Carbon offset

Abstract: This article examines the governance of international carbon offsets, analyzing the political economy of the origins and governance of offsets. We examine how the governance structures of the Kyoto Protocol's Clean Development Mechanism and unregulated voluntary carbon offsets differ in regulation and in complexity of the chain that links consumers and reducers of carbon, with specific consequences for carbon reductions, development, and the ability to provide “accumulation by decarbonization.” We show how carbon offsets represent capital-accumulation strategies that devolve governance over the atmosphere to supranational and nonstate actors and to the market.

Abstract: After five consecutive years of robust growth, the total value of the global carbon market stalled at $142 billion. Suffering from the lack of post-2012 regulatory clarity, the value of the primary Clean Development Mechanism (CDM) market fell by double-digits for the third year in a row, ending lower than it was in 2005, the first year of the Kyoto protocol. The Assigned Amount Unit (AAU) and the United States Regional Greenhouse Gas Initiative (RGGI) markets shrank as well. As these segments declined, the dominance of the European Union Allowances (EUAs) market became more pronounced than ever and the share of the carbon market primarily driven by the EU Emissions Trading Scheme (EU ETS) rose to 97 percent, dwarfing the remaining segments of the market. The carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest on record, while emission levels continued their seemingly inexorable rise. In the end, however, the year may be remembered most for the political opportunities that arose, yet were ultimately failed to materialize in the United States, Japan, Australia, and the Republic of Korea. While the international regulatory environment remains uncertain, national and local initiatives have noticeably picked up and may offer the potential to collectively overcome the international regulatory gap. These initiatives signal that, one way or another, solutions that address the climate challenge will emerge.

Abstract: The total value of the carbon market grew by 11 percent in 2011, to $176 billion, and transaction volumes reached a new high of 10.3 billion tons of carbon dioxide equivalent (CO2e). This growth took place in the face of economic turbulence, growing long-term oversupply in the EU Emissions Trading Scheme (EU ETS) and plummeting carbon prices. By far, the largest segment of the carbon market was that of EU Allowances (EUAs), valued at $148 billion. With the end of the first commitment period of the Kyoto Protocol in 2012, the value of the pre-2013 primary certified emission reduction (CER), emission reduction unit (ERU) and assigned amount unit (AAU) markets declined in 2011. At the same time, the post-2012 primary Clean Development Mechanism (CDM) market increased by a robust 63 percent, to US$2 billion, despite depressed prices and limited long-term-visibility. Against this backdrop, several new domestic and regional carbon market initiatives gained traction in both developed and developing economies in 2011. Five new jurisdictions (i.e., Australia, California, Quebec, Republic of Korea, and Mexico) passed legislations laying the foundation for cap-and-trade schemes. Together, these initiatives will drive substantial resources towards low-carbon investments and they have the potential to unleash a truly transformational carbon market, in support of a global solution to the climate challenge.

Abstract: Biofuels from land-rich tropical countries may help displace foreign petroleum imports for many industrialized nations, providing a possible solution to the twin challenges of energy security and climate change. But concern is mounting that crop-based biofuels will increase net greenhouse gas emissions if feedstocks are produced by expanding agricultural lands. Here we quantify the ‘carbon payback time’ for a range of biofuel crop expansion pathways in the tropics. We use a new, geographically detailed database of crop locations and yields, along with updated vegetation and soil biomass estimates, to provide carbon payback estimates that are more regionally specific than those in previous studies. Using this cropland database, we also estimate carbon payback times under different scenarios of future crop yields, biofuel technologies, and petroleum sources. Under current conditions, the expansion of biofuels into productive tropical ecosystems will always lead to net carbon emissions for decades to centuries, while expanding into degraded or already cultivated land will provide almost immediate carbon savings. Future crop yield improvements and technology advances, coupled with unconventional petroleum supplies, will increase biofuel carbon offsets, but clearing carbon-rich land still requires several decades or more for carbon payback. No foreseeable changes in agricultural or energy technology will be able to achieve meaningful carbon benefits if crop-based biofuels are produced at the expense of tropical forests. S Supplementary data are available from stacks.iop.org/ERL/3/034001