The Voluntary Carbon Market Does Not Reward Complexity

I had a lively discussion with Susan Wood, the CEO of SCC Americas, at the Carbon Finance North America Conference last week. SCC Americas is the US arm of Syndicatum Carbon Capital, one of the largest developers of Kyoto based CDM carbon credit projects in the world, and Susan herself has been doing emissions trading for over a decade, after starting out as an environmental engineer.

The punchline in our chat was quite fascinating – the US voluntary carbon market does not reward complexity in projects, Susan says. Basically, US carbon credit developers are only doing a few limited types of projects, like methane destruction. Why? Because the buyers, who dictate the voluntary markets, tend to be scared off by anything complex that they do not understand, or anything that does not appear to be future proofed against coming US regulations. This stands in stark contrast to the CDM market, where complexity is often the hallmark of the major developers since the methodology and standards process is trusted to a much greater degree by compliance buyers than the voluntary standards are.

One other way to look at this issue is that much of the innovation in new ways to abate carbon is coming from CDM under Kyoto, not the voluntary markets. A bit sad, and a challenge to the voluntary standards community to get its act in order. Possibly the rise of new standards like Voluntary Carbon Standard and Green-e Climate will help fix the crisis in complexity, but we have been saying that for a while. As Susan puts it, we need it to happen yesterday.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET’s Greentech blog. He is also the founder of Carbonflow, a provider of software solutions for the carbon markets.

3 replies
  1. William John Raitt
    William John Raitt says:

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  2. Erich J. Knight
    Erich J. Knight says:

    I just wanted to make sure Susan Wood is apprised of the current progress in TP soils technology and the complex nature to account for all it's GHG benefits.Biochar, the modern version of an ancient Amazonian agricultural practice called Terra Preta (black earth), is gaining widespread credibility as a way to address world hunger, climate change, rural poverty, deforestation, and energy shortages… SIMULTANEOUSLY!Indeed, James Hansen is now placing it in the center stage of pro-active solutions for the climate crisis.If you would like to get out of the noisy arguments and into the positive vision, please check out Biochar.fund and beyondzeroemissionsThe BBC documentary The Secret of El Dorado is what propelled Terra Preta into global awareness and the Australians especially have been providing exciting documentaries about current applications.This technology represents the most comprehensive, low cost, and productive approach to long term stewardship and sustainability.Terra Preta Soils a process for Carbon Negative Bio fuels via Pyrolysis of Biomass………, Massive Carbon sequestration via Biochar to soils (1/3 ton C per 1 ton Biomass)……………, 10X Lower CH4 & N2O soil emissions………….., and 3X Fertility Too.If you have any other questions please feel free to call me or visit the TP web site I've been drafted to co-administer. http://terrapreta.bioenergylists.org/?q=nodeThank… for giving biochar your consideration.Cheers,Erich J. Knight

  3. greenpower
    greenpower says:

    “The Biochar Revolution” with “The Biochar Solution” http://biochar-books.com/
    The Biochar Revolution collects the results and best practical advice that these entrepreneurs have to offer to the biochar community. When practice and theory advance to the point where they meet in the middle, then we will truly see a biochar revolution.

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