Governments are considering public transportation pricing schemes to help with the rising costs of energy and the burden of inflation. Germany tested the low-priced transit tickets that cost only €9 and also cut carbon emissions by 1.8 million tonnes.

Germany has been offering riders very low monthly ticket prices. This applies to all local trains, metros, trams, and buses for 3 months.

The pricing scheme is an effort to promote the use of public transport and ease the burden of high energy costs.

According to a public-transport organisation in Germany, VDV, the scheme was successful.

52+ million people have bought the €9 tickets, which reduced car use and cut carbon emissions by 1.8 million tonnes.

Oliver Wolff, VDV’s CEO said that:

“The 9-euro ticket not only relieved citizens financially but also had a clearly positive effect on the climate.”

Notable Impacts of Low-cost Public Transportation

The discounted ticket is a huge price reduction because monthly tickets for local transport in Berlin costs €107.

Among the new buyers of monthly tickets since June, more than half said the cheaper price was the key incentive for their decision.

The country’s national rail authority, Deutsche Bahn, reported that it has sold 26 million of the low-cost tickets alone. And over the summer months, they saw a 10% increase in public transport passengers.

As such, they called the 9-euro ticket experiment a total success.

The decision to subsidize the tickets comes as Germany continues to see high inflation, which hit around 8% last month.

Months before this scheme, the ridership was on a slight downward trend.

Alongside reductions in CO2 emissions, the pricing mechanism also improves air quality in metropolitan areas.

Researchers at the University of Potsdam noted that air pollution levels go down by up to 7% as a result of the low-cost ticket.

They said that their findings may have significant implications on policy and health. Their results show that subsidizing public transportation may be a viable way to lower air pollution, particularly in cities.

That can contribute to the UN’s sustainability goal of creating more resilient, safer, and healthier urban areas.

Sustainable Road Transport and Pricing

The results of the experiment reflect the World Economic Forum’s recent report on Sustainable Road Transport and Pricing.

The paper advocated for affordable public transport to boost “adoption and reduce the financial burden for current users.”

WEF’s report argued that road pricing systems should be designed to account for the economic, environmental, and societal impacts of public road transportation. Incorporating these impacts in individual choices means considering the following:

In the U.S., emissions from transportation account for about 27% of the country’s total emissions, making it the largest contributor.

In the EU, transport footprint has jumped by 33% since 1990 while other sectors have cut down emissions.

As shown in the chart below, light-duty vehicles (passenger cars and vans) are the greatest contributor to EU transport GHG emissions.

The carbon footprint from heavy-duty vehicles (trucks and buses) is #2, followed by marine and aviation.

Transport remains a key challenge to achieving the EU’s climate targets. In fact, an analysis shows that transport alone can emit more than the bloc’s total share of the Paris Agreement’s 1.5°C carbon budget.

And that’s even under an ambitious decarbonization policy scenario.

As EU member states are looking for ways to curb transport emissions, the public transportation pricing scheme in Germany may offer one solution.

But this 9-euro ticket scheme expired at the end of August. Still, many advocates are pushing for an extension. Wolf remarked that:

“All responsible actors should therefore now decide quickly on the continuation and further development of such an offer… If we take the traffic turnaround and climate change seriously, then we have to act now.”

As noted by the EU lawmakers, 15% of the bloc’s total emissions come from road transport. And so cutting these emissions is vital if the region has to reach its climate goals.

The post Public Transportation Pricing Schemes Can Cut Emissions appeared first on Carbon Credits.

The mid-sized and smaller pension schemes in the UK are under tighter rules as new reporting regulations are requiring more detailed information.

The UK has been one of the fastest countries to adopt the Taskforce on Climate-related Financial Disclosure (TCFD) reporting requirements into law. This covers corporates, regulated financial institutions, and pension schemes.

Large pension schemes in the country have to report climate risks in line with TCFD guidance since last October. This is also part of the Occupational Pension Schemes Regulations 2021.

According to a law firm associate, the trend goes towards demanding more and more detailed information. He also added that:

“The aim is clearly a good one. That said, the regulations are detailed and it is going to be quite an uphill battle for smaller schemes to comply. There will be a challenge to find the time and resources.”

The requirements stem from the 2017 recommendations of the Financial Stability Board (FSB), which was a forum set up in the wake of the 2008 global financial crisis.

Pension Schemes as Responsible Stewards

Schemes in the UK have to disclose four measures in their accounting which include:

the total carbon emissions of all the scheme’s assets;
a measure of the intensity of such emissions per unit of currency;
a measure of the trustees’ own choices in relation to climate factors; and
a measure of the extent to which the scheme’s investments align with the aim of the Paris Agreement to limit global warming to 1.5°C.

The last measure has become compulsory only recently. This obliges trustees of the schemes with the Paris goals as their 3rd measure to find a new one.

Speaking on the recent change in reporting for pension schemes, the Department for Work and Pensions (DWP) Secretary noted that it’s to support trustees in their climate disclosures.

And so more work is necessary to refine methodologies and ensure consistent and robust reporting. This is vital to also ensure that schemes act as responsible stewards on behalf of millions of UK pension savers.

Commenting on this, Director of Policy and Advocacy at the Pensions and Lifetime Savings Association, Nigel Peaple said:

“As we enter the next phase of scheme reporting, it is important that the largest companies and asset managers meet institutional investors’ expectations… by enhancing their climate impact disclosure, as well as fully implementing their regulatory responsibilities within the TCFD regime.”

Getting enough information

Preparing TCFD reports started with larger pension funds last year. But it includes mid-sized operators this year, too, from £5 billion in assets under management to £1 billion.

This would be challenging for smaller pension schemes in the UK. One challenge is the ability of trustees to get relevant information from asset managers.

This may not be the case with listed equities and corporate credits. But it might be for emerging markets and private asset classes where confidentiality is a concern.

For instance, Hymans Robertson, a pensions and financial services consultancy firm stated that private market managers are failing to provide their clients with the information they need to manage climate risks.

The firm’s analysis revealed the industry-wide concerns about the incomplete disclosure of climate data.

Hymans also stated that the reporting of carbon emissions data is not yet commonplace. It said that:

“Managers of property and infrastructure funds are better prepared with just under half – (44%) for property and 48% for infrastructure – providing data on carbon emissions… In contrast, private equity and private debt managers were able to report significantly less information on climate issues – no private debt managers in the survey provided carbon emissions data.”

In line with this, the DWP remarked that it will review the existing thresholds for pension schemes’ climate-related reporting.

Taking into account (or ignoring) the risk

Reporting in line with the TCFD framework measures financial risk linked to climate change. But this is not the only concern for UK pension schemes.

Asset managers must also take into account stewardship and engagement. This means looking at ways how the financial sector can help in the race to net zero.

Some experts in this matter said that some schemes will find it impossible to meet the new TCFD reporting requirements.

While operators may see it as a once-a-year exercise, there’ll be more requirements on what the trustees need to do.

A worst-case scenario would be some firms will refuse to give trustees the TCFD information. And this will place their portfolio under question.

If such happens, any scheme that ignores climate change reporting also turns a blind eye to a major risk to pension savings. Most importantly, they’re missing out on vital investment opportunities.

Pension schemes in other countries have been diligent enough in disclosing their climate change data.

Allocating capital more efficiently

Regulators across the entire UK investment chain are committed to disclose climate information. And the government is making plans to reach its target of net zero carbon emissions by 2050.

This means that resilient pension schemes protecting savings from climate risk are within reach. But to achieve this, pension trustees should focus on their three major duties:

Exercise of investment powers for their proper purpose;
Take into account material financial factors (including transition and physical risks); and
Act according to the “prudent person” principle.

The prudent person principles means:

“Trustee investment powers must be exercised with the ‘care, skill and diligence’ that ‘a prudent person would exercise when dealing with investments for someone else for whom they feel morally bound to provide.”

Performing those duties will allow for a more efficient allocation of capital. Better yet, firms and investors alike will understand the financial implications of transitioning to a lower-carbon economy.

Finally, the International Sustainability Standards Board (ISSB) also has new climate reporting standards. Adoption of these standards will further place more pressure on climate reporting by pension schemes.

But the UK government has committed to promptly implementing the ISSB standards. The goal is to help pension scheme savers in their investment decisions.

The post UK Pension Schemes Under Pressure for Climate Impact Reporting appeared first on Carbon Credits.

As the global economy is racing to net zero emissions, Environmental, Social, and Governmental (ESG) investors are considering how they can measure the Scope 4 emissions into their analysis.

The path to net zero has been the common direction as the world tackles climate change. But taking this road calls for going beyond the common ways of categorizing various emissions into different scopes.

Many are familiar with the Scope 1, 2, and 3 emissions. Yet, we also have to take into account the climate-related benefits of new technologies and products. Or what is otherwise called the Scope 4 emissions.

This new category refers to the emissions saved or avoided for customers/clients due to product performance.

ESG investors are now thinking about factoring this kind of emissions into their portfolio analysis.

Who Should Measure Scope 4?

The first three emissions sources are well-known within the investment world. But Scope 4 emissions emerge as the new disclosure frontier for investors to ponder.

Scope 4 emissions are the avoided emissions happening outside of a product’s life cycle or value chain.

Integrating it is crucial when an investor prefers a holistic approach on a firm’s contribution to Paris Agreement climate goals.

The common examples of companies adopting this new emissions disclosure are in the capital goods sector. They develop and provide a wide range of parts and even automation solutions.

As such, they’re in the position to allow for energy efficiency, green mobility, and decarbonization of electricity systems for a broad range of products.

More significantly, they provide equipment and technological solutions to the end-users of the products. These users are often the largest emitting sectors affected by climate regulations.

Take for instance the case of Schneider Electric, a French company that focuses on digital automation and energy management. Through its variable speed drives (VSDs), the company offers a specific example of generating saved and avoided emissions on electricity use.

Using the VSDs allows customers to save on energy consumption by motors by regulating speed and rotational force.

Most notably, the energy company distinguishes between its saved and avoided emissions per type of product installation. The firm is also using a forward-looking energy mix in calculating Scope 4 emissions.

Plus, it’s even more interesting to note that Schneider Electric reports sales by country. This enables them to adjust for national electricity generation sources. They can also measure different averages for the emissions of purchased electricity by nation and by year.

For example, one of its advanced platforms helped product users to save as much as 134 million metric tonnes of carbon dioxide since 2018. This is equal to the emissions of 28+ million gas-powered passenger cars driven for a year.

Key Barrier in Reporting Scope 4

Apart from a limited method of disclosure, the biggest challenge in reporting Scope 4 emissions is the lack of standardization. This means firms need to have their own way to account for this emission and report any saved or avoided emissions.

But this issue is manageable as Scope 4 emissions are still in its early stage. And given the lack of standards in this field, firms can be transparent in their reporting methods and in auditing their annual reports.

For instance, when reporting saved/avoided emissions, companies must not deduct these from their real emissions to prevent mixing theoretical and real figures.

Rather, firms may apply a ratio approach where they report Scope 1, 2, and 3 emissions over saved/avoided emissions.

How Should Investors Take This?

The world is witnessing great efforts on avoiding emissions via the net zero pledges from corporations. But measuring scope 4 emissions is very new.

So getting consensus on measurement methods and improving transparency in reporting can improve its usefulness to investors.

It can also help bring a consensus among climate standards and bodies as to how to include Scope 4 emissions officially in climate goals. It’s not an official category of the GHG Protocol.

So, it doesn’t count towards a firm’s total emissions reductions right now.

Instead, it represents a theoretical measurement of emissions via a reference scenario only. This often involves comparing products to the average market solution. It’s a solution that’s previously in place or a previous generation of a product.

Measuring this metric enables the economy to appreciate the products’ decarbonization power. It also shows a company’s innovative quality.

Not to mention that the three known emissions scopes have their own limitations, too. They may understate the climate positive value of products.

Finally, disclosing Scope 4 emissions doesn’t only favor sustainability reputation but it can also show the real added value a company makes towards its ESG agenda.

The post Factoring In Scope 4 Emissions appeared first on Carbon Credits.

Are you looking to directly reduce your carbon footprint or support projects that cut emissions elsewhere? Then carbon credits allow you to do either of these.

A carbon credit is also called carbon offset in the voluntary carbon market (VCM).

Each credit goes through a general lifecycle process that starts from creation to retirement. Individuals and firms use these credits to voluntarily offset their emissions.

With growing pressure on corporations to take climate action, the VCM demand deems to grow up to 10x over the next 10 years and 30x by 2050 from 2020 value.

As such, we’re also expecting to see more carbon offset project developers enter the market to meet the rising demand.

This calls for a better understanding of the role of developers in the VCM. The same goes for the state of the carbon project developer ecosystem and its maturity level.

That’s important to inform the supply-side views on the market’s ability to deliver on the integrity claims of carbon credits.

Most notably, this article will also shed light on what are the top carbon offset project developers that contribute to the growth of the market. We’ll identify five of them to help you find the best developer you need.

The Role of Carbon Project Developers in the VCM

Delivering the promise of the Paris Agreement calls for adopting more ambitious emission reduction initiatives.

It also requires more commitments to develop carbon offset projects to neutralize unavoidable emissions.

It’s becoming clearer that well-designed VCMs are critical to achieve the Paris Agreement goal. That’s to enable the world to reach net zero emissions by 2050.

And carbon project developers play a central role in the VCM. They are key to delivering its success given the current state of the market and its projection.

Project developers perform several tasks to help ensure the growth of the VCM. These include:

Sourcing carbon offset projects
Working with carbon credit standards and verification bodies, and other partners, and
Bearing the financial risks of developing carbon projects

The Current State of Carbon Project Development

Observing the current state of the carbon project development ecosystem reveals a couple of insight.

One of them tells us that the carbon project developer ecosystem remains concentrated by volume into a few players with big portfolios.

Yet, it’s the small and mid-sized carbon project developers holding smaller carbon portfolios that dominate the market.

The difference is so huge that you’d think the developer market remains largely untapped. And it seems to be the case right now.

9 out of the top 10 carbon offset project developers by issued volume are working on large-scale avoided conversion / REDD+ or improved forest management projects.

Another notable observation is the dominance of avoidance carbon offsets, particularly with renewable energy.

Renewable energy developers, which are mostly from India and China, dominate the market by number.

But the recent supply shifts prompt project developers with avoided emissions portfolios to expand into nature-based projects.

However, lack of expertise in nature-based projects may limit developers with removal portfolios producing industrial carbon capture credits.

This may give them higher project development risks like fire.

Lastly, when it comes to type of project, nature-based seems to be dominant.

Almost half of total volumes of credits issued was from nature-based project developers. This result is due to high entry to market barriers.

Most issuances are in the hands of a few large nature-based operators in the Global South.

While the top carbon offset project developers of most improved forest management portfolios are in the U.S. Blue Source and Finite Carbon are the dominant players in this field.

Offset buyer preferences are forcing project developers to shift to nature-based solutions and removal credits.

But with limited new market players, there’s a risk of failing to meet increasing demand. This may further impact the current carbon pricing.

Project developers tend to focus on nature-based avoidance carbon credits. But other types of carbon credit projects are also available to consider for your offsetting needs.

With that being said, here are the top five carbon offset project developers that made it to our list.

Top Carbon Offset Project Developers

1. BlueSource, now Anew

Formally founded in 2001, Blue Source has a new brand name called Anew after merging with the Element Markets last June. It gets the top one slot when it comes to providing offset credits from improved forest management, carbon capture, and other projects.

It has offices in the U.S., Canada, and Europe, and an environmental commodities portfolio that extends across 5 continents.

Since inception of its legacy companies, Anew has the following achievements:

transacted 150+ million tonnes of carbon
provided 240+ million diesel gallons equivalent of renewable fuels for transportation
developed projects on over 3.5 million acres of forest and farmland
developed 400+ overall projects

Anew’s activities amount to the emissions avoidance of 539 million solar panels generating power for an entire year.

Plus, the firm also developed projects with protocols made via scientific review and public stakeholder processes. Oversight for these projects comes from the top carbon standards, including:

Climate Action Reserve,
Verified Carbon Standard (Verra),
American Carbon Registry,
California Air Resources Board,
Alberta Environment, and
Canadian Standards Association.

What sets Anew apart from other project developers is that it serves the multiple functions of a broker, trader, retailer and advisor in the carbon space.

Under its core project development expertise, forestry projects, Anew follows these steps for a project to be eligible for offset crediting:

Apart from developing natural climate solutions like forestry projects, Anew also offers the following services and project development:

2. Finite Carbon

Finite Carbon, founded in 2009, is North America’s biggest developer of forest carbon offsets by volume. It focuses mainly on improved forest management projects.

With offices in 7 US states, it combines unparalleled project development experience with extensive carbon market knowledge.

To date, this offset developer is able to achieve the following performance.

The developer generated over ⅓ of all compliance offset supply. It has also delivered 800+ million dollars to landowners.

Unlike other top carbon offset project developers such as Anew, Finite Carbon is working with landowners who have 5,000 acres or more. Anything less than 1,000 acres is not a cost-effective project for the company.

But with its upcoming Core Carbon program, those who own as little as 40 acres can enter the growing carbon offset market.

Its entire offset project development process can take up to 6 months long, depending on several factors. In general, it involves the following processes:

Same with other developers, Finite Carbon pays the capital for each project. And then it collects only a percentage of the carbon offsets once completed.

With its wide coverage, the developer’s projects are in every region and major forest type from the Appalachians to coastal Alaska. Below is its project map showing its forest projects.

If you’re after a project developer that demonstrates expertise in forestry offsets, Finite Carbon should be on your top list.

3. 3Degrees

For over 15 years, 3Degrees has been a pioneer in providing climate solutions. Within that time period in the project development market, the company has achieved these results:

The company also deals with many other carbon offset projects apart from nature-based solutions. They mostly include landfill gas capture projects.

3Degrees’ project development solution is broken down into 5 major phases:

Setting aside its proven track record in the space, what makes 3Degrees stand out from other top carbon offset project developers are a couple of differences. They include the following:

Quality Standards:
3Degrees works with all four of the major internationally-recognized voluntary carbon offset standards. They include Verra, Gold Standard, American Carbon Registry, and Climate Action Reserve. The firm ensures that each project adheres to approved protocols.

Tailored Solutions:
3Degrees help organizations build a portfolio of high-quality projects that are relevant to their business and engage stakeholders.

Portfolio Management:
The project developer takes a holistic approach to portfolio management. It works with clients to balance immediate needs with long-term program goals.

All these enable 3Degrees to be a strategic partner for entities looking to build a portfolio of high-integrity carbon reduction and removal projects. They include opportunities both for long-term and new project development.

4. Forest Carbon

Making it to the top 4 spot, Forest Carbon’s main goal is to restore degraded tropical forest and wetland ecosystems. These projects fall under the broad category of REDD+.

So far, it’s a premium restoration project developer in Southeast Asia. Its projects deliver benefits for local communities, biodiversity and investors.

With offices in Jakarta and Singapore, Forest Carbon’s team is built on a track record of success in the region. The team brings a decade of experience working on the ground, from mapping wetlands and assessing below-ground carbon storage, to winning community support.

The REDD+ developer follows these key project development stages.

Feasibility assessment:

Forest Carbon is on the ground to assess threats to tropical forest ecosystems and develop business models to protect them.

From the dry dipterocarp forests of Malaysia to the carbon-rich peat swamp forests of Indonesia, the developer specializes in assessing these areas. It offers the following major advantages in creating carbon credits from natural climate solutions:

Rapid GIS assessments with our in-house team
Automated carbon credit calculations
Drone-based aerial surveys

Project design:

In designing its REDD+ projects, Forest Carbon works exclusively under the Verified Carbon Standard (VCS). It also adopts the Climate Community and Biodiversity Standard.

Forest Carbon has designed Indonesia’s first peatland restoration project in Central Kalimantan under VCS. It also did the same with Seima, Cambodia – WCS Restoration Project.

Impact verification:

Forest Carbon is leveraging IoT sensors and machine learning for a project’s robust impact verification.

These IoT sensors monitor water table levels for peatland ecosystems. They also provide fire risk data in real-time in a project dashboard. The data generated make it easier to measure project impact by auditors.

5. C-Quest Capital

C-Quest Capital (CQC) is a social impact project developer that aims to transform the lives of families in poor communities worldwide.

The firm does it by providing access to sustainable energy services and clean energy technologies that reduce emissions.

CQC was founded in 2008 and is headquartered in Washington D.C., USA, with local offices in India, Malawi, Malaysia, Singapore, Cambodia and Australia. Its global teams lead project operations across Sub-Saharan Africa, Central America, and South and Southeast Asia.

The developer creates high impact carbon offset credits under three operational platforms:

Cleaner Cooking,
Efficient Lighting, and
Sustainable Energy (Nature-based Projects).

Together, they form the so-called Transformation Carbon projects. They all comply with specific carbon offset standards. They then go through rigorous 3rd-party assessments by auditors to ensure credits are real and measurable.

Currently, CQC certifies all new projects under the Verra Verified Carbon Standard (VCS) same with other top carbon offset project developers on our list.

Each project is registered onto a cloud-based data management system using Android phones or tablets. Registration involves data collection for monitoring and follow-up.

Doing all these are critical for project evaluation, verification, and improvement.

So, for high integrity and high impact offsets that help the poorest communities, CQC tops this project category.

As you can see, each project developer has its own set of processes when developing a project. But overall, you have to carefully think about the specific results you want to achieve.

They may follow the same offsetting standards but not all carbon offset project developers will make it to the top of our list. You’ll never go wrong with any of them.

The post The 5 Top Carbon Offset Project Developers appeared first on Carbon Credits.