Earth’s forests, oceans, wetlands and other natural landscapes have the power to pull carbon out of the atmosphere and store it, making well-managed ecosystems essential resources in the fight against climate change. climatic. According to the latest report of the Intergovernmental Panel on Climate Change, the protection of these resources offers one of the highest attenuation potentials.
Efforts to maintain healthy ecosystems intact, restore those that have been cleared or degraded, and improve the management of these landscapes can have enormous benefits for people and the planet, such as improving the quality of water or the protection of biodiversity. When these efforts also increase carbon storage or avoid greenhouse gas emissions, they are known as natural climate solutions, or NCS.
Around the world, healthy ecosystems are rapidly disappearing as more of the planet is degraded or converted to other uses. This continued loss could have disastrous consequences for the whole world through its effect on the climate, while causing particular harm and injustice to the indigenous and local communities who have historically managed many of these crucial environments.
Increasing global funding and support for CNS activities is an opportunity to limit climate damage while enhancing and protecting the enormous good that these ecosystems provide – and to benefit the local people who carry out these important tasks.
One way to do this is to integrate SNC’s business into global carbon markets by crediting emissions. The Environmental Defense Fund is now leading a collaborative process to outline key considerations and challenges in supporting the NCS with the potentially powerful tool of crediting emission reductions and removals – and ensuring the systems to support this tool are ethical, fair and effective at the level of ambition much larger scales were needed to face the moment.
Enabling climate ambition through NCS credits and trading
Natural climate solutions have the potential to close the gap between the planet’s GHG mitigation needs and what is possible through fossil fuel reductions alone – around 20% of the emissions reductions needed to keep the planet healthy. below 1.5 or 2 degrees Celsius warming.
Well-designed SNC credit and trading systems can help close this gap at a lower cost and at a faster rate, as the emission reductions and removals achieved through SNC are often less costly per unit of equivalent. CO2 than those obtained by other means. NCS have the potential to significantly increase the scale of possible mitigation ambition in the near future, especially if the international community can finance them through a well-designed credit market.
A 2019 study by EDF researchers demonstrated that international carbon trading markets could enable the world to achieve nearly double climate mitigation from 2020 to 2035 for the same cost as countries achieving these targets on their own; nearly half of these simulated earnings came from international trade in forestry NCS activities.
Recognizing the many benefits of conserving forests and other NCS for climate mitigation and beyond, many countries, sectors and companies wishing to achieve their climate goals by protecting nature have shown increasing interest in funding NCS. through carbon credit markets.
The total annual value of voluntary credits sold last year topped $1 billion for the first time. More than half of this volume ($544 million) came from credit trading based on forest conservation and related activities. The price of these NCS-based voluntary credits also increased by a third between September and December alone.
High integrity NCS credits are an important complement to broader decarbonization efforts around the world. Done fairly and well, it can empower businesses, governments and local stakeholders to continue to increase financing for climate change mitigation and ecosystem protection, while supporting social, environmental and economic benefits ( such as strengthening land tenure and recognizing self-determination) for Indigenous peoples. and local communities at the heart of these goals. But the details of the complex technical and political aspects of designing and deploying NCS credit systems can be difficult to navigate – and those complicated details are extremely important to ensuring credit is effective and fair.
Shedding light on the NCS credit landscape
There is currently no single, universally accepted framework for ensuring the integrity of NCS credit systems. Confusion and conflicting opinions on best practices and credit quality standards are pervasive in the NCS space, creating barriers for businesses and governments interested in participating in the NCS carbon credit market.
To help break down these barriers, EDF and partner organizations are exploring the key issues at stake, articulating critical issues and proposed solutions in a series of briefs that will culminate in an NCS Credit Handbook and a series of Briefing Briefs.
The handbook and notes will address mistrust and confusion in the industry by providing accessible guidance to potential buyers, sellers and other stakeholders of NCS Credits to seek out and support high integrity NCS Credits. These resources will also serve as a training manual and reference manual for government officials, consultants, academics and civil society actors.
Advancing credit integrity, while ensuring the ethical and meaningful inclusion of local communities in the development and management of these systems, is fundamental to increasing trust and ultimately participation in the NCS credit market. – and thereby harness market forces to increase potential funding for NCS globally.
Clear the path to action
Successful implementation of NCS on a global scale will require carefully designed systems based on a nuanced understanding of many technically complex topics.
The NCS Credit Handbook will present the key considerations needed to achieve positive results from well-designed credit systems; in the process, these resources will help unlock the potential of NCS credits to equitably improve global climate efforts.
Visit our NCS Crediting Handbook and Briefing Series page for upcoming submissions and for the latest information on our work in the NCS credit space.