1. Voluntary Emission Reduction (VER) Standards EcoSecurities Carbon Neutral Network on 2Degrees September 2008

2. © 2008 ECOSECURITIES GROUP PLC REDUCING EMISSIONS - VER TRANSACTION The hitchhikers guide to offsetting standards The world of emission reduction standards and credit registries can be a confusing one, particularly with the number of standards competing for dominance of the voluntary emission reduction project market. In order to help you navigate and understand the voluntary market maze here is a guide to the main offset standards out there, and their registries...

3. © 2008 ECOSECURITIES GROUP PLC 2. Different VER Standards No central body to regulate voluntary emission reductions. As such, several different organisations have launched voluntary market standards, all claiming to assure high quality projects. Luckily EcoSecurities is here to help you become familiar with each of the 5 main standards currently occupying the market, so that you can explore offset purchases with confidence. REDUCING EMISSIONS - VER TRANSACTION

4. © 2008 ECOSECURITIES GROUP PLC The Clean Development Mechanism (CDM) The CDM is actually the standard for Kyoto-compliant projects. These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under Kyoto. The projects must qualify through a rigorous and public registration and issuance process designed to ensure real, measurable and verifiable emission reductions. The mechanism is overseen by the CDM Executive Board, answerable ultimately to the countries that have ratified the Kyoto Protocol. Keyword – additionality. Many credits certified under voluntary standards are in fact from pre-registration CDM projects. REDUCING EMISSIONS - VER TRANSACTION

5. © 2008 ECOSECURITIES GROUP PLC VGS – The Gold Standard for VERs  Voluntary market companion to the Gold Standard (GS), developed by a WWF-led consortium who felt that existing standards for projects did not require sufficient contribution to sustainable development (SD) in the countries hosting the projects.  Only covers renewable energy and energy efficiency projects, and specifically excludes forest and land- use projects (due to permanence concerns ) All VGS projects must be verified by a UN- accredited independent body. A registry to track VGS credits is currently under development. REDUCING EMISSIONS - VER TRANSACTION

6. © 2008 ECOSECURITIES GROUP PLC CCAR – California Climate Action Registry’s Climate Action Reserve The California Climate Action Registry (CCAR) was originally established as a non-profit voluntary registry for VERs in the US. It has now launched the Climate Action Reserve, which will continue to develop these protocols, and register projects that meet their requirements. Only US projects are eligible, and under current rules all forestry projects must take place in California REDUCING EMISSIONS - VER TRANSACTION

7. © 2008 ECOSECURITIES GROUP PLC (4) Voluntary Carbon Standard (VCS)  Launched by The Climate Group, IETA and the World Economic Forum this is currently the most popular standard, having won almost one quarter of the market demand  VCS-certified credits are called VCUs (Voluntary Carbon Units)  VCS aims at standardising the market, increasing fungibility and creating a basic ‘quality threshold’ REDUCING EMISSIONS - VER TRANSACTION

8. © 2008 ECOSECURITIES GROUP PLC (5) VER+ by TÜV SÜD Established by TUV-SUD, a UN-accredited project validator & verifier, in mid-2007. In comparison to CDM, VER+ provides more flexibility on methodologies, which speeds up validation and verification. Potential conflict of interest in administering their own standard. Does not have the wide-support of some of the other standards. REDUCING EMISSIONS - VER TRANSACTION

9. © 2008 ECOSECURITIES GROUP PLC Choosing the right standard for your organisation So, what is the right standard for you? VER+ and Gold Standard are the voluntary standards most closely linked to the CDM and JI standards. Gold Standard generally viewed as most rigorous standard, but consequently sells at a premium. VER+ as a standard is proving to have fared less well in terms of popularity compared to its competitors. VCS has started to emerge as a widely used, scaleable and recognisable standard. REDUCING EMISSIONS - VER TRANSACTION

10. © 2008 ECOSECURITIES GROUP PLC VER Standards Comparison Table StandardComment CDM UN backed. - Rigorous but bureaucratic procedures. Predominantly large scale projects e.g. Renewables, industrial & domestic energy efficiency, industrial gases, methane capture, afforest. & reforest. Gold Standard for VERs Backed by 40+ NGOs & charities. As CDM but strong sustainable development focus & community consultation element. Renewables and energy efficiency. VER+ Developed by TUV SUD, a UN approved project validator and verifier. Follows CDM, but no requirement to take projects through CDM or to Executive Board. Technologies as CDM. VCS Developed by TUV SUD, a UN approved project validator and verifier. Follows CDM, but no requirement to take projects through CDM or to Executive Board. Technologies as CDM. CCAR California Climate Action Registry originally established as a non-profit voluntary registry for VERs in the US It has now launched the Climate Action Reserve, which will continue to develop these protocols, and register projects that meet their requirements. REDUCING EMISSIONS - VER TRANSACTION