CA Governor's Global Climate Summit 3

By Mitch Jones, SFCC

November 17, 2010 - The Governor’s Global Climate Summit 3 recently finished after three days of discussions on new strategies to combat climate change.  Hosted by the University of California at Davis, this annual event led by California governor Arnold Schwarzenegger brought together private industry, environmental groups, and leaders from national and sub-national governments from around the world.

Marking Schwarzenegger’s last few climate acts as governor, the conference celebrated the overwhelming defeat of Prop. 23 and pushed for a way to get climate policy moving at the sub-national level since many national policies are stalled or have suffered serious setbacks.  Of all the news generated from this star-studded event (Prince Charles and David Cameron were available by satellite) two of the most interesting pieces were the launch of the Regions of Climate Action, or R20, and the announcement that California’s upcoming cap-and-trade market intends to accept REDD credits from Mexico and Brazil.

Discussed at the United Nations climate change meetings in Copenhagen last year, the R20 is a non-profit organization comprised of 100 sub-national governments, observer nations and corporations.  The aim of the group is to have 20 sub-national and national governments adopt comprehensive climate change policy within five years.  Since national policies are not easily adopted, members of the R20 want to use their combined economic weight to create climate treaties among members trying to create bottom up momentum toward federal policies.

Part of California’s commitment to a comprehensive climate policy will be the implementation of AB32, which will include a cap-and-trade system that will allow for carbon offsets from various sources. Forestry is expected to play a large role, including offsets generated from REDD projects (Reduced Emissions from Deforestation and forest Degradation).  The California cap-and-trade program will be the largest compliance scheme to include REDD credits, ideally spurring more funding and development for forest conservation.

Furthering California’s commitment to REDD, Gov. Schwarzenegger signed a pact at the Climate Summit with the governors of the Mexican state of Chiapas and the Brazilian state of Acre to develop REDD pilot projects in those states whose credits will also be accepted under AB32.

In a separate announcement on Wednesday, Nov. 17, Barclay's Capital has announced the first forward trade of California Carbon Allowances (CCAs) under AB32. The forward contract for delivery in December 2012 was documented under the Barclays capital carbon Allowance Forward Trade Agreement (CAFTA), developed with NRG Power Marketing.