Voluntary Carbon Offsets play crucial role in net zero acceleration.
The voluntary carbon market is a crucial component for achieving ambitious net zero targets. Voluntary carbon offsets play an important role in the corporate transition to net zero. They are the one tool than can help companies accelerate the actions needed to achieve these goals when used as part of an integrated reduction strategy. Voluntary carbon offsets can be used to counterbalance unabated emissions in both the short and long term.
Natural Climate Solutions for Businesses
The recent report from the WBCSD Natural Climate Solutions Alliance says all businesses should build a credible climate strategy using natural climate solutions voluntary carbon credits.
Using these nature-based credits as an integral element of ambitious corporate climate strategies escalates the ability to achieve year on year emissions goals during the long-term pathway towards net zero.
“The voluntary carbon market can be an incredible force for good that can help us accelerate the transition to a net zero economy. Time is of the essence.” Global Head of Carbon Markets, HSBC
The recent increase in global demand for carbon offsets is driven by companies large and small across all industries mobilizing their actions towards decarbonisation aspirations.
Reducing overall carbon emissions and accelerating reduction and removal practices are all positive actions towards net zero. However, voluntary carbon offsets have an essential part to play in achieving this, where emissions are unavoidable.
Avoid, Reduce, Offset
Companies should aim to decarbonise as much as is possible, and any available technologies or practices that can be reasonably implemented should be utilized. However, even with the best of intentions and strategies, there are likely to be residual emissions that cannot be avoided or reduced. These emissions should not be ignored, and for some companies, can still equate to a significant footprint.
Balancing unabated emissions year on year through the purchase and retirement of high-quality carbon offsets that are fully verified, and have demonstrated proven results over time is an effective, powerful solution within a high-ambition corporate approach.
“Virtually every company that pursues a net-zero target will need to offset some portion of its emissions in the long run.” The Climate Board
Why are Natural Climate Solutions so important?
Scientific studies have shown that Natural Climate Solutions (NCS) can provide around 30% of the emissions reductions needed to limit global warming to 1.5ºC.
In addition to mitigating climate change, natural climate solutions can also provide other important benefits, such as the protection of ecosystems and biodiversity, restoration of previously degraded land areas as well as the support of sustainable livelihoods and socio-economic benefits.
The Global Head of Carbon Markets, HSBC writes about the vital role of voluntary carbon markets: “The voluntary carbon credit market offers a chance to tip the economic scales toward more sustainable practices – for example, by making a tree worth more standing than if it were cut down.”
In addition to offering multiple benefits to nature and people, high-quality NCS projects are one of the largest readily available solutions for carbon removal. To achieve the scale of impact needed, jurisdictional-scale projects such as the Trocano Araretama project in Brazil, play a crucial role in delivering the scale of carbon offsets needed to support effective carbon strategies.
Indicators of high-quality voluntary carbon offsets
High-quality carbon offsets are identified in their ability to effectively address permanence and additionality, with robust quantification methods and independent verification of the climate mitigation activities implemented.
The Integrity Council for the Voluntary Carbon Market (ICVCM) is seeking to define a set of core carbon principles, to establish a readily available benchmark for high-integrity carbon credits. This framework will set threshold standards for identifying credits that create real, additional, and verifiable climate impacts with high environmental and social integrity.
This will certainly help build trust within the market in addition to delivering the positive climate impacts at the speed and scale needed to achieve climate targets. However, whilst the framework has completed its public consultation period, the finalised framework is likely to take well into 2023 to be published.
In the interim, there are several indicators that can help identify high-quality carbon offsets based on the ICVCM principles. One useful indicator of permanence is identifying projects that have been successfully implemented for 10 years or more. This is a high-level demonstration of permanence, versus a project that has been in existence for 2 years or less for example.
Further, if the project can evidence independent verification of the carbon benefits attributed to the project, then this is also an important measure of quality.
Similarly, it is important to identify projects that only have credits issued ex-post (meaning credits that are issued after the benefits have been proven). Ex-post crediting ensures that the emissions reductions or removals have already occurred and have taken place before the carbon credits were verified and issued.
The ICVCM touches on the inadequacy of ex-ante (before the event) crediting in its public consultation. The Taskforce on Scaling Voluntary Carbon Markets Phase II Report also disallows ex-ante crediting, indicating the element of doubt and risk ex-ante credits can introduce to the integrity of the voluntary carbon credit market.
Natural Capital Credits: A good choice for companies
As a nature-based voluntary carbon offset, Natural Capital Credits are a powerful and practical carbon offsetting solution. They are ideally suited to businesses wanting to balance their unavoidable emissions through the purchase and retirement of high-quality voluntary carbon offsets from natural climate solutions projects.
“Businesses in all sectors, regardless of size, should invest immediately in high-quality NCS carbon credits through the voluntary carbon market to counterbalance their unabated value chain emissions, thus contributing to global climate mitigation and biodiversity recovery targets.” Natural Climate Solutions Alliance