CFI – ‘black swan event’ treatments

Friends recently said they have been challenging conventional thinking, and they are tiring of the seemingly ‘black swan event’ treatment for their CFI ideas. It seems despite what is obvious until it is policy it cannot be measured and the process to change that view requires a consensus from the vested interests. In open discussion it was thought the matter centered around influence and the funding facility too old school as it measures either through historic evaluation or by a formulae that has not been questioned. This could be relevant because we are talking of the action of innovation being exercised to get results as opposed to standard measures for an outcome.

It follows that I was told a few years ago ‘ as a courageous person we need to reward you, a generous package should do it. But beware your ability to see through the veneer of policy, and act with sincerity is not the true reality of the politics. This of course points to how easy it is that the person acting out of moral fortitude can be seen as counterproductive in the minds of those that ‘play the game’. CO2Land org postulates that the ultimate manifestation of the artificial reality is by manifesting confusion and resentment and formulating as if the views were facts in order to direct perceptions of ‘doing good’ in their public decision-making declarations.  Postulating in this way shows that the courageous are seem as dangerous to those maintaining the Status Quo, or business as usual, and to get momentum for your good ideas or even get a fair audience on the carbon risk products you might offer will be subject to a difficult path.

A very good example is provided by Peter & Kerry Davies <realpowersystems@gmail.com>where they said it is eerily quiet when we asked about Bio char Methodology using Traditional Indigenous burning techniques. When questioned it was obvious they have products and advanced thinking capabilities that can reduce emissions and control waste impacts. They also actively showcase what is possible and are prepared to demonstrate the possible and as a direct quote from them where they asked a government officer in Climate Change a question on business as usual in the hope it could receive a fair audience, or influence for a commonsense response:

“Can you tell us whether there is any Carbon Methodologies based on Aboriginal burning practice under consideration or proposed?

The reason we ask is that we were privileged to have Rod Mason the Monaro Landscape Connectivity Project’s Indigenous Land Manager out to our property yesterday. He was showing us how they would manage some woodland and forest restoration using small patch burning. Now the question was asked of us by one of the other project officer’s present ‘Did we understand what he was doing and how it actually worked?’(Because they had witnessed some outstanding results but had no good scientific explanation for what was really happening).

The funny part is we do, but only because of our multidisciplinary background in sustainable forest management AND bio char production and use. What he showed us was a distillation of several thousand years of practice evolved through observation of the response.”

The Davies are uniquely qualified for their perspective, and know that these methods are actually optimised in situ bio char production techniques where temperature and duration of the process is controlled and aimed at minimizing damage to living plants and creating a interconnected pathway “for mycorrhizal fungi growth, which in itself is one of the key reasons  Bio char provides benefits well above its inherent fertiliser value”.

CO2Land org knows there is lots more to this and the material viewed shows a viable business we are quietly excited about. What is needed is recognition of the methodology. It is proposed that CFI and ACCU creation is the way forward. The ACCU could be more effective in encouraging the benefit from the concepts – it will also provide the incentives for training and education and research that might fill in our own knowledge gaps. It is certainly worthy of much greater research than we are aware is happening.

Some numbers you might like to think about in terms of conversion to bio char:

Method as proposed – char ratio yield approx. 5%

Uncontrolled bushfire – char ratio yield approx. 1%

In perspective (back of the envelope calculation) the yield volume of the method proposed would produce a suggested volume equivalent to around 1.25 tonnes/ha bio char application through this managed patch burning. The Davies’ mention that “this practice should not to be confused with large area mosaic burning as practiced by National Parks Managers”. The point out being “mosaic burning is a poor parody of the indigenous practices”.

It should also be added that “Rod Mason indicated that Wattles, Tea trees and Eucalypts produced different chars that were applied in specific areas to encourage particular plant communities” – Interesting is it not?

Non-Kyoto Carbon Fund discussion paper

What is a position paper when it does not necessarily represent the views of the Government or any Government Minister – It could be a discussion paper and one very recent issue on the CFI related discussion is a position paper prepared by the Land Division of the Department of Climate Change and Energy Efficiency to promote discussion ahead of developing program guidelines for the Non-Kyoto Carbon Fund. The paper titled Non-Kyoto Carbon Fund Discussion paper for public comment – November 2012.

If you are wondering what does it mean, firstly you need to understand that the Non-Kyoto Carbon Fund is about abatement activities that do not count towards Australia’s emissions targets. It is about a market based incentive for CFI credits that do not have access to other markets. Equally important the Fund will not duplicate other grant-based or research and development funding provided under the Clean Energy Future Plan.

So why do it?  To encourage investment and promote innovation all related to reducing emissions or store carbon and would not have been contributing in other ways to Australia’s emissions targets. A big part of this objective is the ‘learning by doing’.

Looking closer at the Carbon Farming Initiative it is a legislated framework to ensure that abatement is real, permanent and additional. If you want to investigate what is thought of this statement you can read CO2Land orgs post  Real, Additionality, RECs

Posted on August 14, 2012 by co2land “Curiosity lead to checking out the reporting standard AS/NZS ISO 14064, finding it is silent on the word or term ‘real’ and completely avoids the topic of additionality, was fascinating given that you can’t even conceive of an offset without the concept of additionality!

CO2Land org now ponders: If ‘real’ cannot be a guarantee of a good project outcome. It follows that the use of the word or term ‘real’ can be seen as a initial or promised activity increase and not be seen as a guarantee of an increase in the carbon offset (it could be real activity and still lead to a decrease of carbon offsets). So if I say it was real at the time I acted; it was an act in good faith only. The issue with the word ‘real’ is it literally means the activity is a cause of change.

This lead to thinking of the impact this has on the Carbon Farming Initiative as legislated when the Gold Standard and Carbon Fix require that projects be “real”, but no international standard could explain what they mean by using the terms.

CO2Land org looked a little harder (we don’t want this post to be no more than ‘hot air’) and found:

◦    Specifically ISO 14064-2 (project accounting) does not include ‘Real’ because during development of ISO 14064-2 ‘Real’ was regarded as a programmatic rule/criteria, which is outside the scope of ISO 14064-2.

◦    ISO 14064-2 is a standard rather than a program

◦    ISO 14064-2 (Clause 5.4) specifies the following requirement in regards to additionality: “The project proponent shall select or establish, justify and apply criteria and procedures for demonstrating that the project results in GHG emissions reductions or removal enhancements that are additional to what would occur in the baseline scenario.”

◦    Additionality is incorporated into ISO 14064-2 is based on the core principles of ISO standards in general, i.e. that ISO standards not be a barrier to trade (WTO-TBT – anyone following development of ISO 14067 (product) will know this is a major issue). As such, ISO standards must be policy-neutral (extended to include program-neutrality). This is of course very important for market confidence.

◦    ISO 14064 deals with the concept of additionality by requiring that the GHG project has resulted in GHG emission reductions or removal enhancements in addition to what would have happened in the absence of that project. It does not use the term “additionality”…Thus the project proponent may apply additionality criteria and procedures, or define and use boundaries consistent with relevant legislation, policy, GHG programmes and good practice.”

◦    Although the concept/requirement of additionality is within the requirements of ISO 14064-2, the simple reason why the ‘term’ additionality is not present within the requirements of ISO 14064-2 is because of certain sensitivities/perceptions/politics of certain parties involved in the development of the standard. ”

If we press on with the currect discussion paper: You should be aware the Non-Kyoto Carbon Fund will only purchase credits issued under the Carbon Farming Initiative (CFI) and the department states the rigorous CFI integrity standards apply to both Kyoto and non-Kyoto projects.

To quote the Department: “The CFI is based on internationally accepted principles for ensuring that abatement is real, permanent and additional; and incorporates safeguards against adverse impacts — for example on biodiversity, water availability and employment. It allows landholders to generate carbon credits for abatement actions, whether or not they contribute to Australia’s emissions targets. All abatement — including Kyoto and non-Kyoto abatement — is subject to rigorous integrity standards, which cover:

  • Measurement:  each CFI project must use an approved CFI methodology to ensure that abatement is measurable and verifiable. CFI methodologies are supported by peer reviewed science and assessed by an independent expert committee (the Domestic Offsets Integrity Committee).
  • Additionality:  abatement must go beyond legal requirements and common practice within a comparable industry and/or region.
  • Leakage:  measurement methods must account for leakage and variability and use conservative assumptions.
  • Permanence:  sequestration from establishing trees or building soil carbon must be permanent.

The CFI is administered by the Clean Energy Regulator. It is supported by legislation and includes measures to minimise fraud and dishonest conduct. The CFI framework gives buyers confidence that offsets make a genuine contribution to climate change mitigation. “

Co2land org does not intent to verbatim the paper and you can easily get a download of  the discussion paper at:  http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative-non-kyoto.aspx .

But if you prefer we can explain what is Kyoto versus non-Kyoto activities. Kyoto protocol was ratified by Australia in 2007 and we agreed to to limit our national emissions in the period 2008-2012 (the first commitment period) and the Government has recently announced its intention to join a second commitment period, consistent with our domestic commitment to reduce emissions by 5 per cent from 2000 levels by 2020.

The Non-Kyoto Carbon Fund promotes land sector abatement that does not contribute to Australia’s internationally committed emissions targets, but represents genuine abatement nonetheless. Some non-Kyoto activities are likely to transition into the Kyoto framework (or its successor) over time.

The Kyoto Protocol establishes an internationally-agreed framework for measuring and reporting greenhouse gas emissions. Australia ratified the Kyoto Protocol in 2007, agreeing Land sector activities that contribute to Australia’s Kyoto Protocol emissions target (Kyoto activities) include:

  • activities that reduce agricultural emissions;
  • reforestation (land that was clear of forest before 1990); and
  • avoided deforestation (those present in 1990).

Under a second Kyoto Protocol commitment period (from 2013), it will be mandatory to account for forest management.

Rules:

* The carbon pricing mechanism allows CFI credits from Kyoto activities can be used as offsets.

* You can use the CFI to credit abatement from activities that do not currently contribute to Australia’s Kyoto Protocol emissions target (non-Kyoto activities).

* Credits generated from non-Kyoto activities will be eligible under the Non-Kyoto Carbon Fund, but cannot be used as offsets under the carbon pricing mechanism.

Transitioning activities into the Kyoto framework

  • International climate change negotiations are ongoing. What we have the moment is an intention to join a second commitment period.
  • Forest management and other voluntary land sector activities were not followed in the first commitment period because of risk. Risks that the gains from carbon sequestration could become losses from natural events, such as bushfire and drought. New provisions allow countries to exclude emissions from major natural disturbances when accounting for forest management and reforestation.
  • Accounting for forest management will become mandatory for parties under a second Kyoto Protocol commitment period.
  • Other land sector activities — including the storage of carbon in agricultural soils, grazing land management and the restoration of wetlands — will remain voluntary. Or at least until the Government assesses the impacts in Australia’s national accounts.
    • If activities enter the national accounts, credits from those activities would become allowable offsets under the carbon pricing mechanism and would no longer be eligible under the Non‑Kyoto Carbon Fund.
    • Fence sitters will be delighted. There will be arrangements to help stakeholders to manage uncertainty around the timing of any transition.

What happens if non-kyoto activities are brought into the Kyoto framework? The proposal is :  A voluntary opt-out clause would allow Non-Kyoto Carbon Fund participants to choose to sell to other buyers, if activities become eligible offsets under the carbon pricing mechanism.

What happens from here?  “The Department of Climate Change and Energy Efficiency will continue to consult with stakeholders on the design of the Non-Kyoto Carbon Fund. Interested parties are encouraged to make submissions on the proposals outlined in this discussion paper.

Draft program guidelines will be published in the first half of 2013, for further stakeholder comment. This will be followed by the release of final program guidelines prior to program commencement.”

In the mean time, if you are an interested stakeholder – Submissions are accepted until 14 Dec 2012 from stakeholders. Follow the full discussion and make your comments as described and email to cfi@climatechange.gov.au .

Time for a real review

Smart forms of research has found that customer service and sales skills are considered the least important when building a brand, and it would seem big brand and government know this very well. This might explain why any meaningful programs are explained in a way of the language of spin. For what is done would we not prefer to hear or feel that our policy makers value some measure of the actions and actively seek feedback from those that influence our lives at least every 6 to 12 months from a startup campaign. This view suggests government is a business – a business that must please its total stakeholder basis.

Why should this happen? Take a look at quotes taken from the writings of Laurissa Smith and Anna Vidot (www.abc.net.au ), on Monday, 20/08/2012, the story ‘Carbon farmers challenged by rigorous process’: “The guidelines which set out how they can make money from schemes like the Federal Government’s Carbon Farming Initiative are still being developed…It’s still sitting under consideration with the Domestic Offset Integrity Committee which is the committee tasked under the clean energy regulator to review the methodologies…So we hope that it’s going to become available for public interest by early 2013.” This is extremely frustrating when you consider the Department responsible made announcements of a body as set up for Carbon Offsets in June 2010.

In fairness some methodologies are already approved – 3 with the possible 4th soon, and the promise is new methodologies on the way would allow farmers to earn credits not yet seen for not yet approved promotions on their properties.

Following on with the need for measures and feedback, consider another story featuring Anna Vidot, it too is clearly linked to our food security, the National Retailers Association says the sector is suffering from “review fatigue” and is an easy target for people concerned about the viability of Australian food processing. The story is leveraged on how the industry is responding to recommendations made by a Senate committee which has just concluded a year-long investigation into food processing in Australia. Rather than call it a broad based affair, the report is labeled ‘wide-ranging’ across areas of diverse ranges. The report makes more than 30 recommendations from industrial relations to food labeling.

If we refrain from discussing the market dominance of Coles and Woolworth, views of a political advantage etc, and concentrate on finding evidence of how customers and suppliers are satisfied with their treatment by the big two, you can narrow down to the need for a survey of supermarket activities. That survey concept could also be used to find evidence of government performance, and that survey could, ideally, be reviewable on a half yearly or yearly basis. Correctly structured we could be well assured ‘all funny business’ would be stamped out of politics, and we would remove the election cycle porkbarreling we are so used to in new policy announcements.

If we explore this a little further, from the retailers: “We’ve had a number of reviews in this space, and the last Australian Competition and Consumer Commission review found that there was workable competition in this country… The supermarkets already do an enormous amount of research and collection of data… Many of the suppliers you’re talking about are big multinationals in their own right…From the perspective of farm-gate suppliers, in the case of Coles and Woolworths, the majority of their suppliers have been with them for 20 or 30 years.”

Then from a peak body for the manufacturers, the Australian Food and Grocery Council sums it all up very well: “If you’re looking at how we become more competitive, to improve productivity and compete effectively against imports and secure export markets, innovation is absolutely fundamental to that…,[It’s about] giving that a commercial focus and providing some leadership, or a catalyst if you like, for some of the innovative effort that assists in improving productivity and identifying and securing export markets…But it’s not easy and we welcome the fact that this report has identified this as an area for future action.”

Can you see the similarities that each industry faces, it follows: Call for interest, formulate, approve, review, report, review the review, determine if real, and review if the review equals very little intervention other than a market correction and then all care and no responsibility taken.  And, what if each industry could review the performance of the politician and review that appointment?

 

Real, Additionality, RECs

Observing CTi’s Carbon Offsets 2 day Masterclass offering, it occurred that a US based mob was on about getting real about ‘real’ carbon offsets. Curiosity lead to checking out the reporting standard AS/NZS ISO 14064, finding it is silent on the word or term ‘real’ and completely avoids the topic of additionality, was fascinating given that you can’t even conceive of an offset without the concept of additionality!

CO2Land org now ponders: If ‘real’ cannot be a guarantee of a good project outcome. It follows that the use of the word or term ‘real’ can be seen as a initial or promised activity increase and not be seen as a guarantee of an increase in the carbon offset (it could be real activity and still lead to a decrease of carbon offsets). So if I say it was real at the time I acted; it was an act in good faith only. The issue with the word ‘real’ is it literally means the activity is a cause of change.

This lead to thinking of the impact this has on the Carbon Farming Initiative as legislated when the Gold Standard and Carbon Fix require that projects be “real”, but no international standard could explain what they mean by using the terms.

Now lets talk of the other mob: In their story –

Getting real about “real” carbon offsets,  by Michael Gillenwater –it was said:

“The qualities of a good emission offset project are one of the most common refrains you hear in the carbon offsets community. You can probably repeat most of them by memory: real, additional, permanent, verifiable, etc. Different programs or protocols might add other points about leakage or accuracy, or conservativeness or some other offset quality principle. But common to almost all programs and standards and protocols is the criterion that offset projects or credits must be ‘real’. Here is a question for you: What does it mean for an offset project to be real? What would an unreal offset project be? How could we tell if it was unreal, and is this something we should be concerned about?”

They go on to look even closer at the word or term ‘real’:

If you check out the Offset Quality Initiative and how they express the term ‘real’ and explain it the word should be done away with entirely as it is not meaningful, or at least ambiguous, and those that use the term are employing vacuous language. They claim the problem for ‘real’ is it most likely used to describe itself is real, and used this way one cannot ban imaginary projects, and one may ‘forward credit’. That is you can issue a credit before emissions have been achieved.

They continue that where ‘real’ is covered with a contrived definition and includes the concepts of completeness and accuracy in accounting, and leakage. It does so as no more than use ‘real’ as a synonym!

Now how do the markets act responsibly on handling this issue:

  • The Clean Development Mechanism (CDM) rules states that offset projects must be “real” in various places, but the definition is absent.
  • The Verified Carbon Standard (VCS) does attempt to handle this and goes with the imaginary friend test: All the GHG emission reductions and removals and the projects that generate them must be proven to have genuinely taken place. Much better description than using ‘real’ – no room for weasels in this one.

CO2Land org looked a little harder (we don’t want this post to be no more than ‘hot air’) and found:

  • Specifically ISO 14064-2 (project accounting) does not include ‘Real’ because during development of ISO 14064-2 ‘Real’ was regarded as a programmatic rule/criteria, which is outside the scope of ISO 14064-2.
  • ISO 14064-2 is a standard rather than a program
  • ISO 14064-2 (Clause 5.4) specifies the following requirement in regards to additionality: “The project proponent shall select or establish, justify and apply criteria and procedures for demonstrating that the project results in GHG emissions reductions or removal enhancements that are additional to what would occur in the baseline scenario.”
  • Additionality is incorporated into ISO 14064-2 is based on the core principles of ISO standards in general, i.e. that ISO standards not be a barrier to trade (WTO-TBT – anyone following development of ISO 14067 (product) will know this is a major issue). As such, ISO standards must be policy-neutral (extended to include program-neutrality). This is of course very important for market confidence.
  • ISO 14064 deals with the concept of additionality by requiring that the GHG project has resulted in GHG emission reductions or removal enhancements in addition to what would have happened in the absence of that project. It does not use the term “additionality”…Thus the project proponent may apply additionality criteria and procedures, or define and use boundaries consistent with relevant legislation, policy, GHG programmes and good practice.”
  • Although the concept/requirement of additionality is within the requirements of ISO 14064-2, the simple reason why the ‘term’ additionality is not present within the requirements of ISO 14064-2 is because of certain sensitivities/perceptions/politics of certain parties involved in the development of the standard –

And, the following references helpful in gaining a more complete understanding:

CO2LAND armed with this information focused more on Australia, and with raised eyebrows takes note ‘real’ is long-overdue for a critique of the ‘real world’ of concepts and terminology defining emissions offsetting and accounting policy and practice. In fairness what becomes obvious is domestically and internationally in Australia have had to deal with the vagaries of the debates and arguments over the development of both an international REDD mechanism and revision of accounting rules for land use, land use change and forestry (LULUCF) by Annex 1 countries.

Dealing with this is not as making the concept closer to simplicity and ‘naturalness’ in terms used as much of the confusion stems from failure to separate out responsibilities for project managers, national/sub-national regulators and for the international community. In short the levels of responsibility presume everyone else should be responsible for everything. Then everything ‘real’ becomes perverse. Source: Alistair Graham
Tasmania, Australia
7 August 2012

Previously CO2Land org has written of the perils of the REDD issues, and that things are going to avoidably get more complex, and Alistair Graham also believes we best get our house in order for the, relatively easier stuff in the non-LULUCF sectors.

Then rock my socks along comes Judith Hull (talking of work with Environment Canada) and commented, August 13th, 2012:

“Michael – In response to your August 9 note on my short comment, I would emphasize that isolating one criterion is always problematic. Clearly baseline setting with functional equivalence is key. We used the ‘real’ criterion to flag that just a cut in production would not be eligible. A project to make that production more efficient (even if total output were to decrease) may well be eligible. Judith”

Is it ‘real’?

Now look at confusion on RENEWALBLE ENERGY CERTIFICATES (RECs):

There are a few other terms bandied about incorrectly.

1) RECs are not offsets. Yet routinely you hear they “have offset their carbon emissions with RECs.” That is wrong on several levels. Yes, it is inconvenient that the word offset can be a verb or a noun. But get it right. RECs can be said to “compensate for” or perhaps “balance” the GHG emissions from electricity consumption, but leave offsets out of the conversation.

2) While we’re hammering RECs, if a facility/organization is buying RECs they are not “powered by wind.” There is no orange extension cord connected to a wind turbine. RECs connect load to renewable power by a contract, not a wire. To say “powered by wind” creates false images in lay peoples’ minds.

3) If a facility/organization is buying offsets or RECs sufficient to equalize all their GHG emissions, they have not attained “climate neutrality.” They have attained “GHG neutrality.” The definition is “no net GHG emissions.” That definition does not define a state of the climate, it defines a state of emissions.

It is wrong to connect climate with RECs – RECs like green power energy are project outcomes.

 

REC References: