CARBON OFFSETS 101 Definitions, Projects, Players and Trends August 6, 2014 Todd Jones, Green-e Climate Manager Center for Resource Solutions

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GREENHOUSE GASES AND CLIMATE CHANGE

Greenhouse Gas (GHG) Chemical Symbol Global Warming Potential (GWP) Carbon Dioxide CO2 1 Methane CH4 21 Nitrous Oxide N2 O 310 Hydrofluorocarbon HFC 140 - 11,700 Perfluorocarbon PFC 6,500-9,200 Sulfur Hexafluoride SF6 23,900

Source: IPCC, AR 5, Working Group I, Summary for Policymakers, pg.14, http://www.climatechange2013.org/images/report/WG1AR5_SPM_FINAL.pdf

Source: Hugo Ahlenius, UNEP/GRID‐Arendal, http://www.grida.no/graphicslib/detail/historical‐trends‐in‐carbon‐dioxide‐concentrations‐and‐temperature‐ on‐a‐geological‐and‐recent‐time‐scale_a210

Source: IPCC, AR 5, Working Group I, Summary for Policymakers, pg.18, http://www.climatecha nge2013.org/images/re port/WG1AR5_SPM_FI NAL.pdf

OFFSET BASICS

Types of Carbon Markets Compliance Voluntary Emissions (allowances) 1 Cap-and-trade 2 Voluntary Cap-and- trade Emissions Reductions (offsets) 3 Compliance Offsets 4 Offsets

Carbon Offset An intangible commodity representing a reduction in greenhouse gas emissions

+ - GHGs

scopes 1 2 3

projects

STRUCTURE OF THE VOLUNTARY MARKET

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Lifecycle of a Retail Offset

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Lifecycle of a Retail Offset Credits

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Lifecycle of a Retail Offset Credits Project developers/ owners Project Standards and Certification Programs Offset Providers/ Retailers Project Registries Retail Offset Standards and Certification Programs Brokers and Exchanges Direct and wholesale purchasers

OVERSIGHT AND QUALITY ASSURANCES

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight

 The American Carbon Registry  The Clean Development Mechanism  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers

 The American Carbon Registry  The Clean Development Mechanism  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Retailers • Direct and Wholesale Purchasers • Permanence • Additionality • Verified • Enforceable • Real

 The American Carbon Registry  The Clean Development Mechanism  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Retailers • Direct and Wholesale Purchasers • Permanence • Additionality • Verified • Enforceable • Real

 The American Carbon Registry  The Clean Development Mechanism  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Permanence • Additionality • Verified • Enforceable • Real in Transparency & Oversight Gap

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 The American Carbon Registry  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Permanence • Additionality • Verified • Enforceable • Real

 The American Carbon Registry  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Permanence • Additionality • Verified • Enforceable • Real Looks for the Green-e logo

Endorsed Programs Endorsed Programs Endorsed Programs Retail Assurances 1. Offsets are supplied with verified emissions reductions and projects that meet a high standard of quality. P.A.V.E.R. 2. Emissions reductions are not being double-sold. Retirement of correct volumes and types of emissions reductions on behalf of customers based on an audit of sales and supply. Exclusive Ownership 3. Customers are given complete and accurate information about their purchase and are not mislead with inaccurate advertising. Disclosure

• P.A.V.E.R. • Exclusive Retail Ownership • Disclosure  The American Carbon Registry  The Climate Action Reserve  The Gold Standard  The Verified Carbon Standard Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Registry account- holders/retailers • Permanence • Additionality • Verified • Enforceable • Real Looks for the Green-e logo

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Looks for the Green-e logo •Additionality •Permanence •Real •Ownership •Verified •Enforceable •Disclosure

Carbon offset project Greenhouse gas emissions reduction Retail carbon offset Retail consumer Carbon Offset Market - Oversight Looks for the Green-e logo A .P.R.O.V.E.D.

TRENDS IN THE VOLUNTARY MARKET

Please visit http://www.forest‐trends.org/vcm2014.php for the Ecosystem Marketplace State of the Voluntary Carbon Markets Report 2014.

0 20,000 40,000 60,000 80,000 100,000 120,000 2008 2009 2010 2011 2012 preliminary 2013 metric tons CO2e Green-e Climate Growth* *Current Endorsed Programs only and controlling for outlying purchases.

Green-e Climate Certified Sales 2012 57.25% 18.41% 13.65% 5.91% 3.99% 0.43% 0.35% Project Types LFG Methane Coal Mine Methane Wind RE EE Forestry Solar RE Geothermal RE 83.74% 5.91% 3.99% 3.00% 3.00% 0.35% Project Location US South Africa Kenya China India Turkey

55.53% 36.39% 8.08% Endorsed Programs CAR VCS PRE Green-e Climate Certified Sales 2012

0 20 40 60 80 100 120 MA OH NY OR CT CA WA NJ IL PA Top 10 Number of Customers by Location Green-e Climate Certified Sales 2012

Todd Jones Green-e Climate Manager Center for Resource Solutions todd@resource-solutions.org CONTACT @greenemarktplc facebook.com/CenterForResourceSolutions