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California’s Next Innovation: Performance-Based Rainforest Conservation (Commentary)
Guest commentary by David Rothschild and Karin Burns July 22, 2013 Often misunderstood, REDD+ forest carbon offsets are a “must have” for any realistic climate-change mitigation strategy. Californians are known as innovation leaders, and once again, we are on the verge of demonstrating critical leadership. Only this time it isn’t about the Internet, social networking, reality television, venture capital or electric cars. It is about stopping tropical deforestation and supporting local communities. ‘What!?’ you say? How is the great state of California, home of bankrupt and massive, thirsty desert cities and Silicon Valley, a place that elected such juggernauts of history as Ronald Reagan and Arnold Schwarzenegger, about to lead in avoiding tropical deforestation? Thanks to the people of California, and Arnold, in 2006 we passed the California Global Warming Solutions Act (AB32). As a result, this January the state launched its own cap-and-trade carbon market, demonstrating global leadership on climate change as well as opening doors to further innovation in green technologies and job creation. California now has an opportunity to again be an early adopter, offering polluting companies the chance to offset a small percentage of their carbon emissions by supporting reductions in tropical deforestation through a mechanism called jurisdictional REDD+ – Reducing Emissions from Deforestation and Forest Degradation. Since deforestation accounts for some 15% of global carbon emissions, reducing deforestation plays an essential role in addressing climate change. Trees perform vital functions for our climate such as absorbing and storing carbon. But they are currently not valued for these services – and it is this shortcoming that REDD+ forest carbon offsets aim to address. Entities regulated under AB32 would be able to contribute to this solution by reducing a small portion of their emissions by purchasing forest carbon offsets as part of their strategies to reduce their carbon emissions. Companies and other institutions can contribute to this effort by signing Code REDD’s Letter of Support for inclusion of REDD+ in CA’s climate policy. Carbon offsets are often misunderstood. Some claim they amount to “permits to pollute,” but this is not accurate. Offsets are necessary to achieving emission reduction goals as we transition to a low-carbon economy since they are one of the only ways to address unavoidable emissions. They are part of, and do not replace, companies’ emissions reductions efforts. To be clear, we aren’t talking a huge amount. If approved, California polluters would be allowed to offset just 2% to 4% of their compliance obligations with REDD+ offsets (only 8% can be offset in total). This means that 92% of a regulated entity’s carbon emissions must still be addressed at source. Yet this 2% to 4% would play a hugely important role—demonstrating to the world that REDD+ is a viable climate solution, and empowering local communities, protecting wildlife and slowing deforestation. And since the planet does not differentiate between CO2 molecules – no matter where they originate – reducing carbon emission from tropical deforestation is still reducing carbon emissions – even here in California. Furthermore, California’s leadership in REDD+ is already catalyzing innovation, growth in California’s green jobs, technology development, and public-private partnerships – right here in California. It is not enough anymore for businesses to simply change light bulbs and make their buildings more energy efficient. We need corporate leaders to understand that sustainability and addressing climate change means taking that extra step needed to meet our 2020 emissions goals. It is time for more companies to recognize and adopt offset policies as an integral part of carbon emission reduction plans. REDD+ allows responsible companies to go beyond the reductions achievable in their direct operations and offset their unavoidable emissions by reducing deforestation. In addition to jurisdictional REDD offsets under AB32, through the voluntary market companies and philanthropists today can directly support high-quality, high impact REDD+ projects. REDD+ projects “done right” are transforming the economic incentives that lead to deforestation, protecting endangered wildlife and improving the lives of local communities. These projects demonstrate that REDD+ can bring greater value to forests while supporting the rights of forest peoples. To help stop climate change, we must greatly reduce tropical deforestation. And there has been significant progress. But to succeed, we need to find ways to bring greater value to living forests. REDD+ forest carbon offsets are one step in the right direction. Let’s voice our support and help the great state of California make an important and vital contribution. About the authors: David Rothschild (left) serves as a Principal of the Portfolio Team at the Skoll Foundation and manages a variety of key relationships with funded social entrepreneurs, domain experts, policy makers, corporate partners and co-funders. Karin Burns (right) serves as Executive Director of Code REDD and advocates for corporate leaders to address climate change by catalyzing the market for REDD verified emissions reductions through both voluntary and compliance carbon markets. Editor’s note: Mongabay Founder and President Rhett Butler served as an advisor to the Skoll Foundation on deforestation-related issues from 2010-2012. Rhett was not involved with this commentary, other than posting it on the site. Read more at http://news.mongabay…A6vpj8ycicpP.99 Continue reading
Confidence Growing in the UK Housing Market?
17th July 2013 Investor Today suggests that more confidence has returned to the housing market with the Halifax Housing Market Confidence tracker revealing that the headline House Price Outlook balance (i.e. the difference between the proportion of people across Britain that expect the average house price to rise rather than fall) stood at +40 in June. This was an increase of 7 percentage points compared with last quarter (+33) and was the highest score on this measure since the tracker began in April 2011. Martin Ellis, housing economist at Halifax, said: “Sentiment regarding the outlook for house prices has improved markedly over the past quarter, continuing the trend seen since late 2012. This increase in optimism is partly due to house prices being stronger than expected in the first half of the year. We continue to see a clear north / south divide with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK. Nonetheless, the market still faces substantial headwinds with, for example, house prices remaining above the historical average in relation to earnings. Such factors are likely to prevent a sharp acceleration in house prices.” Meanwhile Stephanie Butcher, European Equities Fund Manager at Invesco Perpetual tells investors not to write off Europe as an option to put their money into stating “At current levels valuations are so cheap on a cyclically adjusted basis that I believe the environment simply needs to be ‘less bad’ for Europe to be an attractive case. We could point out that Europe is chock-full of world class companies, which have international exposure, and are (thankfully) run by first-class managers not politicians, but that has been the case for a while and it hasn’t persuaded investors thus far. As investors we have one role – that is, to find under-valued assets, whatever those assets might be. Most appear to be persuaded that bonds are intrinsically over-valued. Equally, many seem persuaded that equities are, at this point, a cheap asset class. What fewer seem to accept is the fact that Europe today is the global value play, and within Europe itself, there are areas of the market which sit at generationally low valuation levels.” Finally Knight Frank’s Prime Global Rental Index states that Prime rents in key cities worldwide rose by just 0.2% in the first quarter of 2013 – The Index’s lowest rate of quarterly growth since 2009. Knight Frank’s Kate Everett-Allen said: “Prime rents are rising strongly in many emerging markets, but this growth is being overshadowed by weakening rents in some of the world’s more established financial centres such as Hong Kong, New York and London. Luxury property for rent in Dubai, Nairobi and Beijing rose by 18.3%, 13.9% and 12.3% respectively in the year to March. By comparison, Hong Kong, New York and London saw prime rents fall by 2.3%, 2.6% and 3.1% over the same period. In this second group of cities, the rental markets have suffered as relocation budgets for executives have been trimmed during a period of weaker financial sector performance.” Continue reading
Carbon Credits Surge to Six-Month High as EU Refines Eligibility
By Mathew Carr – Jul 18, 2013 United Nations Emission Reduction Units surged 39 percent after Europe specified which credits are ineligible for use in its carbon market, the world’s biggest. ERUs for December jumped as high as 25 euro cents ($0.33) a metric ton, the highest since Jan. 31, on the ICE Futures Europe exchange in London . The European Commission, the bloc’s regulatory arm, upgraded its carbon registry yesterday to clarify which offsets can be used to meet emissions obligations. ERUs fell to a record low in May after the European Union said it may restrict the use of some offsets from countries including Russia and Ukraine should they fail to adopt new carbon goals as of this year. The credits, created from carbon-reducing projects in developed nations and emerging countries, may now narrow the price gap with more expensive Certified Emission Reductions from developing countries, according to Bloomberg New Energy Finance. The majority of ERUs issued since the start of the year are “likely to be confirmed as eligible” because they have been certified by an audit firm, Richard Chatterton, a London-based analyst for New Energy Finance, said in an e-mailed note. ERUs were trading at 22 euro cents a ton at 1:55 p.m. in London, while CERs fell 1.9 percent to 52 euro cents. Factories, power stations and airlines in the EU market can use either CERs or ERUs to match a limited portion of their emissions obligations. “The difference between the CER and ERU price will continue to narrow as the market gains confidence that ERUs will ultimately be able to be exchanged for EU allowances,” Chatterton said. Price Plunge ERUs plunged to a record 6 cents on May 1 amid a surplus of carbon permits in Europe, where slowing economic growth has damped demand for the credits. EU lawmakers are still debating a plan to temporarily reduce supply and boost prices. EU carbon allowances rose 1 percent to 4.17 euros a ton. The UN 1997 Kyoto Protocol supports the development of carbon-cutting projects by awarding investors with ERUs or CERs that can be sold to companies and governments with pollution caps. One credit is equivalent to a one-ton reduction of carbon dioxide. To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Continue reading
