Climate change has created an imperative to transition our global society towards low carbon economies to help lessen its imminent impacts. These economies would foster less dependence on fossil fuels and embed practices across all sectors that would mitigate the release of greenhouse gases (GHG) emissions into the atmosphere.
The carbon market has arisen to help facilitate this transition by providing a financial incentive to implement a wide range of GHG emission-reducing projects. For every ton of carbon dioxide that is either sequestered or abated from being released into the atmosphere that would have otherwise not occurred without the implementation of the particular project, one carbon credit can be incurred.
These credits can then be sold to buyers through the carbon market with the average price per credit ranging from US$10 - US$20. These buyers include developed countries or entities looking to meet their international or regulatory climate change commitments, as well as companies and individuals looking to compensate for their own emissions on a voluntary basis.
Valued at over US$140 billion in 2010, the carbon market is a growing opportunity for Jamaican entrepreneurs to raise revenues from implementing GHG emission-reducing practices. While the framework for carbon trading in Jamaica is being supported by the impending Carbon Trading policy and encouraged by the current Energy Policy, carbon trading prospects in Jamaica are only as promising as our ability to become carbon project proponents and developers, and to think creatively how carbon emission-reducing practices can be applied to our own operations.
Businesses, co-operatives, and associations from all sectors can participate; and in some cases, bundling individual small scale projects may be advantageous to cover their development cost and ensure their profitability.
Jamaica has already demonstrated successes in carbon trading, including the Wigton Wind Farm renewable energy project and the Compact Fluorescent Lamp Replacement energy efficiency project. However, while the energy sector will continue to provide significant scope for carbon trading, opportunities also exist in many other areas. For example, environmental stewards, landowners, farmers, and other entrepreneurs could consider pursuing these areas in the forestry and agricultural sectors.
Agricultural Land Management project activities include use of cover crops, use of improved vegetated fallows, manure management, conversion from annual to perennial crops and introduction of agroforestry practices on cropland, including coffee farms.
Improved Forest Management projects include activities that increase biomass carbon stocks of forest lands managed for wood products, including bamboo plantations, through improving forest management practices.
Reducing Emissions from Deforestation and Degradation (REDD) projects reduce the deforestation and/or degradation of forests, including mangroves.
Afforestation, Reforestation and Revegetation (ARR) projects establish, increase, or restore vegetative cover through the planting, sowing and other human-assisted activities.
The Jamaica Conservation and Development Trust (JCDT) is currently championing carbon trading in the forestry sector by pursuing plans to earn carbon credits to fund future REDD and ARR activities for the Jamaica Blue and John Crow Mountains National Park.
As golden rules, project activities must increase carbon sequestration and/or reduce GHG emissions, and meet the following requirements: additional (beyond business-as-usual activities), measurable based on an approved methodology, and independently verified. Essentially, the amount of carbon sequestered or the reduction in GHG emissions must be additional to what would have occurred without the project. To signal that these requirements have been met to potential buyers, project activities must also be certified by a leading carbon standard, such as the Verified Carbon Standard.
With an abundance of carbon developers and market intermediaries on the international scene available to manage the project development process and to help solicit project financing, there are many approaches to pursue carbon trading. Businesses, groups, or individuals with a project idea should connect with a local carbon broker who can better advocate their interests and advise the most appropriate approach, as the initial step for exploring any potential opportunity.
Carbon trading can provide extra revenues to fund activities that improve the efficiency of your operations while reducing GHG emissions, but requires creative and entrepreneurial thinking.
Carol Lue is a carbon trading broker and advisor