As we approach the end of 2023, the race for defining and producing high-quality and trusted carbon dioxide equivalent (CO2e) credits is in full swing. There are many different standards that are trying to stake a “best in class” claim. Capturiant, a global environmental asset validator, authenticator, registry, and exchange operating on a regulated private-sector model utilizing distributed ledger technology (DLT) and warranty coverage, has developed the Capturiant Standard on which measurable quantification will take precedence. Many of the popular nature-based credits do not currently meet this threshold. However, it is worth emphasizing that just because past and current nature-based methodologies have not met the Capturiant Standard does not mean that others will not in the future; nor that they are unimportant in the broader marketplace. This article describes some of the requirements to meet Capturiant’s threshold for measurable quantification and shares some alternative outlets for those who may be holding credits that don’t meet this standard.
Capturiant has a threshold of scientific rigor with measurable results and calculations that are quantifiable and verifiable which projects must meet to be validated. For every type of project and methodology, there are unique circumstances that determine the specific instruments, protocols, and best practices necessary to meet the Capturiant Standard.
The Capturiant Standards consist of the following:
1. Quantifiable baseline that is real, measurable, and unique
2. Third-party verification that is both independent and transparent
3. All Projects must be complete, have a reasonable approximation of permanence, and show additionality
One requirement that is universal — measurements must be verified by a qualified third-party. Another component is a quantifiable baseline for calculating total emissions stopped or avoided. Important factors not mentioned in the following analysis are project governance and regulatory landscape, either of which could make or break even sound methodologies.
An example of a methodology type that meets the necessary scientific threshold requirements is methane abatement of abandoned gas wells. The emissions coming from these orphaned wells are measured by commonly used instruments which calculate the rate and flow of gas being vented into the atmosphere. Once a baseline of rogue emissions without intervention is established, the difference between that and the lack of emissions after plugging the well is easily quantifiable. Tools to determine how long the well would continue to vent can also be used, with a high degree of certainty, to minimize the potential risk of an over-crediting error.
Alternatively, a methodology type that does not meet these threshold requirements is “reducing emissions from deforestation and forest degradation in developing countries,” commonly referred to as REDD+. While there can be some nuance between different projects using this type of methodology, they all face similar shortcomings. First, these methodologies approximate carbon density within a certain geographic area by aggregating many types of foliage without measuring specific ratios of tree population or calculating the carbon storage capacity of every type of tree. Second, loss prevention rates are estimations based on past deforestation rates which may or may not change over time based on factors that are not easily quantified. When taken together, these estimations and approximations compound the potential error factors to unreliable levels.
Under the threshold of quantifiable accuracy that Capturiant is willing to validate, there are still many CO2e projects considered valid by other registries on the voluntary carbon market and through certain compliance markets. These projects often have great theories and intentions, some are even successful in curtailing unnecessary emissions, all of which are needed in the global climate change battle.
Capturiant has partnered with Entoro Eco-Merchants to facilitate transactions for project developers and buyers of all types of credits, regardless of where they are registered. Projects with these devalued credits to sell are finding a tougher market than this time last year. Eco-Merchants combines its financial and regulatory compliance expertise with experience in the carbon industry to build connections using OTC (over the counter) methods.
Categorizing carbon projects below the threshold may include labels such as:
- NNS (Nature non-scientific)
- Unmeasurable
- Compound Approximations
- BCG Report
Quantifiable and measurable CO2e credits offer a more robust and scalable approach to carbon offsetting than guesses and hopes. While nature-based credits with low scientific thresholds have helped to bring the voluntary carbon market to prominence, these credits cannot be relied upon exclusively to solve the climate crisis. The markets are waking up to this reality, and we should expect to see science-based credits taking center stage in the years to come. Here is an article on the Future of Carbon Markets detailing the projected rise of non-nature-based solutions.
The transition from the way things have been done to the way things will be done has always been a process. There are avenues to enable conscious market participants to choose what credit solutions are right for their own needs. As better measurement tools and guidelines come into play, our markets become more robust, and the highest quality solutions will rise to the forefront.
This article was written by Nathan R. Murphy, Validation Manager.
Disclaimer: This blog post is for informational purposes only and should not be considered as financial or investment advice.
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