V – Review of California Climate Action Reserve (CCAR)


California Climate Action Registry (CCAR)

The State of California formed the California Climate Action Registry (CCAR), a private non-profit organization promoting early action in reducing carbon emissions. CCAR is the leading standard in the US and much of experience from experts working on CCAR is being built into the Waxman-Markey Climate Bill (CCAR, 2009).

CCAR began as a voluntary scheme with that the State of California beginning to use CCAR as a cap and trade scheme from 2012. CCAR Forest Protocol is the most popular in the US for forestry projects (Carbon Positive, 2009a).

The analysis below has been assessed from information available at the CCAR website (CCAR, 2009); Forestry Sector Protocol version 3.0, (Climate Action Reserve, 2009) voted on 1st September 2009; Forestry Sector Protocol version 2.1 (Climate Action Reserve, 2007) in use since September 2007 is only analysed as a comparison when relevant;  including information provided by Joy Cernac from CCAR.

There are 3 projects registered that are already issuing credits and another 6 projects that are listed and in the process of validation.

Afforestation/ Reforestation         Score: 5

CCAR accepts afforestation, reforestation and improved forest management.

REDD        Score: 5

At the moment, version 2.1 does not allow REDD projects, but version 3.0 will be voted on 1st September 2009, which will include Avoided Conversion, a different name for REDD.

Location         Score: 3

Version 2.1 only accepts projects in California. However version 3.0 will accept projects from all around the US and potentially Canada, Mexico and Brazil after the US implementation.

Additionality          Score: 2

CCAR uses a top-down approach for additionality attempting to produce a sectoral definition of additionality. Other standards commonly use project to project analysis, instead CCAR defines sectoral variables and any project within that frame is automatically accepted.

Version 3.0 uses two tests to identify additionality:

Legal requirement test: projects must achieve reductions above any law for that project area.

Performance test: projects must achieve reductions above business as usual.

Some examples to pass the performance test:

Reforestation: A land that had no forest (less than 10% tree canopy) in the last 10 years automatically applies.

Improved Forest Management: automatically applies (the baseline scenario must be determined).

Avoided Conversion: this is the only one that is truly additional as the alternative land use (must show evidence) must have an economic value 40% greater than the current land use for forests.

Although the additionality test has improved largely from version 2.1 to version 3.0 it still lacks the guarantee that a project is actually additional. This additionality test does not identify barriers nor asks to provide evidence that carbon finance is the only reason that this project has been made possible (apart from Avoided conversion).

Methodology Approved       Score: 5

Version 3.0 has successfully corrected most of the weaknesses from Version 2.1. The new methodology is very similar to VCS and provides enough details to produce a good project design documentation.

Tools available include:

– Forest project definitions and requirements

– Eligibility rules and other requirements

– Defining a forest project’s GHG assessment boundary

– Quantifying net GHG reductions and removals

– Ensuring the permanence of credited GHG reductions and removals

– Project monitoring

– Reporting requirements

– Verification

The annexes provide very interesting data to use during the project development. The carbon sequestration has been quantified for wood products used in all eligible scenarios using a 100 year factor. This data is very helpful for project developers as it hastens the process and reduces costs.

For these reasons, the methodology will score 5.

Permanence         Score: 5

In Version 3.0, projects must ensure that carbon will remain sequestered for at least 100 years. There are three mechanisms to ensure permanence:

– Submit annual monitoring reports

– Sign the Project Implementation Agreement; any future owner of the project must comply with CCAR agreements and must retire CRTs to compensate if the project fails to deliver the credits.

– Buffer pool to cover natural disturbances based on a risk rating similar to VCS.

Permanence is properly dealt with and covers any risk associate with forestry projects and delivers the correct guarantees, for these reasons CCAR receives 5 points.

Leakage      Score: 5

Leakage is thoroughly assessed in Version 3.0. A risk analysis determines the potential risk of leakage as a percentage. That percentage must be discounted from carbon credits produced.

Version 2.1 was poorly handled; project developers only had to quantify off-site leakage. Reporting other types of leakage was optional.

Leakage assessment in Version 2.1 will have a score of 2, as projects may or may not have leakage (no guarantee).

Leakage assessment in Version 3.0 will have a score of 5 because it clearly identifies any leakage and provides the tools to identify and discount any leakage. The final result is based on Version 3.0.

Co-benefits     Score: 1

Only carbon reductions are quantified.

Registry*        Score: 5

Climate Action Reserve now uses third party regitries. All CRTs have a unique serial number which guarantees its uniqueness.

CCAR will receive the highest score.

*Errata: previously the analysis showed that CCAR was not using third party registry, however this information was incorrect. It has now been rectified.

Transparency        Score: 3

Every project’s documentation is publicly available on the registry website. However, there is no public consultation for projects; therefore it will only score 3.

ICROA          Score: 1

ICROA does not accept Forestry CRTs currently.

ICROA accepts all the other CRTs because VCS accepts CRTs as well. However, VCS does not accept Forestry CRTs because CCAR does not use a buffer pool (Version 2.1).

As Version 3.0 is using a buffer pool and has improved its methodologies, it is possible that VCS will accept Forestry CRTs which consequently will be accepted by ICROA.

In addition, ICROA is not fully satisfied with additionality. Therefore ICROA stipulates that a CCAR project developer must sign a letter stating that the project would not have been possible without carbon finance. It is assumed that future Forestry CRTs will request the same action.

For these reasons, CCAR will receive a score of 1.

US Market        Score: 5

CCAR is highly popular in the US market and serves as the basis for the new climate bill; therefore it will receive the highest score.

Comments

CCAR scores 44 points on the review. Version 3.0 (signed on 1st September 2009) has improved the methodology, permanence and leakage issues to the highest level with detailed tools to quantify carbon, a buffer is used for permanence and any leakage is calculated and discounted. In version 2.1, these aspects would have scored much lower. There is still room for improvement, notably on additionality which is still too loose, registry which needs to be third party operated and transparency, where public consultation of the projects needs to be introduced.

CCAR looks at additionality differently from other standards. Most standards assess additionality project per project, in order to guarantee that the project is additional. This approach may encounter the issue that some projects that are additional do not pass the test and therefore do not assist in addressing climate change. CCAR applies additionality with a sectoral approach and is looking to establish clear rules about which projects are or are not additional. CCAR is aware that not all projects approved are additional, but its objective is to ensure that all the projects that are additional are approved.

Lucio Pedroni of Carbon Finances says “In the end, simpler methodologies are better for the climate. It’s better to have 1200 projects and ten that are not additional, than to have only two that are perfectly additional” (Coren, 2009).

The CCAR registry score may improve in the near future if a wider US carbon registry is implemented. Signs show that this is likely to happen, notably with the opening of The Climate Registry that includes most of the states in the US, Canada and Mexico.

CCAR is considered the most progressive carbon standard in the US.

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