The president of one of California’s two carbon offset registries is retiring.
Gary Gero, president of the Climate Action Reserve (CAR), will step down from the organization that he has led since the inception of California’s carbon market. A successor has not yet been named.
The reserve was originally established by California in 2001 as the California Climate Action Registry, with the mission of promoting businesses’ voluntary efforts to reduce their greenhouse gas emissions. It now serves as one of two repositories for offset credits, which can be used instead of greenhouse gas allowances in California’s cap-and-trade system.
Along with another nonprofit, the American Carbon Registry, the group registers and tracks offset projects as they move through the verification process on their way to becoming compliance-grade California offsets. It has had several of its voluntary offset standards — including reductions from livestock farms, forests, urban forests and ozone-depleting substances — serve as models for the versions adopted by state regulators as part of the cap-and-trade program for industrial emitters, which began quarterly auctions in 2012.
In 2009, the group expanded its reach nationwide, changing its name to the Climate Action Reserve. It has processed roughly 70 million offset credits, slightly more than half of them for the California cap-and-trade market.
Under California’s regulations, businesses can substitute offsets instead of allowances for up to 8 percent of their emissions. They are seen as a lower-cost option because supplies are theoretically unlimited; offset projects can be located anywhere in the country.
But a series of moves by regulators over the past year have dampened potential supplies of offsets, sending prices for the instruments upward. At around $12 per ton, offsets are barely cheaper than allowances, which have been trading at roughly $12.70 per ton. That makes them less attractive to emitters looking for a way to lower their cap-and-trade costs (ClimateWire, Oct. 14).
Broadening the business base
In response to the market slowdown, CAR has streamlined its operations and begun expanding its attention elsewhere. It’s gone from 24 employees to 19 over the past two years and has been working on processing projects faster. The organization plans to announce a new initiative soon "in the area of carbon markets and climate finance."
"We’ve been thinking strategically as an organization about what you do next," Gero said. "We are poised for new growth in this new strategic initiative."
Gero said he thought California should focus on expanding the number of jurisdictions covered by cap and trade, rather than adding new sectors that are eligible to produce offsets.
"What’s important is that California and Quebec and eventually Ontario continue on this path of finding new partners and expanding the market," he said. "The most important thing they can do is create a broad-based movement around cap and trade, which I believe is the right policy tool for addressing climate change."
Gero, who previously worked on environmental initiatives for the Los Angeles Department of Water and Power and was the assistant manager of the environmental department for the city of Los Angeles, said he doesn’t have a new job lined up yet.
"It will still be in climate change," Gero said. "Climate change is my passion and interest and where my career has taken me." He will also stay on as a senior adviser to CAR after he steps down.