EcoSecurities and Carbon Markets

EcoSecurities and Carbon Markets

In June, we had the honour of speaking with Pablo Fernandez, CEO of EcoSecurities, and he spoke to us about EcoSecurities and the development of carbon markets. EcoSecurities has been around since 1995 and played a role in the beginning stages of the carbon market development when the Kyoto Protocol came into force in 1997. The Kyoto Protocol was an international treaty adopted on December 11th, 1997. This treaty was between 192 parties and was a commitment for parties to cut their total emissions of greenhouse gases on average between 2008 and 2012 by 5% below 1990 levels. As a result of the commitment to reducing emissions, Carbon Markets were developed. Carbon Markets is a trading system in which countries may buy or sell units of greenhouse-gas emissions to meet their national limits on emissions. Below are some of the highlights of the discussion.

EcoSecurities

According to Pablo, currently, EcoSecurities focuses on Carbon project cycles, which involve a holistic development of programs for businesses to manage their carbon. The typical process is as follows:

Identification: project screening and origination

Design: technical and financial assessment, project design documentation (PDD)

Structuring: project finance, prepays, stakeholder coordination

Development: Validation and registration, monitoring, reporting, and verification (MRV)

Commercialization: long-term offtakes, marketing, and sales

Carbon Markets

Carbon Disclosure Project (CDP) and Greenhouse Gas Protocol are reporting standards commonly recognized and respected to provide reliable carbon accounting. However, these are voluntary reporting standards applicable to voluntary carbon markets, as they are not required to be conducted by businesses.

Compliance Carbon Markets exist, and they are usually reliant on the government to set up regulatory requirements where companies have to pay for their emissions through a carbon tax or a cap and trade system. 

Carbon tax consists of requiring companies to pay based on the amount of carbon they produce. The more emissions, the more they pay. Therefore this program incentivizes companies to reduce their emissions to reduce the taxes required of them. 

On the other hand, a Cap and trade system gives companies a limit on their emissions. If they exceed their allotted amount, they can purchase the remainder from companies with excess space within their limit. This system rewards overachievement through the financial gain of selling extra carbon allotment and punishes those who go over the limit.

The voluntary Carbon Market typically has one of two aims. To be carbon neutral or to reach net zero. Carbon Neutral consists of offsetting carbon emissions through alternative means such as tree planting. For every specific amount of carbon released by a company, the company could plant a tree. Net-zero carbon aims to reduce carbon emissions as much as possible and then further applying offsetting techniques for the remainder of carbon attributed. HOWEVER, the IPCC science-based targets based on scenarios have signified that being carbon neutral is not enough, and we need to strive for net-zero carbon.

In striving for net-zero carbons, there are currently four primary international standards used to measure carbon reduction processes: CDM, Gold Stander, VCS, and ISO 14098. These standards offer frameworks or benchmarks for companies to apply to their business to achieve verification. Companies like EcoSecurities act as consultants to help distinguish which standards are best applicable to your organization and help implement the standards and gain certification.

The Carbon Markets are still on the verge of significant updates, with COP 26 right around the corner. To learn more about how organizations are involved with carbon markets, check out our June webinar featuring Pablo Fernandez.

Climate Action and Adaptation & Mitigation Day 2

You can check out recordings of our other sustainability webinars at https://www.environfocus.com/environfocusknowledge/webinar-series-recordings/ or click HERE.

EcoSecurities and Carbon Markets

Leave a Reply