Making a difference today for a better world tomorrow.

Glossary

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – July 2019

Making a difference today for a better world tomorrow.

Offset Supply Information:

All CCOs issued to date: 157.88 million
Compliance credits awaiting issuance: 24.12 million

CA and General Market Commentary:

  • In July compliance offset prices continued to rise slightly despite a pull-back in CA allowance prices. This trend of increasing offset prices in the May-October timeframe is typical as we approach the interim compliance deadline and entities look to purchase a portion of their offset utilization limit.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – June 2019

Making a difference today for a better world tomorrow.

Offset Supply Information:

All CCOs issued to date: 155.41 million
Compliance credits awaiting issuance: 23.10 million

CA and General Market Commentary:

  • Oregon will not pass a Cap and Trade bill this year. Oregon’s House passed a Cap and Trade bill, and it was expected that the bill would pass out of the Senate in June given the substantial Democratic majority in the Senate.  The bill was viewed as a possible first step to linking to the CA/QC program.  However, after a heated partisan dispute that included the Republican Senators leaving the state to avoid a vote on the bill, the bill has been abandoned, at least for this legislative year.  Democratic Governor Kate Brown has vowed to use the Executive Branch to implement a Cap and Trade program, but it is unclear how far her administration can go with their actions, and likely that they would not result in a fully linkable program.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – May 2019

Making a difference today for a better world tomorrow.

Offset Supply Information:

All CCOs issued to date: 154.78 million
Compliance credits awaiting issuance: 23.06 million

CA and General Market Commentary:

On May 22nd, ARB released the results of the second quarterly allowance auction for 2019. The clearing price for current vintage allowances was $17.45.  The auction cleared $0.76 over our estimate for the 2020 auction reserve price.  The auction was strongly subscribed with a bid-to-cover ratio of 1.46.  The result may be even more bullish than it appears considering that PG&E did not participate in the auction, likely due to PG&E’s ongoing bankruptcy negotiations.  As an entity with one of the largest compliance obligations in the program, their absence may lead to a later need to procure allowances.

Year-to-date, only 13.32 million offsets have been issued by ARB. If this issuance rate continues at a similar pace for the remainder of the year, 2019 would see only 32 million offsets issued.  That result would be a substantially lower annual issuance rate than the 54.17 million offsets issued in 2018.  

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – April 2019

Making a difference today for a better world tomorrow.

Offset Supply Information:

All CCOs issued to date: 152.72 million
Compliance credits awaiting issuance: 21.69 million

CA and General Market Commentary:

A light month of ARB CCO issuances saw the ROC backlog increase to 21.69 million, up almost 4 million from March.

On April 8th, the Intercontinental Exchange (ICE; theice.com) listed and traded the first California Carbon Offset futures contract. ClimeCo was pleased to be involved in this historic trade.  The contract is for the physical delivery of CCO-0s- offsets whose invalidation period has expired.  The first trade was for delivery of CCO0s in December 2021 and was priced at $16.66.  Following up on this previously reported event, we are now listing the monthly settlement price for the DEC2021 contract for CCO-0s in our pricing table above.

ARB’s second quarterly auction of 2019 will be held on May 14th, with results available May 22nd. We will look to see whether the substantial move upward in allowance prices during the last few weeks is sustained by the auction results, or whether the auction clears close to the 2020 floor price of ($16.70 estimated) as typically has occurred in the past. 

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Land Degradation and Our Future

Land Degradation and Our Future

Making a difference today for a better world tomorrow.

Many of us remember growing up with picture books to help us learn the alphabet.  My favorite books were the ones that matched letters with beautiful images of exciting animals.  Who could forget the mnemonics “G is for Giraffe,” “L is for Lion,” or “R is for Rhino?”  I fell in love with these animals at a young age and it continued into my adulthood, where I had the privilege to go and observe many of these species in the wild.  

In college, I wanted to pursue my passion for wildlife and science, so I chose to major in Ecology and Evolutionary Biology.  There I learned that our planet’s environment is currently undergoing constant changes and, in many cases, threatening the number of healthy habitats for animals to live in.  I realized that unfortunately for future generations, some of the animals that I had so much fun learning about when I was a kid might only exist in books or pictures. 

For my senior thesis, I was able to do research in Kenya to study how the giraffe was impacted by changes in land quality.  Some of these changes are directly caused by the impact humans have on their surroundings, and one of the most problematic transformations has come from the decrease in land quality, also known as land degradation.  Kenya has some of the most interesting animals on the planet and, in some cases, its degraded land is directly adjacent to conservation areas; this means that the species living on the conservancies and the grazing population have a significant amount of overlap.  One example of this would be where I did my senior thesis: the Mpala Research Center.  Located in Laikipia County, Kenya, Mpala boasts the highest diversity of large mammals in the country and it is right next door to land that Kenyans commonly use for cattle grazing. 

As Lauren Mechak outlined in her recent blog post, “More Than Grassland,” utilization of grasslands is an extremely important part of human livelihood, however, grazing that is not managed in a sustainable way is one of the main threats to viable habitats for some of the earth’s most famous animals.  As the number of degraded land increases, the native fauna are forced to move around more frequently and in much broader ranges to try to find food.

While fascinating, the work I did there was more important to me than simply deepening my understanding of the crucial steps we must take to protect our planet; my research confirmed that giraffe lives are impacted by these negative changes in their wooded grassland home. I found that because degradation had impacted what land was available, giraffe had to change where they chose to eat, raise their babies, and interact with other giraffe.  These changes in behavior were different from what had been found in previous research. For example, some of the giraffe had no option but to choose to forage in the lower quality habitat and put their nutritional health at risk so that their offspring would be safe from predation.  This was a result of one of the things I did not expect to observe: other species which did not directly feed on the plant life in the area were also negatively affected by this land degradation.

Through interacting with the cattle ranchers, I learned that they were also troubled by the disappearing wooded grasslands.  In order to feed their animals, the people using the land faced pressure to adjust where they herded their cattle.  This increased the span of the degraded land but minimized the amount of land hospitable to local predators, which were not directly feeding on the flora in the region.  Similarly to the disappearance of Gray wolves that Quin Pompi referenced in “Beyond the Trees,” the people working with the grazing cattle felt threatened by the local lion population that hunted there and, therefore, made efforts to ensure that the land was unwelcome to these predators.  This then affected the lions’ home ranges, just like the giraffe’s, because as the amount of degraded land grew, the ranchers had to expand the land they used for grazing and, as a result, expand the areas that lions were unwilling to hunt.  This chain of circumstances leads to one of the most important things I learned while in Kenya:  modern environmental problems require modern solutions, as everyone is affected by negative environmental changes, so we must utilize a solution that has the potential to benefit all.

The disappearance of grasslands, while prevalent in Kenya, is an issue that is present in the United States as well in a different form: conversion to cropland.  Although grasslands’ importance is sometimes forgotten, they are homes to some of our most valuable and unique species.  Preserving the habitats of species matters, not only for the animals but also for the preservation of many American’s livelihoods and for the environment we all appreciate.  ClimeCo, through Edenfort, is making a difference in a way that is feasible: by developing high-quality offsets that integrate the interests of the agricultural land management world with the goals of the conservation world.  Hopefully, through awareness and a strong effort for preservation, our future children will one day get to know, love, and protect these species and their homes too.

To learn more about grasslands preservation, please contact us.

 

 

 

 

About the Author

Kendall Bedford specializes in managing the data associated with ClimeCo’s extensive network of biogas destruction projects and works closely on the environmental crediting process. Kendall conducted research on giraffe social structure associated with land degradation in Laikipia County, Kenya. Using various statistical, image processing, and modeling programs, she analyzed vast data collected through her own fieldwork for publication in biological journals.

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – March 2019

Making a difference today for a better world tomorrow.

Offset Supply Information:

All CCOs issued to date: 151.95 million
Compliance credits awaiting issuance: 18.03 million

CA and General Market Commentary:

  • ARB issued 6 million new offsets in March and reduced the ROC backlog to 18.03 million, its lowest point in several years.
  • On April 8th, the Intercontinental Exchange (ICE; theice.com) listed and traded the first California Carbon Offset futures contract. ClimeCo was pleased to be involved in this historic trade.  The contract is for the physical delivery of CCO-0s – offsets whose invalidation period has expired.  The first trade was for delivery of CCO-0s in December 2021 and was priced at $16.66.  While the contract does not directly provide pricing for the CCO-8s and CCO-3s generated by offset projects today, it does provide a price signal that will be useful for developers and allows a mechanism for hedging offset credits  Using the $16.66 trade price, and the April 5th settlement price of the DEC21V21 allowance futures contract of $19.15, the trade implies a 13% discount for the risk-free CCO-0 versus allowances.  It is important to note that this new contract does not distinguish between DEBs and non-DEBs credits (“DEBs” describes credits that qualify as having direct environmental benefits in the state of California.  Emitters are limited, from 2021 onward, to a maximum offset usage of 4% for non-DEBs credits).

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.