Overview of 2011, Setting the Agenda for 2012

Letter from CEO David Antonioli
Dear Friends & Colleagues,

December is the time to look back on achievements, and I’m happy to say that 2011 was a stellar year for VCS. Despite major uncertainties in global markets, VCS grew rapidly in 2011, surpassing even our own forecasts. Here’s a short list of what we achieved:

  • VCS Version 3 released, consolidating requirements and streamlining usability
  • New name and website launched, highlighting verification, building trust in brand
  • Ten AFOLU methodologies approved, 5 million AFOLU credits issued, first VCS REDD credits issued
  • Jurisdictional REDD committees (advisory and technical) convened, bringing together representatives from more than a dozen countries to collaborate and set forth pathways for nested REDD
  • Rules for standardized methods developed and approved, setting out best practice for the new generation of crediting approaches in 2012 and beyond
  • VCS endorsed by key voluntary frameworks in Australia, Chile and Costa Rica as well as Canada’s CSA Registered Carbon Neutral Program
  • On behalf of British Columbia, Pacific Carbon Trust purchased VCUs from a local forestry project to meet the Province’s carbon neutrality regulation
  • Partnership inked with Fundación Chile to open VCS office for Latin America
  • Requirements released for avoided conversion of grasslands and shrublands
  • Projects registered surpassed 700; total credits issued surpassed 70 million

In addition, we made major headway on requirements for crediting wetlands and jurisdictional REDD, laying the groundwork for further advances in 2012. I will provide a 2012 outlook in the first quarter. But for now, let me say a quick word about COP-17.

Needless to say, we are thrilled that the EU and nine other nations agreed to a second Kyoto commitment period and that the negotiations bridged the Annex 1/non-Annex 1 divide, opening the way to a future global accord. We also welcomed the (incremental) progress on REDD+ reference levels and safeguards – and the addition of articles in the SBSTA text to allow subnational governments to move toward setting reference levels and MRV systems. This could help early-acting states and provinces advance, serving as a stepping stone to national-scale accounting.

We saw positive signals on standardization, with the CDM Executive Board receiving a clear mandate to continue its work on simplified top-down baseline and monitoring methodologies, tools and standardized baselines. And we were happy to see rules for carbon capture and storage advance, backed by a buffer credit “insurance” system similar to what VCS pioneered in the AFOLU space. This is just one small example of the power of demonstration projects, and we will need many more such demonstrations to ensure the continuing development of carbon markets.

We believe the tools we have been developing (notably for standardized methods and jurisdictional REDD) have the potential to open the way for the demonstration projects we need. Below is a summary of where our work stands at the end of 2011. We will redouble our efforts to continue advancing this work in 2012.

David Antonioli

Program Updates

Where we stand: Standardized Methods, Jurisdictional & Nested REDD
As the year draws to a close, both of our major 2011 program development initiatives are well on their way to completion.  Indeed, new guidance and requirements for using standardized methods are already approved and being prepared for January release. The requirements will provide greater clarity for the development and use of positive lists and performance benchmarks to lower transaction costs and scale up emission reductions in 2012.

Our Jurisdictional and Nested REDD Initiative is advancing and garnering input from key REDD jurisdictions along the way. In the fourth quarter, we released summary draft technical recommendations and a JNRI fact sheet. We expect to release draft JNRI requirements in early 2012.

Looking Ahead: Double counting paper slated for January release
In January, we will release a short paper on double counting and most likely a minor clarification of VCS requirements. The paper sets out a logical framework for assessing and addressing double counting in a global environment where, even with a new Kyoto commitment period, we will have different and possibly overlapping compliance regimes. Carbon markets will need rules to credit and account for emission reductions between countries. The paper will set out a framework to clarify this debate.

Methodology pipeline

Open for comment: Pacific Carbon Trust submits forest carbon protocol
On 13 December, a new forest carbon methodology from British Columbia was posted for public comment. Pacific Carbon Trust submitted the Forest Carbon Offset Protocol for assessment and approval under VCS. See theProtocol for the Creation of Forest Carbon Offsets in British Columbia

Open for comment: Peatlands methods by Silvestrum, Winrock/WWF-Germany
On 13 December, two new methodologies were posted for comment for crediting the carbon benefits of peatlands restoration and/or conservation activities. The peatlands methodologies were submitted for approval under VCS by Silvestrum and Winrock/WWF-Germany, respectively. See methodologies under development