Senate Subcommittee Hearing Recognizes Importance of Forests in Climate Debate

April 23, 2008 8:18 PM in GHG Regulation • US Law and Policy | Jeremy Schiffer | Comments (0) | Tags: , |

During yesterday’s hearing on International Deforestation and Climate Change, Senator John Kerry committed to ensuring that any future domestic cap-and-trade program will accept credits from international forest projects.

Stuart Eizenstat, the former U.S. Ambassador to the EU and leader of the US delegation in the negotiations of the Kyoto Protocol, argued for the importance of “starting with domestic legislation” in the fight against tropical deforestation. Senator Kerry responded that he would “add a marker” to any domestic climate change legislation, including the Lieberman-Warner bill, to ensure that credits derived from forest projects in other countries can be used to offset emissions in the United States.

The Lieberman-Warner bill, in its current form, would allow regulated industries to meet up to 15% of their emissions requirements by purchasing credits from carbon offset projects. Including international projects in the 15% offset quota would significantly boost efforts to avoid tropical deforestation. Emissions trading systems established under the Kyoto Protocol, including the European Union Emissions Trading System, do not allow the use of credits derived from most types of forestry projects. As a result, US leadership on this issue would help to create a robust market for credits from “avoided deforestation” projects [subscription req.].

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California Emissions Credit Sale Could Lead to Revitalization of Forest Offset Credits

February 12, 2008 11:57 PM in Sectors • State Policies • US Law and Policy | Jeremy Schiffer | Comments (0) | Tags: , , , |

In October 2007, the California Air Resources Board adopted the Forest Sector Protocols. The Protocols, which originally were created by the California Climate Action Registry, detail how to measure the amount of carbon that can be stored in a forest. This measurement process is necessary in order to properly certify and verify that emissions reductions actually occur.

Once verified, the credits can be sold in either voluntary markets to individuals or businesses, or in compliance markets, as part of a comprehensive cap-and-trade system designed to reduce greenhouse gas emissions. California is in the process of establishing a cap-and-trade system within the State, as required by the Global Warming Solutions Act of 2006 (also known as AB32).

Last week saw the first sale of emission reduction credits under the Forest Sector Protocols. Natsource Asset Management purchased 60,000 tons of carbon dioxide emissions reductions for an undisclosed price. The theory behind the investment is that the credits will increase in value once the cap-and-trade system begins operating, providing a return for the project’s investors.

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