Verification is an essential part of the generation of offset credits for the WCI cap-and-trade program. Air Resource Board (ARB) has devised highly stringent review processes for projects claiming CCOs through both the ARB protocols and the early action mechanism, which participants have had to get to grips with. This has been a challenging process at times, but Christie Pollet-Young, Director of GHG Verification at SCS Global Services believes that her firm is now on top of the layers of regulatory complexity surrounding offset project verifications.
CaliforniaCarbon.info: We reckon that most livestock and forestry operators, if they want to attain CCO-3s, are more likely to opt for verifier rotation rather than a second regulatory verification. Is this also what your experience in the market suggests?
Christie Pollet-Young: Right now that the market is so new in terms of projects that have actually made it through the first process, I don’t think there are a lot of data points to speak about. But as you saw, it was in your last newsletter, the very first ARB compliance project that went through, the Yurok Tribe project, actually just did an annual with SCS so there was no verification body rotation and thus no issuance of CCO-3s.
CC.info: ARB has been doing desk reviews for almost two years now. Do you think they have got more efficient during this time? What more could be done to shorten lead times for documentary review and credit issuance?
CPY: I think that this is an interesting question since it’s been a learning process. For the desk reviews, it is wonderful that ARB allows early action offset projects to be welcomed into the California Cap and Trade program. However, it wasn’t a primary focus of the program. It sounds like the way it was described in the Regulation, just the mechanics of it, made things a little difficult for project developers and verifiers to really streamline the process. I think what happened was that a lot of projects were front-loaded, i.e. they wanted to be converted from EAOCs to ARBOCs very quickly. So they were verified relatively quickly, before the ARB began their review. Since it was a new process, the ARB developed questions and clarified requirements that needed to be retroactively reviewed on previously reviewed desk reviews. It was an iterative process over a long period of time, so, as we were saying, two years or perhaps more in some instances. So, while verification bodies may have completed desk reviews, this was still an interim process through which ARB was clarifying what they were looking for. We needed to go back and change things we had hoped and believed were completed, but again, since it was a new standard, we needed to make sure that we were conforming to what ARB was looking for. I think now we have all gotten to the point where we know what ARB is looking for. At this point we are only rarely reviewing new projects, rather just going back and updating old ones based on ARB feedback. Now the process is relatively completed in that most of the projects have had their credits transferred.
CC.info: Forests are potentially great projects because the benefits can extend beyond just carbon sequestration. Is this an aspect to it that you see a lot of?
CPY: I think that some forest projects are particularly attractive to entities looking to promote their corporate social responsibility. People do enjoy the fact that forests are a magnificent ecosystem and that communities can benefit from the watershed benefits of forest protection. We have seen this with all of our verifications, particularly in the developing world, but also domestically as there is always an interest in protecting the forests in one’s own country and perhaps their own neighborhood.
CC.info: Do you notice a difference between the different registries actively processing ARB projects? Are there differences in approach, efficiency, etc.?
CPY: From our perspective as a verification body, we have been happy working with all registries. We have maintained really fantastic relationships, with not only the two first registries but now the third one, the Verified Carbon Standard, as well as the Air Resources Board. I think that it is a learning process and we are happy to see that the registries and the ARB are working collaboratively to address any issues or clarifications that may come up. I know that project developers we have spoken with have had varied experiences, but I think that overall people are satisfied with the registries and sometimes it may come down to a project-by-project assessment of the registries’ approach to efficiency and review turnaround. As a verification body, we have had excellent experiences with both registries and we are more than happy to work with the VCS, a registry that we have worked very well with on the voluntary market side during the past six years.
CC.info: How important are post-2020 certainties to your own plans in this market, and
have recent policy developments in California and elsewhere changed your outlook?
CPY: I think that there is a lot of hope about post-2020, but of course there is always uncertainty. Governor Brown’s recent statement about the 2030 target for the reduction of GHGs has really bolstered confidence in the market as we look towards the future. Internationally, I think there is a lot of optimism about climate change policy with respect to COP21 in Paris this December. Thankfully, we have seen a global interest and concern, not only from policy-makers but also from the general public about climate change. So we are hopeful that what we are seeing in California’s cap-and-trade program will continue, but again, as we have been in the carbon markets since 2007, we have seen one thing that is certain, that there is always going to be change. Things will always be updated, and hopefully improved. So we are confident that our skillset, experience, and expertise is what’s needed and required to make sure that there is confidence in the Cap and Trande Program beyond 2020.