A blue-carbon framework workshop held last week highlighted a lack of public knowledge on what carbon, carbon trading and marketing are. Reporter NATHAN WOTI summarises discussions with general manager of REDD+ and mitigation Gwen Sissiou and measurement, reporting and verification and national communication division acting general manager for the Climate Change Development Authority Debra Sungi.
CARBON is now being traded like any other commodity.
The value of the carbon market has grown rapidly due to the demand from industrialised nations and multinational corporations who need to buy carbon credits to compensate for their greenhouse gas emissions, which is the main cause of global warming.
As the world changes socially and environmentally, people are beginning to realise the importance of the natural environment.
There is a campaign to protect the natural environment, especially forests and marine life.
Hundred and ninety-six countries gathered in Paris, France and signed the Paris Agreement.
Hundreds of years ago, the planet was at its coldest at just under 0.1 degrees.
Today, it is about 1.2 degrees.
This may seem a small jump but viewed from a science perspective, it is a huge leap.
The cause is human activities.
As human activities increases every day, so does the amount of carbon dioxide released into the atmosphere.
The gases, when trapped in the ozone layer, warms up the planet, causing icebergs in the North and South poles to melt, resulting in an increase in sea level, putting humans at risk.
The countries at the 2015 Paris Agreement signed a pact to stand united against a common adversary – global warming. And the main weapon is the forest.
With the signing of the Paris agreement on Nov 12, 2016, the developed countries with more carbon emissions agreed to fund the countries with have some of the largest forests.
And that is called carbon trading or marketing.
What is carbon marketing or carbon trading?
Sissiou: Carbon marketing or trading is the process of buying and selling carbon credits or offsets.
They are units of measurement used to quantify the reduction or avoidance of greenhouse gas emissions.
When companies or individuals reduce carbon footprint, they help to slow down climate change and protect the planet for the future.
The value of carbon marketing lies in its ability to incentivise businesses and individuals to reduce their carbon footprint by providing a financial reward for doing so.
This creates a market-based solution to address climate change, as companies can buy carbon credits to offset their emissions, while those who reduce emissions can earn credits to sell on the market.
What is the value (in estimation or exact) of PNG forest in regard to carbon trade?
Sissiou: The value of a forest regarding carbon trade is dependent on several factors, including the size and type of the forest, and the current market demand for carbon credits.
PNG has the third largest rainforest in the world with 14 types of forests.
In terms of carbon trade, PNG’s estimation of CO2 emissions and removals are provided on the forest reference level and the REDD+ technical annex which are reports that the government submits as part of eligibility conditions to participate in REDD+ under the UNFCCC (United Nations Framework Convention on Climate Change) and Paris Agreement.
To give an example of carbon value under the national REDD+ programme, the first REDD+ Technical Annex covered the 2014 -2015 period, which estimated carbon emissions reductions of 9 million tonnes of carbon dioxide equivalent for that period.
Given that there is no REDD+ market as yet even though it is called for in the Paris Agreement, countries can seek the results based payments for REDD+ from the Green Climate Fund.
The CCDA submitted the 9 million tonnes “results” in a proposal for funding.
Initial assessment against the Green Climate Fund (GCF) eligibility score card found that GCF could fund only 6 million tonnes of those results.
GCF “price” is about K17.59 (about US$5) per tonne of carbon dioxide equivalent (CO2e).
This proposal is still in process.
Should this proposal be successful the funds will flow to the GCF accredited entity working with government for implementation in line with the National REDD+ Strategy.
On the other hand, the voluntary carbon market platform VERRA which registers avoided deforestation projects such as the NIHT Project in New Ireland and April Salumei project in East Sepik, provides a market for intact forests but at the project scale.
PNG has the third largest tropical rainforest in the world and undisturbed mangrove forests with high species diversity, extending over many thousands of kilometers along the shores and all forests are now considered important in a global climate solution, the value PNG’s forests in the carbon value would appreciate over time due to the growing demand for carbon credits and perhaps markets will also be available.
How do we calculate it?
Sissiou: The calculation of carbon reduction is typically based on the methodology approved by a recognised carbon standard.
At the national level, PNG and other participating countries calculate the carbon credits to be sold based on a collectively agreed guidelines set by the UNFCCC.
CCDA has a national system in place called National Forest Monitoring System (NFMS) which uses Geographical Information System (GIS) and Remote Sensing technologies to collect the data that is required for estimating the emissions reduction. The system collects data and calculates the amount of carbon emitted into the atmosphere and the reductions.
This methodology considers factors such as the type of forest, its age, and the amount of carbon stored in the trees and soil.
For PNG, technologies such as remote sensing, ground-based measurements, and satellite imagery are used in this system.
The metric system used to measure carbon credits is typically based on the tonne of CO2e, which is a standardised unit of measurement used to compare different types of greenhouse gases.
All other greenhouse gases are converted to CO2e.
Carbon trading companies use different pricing mechanisms depending on the specific market and the factors mentioned above.
What is Blue carbon?
Sungi: Blue carbon is the latest in the carbon marketing.
There are a lot of activities around the nation to protect the marine lives and the reason is blue carbon plays an important role in absorbing some large amount of carbon emissions. It covers all the plants under the sea and on the coastline of shores.
Blue carbon ecosystems such as mangroves, seagrass beds and saltmarshes constitute two to six per cent of the tropical rainforest.
It also contributes to absorb up to 19 per cent of the annual carbon emissions from global deforestation.
During the three days Blue Carbon Workshop a lot of emphasis was placed on the protection of marine and forest life.
Both ecosystem have the same ability and potential to save the planet as well as provide economic activities for local marine and forest owners aimed at addressing and bring to light the key role marine ecosystems play in the reduction of carbon emissions and how best the government can regulate the activities through a policy framework.
Sissiou: The Government through the CCDA recognises the importance of blue carbon as well as blue carbon activities in the country and is planning on developing a blue carbon policy to provide an enabling framework for blue carbon activities.
What is the objective of the workshop?
Sungi: To assess PNG’s current status on Blue Carbon activities.
Inform decision-makers on challenges and opportunities of addressing blue carbon activities, strengthen coordination roles amongst stakeholders and re-affirm key action priorities and guidance from stakeholders for government consideration
Policy framework
The country currently does not have a regulatory framework around carbon marketing at the moment.
The creditors who are in the country are given permit from Verra–a climate change organisation that does the screening and verifies any company who wishes to go into a forest land and do carbon credits trade.
CCDA also gives a permit upon the advice from Verra, but they do their own screening and give suggestions for Verra to do the final check. But all these is done under the voluntary base in accordance with Article 6 of the Paris Agreement.
Even the Government does not have powers to stop investors to come and negotiate directly with locals.
This is because the country does not have a carbon marketing policy framework to allow the Government to monitor, regulate and allow for carbon marketing to take place, whether it be in the forest or marine.
We need a regulatory framework to ensure that everyone is working for a common goal.
