Carbon Offset


CIBC, IItaú Unibanco (the largest bank in Latin America), National Australia Bank (Australia’s largest business bank), and NatWest Group (a leading banking and financial services group in the UK and Ireland) today announced the launching of Project Carbon (the Project), a carbon offset platform which will seek to increase transparency in the voluntary carbon markets. The Project aims to provide carbon offsets to clients of the four banks with clear and consistent pricing and standards and aligns with the Mark Carney led Taskforce on Scaling Voluntary Carbon Markets (TSVCM) (read our earlier bulletins on the TSVCM here and here). Key features of the Project: Represents the book of record for ownership of carbon credits; Allows owners of credits to clearly demonstrate possession, reducing risks of double counting and simplifying reporting; Supports price discovery through the posting of executed trade sizes and prices to the market; Promotes project investment through the transparent demonstration of market demand; Provides full traceability and linkage back to source of the credit; Assists Registries by facilitating the rapid scaling of client base; Takes care of post trade settlement, allowing all market participants including exchanges and marketplaces to offer additional value added services;  Aligned with the objectives of the TSVCM;  Pilot built on a private Ethereum platform developed with ConsenSys.  The Project seeks to increase the delivery of high-quality carbon offset projects, facilitate a liquid carbon credit marketplace, create a strong ecosystem to support offset markets, and develop tools to help manage climate-related risks. The Project is launching as a pilot in August. Institutions interested in advancing the objectives of the of TSVCM are invited to join the Project. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

The Ecosystem Marketplace, an initiative of Forest Trends, in collaboration with the Forest Carbon Partnership Facility of the World Bank, yesterday released its report on the state of forest carbon finance in 2021 titled “A Green Growth Spurt: State of Forest Carbon Finance 2021” (the Report). The Report indicates that forest carbon financing remains inadequate to support increased climate ambition and counter global deforestation, noting that 23% of all anthropogenic GHG emissions are a result of the inefficient and destructive use of forests, farms, and fields. This bulletin summarizes the Report’s key findings:   Funding for forests. Funding for forests through carbon markets and results-based payments for REDD+ has more than doubled since 2017, including $5.9 billion to forest carbon offset projects and an additional $1.3 billion for “REDD+ readiness” in developing countries.    Compliance-driven forest carbon markets. Compliance carbon markets have provided over $3.9 billion to forests and sustainable land use. This is expected to further increase as a result of new compliance mechanisms such as CORSIA and the still-to-be-finalized markets provisions under Article 6 of the Paris Agreement.   Natural climate solutions. From 2017-2019, approximately $400 million was generated in transactions through global voluntary carbon markets (VCM), representing 105 MtCO2e of carbon credits from forest and land use natural climate solutions (NCS), as well as generating an overall transaction value of over $1 billion in demand for NCS offsets.     Voluntary carbon markets. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) estimates that VCMs must grow 15-fold by 2030 and 100-fold by 2050 to meet the goals of the Paris Agreement (read our earlier bulletins on the TSVCM here and here). The Report notes that most forest carbon offset buyers in VCMs are concentrated in Europe and the US, with companies in France and the UK accounting for almost a third of all offsets purchased in 2019.  …