-and-trade proceeds have been invested to date.

This post originally appeared in California Dream 2.0

By Annie Petsonk

Thousands of words have been written this week about a new efficiency standard recommended by a technical group of the International Civil Aviation Organization (ICAO). The standard, if adopted by ICAO’s executive council, is intended to require aircraft manufacturers to start producing more efficient airplanes.

But one picture makes clear that even with the new efficiency standard, international aviation still has a huge gap between its anticipated emissions and its own environmental goals.

Source: Environmental Defense Fund

The top of the upsloping curve shows how international aviation’s emissions are slated to skyrocket in coming years.

The horizontal red line toward the bottom, labeled “Emissions Cap at 2020 levels,” shows the industry’s own goal of “carbon-neutral growth from 2020.” ICAO has also embraced this goal.

The area below the top of the curve and above the horizontal red line at 2020 is the total amount of emissions that international aviation must deal with to meet this goal.

This week, ICAO’s Committee on Aviation Environmental Protection (CAEP) recommended that ICAO’s Executive Council adopt, at its next meeting in June, a carbon dioxide efficiency standard for aircraft, akin to a fuel economy standard for cars. That’s a step in the right direction.

But how big a slice will this new standard take out of international aviation’s skyrocketing emissions? At best, that’s the blue sliver shown in this picture. (The red sliver aviation hopes to cut through “operational improvements” like better air traffic control.)

That leaves a huge “Emissions Gap” – shown in green – about 7.8 billion tonnes of carbon pollution that international aviation will have to deal with to meet its own climate goals, let alone the kinds of reductions that will be needed if the sector is to bring emissions down to the dashed red arrow, along the lines of the Paris Climate Agreement.

The industry has a long way to go to make carbon pollution go down, not up.

ICAO’s pledged to finalize, this September, a global market-based measure (MBM) with offsetting to drive industry’s net emissions down to the 2020 cap. President Obama has made climate action a centerpiece of his legacy. Success in cutting aviation emissions could help – but that will only happen if the Obama administration takes the lead in the intensive talks now underway in ICAO.

The picture is clear: While the aircraft standard will help, the Administration now needs to keep its eyes on the prize – the ICAO decision on the market-based measure in September.

By Annie Petsonk

If international aviation were a country, it would be a top ten emitter of carbon dioxide (CO2), on par with Germany or the United Kingdom. And it’s expected to grow enormously: with more than 50,000 new large aircraft slated to take to the skies, its emissions are expected to triple or quadruple by 2040.

In Paris in December 2015, the world hailed the success of the UN Framework Convention on Climate Change (UNFCCC) in adopting the first broadly applicable instrument to start driving carbon pollution down, with a goal of limiting warming to 1.5-2° C.

But Paris didn’t cover pollution from flights between countries. Why not? Because in 1997, aviation lobbied for, and got, the UNFCCC to defer these to another UN body, the International Civil Aviation Organization (ICAO).

ICAO talked about the issue for fifteen years until 2013, when, with Europe poised to enforce a cap on emissions of inbound/outbound flights, ICAO pledged to act by 2016. Quiet talks are now underway on:

1. An ICAO CO2 standard for aircraft – akin to a miles-per-gallon standard for cars. In Montreal next week, possibly as early as Monday, February 8, 2016, a technical group is expected to agree a recommendation for this standard.

1. A cap on international aviation’s total CO2 emissions at 2020 levels. ICAO is slated to vote in September 2016, on the cap and a market-based measure (MBM) to help airlines implement it.

Here’s what’s at stake:

Source: Environmental Defense Fund

Without any new rules, international aviation’s carbon pollution is expected to skyrocket (top red line). Better air traffic control can trim some pollution (top red wedge). An ambitious CO2 standard would mean fewer emissions per passenger-mile, further slowing the sector’s emissions growth (blue wedge). But because the industry’s overall emissions are expected to far outstrip these per-trip efficiency gains, there’s still a huge gap (green triangle) – at least 6-8 billion tonnes – to get to the goal of an emissions cap at 2020 levels (red horizontal line), or even more ambitious goals along the lines of the Paris agreement (red dashed line).

The real prize is the market-based measure to cap aviation emissions and drive pollution down, not up.

Learn more at edf.org/aviation.

By Kritee

EDF-Fair Climate Network science team training a new village volunteer to collect samples from a groundnut farm. Source: Environmental Defense Fund

Agriculture around the world is already experiencing the effects of the changing climate, including more intense droughts, heat waves, floods, and a growing influx of pests and diseases. This contributes to unstable livelihoods for the world’s 2 billion rural poor who depend on small-scale farms and live on the margins of the poverty line.

With these challenges, the world is increasingly shifting toward climate-smart agriculture, which the Food and Agriculture Organization (FAO) of the United Nations defines as an umbrella of agricultural practices that lead to a “triple win” because they:

1. sustainably increase agricultural productivity and income;
2. adapt and build agricultural resilience to climate change; and
3. reduce and/or remove greenhouse gas emissions.

The FAO’s definition offers initial guidance for climate-smart agriculture. However, for the global scientific community, national policy makers, and those who care about global food security, there remains a need for more solid evidence around how the triple win can be achieved across geographies, crop types, and different farm scales, especially small-scale farms spread across much of the developing world.

Environmental Defense Fund (EDF) has released two new peer-reviewed journal articles that contribute important evidence to support a triple-win approach to feeding the 9 billion people who will be living on this planet in 2050. In the first article, we present a rigorous pathway to measure climate impacts of farming practices, especially in the tropical and developing parts of the world. In the second article, we demonstrate that carefully chosen climate-smart farming practices can improve resource use efficiency, enhance food security, increase farmer savings, and provide better ecosystem services while decreasing greenhouse gas (GHG) emissions.

With our partners, we conducted the research in India, where there is a huge opportunity to implement climate-smart agriculture. India has 100 million small-scale (under 2 acres of land) farming families, which means it’s in the best interest of India and its farmers to learn to adapt in a way that maintains (and preferably improves) crop yields and secures their profitability while also reducing agricultural GHG emissions.

The challenge, and solution, to identifying baseline farm conditions in rural India

The first step to evaluating the effectiveness of new agricultural practices is to establish baseline (i.e., conventional or “business as usual”) farm conditions. However, India’s farms have challenges that are also common in most of the developing world: very small land holdings; socioeconomic constraints; and enormous diversity of terrain, soil types, rainfall regimes, and crop choices.

To address these challenges, EDF began working in 2012 with the Fair Climate Network (FCN), a coalition of 35 grassroots NGOs in India, to conduct thousands of small-scale farmer surveys to determine baseline economic, demographic and farming practices.

We believe that similar approaches to research can bridge the gap between theory, practice and policy by simultaneously achieving scientific rigor and ushering in tangible socioeconomic impact.

Simultaneously, EDF and FCN collaborated with diverse stakeholders, and domestic and international research groups, to establish five state-of-the-art GHG measurement laboratories with the support of five of our NGO partners in South India, and to train local researchers to conduct technical measurements and to develop a rigorous methodology to measure crop yield-scaled GHG emissions (i.e., GHG emissions per unit crop yield) in multiple agro-ecological zones. We detail this comprehensive methodology in "Sampling guidelines and analytical optimization for direct greenhouse gas emissions from tropical rice and upland cropping systems" in the journal Carbon Management.

In this study, we compare all leading internationally and regionally recommended approaches to monitor agricultural GHG emitted directly from soil. We also highlight issues related to air sampling, instrumental (Gas Chromatograph) analysis and calculation that, when left uncorrected, contribute to extremely high errors in cumulative GHG emission rate calculation, especially in tropical regions. Additionally, we introduce several new strategies to improve precision and accuracy of such measurements in all developing parts of the world.

Identifying effective climate-smart farming practices

Using the above methodology at five laboratories and the data from the baseline surveys, we designed many research studies on farmer fields across multiple states that have allowed us to determine changes in yield, farm-profit and methane and nitrous emissions from potential climate smart farming practices for rice and several upland crops (e.g., millets and groundnut) across six states in South India.

In a recent peer-reviewed study in Nutrient Cycling in Agroecosystems, “Groundnut cultivation in semi-arid peninsular India for yield scaled nitrous oxide emission reduction,” we find that carefully chosen climate-smart farming practices can:

• enhance food security through drought resilience and higher yields;
• increase savings through lower input costs for the farmer (and also governments that spend on fertilizer subsidies or crop insurance schemes); and
• provide better ecosystem services including climate mitigation.

For example, high resolution field measurements done at a groundnut (also known as peanut) farm in one of the most arid regions in India show that integrated nutrient management led to a number of benefits in a drought-hit year, including a 40-60% reduction in total nitrogen fertilizer use, increased crop yield by 35-50%, and net profit by 70-120% – while decreasing GHG emission intensity (per unit yield) by 50%. In addition to the direct reduction in GHG emissions from soil (i.e., agricultural sector emissions), our estimates show a concomitant reduction in GHG emissions from the industrial sector due to decreased demand of fertilizers at the groundnut farm. Such demonstrations of “triple win” help in making a case for better agricultural policies and increased investments in this sector.

The results presented in this study (and also unpublished data from 2013-2014) also show that emission factors (i.e. percentage of added nitrogen from fertilizers emitted as nitrous oxide – which is a powerful GHG) for groundnut could be as much as ~2%. That’s significantly more than the emission factors of 1% and 0.58% for upland crops assumed by the United Nations Intergovernmental Panel on Climate Change (IPCC) and the Indian national government, respectively. This implies that India might want to revisit its “business as usual” GHG emissions from soils and incorporate higher resolution data in its calculations. Our ongoing research supports the assessment that intensive measurements on multiple crops and in multiple regions are necessary to correctly determine GHG emissions from Indian soils.

Our approach to climate-smart agriculture in India incorporates farmers, researchers, the private sector, governmental organizations, and policymakers, and encourage a move towards climate-resilient and mitigation pathways by building evidence; increasing local institutional effectiveness; fostering coherence between climate and agricultural policies; and linking climate and agricultural financing. We believe that similar approaches to research can bridge the gap between theory, practice and policy by simultaneously achieving scientific rigor and ushering in tangible socioeconomic impact.

Resources from this post:

• EDF’s work in India: Development while fighting climate change
• Carbon Management: “Sampling guidelines and analytical optimization for direct greenhouse gas emissions from tropical rice and upland cropping systems”
• Nutrient Cycling in Agroecosystems: “Groundnut cultivation in semi-arid peninsular India for yield scaled nitrous oxide emission reduction”

 

By Dana Miller

By Dana Miller, Research Analyst and Ruohong Cai, Ph.D. Economist

A smoldering landscape in Central Kalimantan, Indonesia. Credit: Ruohong Cai, October, 2015

You may have seen news stories this fall about Indonesia and the blanket of haze choking the country and neighboring countries Singapore and Malaysia. This haze comes from burning carbon rich forests and peat soils for the production of palm oil and other commodities; burning currently releases more greenhouse gases daily than the entire U.S. economy.

To address deforestation and the fires and haze it brings, companies that control 90% of palm oil production have pledged to eliminate deforestation from their supply chains. Several major palm oil companies have pledged not to clear High Carbon Stock (HCS) lands—high, medium and low density forests—or peatlands for palm oil and other commodities; instead the companies would shift new production to low carbon stock areas, which are young regenerating forest, scrub or cleared or open lands.

The Government of Indonesia pledged to reduce emissions by 26% unilaterally or 41% with international support below a projected "business as usual" baseline by 2020. This year, Indonesia committed to reduce emissions by 29% to 41% below a projected baseline by 2030.

In a new report, Environmental Defense Fund explores how companies could eliminate deforestation from their supply chains by preferentially sourcing palm oil and other commodities from provinces in Indonesia that meet criteria for Zero Deforestation Zones (ZDZs).

ZDZs would be districts or provinces that align public and private sector actors and are on a path to reaching zero net emissions from deforestation across their jurisdiction while increasing agricultural production. ZDZs would have strong policies in place consistent with the framework Reducing Emissions from Deforestation and forest Degradation (REDD+). Then, companies could source commodities such as timber and palm oil from ZDZs.

For provinces in Indonesia to become ZDZs, local and national governments would have to address the root causes of deforestation.  Specifically, Indonesia would need to:

• Revise laws that allow and even encourage deforestation; strengthen law enforcement; and address conflicting agendas between local and regional governments, ministries, and powerful private sector actors.
• Create a definition for ZDZs that fits Indonesia’s national context. The definition would need to put provinces on pathways to produce zero net emissions from deforestation and comply with UN decisions on REDD+.
• Set up monitoring systems that both the government and private sector would use to enforce deforestation policies and clarify disputed land claims by local communities and plantations.
• Provide essential economic incentives to producers to reduce deforestation, increase yields on existing plantations, and shift new production to degraded lands.

Figure 1. This spatial map shows that the opportunity costs of the land translated into a minimum carbon price (local-specific) needed to eliminate deforestation in Kalimantan, Indonesia, which varies widely by location from $0 to $100 per ton CO2.

Economic Incentives for Reducing Deforestation in Kalimantan Provinces:

A carbon price could generate much needed economic incentives to reduce deforestation. To predict the carbon price needed to reduce emission from deforestation, EDF performed a 10-year simulation of deforestation in Kalimantan, Indonesia, using the historical relationship between palm oil revenues per hectare and deforestation rates to estimate landowners’ responses to economic incentives.  Kalimantan provides a good case study for Indonesia because it contributes one quarter of Indonesia’s palm oil production.

Based on our empirical analysis, the opportunity cost of conserving forest varies widely across Kalimantan. Figure 1 translates the opportunity cost of the land into a price per ton of carbon.

We further compared the cost in terms of dollars per ton of carbon for reducing emissions from deforestation on low carbon stock (LCS, less than 40 t C/ha) and high carbon stock (HCS, more than 40 t C/ha) lands. In Figure 2, at a carbon price of $10/t CO2e, Kalimantan provinces can reduce 75 million tons (Mt) CO2e per year from LCS areas, 185 MtCO2e from HCS areas, and 260 MtCO2e per year from both HCS and LCS areas. In the latter and highest scenario that conserves both HCS and LCS areas, Kalimantan could reduce emissions from deforestation 74-78% below the scenario without a carbon price.

Figure 2. Estimated cost curves for avoiding emissions from deforestation on high carbon stock lands (red), low carbon stock lands (yellow) and all lands (blue) in Kalimantan, Indonesia. This figure shows that more emissions can be avoided if Kalimantan conserves both high carbon stock and low carbon stock lands.

This result indicates that more emissions can be avoided at a lower cost if Kalimantan conserves portions of all lands, not just high carbon stock lands.

To further illustrate this point, the table below shows that Kalimantan could achieve its contribution to Indonesia’s emission reduction goals of 26% to 41% below business as usual by 2020 at a lower price if both high carbon stock and low carbon stock areas are conserved.

This shows that a “Zero Deforestation Zone” approach focused on an entire landscape has the potential to more cost-effectively reduce emissions than an approach focused on just a particular subset of lands.   This analysis does not consider the potential for “leakage” or shifts of deforestation from one location to another.  Incorporating leakage would lend a further argument for a regional approach that would capture shifts in deforestation across an entire zone.

 

Indonesia has many hurdles to cross before it can level off its rapid deforestation rate and reduce it to zero. But, the haze, health implications, productivity loss and public outrage that ensue from peat fires might just be the wakeup call that Indonesia needs to address its deforestation.

 

Read more in our paper Zero Deforestation Zones in Indonesia; A proposal to curb deforestation and increase agricultural production.