As we write this, we are in the latter half of 2022 and we are all that much closer to the year in which we collectively aim to have cut global emissions by half. 2030. The amount of work that remains for us to do is significant, from regulations and effective incentives to conservation and impactful voluntary actions. As a Public Benefit Corporation doing business in the latter category, we are pushing the voluntary carbon market to better contribute, alongside the many other necessary measures, to the transition to a low carbon future. One contribution is to bring early funding to those making change on the ground before they begin, before they generate results or derive benefits, to overcome cost barriers and unlock more important and new climate actions at an adequate pace and scale. An area where the voluntary carbon market has fallen short.
In our experience, supporting a carbon offset project can be an impactful, measurable way to support the types of climate action necessary to transition to a low carbon future. When supporters also want to claim those offsets to balance out past emissions from their business, important rules come into play. Supporting companies must show the climate action is additional and that it has happened – that CO2e was avoided or removed in an amount that balances the amount emitted. These rules seem both obvious and essential.
As a result, carbon offset project developers self-select projects for which upfront costs are below a certain amount. The focus is to find projects with no or low upfront costs, and projects with a short period between initial costs and return, which occurs after the avoidance or removal occurs, is verified, and is sold to companies supporting the project.
There are other climate actions, other types of carbon projects, that are possible, but less attractive financially because they have higher upfront costs and a longer timeframe for investment and return. And for two decades, these are the types of climate actions Native has focused on. We do so because our climate and our planet sorely need all types of carbon projects.
We seek out instances where change is not occurring – despite very high potential benefits for the climate and communities – because upfront financing is needed. And while there are many grant programs, foundations and nonprofits doing excellent work, too many important climate actions remain locked without access to funding.
Our approach has been to leverage the voluntary carbon market, and more specifically, collaborate with companies looking to lead that market who also share our ambition to cause and build more change than the conventional carbon market will accomplish.
We work with communities and local experts to identify desired changes – new biofuel infrastructure for small rural farms; new grazing practices on grassland ecosystems – and we make the payments and provide the support that gets those desired changes underway. Today. We finance this by forward selling a number of carbon credits to companies that want to see their climate budget and offset dollars catalyze change and unlock new climate action. The confidence to work in this way comes from our initial evaluation of the proposed changes, the associated potential to avoid or remove CO2, the circumstances of those making the change on the ground, the track record of our local partners and the factors that will ensure the changes endure over decades.
As a result, we find a way to implement carbon offset project types – practice changes and technologies – at a pace and scale that is otherwise not occurring. Companies support each project upon launch, on-the-ground partners receive payments to cover their costs and risks, and we work to bring everything together for third-party validation to VCS or a comparable standard. In time, the project succeeds, credits are verified and issued, and supporters receive their credits in turn. The first credits may be delivered 2-5 years after they have made their investment in the project, and continue to be delivered for the ten, twenty or thirty year life of the project.
These supporting companies are willing to make this investment because they know their money has helped fund and launch an important change that will now measurably avoid or remove CO2 for decades to come. Being a real catalyst for change in this way – causing new climate action – accelerates the pace and scale at which we are able to increase our collective ability to achieve a low carbon future. And it is an important part of the many ways we all need to work together.
Learn about two of our new catalytic climate impact projects in Uganda and Mexico, or read more about WWF’s blueprint for financing climate and nature impact by unlocking new solutions and supporting CO2 reduction and removal.