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 Voluntary Carbon Markets (2nd Edition)
Author: Ricardo Bayon and et. al.
Release Date: April 1, 2009
Number of Pages: 176
Binding: hardback
Publisher Information
Earthscan
Dunstan House, 14a St Cross St.
London, EC1N 8XA
UK
Phone: +44 20 7841 1930
E-Mail: earthinfo@earthscan.co.uk
Web: http://www.earthscan.co.uk
When the first edition of this slender volume appeared in January 2007, the motives behind and practices of selling and buying tons of carbon emissions reductions voluntarily were shrouded in mystery. Whatever information came to light was scandalous as often as it was commendable.
The story is far from finished. However, the voluntary carbon market is much more credible than it was three years ago. Buyers — the parties saddled with the risk — can have some confidence that the emission offsets they purchase are real.
Businesses have made strides forward in achieving carbon neutrality and in boasting of their accomplishments. Firms of all types and sizes have earned “feel-good” benefits from their stakeholders for their attempts to combat global climate change before government-mandated rationing programs take root.
This edition is as useful as the first one in explaining the way carbon credits are generated, certified, registered, verified, and traded. In several respects the work is a reference tool. News articles about carbon offsets would benefit if journalists kept the book within reach. Politicians should have a copy close by, too.
The annexes contain a glossary of terms, a handy table of voluntary carbon offset suppliers, annotated lists of offset registries and offset standards, and short but thorough descriptions of offset project types.
The chapter explaining the debate over the appropriateness of renewable energy certificates as offsets in voluntary carbon markets is indispensable, particularly because government-mandated targets for utilities are on the rise.
The future of voluntary carbon trading is uncertain, but the authors, who are in the business, have a generally bright outlook. They say that even if the regulated market takes off, voluntary trading will serve a purpose. There will be a market for gourmet buyers who look for environmental and social qualities in the type of carbon offsets being offered. The technical challenge the authors zero in on is standardization.
Ricardo Bayon is co-founder of EKO Asset Management Partners, a new team of investors and bankers that includes the investment firm of James Wolfenson who was president of the World Bank. Amanda Hawn advises clients on strategies for commercializing environmental assets and transacting in environmental markets for New Forests, an investment services company. Hawn used to work at Ecosystem Marketplace where the third author Katherine Hamilton is managing director. Hamilton is part of the Katoomba Group of individuals who promote markets and payments for ecosystem services.
The authors know there is a need for more confidence, certainty, and fungibility in the carbon market. However, they also want to preserve the flexibility, innovation, and inclusiveness that are the hallmarks of the voluntary market.
They write, “… we feel it is important for those developing standards for voluntary carbon not to be unnecessarily restrictive in the types of carbon offsets that can be considered, and that they come up with inexpensive and cost-effective ways of ensuring and verifying additionality; ways that don’t impose too onerous a cost on offset project developers.”
Their comment encapsulates the problem with emissions trading. Its proponents argue that the complexities, unknowns, and loopholes should not impede the use of the market mechanism to address climate change. The critics are left to wonder just how much imperfection the deal-makers, speculators, and politicians will tolerate before the carbon trading schemes they cook up are completely indigestible.
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