- Q: How is the Climate Action Reserve different from the California Climate Action Registry? Is the California Registry also certifying carbon offsets?
A: The Climate Action Reserve was previously named the California Climate Action Registry (California Registry). It began as a program of the California Registry and became the parent organization in April 2009. While the California Registry focused on GHG emission inventories, the Reserve is focused on developing standardized GHG reduction project protocols, serving as a registry for GHG reduction projects, and tracking GHG offsets through a publicly accessible database.
- Q: How is The Climate Registry different from the Climate Action Reserve?
A: The Climate Registry is a sister organization of the Climate Action Reserve that supports entity-wide GHG emissions inventory reporting and verification for all of North America. It does not support the registration or tracking of GHG emission reduction projects. More information is available at www.theclimateregistry.org.
- Q: What is your relationship with NYSE Blue?
A: NYSE Blue is the software provider for the Reserve. NYSE Blue also handles the billing, transactions and payments that occur through the Reserve.
- Q: Do you accept CDM methodologies as approved Reserve protocols? Do you recognize Gold Standard projects?
A: No. Only project protocols that are developed by the Climate Action Reserve are accepted for use in our system. The Reserve often looks to CDM methodologies as a starting point for our protocols, but CDM methodologies (on which the Gold Standard relies) do not have the standardized additionality and/or baseline criteria that are built into our protocols. CDM methodologies are also designed for projects in developing countries, which are not always appropriate for use in the United States.
- Q: What is the difference between the Climate Action Reserve and the Chicago Climate Exchange?
A: The Chicago Climate Exchange (CCX) operated from 2003 to 2010 as a voluntary, for-profit GHG trading system. Under this system, CCX members agreed to legally binding voluntary GHG reduction targets. To comply with those targets, which were set as a percentage of a historical baseline, members had to either reduce their emissions internally or purchase tradable allowances or offset credits from other members who had generated GHG reductions. The CCX developed its own set of protocols for quantifying and certifying emission reductions from offset projects. However, offset credits comprised only a fraction of the total number of tradable emission certificates issued by the CCX (the majority were emission allowances). The CCX now operates as the Chicago Climate Exchange Offsets Registry Program, which more closely resembles the Climate Action Reserve model but is based on CCX protocols. The Reserve is not an exchange, but rather a non-profit registry that serializes and tracks GHG reductions generated in adherence to our protocols and independently verified by accredited verification bodies. Although offset credits may be transferred between accounts in the Reserve registry, credits are not traded through the Reserve system and the Reserve plays no role in setting the price for CRTs.
- Q: Can the CRTs also be sold on CCX?
A: CRTs cannot be sold on the CCX system. However, CRT futures can be traded on The Green Exchange and the Chicago Climate Futures Exchange (CCFE).
- Q: What is the relationship between the Reserve and CRS’s Green-e Climate program?
A: The Climate Action Reserve is an Endorsed Program by Green-e Climate. Green-e Climate is a consumer protection program that provides certification for greenhouse gas (GHG) emission reductions sold to consumers on the retail market. This consumer-protection program strengthens the voluntary market by providing credible oversight of and transparency to retail offset products. Green-e Climate is a program of Center for Resource Solutions (CRS), a nonprofit that creates policy and market solutions to advance sustainable energy. Learn more about Green-e Climate at www.green-e.org/climate.
- Q: Is it possible to transfer projects to the Reserve from other registries?
A: Eligible projects that have been registered with other registries may be transferred to the Reserve according to the rules and deadlines outlined in the Program Manual. In addition to completing program requirements, such as verification by a Reserve-approved verifier that the project meets the Reserve’s project protocol requirements, the project developer must also submit a Project Transfer Form and provide the Reserve with a signed Project Transfer Letter confirming that no additional emission reductions/removals will be registered for the project under its old registry while it is listed with the Reserve. For example, a livestock or landfill project could be transferred from another registry because the Reserve has protocols established for these kinds of projects. The project would only receive credits from the Reserve for the remainder of its crediting period (measured from the date the project started operation, not from the date of transfer). No credits for prior years issued under another program may be re-issued or transferred to the Reserve.
- Q: What is the status of the relationship between the Climate Action Reserve and the Verified Carbon Standard (VCS)? Will Reserve methodologies be applicable under VCS, or will the certifications have any kind of reciprocity in the near future?
A: The Reserve is the first GHG program in the United States to be approved by the VCS. Thus, all of the Reserve’s project protocols are approved methodologies under the VCS. This means that all reductions verified under Reserve protocols and registered as CRTs on the Reserve, excluding forestry, are eligible to be converted to Verified Carbon Units (VCUs). VCUs cannot, however, be converted to CRTs.
- Q: How does a project developer obtain VCS approval for a project using Reserve protocols? In which tracking system are the CRTs/VCUs credited?
A: All projects registered on the Reserve are eligible for approval under the VCS and all CRTs issued by the Reserve, excluding forestry, are eligible for conversion to VCUs and tracking on a VCS-approved registry. No additional verification or approval is needed from VCS. More information on VCS is available at www.v-c-s.org/.
- Q: How will the Reserve interact with the VCS registries (Markit Environmental Registry, NYSE Blue, Caisse des Dépôts), which also provide for issuance, trading and retirement? How does the Reserve’s role as a registry differ?
A: While the Reserve is an approved program under VCS, it is not an approved VCS registry. In order to create VCUs using the Reserve, a project developer would first register a project with the Reserve and have CRTs issued. The project developer would then request the CRTs to be transferred to a VCS-approved registry and re-issued as VCUs. Since the Reserve and the VCS registries use the same software provider, this transfer and re-issuance will be seamless.
- Q: Do you plan to automatically recognize a VCS-approved protocol?
A: No. Although the VCS recognizes the protocols developed and credits issued by the Reserve, this recognition is only one-way. The Reserve does not issue credits for projects verified against protocols developed under other programs, or that use verifiers that have not been accredited by the Reserve.
- Q: Would new protocols automatically be VCS-approved as well?
A: Yes. The Reserve is an approved program under VCS; this means VCS automatically recognizes all projects and protocols allowed by our program, including new protocols we develop in the future.
- Q: What kind of fee structure will be involved with transferring CRTs to the VCS registry?
A: Under VCS Version 3, the conversion fee of GHG credits from approved GHG programs is $0.05/VCU. On the Reserve side, the $0.03/CRT transfer fee that is levied when moving CRTs between Reserve accounts also applies when transferring CRTs to a VCS registry.
- Q: What happens to the Reserve if a federal mandate is established for offsets?
A: While we cannot predict how or when the federal government will regulate GHG offsets, we are confident that we are developing a program and processes that will ultimately inform their actions. The Reserve has already been recognized as a source of high quality offsets by a number of government bodies. For example, the State of California has recognized four Reserve project protocols under its landmark Global Warming Solutions Act, AB 32, and Pennsylvania has named the Reserve as a recommended source of offsets for businesses operating in the state. We believe the Reserve is also well positioned to be a supplier of offsets for the Western Climate Initiative. All of this leads us to believe that the Reserve will be recognized by a federal offset program.
- Q: How do you expect the Reserve to interact with the Western Climate Initiative?
A: Some of the offset protocols developed for the Reserve apply to project types that have been identified as “a priority for investigation and development” under a possible Western Climate Initiative (WCI) cap-and-trade program. These include manure management, forestry (afforestation/reforestation, forest management, and forest preservation/conservation), urban forestry, and landfill gas management. It is possible these protocols will be considered by WCI program designers. It is unclear right now whether there will be any broader form of interaction between the Reserve and WCI.
- Q: Is there any overlap with RGGI offset protocols? Can CRTs be used to meet RGGI requirements?
A: Both the Reserve and the Regional Greenhouse Gas Initiative (RGGI) have performance-based offset protocols for landfill and livestock operations, and for re-foresting of land that has been out of forest cover for a minimum of 10 years (RGGI refers to this as afforestation). RGGI also has offset protocols for:
- Reduction in emissions of sulfur hexafluoride (SF6) in the electric power sector
- Reduction or avoidance of CO2 emissions from natural gas, oil, or propane end-use combustion due to end-use energy efficiency in the building sector
- Q: What kinds of projects are eligible for registration?
A: Currently, the Reserve accepts the following project types:
RELATIONSHIP/INTERACTIONS WITH OTHER ORGANIZATIONS
VERIFIED CARBON STANDARD
INTERACTION WITH GHG REGULATIONS
- Coal mine methane capture and destruction
- Forest (reforestation, avoided conversion, improved forest management)
- Landfill gas collection and destruction (U.S. and Mexico)
- Livestock manure management gas capture and destruction (U.S. and Mexico)
- Nitrogen management
- Nitrous oxide abatement at nitric acid plants
- Organic waste composting
- Organic waste digestion (including co-digestion)
- Ozone depleting substances destruction
- Rice cultivation
- Urban forest
A: No. Currently, we do not have any fuel-switching project protocols. Boiler efficiency (which includes some types of fuel switching) has been assessed through development of an issue paper which can be found on the Future Protocol Development webpage.
A: Yes. All of our project protocols apply to the entire U.S. We have also approved versions of our landfill and livestock protocols for projects located in Mexico. We plan to extend our project protocols to Mexico and Canada in the future.
A: You may upgrade to a newer protocol with certain restrictions. 1) You must upgrade to the most recent version adopted by our Board and listed on our website. 2) Your project must be in conformance with all monitoring/metering requirements, calculations, and eligibility requirements of the newest version. If you choose to upgrade to the newest version, you do not need to notify the Reserve in advance. You will need to upgrade the monitoring plan and all project activities to be in conformance with the newest version and then notify the lead verifier so that the project may be verified to the correct standards.
A: No, you may use the protocol version under which your project was listed for the duration of the crediting period. If errata and clarifications are released that correct or codify certain elements of the protocol version you are using, you must incorporate the errata and clarifications posted for that version.
A: The Reserve will allow variances from protocol requirements only where Reserve staff determines that such variances are acceptable. Variances are only granted for deviations from requirements related to monitoring or measuring of GHG reductions or removals, not eligibility requirements or general methodological approaches specified in the protocol. To submit a project variance, the project developer must complete and submit a Request for Project Variance and pay a $1,000 fee. More details on the process can be found in the Program Manual.
A: New project types are always welcome for consideration. The Reserve uses an intensive multi-stakeholder process to develop its standardized project protocols. This process generally takes 9 to 12 months from start to finish. You may see what project protocols we are in the process of developing by visiting our Protocols webpage. Once the development process is initiated with the formation of a workgroup, the protocol in development will have its own webpage with additional information on timeline, workgroups, contact information, background resources, etc.
A: The Reserve welcomes your ideas for new project protocols. The project concept submission and review process is described in detail on the Future Protocol Development webpage. Previously submitted concepts and commissioned issue papers are also listed on that webpage and should be reviewed prior to new concept submission. If a similar concept has not been previously submitted, a completed Project Concept Submission Form can then be emailed to policy staff and the submissions are reviewed monthly.
A: While the Reserve is located in California, it is international in its scope. We use an internal screening process to identify candidate project types with good potential as carbon offsets across the United States, Mexico, and Canada. The Reserve takes into consideration a number of issues when assessing a project type for development and they are described in detail on the Future Protocol Development webpage.
A: All protocols that are adopted by the Climate Action Reserve Board need to go through our multi-stakeholder development process, regardless of whether the methodology has been accepted by another program or registry. You can submit methodologies created by other entities through our project concept submission process, described on the Future Protocol Development webpage. If we decide to move forward with the project type, the methodology would become the starting point for the protocol development process. Having a fully-developed methodology to start with could speed up the development process significantly.
A: Our protocols assess project additionality using a technology or performance threshold (Performance Standard Test) and a regulatory additionality test (Legal Requirement Test). For each of our protocols, a threshold analysis addresses the issue of financial additionality by identifying a class of projects or activities that may be considered “business as usual,” taking into account common practice and other variables. Projects that fall within this class are presumed to be financially viable without access to GHG credits, i.e., not additional. Projects outside of this class are presumed to be additional as long as they are not required by law. The development of a performance threshold is a data intensive endeavor, but once the threshold is established it provides a more streamlined and objective means for determining project additionality than the financial examination of individual projects.
A: There are no restrictions on who may comment during review periods. We hold a 30-day public review and comment period during the development process for each of our protocols. We distribute the notice of the public review period to the Reserve newsletter mailing list and to Reserve account holders. During the public review period we also hold an in-person public workshop with conference call and webcast capabilities. Click here to add your e-mail address to our mailing list.
A: The Reserve’s protocol development process is stakeholder-driven; we rely on outside experts and interested parties from business, government, the non-profit sector, industry, and academia to guide the development of protocols. Each protocol development effort begins with either a scoping meeting or a kick-off meeting, where we ask attendees to express their interest in participating as a workgroup member or an expert reviewer. We also send announcements to our mailing list to solicit interest when we begin the protocol development process. Workgroups are then formed by invitation to ensure a well-balanced mix of representatives, selected based on their relevant experience and expertise in the protocol subject matter and their knowledge of the GHG market, financing, technology, research, standard practices and GHG accounting related to the project type.
A: Positive social and environmental impacts are not quantified in the Reserve protocols. However, these positive "co-benefits" are considered during the protocol scoping process. The Reserve strives to develop protocols for project types which have the potential to improve not only the climate system, but other environmental issues as well. The Reserve’s protocols do not require additional social or environmental benefits from a project, but steps are taken to ensure that GHG projects do not exacerbate or cause other environmental problems, or conflict with existing environmental regulations. All project protocols contain provisions for verifying that projects registered with the Reserve comply with all local, state, and national environmental regulations. Individual protocols may also encourage GHG project developers to consider and report on potential environmental co-benefits of GHG projects, such as reductions in other air pollutants, improvements in water quality, enhancement of wildlife habitat, etc.
EXPANSION OF PROTOCOLS TO MEXICO
A: We are taking a phased approach to adapting protocols for use in Mexico. Our first priority was to adapt the Landfill Project Protocol and the Livestock Project Protocol for use in Mexico, both of which were adopted on July 1, 2009. Currently, we are adapting the Forest Project Protocol for use in Mexico.
A: We are concentrating our efforts on expanding the Reserve and its protocols to cover projects throughout North America. As of yet, there are no plans to expand to other countries beyond Mexico, except in the case of the destruction of ozone depleting substances (ODS) sourced in Article 5 countries and imported to the U.S. for destruction.
ENERGY EFFICIENCY AND RENEWABLE ENERGY
A: We will not be developing protocols for energy efficiency projects that reduce consumption of grid electricity. The majority of the reductions would occur at facilities (i.e., power plants) not owned or controlled by project developers. Because of this, it can be difficult to establish ownership for the reductions, and the reductions may be prone to double-counting. This would be particularly true if a regulatory cap-and-trade program is imposed on the power sector. The Reserve has chosen to focus on project types for which ownership to reductions is relatively easy to establish and where double counting – now and in the future – is unlikely.
A: The Gold Standard was originally developed as a high-quality overlay to officially registered Clean Development Mechanism (CDM) projects, and its provisions and requirements are therefore largely tailored to a developing country context. The Reserve focuses on offsets primarily in the United States and eventually all of North America. Although we believe that U.S. investment in renewable energy and energy efficiency will be critical to mitigating climate change, there are several reasons why we are not focusing on grid-connected renewable energy and energy efficiency projects as a way to generate carbon offsets. The primary reason is that once an emissions cap is in place for the power sector, it will not be possible to issue offset credits for renewable energy and energy efficiency projects that affect emissions at capped power plants because doing so would result in the double counting of emission reductions. As a policy matter, the Reserve has chosen to focus on project types that affect sources, sinks, and reservoirs of GHG emissions that are unlikely to be covered under U.S. cap-and-trade programs in the near term.
A: You may be able to generate both CRTs and RECs from a methane destruction project because the CRT is created by capturing and destroying the methane (i.e. the GHG reduction that comes from turning CH4 into biogenic CO2), while the REC is generated by using the energy from that destruction to create renewable energy. Our livestock and landfill project protocols do not require project developers to generate energy, but rather to destroy the methane. We agree that you should not create both a GHG offset and a REC from the same activity (e.g., the sale of renewable electricity), but methane destruction and electricity generation are two separate activities resulting in separate types of GHG reductions.
Climate Reserve Tonnes (CRTs)
ACCOUNTS ON THE RESERVE
It is important that investors understand the risks associated with the purchase of environmental commodities, including voluntary carbon offsets like CRTs. Unlike instruments approved for use in regulatory cap-and-trade programs, CRTs cannot be used for compliance in such programs. There is little ability to accurately forecast future demand and prices in the voluntary carbon offset market. As a result, the Reserve strongly believes that CRTs are not suited for individuals as investments. This view is shared by the UK Financial Services Authority, as well as the International Carbon Reduction and Offset Alliance.
Pursuant to the California cap-and-trade program being implemented by the California Air Resources Board (ARB), certain categories and vintages of CRTs may be eligible as early action offsets for conversion to regulatory offset credits (ARB Offset Credits). Once converted and approved by the ARB, these credits may be used for compliance by regulated entities under California’s cap-and trade program. To date, only CRTs issued in connection with the four ARB-approved early action protocols (U.S. Forest, Urban Forest, Ozone Depleting Substances, and Livestock) are eligible to be converted to ARB Offset Credits. Here too, information on future demand and prices is limited, making such offsets unsuitable for individual investors.
Individuals may be interested in purchasing and retiring CRTs and other voluntary carbon offsets for the purpose of balancing out emissions from their activities, such as travel and energy consumption. When doing so, individuals should choose and purchase offsets from a credible offsets provider that ensures the environmental integrity of its emissions reductions. Be sure to choose a provider that discloses full documentation on where the offsets came from and how they were generated. For example, full documentation on projects registered with the Reserve is available online, so buyers and members of the public can be assured the offsets generated are real, permanent, additional, verifiable and enforceable. To contact a trusted source that sells CRTs to individuals for the purpose of offsetting personal emissions, please see our CRT Marketplace.
If you are an individual who has been marketed CRTs as an investment or if you have any other questions, please contact the Reserve at [email protected] or by phone at 213-891-1444 and press 2 to reach the Programs team.
A: In order to register a project on the Reserve, you must have a project developer account. Any person or organization may obtain a project developer account regardless of location or affiliation. To establish an account, visit our account registration webpage. There is a $500 annual account maintenance fee for project developers.
A: No. There is no “observer” account type in the Reserve. Detailed information about registered projects is publicly available for interested parties without an account. Accounts are only needed to register, verify, transfer, and retire CRTs, and having an account does not provide access to additional information about other projects that is not available to the public.
A: There are different types of accounts in the Reserve software, one of which is a project reviewer. Project reviewers are individuals that have been asked by the Reserve to review a project as part of the Reserve’s oversight of project registration and verification. These individuals may be experts in the project sector, representatives from the American National Standards Institute (ANSI), Reserve contractors, etc. Note that a project reviewer has “read only” access to information, and cannot make any changes to information or values within the Reserve. Project reviewers can only access information for the projects it has been granted access to by the Reserve.
A: No. Project developer account holders are able to buy, sell and retire CRTs on the Reserve.
A: Transparency is one of the key principles of the Reserve. This transparency provides interested parties with valuable information, helps inspire confidence in our GHG projects, and brings credibility to the Reserve itself. The public can access the following information online:
- Participating companies: Lists organizations that have an active Reserve account but does not include address or contact information.
- Projects: Displays projects that are listed, verified, and registered with the Reserve. Does not display any cancelled or rejected projects.
- Project CRTs issued: Shows projects for which CRTs have been issued and the original CRT issuance quantity. Does not indicate the current status of the project CRT balance.
- Search serial numbers: Allows searching for a serial number by batch number or block start or end numbers. This search feature is designed for someone (for example, a CRT buyer) who wants see details about a given CRT batch. It cannot be used to search every CRT issued for a company or project. Search results include whether the CRTs are active or retired and, if retired, the time and date of retirement.
- Retired CRTs: Displays the CRTs that have been retired by account holders.
A: A “beneficial owner” has the benefits of ownership of a security or property even though the title is in another name. For example, when an investor purchases stocks from a brokerage firm, they become the beneficial owner of those stocks, even though the brokerage firm remains the actual official owner in the system-of-record. In the case of CRTs, the beneficial owner has the right to use those reductions to offset their own GHG footprint.
A: There are two types of costs for registering projects on the Reserve – administrative costs paid to the Reserve and the costs for implementing and annually verifying your project. The cost of implementing and verifying a project can vary depending on the project type, size of project, etc. The current list of accredited verification bodies can be found here.
A: All of the fees collected based on our fee schedule cover the operating expenses of the Reserve, including software maintenance and updates, staff time and protocol development. The Climate Action Reserve is a not-for-profit 501(c)(3) registered in the state of California.
A: You must pay an account maintenance fee annually for as long as you are an account holder. The only exception is that there is no account maintenance fee for verification bodies.
A: Different registries approach this in different ways. Because the seller is receiving the funds from a transaction, we felt it was appropriate to put this fee on the seller.
A: Account holders with an active login may contact the Programs team at (213) 891-1444 ext. 2 or [email protected] to reset the password.
A: When setting up an account, a third party can sometimes be listed as the Account Manager and main point of contact for the account. If this individual or organization is different than the Account Holder name, both parties must sign and submit the standardized Designation of Authority form to [email protected].
A: Once you have set up an account, and it has been approved in our system, you should see several modules on your screen when you login, including “Account Management.” Under this heading, click on the link titled “Review/Edit/Add Logins.” Here you may add other logins with varying levels of access.
A: At the top of your home screen, you should see a link that says “Customize Page.” Click here to edit which modules appear on the homepage of your account, including “Account Management.”
A: Login to your account and look for the “My Reports” module on the left hand side. Click on the “My Invoices” link. Here you will see a list of all pending and paid invoices. You may click on the invoice number next to each one for details and a full, printable invoice.