From issues with the validity of the verification processes for credits to criticism over the theory of carbon offsetting itself, carbon neutrality has started a lot of controversy. Offsetting can just be a “feel-good” act if not accompanied by emissions reductions and proper funding for alternative energy projects.

BSI, a standards body in the UK, recently released PAS 2060 to help carbon neutralization gain more credence among the business and environmentalist communities. By specifically outlining standards for carbon offset certification and the steps a participating group must take to be labeled “carbon neutral,” these guidelines will help reduce “greenwashing,” or advertising certain business decisions as more environmentally friendly than in actuality.

These standards will help consumers, businesses and the environment.  By having specifications for becoming carbon neutral, consumers know exactly what environmental initiatives their money is in part supporting, and how different a carbon neutral company is from a traditional business.  Also, these standards incorporate long-term energy use reductions, which mean increased profits for companies through lower business costs and green publicity. Lastly, specifications for carbon neutrality will guarantee that offset projects and carbon markets will achieve the emissions reductions they promise, hopefully leading to no more than 450 ppm carbon dioxide in the atmosphere – the scientific community’s limit to keep global warming at only 2 degrees.

On Tuesday, May 18, the EPA announced in the final version of its “Tailoring Rule,” a modification to the Clean Air Act to accommodate the regulation of greenhouse gas emissions, that biomass is no longer considered a carbon neutral source of energy.
Obtaining energy from biomass usually requires the incineration of plant matter.  The process has often been considered in the past to have zero net carbon emissions because the combustion does not release many compounds besides CO2, which can easily be reincorporated into new vegetation. However, the planting, harvesting and maintenance of any sustainable biomass project do emit carbon, so a more appropriate name would be ‘low carbon fuel.’ Furthermore, the US Department of Energy ranks biomass fuel 18th in terms of environmental cleanliness, with 0.0885 metric tons CO2e emitted for every million BTU consumed.  That’s more than the zero tons CO2e per million BTU emitted through traditional renewable energy sources, such as wind and solar energy, as well as the 0.0531 per unit of natural gas and 0.0732 from diesel fuel.
Although the EPA’s decision comes as a shock to some industries and may push current biomass users to switch to fossil fuels for higher efficiency, the fact that biomass produces so much CO2 makes the recent lack of exemption from CO2e permitting requirements not unreasonable.

Satellite imagery of Earth, long used to collect information about activities on Earth’s surface, is being made available as a key tool to help communities understand and plan for climate change. Much like some utilities are sharing bigger-picture information to help consumers make better decisions about energy use, both the CIA and NASA each recently announced programs that expand sharing of existing satellite imagery and data to help climate scientists and decision-makers quantify climate influencing activities, measure effects, predict outcomes, and take action. The imagery and data collected by these satellites is incomparable to any other research tool, and the sharing of it should move us quickly toward better analysis around some of our most vital climate questions.

NASA’s Terra EOS spacecraft has been collecting satellite information of Earth’s vital signs since February of 2000. Currently, NASA is using data collected from the Terra satellite to assist California with their required emissions inventory report–conducted annually by the California Energy Commission and California’s Air Resources Board–and is working to help develop a carbon budget for California. NASA intends to use the California model to work toward developing a national carbon budget.

The CIA has revived the

MEDEA (Measurements of Earth Data for Environmental Analysis) program in the recently formed Center for the Study of Climate Change, which will function to identify and declassify information already being collected that should be shared with climate scientists and decision-makers in their own climate-related work. This information will also be used by Pentagon planners, now mandated to prioritize climate change among key security threats for the first time starting in 2010. The CSCC will provide data to help predict and monitor areas of potential climate induced destabilization.

The CIA and the Pentagon’s growing involvement in climate science shows that climate change is no longer solely an environmental concern, it is a national security concern–from severe weather, to starvation, to war–and the potential impacts are staggering. The increased cooperation and growing awareness indicated by the opening of previously closed doors, despite the 11th hour feel, is exactly what we need to have any hope of understanding and meeting our climate challenges.

We had a meeting with a client in South Carolina Friday. Then I met with the Chicago Climate Exchange Monday. It is interesting how these two disparate groups are saying the same thing. Both see the logic in cap and trade versus command and control. Neither wants the EPA to manage the process (and in my opinion the EPA does not want to either). Both believe a cap-and-trade bill is going to occur in the first quarter of next year.  Both recognize that there needs to be a fundamental change to how we look at our inputs; whether it is oil, gas, or electricity.

The CCX is focused on trading environmental instruments. The amazing thing about the CCX is that they have contracts for the voluntary emissions reductions (CFI’s), Regional Greenhouse Gas Initiative (RGGI) credits, California Climate Action Registry (CCAR) credits, Renewable Energy Certificates (RECs),  and when issued credits under eventual legislation. This doesn’t even include the trading of emissions under the European scheme, which is done by the ECX. The exchange only creates contracts because they know they can make a market. So our friends in South Carolina are not the only ones recognizing the eventuality of a market.

The CCX is currently running a “special” - it normally costs $0.15 per metric ton to register a project on the exchange - however, they lowered the price to $0.05. This has led to increased registration of offset projects. Further, the current legislation includes all the offset project types that the CCX has allowed. Now, it is unclear whether the protocol will match those of the CCX (probably will be similar but technically different) The difference will be that of measurement not acceptance. So a project under the CCX may create 1,000 metric tons of offset could create 1,100 (or 900) metric tons under an eventual protocol.

The reason we work with the exchange is threefold:

1) We recognize that an exchange will lead to the most efficient clearing price

2) Forward thinkers can manage their future risks using futures, options and bankable credits

3) No matter how the eventual carbon markets come out the CCX contracts are written to adjust to them.

The Hamptons Green Alliance (HGA) is building a net-zero energy, carbon-neutral house. We at Verus are proud to be a part of this amazing project and to be working with, Certified Carbon Neutral custom home building firm, Telemark, who is the general contractor.

Telemark President, Co-Founder and Chief Executive Officer, Frank Dalene, is an environmentalist who builds quality custom homes and founded the Hamptons Green Alliance. It makes sense that he invented what he calls the International Carbon Equivalent Mechanism Attributed to Neutrality (ICEMAN™) to calculate and index the carbon neutrality associated with the production of materials and products using guidelines established as a result of the Kyoto Protocol, the Greenhouse Gas Protocol, and other similar efforts.

The market for green-built homes is growing especially as energy costs rise. We are seeing a move past LEED and into Carbon Neutral. According to a University of Michigan study, the building of homes represents 9% of the life cycle greenhouse gas emissions of a home. Living in the home represents the other 91% of the greenhouse gas emissions. Therefore, building energy-efficiency into your home makes a tremendous difference in your annual footprint.

Housing represents 31% of the Greenhouse Gas emissions in the US each year. Of these emissions, 90% come from natural gas and grid electricity. Basically, if you can be energy efficient you can make an important reduction in global climate change!