Is there really a voluntary market in the U.S. for greenhouse gas reductions? Source: Dr. Mark C. Trexler Mark: This is a bit of a complicated question. We're seeing a lot more press coverage recently of climate change mitigation efforts in the United States and the growth in mitigation markets. The Chicago Climate Exchange publishes what it characterizes as a market-clearing price for the U.S. market, but it's not an easy number to interpret. One way to evaluate the U.S. voluntary market is to ask the question of whether people with high-quality emissions reductions projects are able to find interested buyers of those reductions. Reasons for such transactions in a voluntary market can include complying with voluntary targets, or rendering events or products "carbon neutral." We had the opportunity to test this question a couple of weeks ago, when an intriguing project crossed our desk. The project is based on capturing and destroying methane that is leaking from a closed coalmine in Pennsylvania. We've done quite a bit of coalmine methane mitigation work, and we liked the project for several reasons:
We’re not project brokers, but we agreed to see whether buyers might exist for these reductions, if the owners extend their lease and install a flare. Interestingly, we haven’t found any takers. Why? Notwithstanding all the mitigation hype in the media, almost no one is buying project-based credits in the U.S. market. And if they are buying, it’s for very little money and only year-by-year. With those terms, it’s unlikely they’re buying reductions anywhere near as high-quality as those from this project. And we’re not alone. In response to our efforts to publicize this project, I’ve heard from colleagues around the country bemoaning the fact that they, too, can’t find a market for quality reductions. So in answer to your question, here’s a perfect GHG mitigation project available at modest cost with flexible terms. We keep hearing about the expansion of corporate and municipal mitigation activities, but is anyone looking for domestic offsets that aren’t simply cheap and PR-oriented? PR is important, but there should be SOME market for particularly high-quality reductions, too. We’re still looking. ----- Dr. Mark C. Trexler has more than 25 years of energy and environmental experience, and has focused on global climate change since joining the World Resources Institute in 1988. He is now president of Trexler Climate + Energy Services, which provides strategic, market, and project services to clients around the world. Got a question for our climate expert? Email Editor@GreenBiz.com. |