Developing Dimension: State of the Voluntary Carbon Markets 2012 Page: 49
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Figure 39: Transaction Volume and Average Price by Standard and Project Type
Sold to California Pre-compliance Buyers
MtCO2e/US$
3 .$12
$10.0 $10
2 $8.2 ...$8.3 $8
$7.1
L $5.5 $6
1 $4
$2
0 $0
Not Specified CAR ODS CAR and CARB CAR Livestock "Other" (see
Forestry notes)
Volume ooAverage Price
1OW. L wy)ti7(1 ril Adtop&. Uaea n OS; 66 Od..6 On. cAR cud tJ iid i an cLdty ,egts a t c) N SiGJ ly aCL'cw, r CiruCA v-
approved protocol forestry offsets and consists of CAR/CARB IFM and CAR avoided conversion. "Not Specified" includes both CAR early
action and CARB-approved protocols for which a project type was unknown/not reported. "Other" includes ACR retrofitting of high-
bleed pneumatic devices; VCS coal mine and waste water methane; CAR agricultural N20 and landfill methane from multiple standards.
ODS remains most popular pre-compliance project type Respondents attributed the largest volume of transacted
credits pre-compliance to CAR early action ODS credits. Because ODS projects' time to market is significantly less than
one year (California ODS project developer EOS says they have completed 26 production cycles with an average cycle
time of < 2 months) compared to other eligible project types, buyers and sellers were more willing to accept the
"unknowns" of how the early action credits will be converted to compliance offsets - rather than waiting to register
under the CARB protocol and develop CARB-certified offsets, as some did for livestock and forestry projects. The
higher price attained by ODS credits reflects buyers' belief that the credits are at least risk of revocation, based on the
perception that their relatively straightforward accounting of emissions reductions makes it less likely that project
developers would overstate those reductions.
Commitment, complexity weigh down forestry IFM projects were also a popular pick for pre-compliance buyers,
but saw slightly lower prices due to risk concerns. While reversals of forest carbon sequestration are not by
themselves grounds for credit revocation, buyers still priced the credits at a discount to other project types given their
greater complexity throughout the project cycle. CAR's Vice President of Policy Derik Broekhoff Observes, "I think
many people are waiting to see how real the market is and what the final rules will be before committing to 100 years
of forest project activities." He notes, though, that a growing number of projects are getting verified and moving
toward project registration in 2012, as market actors recognize that the California program is on track to launch.
Livestock methane sees smaller volumes, mostly California-driven Behind forestry, livestock methane projects
transacted another 1.4 MtCO2e. Beyond the challenges described above that are common to all California-compliant
project types, livestock methane projects continue to transact smaller volumes in part because project activities
themselves generate small- to medium-scale reductions. Throughout 2011, livestock methane credits transacted at a
price somewhere between ODS (at the top) and forestry (below livestock pricing), according to some stakeholders
because their risk of invalidation was perceived to be somewhere in the middle. As a California-facing livestock
project developer, Camco's Vice President Charles Purshouse pushes back against this notion. "There are a lot moving
parts within these projects -livestock projects are small and you have to be careful about recording and documenting
the data. But," he continues, "once you've gone through the process of putting all the data in front of a verifier and
they've approved of it, and CAR approves of it, it should be given equal weight as any other compliance offset
project." Most livestock methane credits in 2011 were transacted to pre-compliance buyers, in contrast to previous
years when voluntary buyers picked up a larger proportion of this volume.State of the Voluntary Carbon Markets 2012 I 49
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Peters-Stanley, Molly & Hamilton, Katherine. Developing Dimension: State of the Voluntary Carbon Markets 2012, text, May 2012; 1050 Potomac St., NW Washington, DC 20007. (https://digital.library.unt.edu/ark:/67531/metadc226602/m1/67/: accessed March 29, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; .