The landscape of carbon offsetting is rapidly evolving. Historically, nature-based credits, particularly those generated by forestry and land-use projects such as REDD+, have dominated the market. However, recent developments have significantly dented their credibility, bringing their limitations into sharp focus. As a result, market leaders are shifting their attention to engineered solution credits to meet their offsetting needs. In this blog post, we will delve into why engineered solutions not only represent a viable alternative but also the future of carbon markets.
The Fall from Grace: Nature-Based Credits
In January 2023, an investigative report by The Guardian revealed that “more than 90% of rainforest carbon offsets by [Verra] are worthless.” This news was a significant blow to the market’s confidence in nature-based credits, and the CEO of Verra resigned a few months afterward. As an indication of how far nature-based projects have fallen, in September Bill Gates disparaged the idea that climate change would be stopped by planting trees as “complete nonsense.” With sentiment shifting against nature-based efforts, a vacuum has been created in the market.
The Rise of Engineered Solutions
Last September, Amazon announced its investment in Occidental subsidiary 1PointFive’s direct air capture (DAC) facility. This decision is a clear signal that major players are aligning themselves with engineered solutions in recognition of the improved reliability, scale, and permanence. Scalability is particularly important: while the largest nature-based projects may claim a couple million tons of carbon offset per year, engineered solution projects can have an annual impact of hundreds of millions of tons. Moreover, as regulators increasingly put companies’ environmental impact claims under scrutiny, corporations will want to be sure the credits they buy are trustworthy. Engineered solution credits are much more measurable and reliable, and thus more likely to stand up to scrutiny, than nature-based credits.
Engineered solutions encompass a diverse range of technological and legal solutions aimed at offsetting carbon emissions. These include:
· Direct air capture (DAC) projects that mechanically extract carbon dioxide from the atmosphere for storage or utilization.
· Sequestration-in-place (SIP) projects, where legal mechanisms are established to prevent the extraction of petrochemicals, thus averting the release of carbon emissions they would otherwise produce.
· Carbon capture and sequestration (CCS), which involves capturing CO2 emissions at their source — usually industrial plants, but potentially oil fields as well — and securely storing them underground.
Additionally, credits can be generated through industrial processes that reduce or eliminate emissions, waste-to-energy projects, and more. Each of these options offers a unique set of advantages and challenges, but collectively, they represent a dynamic and scalable path forward for carbon offsetting.
Advantages of Engineered Solutions over Nature-Based Credits
Permanence: Unlike trees that can be cut down or forests that can burn, engineered solutions provide a more durable solution to carbon offsetting.
Scalability: Technologies like carbon capture and storage (CCS) can be rapidly scaled to meet growing demand, unlike nature-based solutions, which are limited by available land and ecological constraints.
Accuracy: Nature-based credits often rely on estimations and averages (or even averages of averages) in declaring project impact. In contrast, the fundamental technological basis of engineered solution projects ensures that emissions impact can be directly measured and verified, with a strong scientific basis.
The Road Ahead
Engineered solutions offer a more robust and scalable approach to carbon offsetting. While nature-based credits have their place, they should not be the linchpin of a long-term carbon offset strategy. The market is waking up to this reality, and we should expect to see engineered solution credits taking center stage in the years to come.
The shift towards engineered solutions is not just a trend but a necessary evolution in the carbon offset market. As major players like Amazon invest in technology-based emission removal projects, it’s clear that nature-based credits are being left by the wayside. Engineered solutions offer a reliable, scalable, and permanent alternative to nature-based credits, which have been marred by credibility issues and fundamental limitations.
As we face the escalating crisis of climate change, it’s time to re-evaluate and adopt strategies that are not just good on paper but effective in practice. Engineered solutions offer this effectiveness, making them the future of carbon markets.
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