Dr. James Bulinski, CO2 Australia’s Director of Carbon Innovation, spent the early part of last year in the US working out if there were any opportunities for Australia in emerging US carbon markets.
James, travelling on a Gottstein Fellowship, found the US carbon market very dynamic.
Rather than having a national scheme implemented, individual US states or groups of states have been up their own trading schemes to reduce greenhouse emissions, some of which have now been running for a number of years”, he said.
While a federal scheme has so far failed to pass through the US political system, much of the background work in developing a national carbon trading system has occurred and California is now introducing a wide ranging state-based program that is set to become one of the world’s largest carbon markets. “The value of US carbon markets is significant, with California’s program alone expected to exceed $4 billion USD between 2015 -2020”, he said.
Avoided deforestation, improved forest management and reforestation projects are all potentially eligible under various US programs. International carbon offsets will likely be limited to projects in developing countries.
“Unfortunately, this means Australian-based projects are not likely to be eligible under mandatory-compliance schemes, but it does not preclude Australian managers undertaking projects in developing countries and in the US itself. Australian operators also have the option of trading verified carbon credits into the voluntary market-place”, he added.
“A key consideration in any carbon forest project is the sale-price that can be realised for verified carbon abatement and the demand for that abatement. At this stage, this remains something of an unknown for the Californian market-place, while prices and demand in the voluntary market-place is often too low to make carbon forest projects viable at any real scale”.
James used the Gottstein Fellowship to fund travel across the US, which allowed him to directly interview over 28 organisations in order to understand the carbon investment landscape. “At this stage, I think the time is right for Australian managers and investors to start taking a closer look at opportunities within the US, particularly around the emerging Californian market”, he said.
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