Carbon Markets Work for Climate Change Mitigation and Forest Preservation

By Josh Strauss, President, Environmental Products at Anew Climate

On Earth Day 2024, I am confident in our ongoing efforts to mitigate the worst impacts of climate change and stabilize the health of our planet’s ecosystems. For those of you who know me, this comes as no surprise. I consider myself a highly motivated environmental practitioner, ardently dedicated to conserving forests and other ecosystems through the development and implementation of carbon projects. I believe appropriately designed markets provide an essential tool to address environmental issues by coupling powerful financial incentives with good environmental stewardship.

One of the best market-based solutions currently available to combat climate change is the voluntary carbon market (VCM). Within the VCM, nature-based projects represent the single largest potential contributor to scalable near-term climate impact and our best opportunity to start to bend the curve on GHG pollution.

It is estimated that $4 trillion in annual finance will be needed to stabilize global warming by 2050. Nature-based solutions such as improved forest management and afforestation have the potential to provide about one-third of the climate mitigation needed to meet climate goals, at costs far lower than those associated with other ghg mitigation approaches.¹

Encouragingly, more than ten million U.S. acres have been conserved over the past decade through market-based incentives, which is twice the rate of conservation through traditional easements since the formation of modern-day land trusts approximately 60 years ago. Yet, we are at risk of losing the progress we’ve made toward our climate goals if we don’t strengthen and evolve the VCM such that its projects provide the data transparency and analytical rigor necessary to assure the global community of their efficacy.

VCM must evolve alongside technology advancements

When the VCM first began over two decades ago, technologies like high-resolution satellite imagery, cloud computing, and machine learning were either primarily used by the military, aerospace programs, and academic institutions or not even invented yet. Anew Climate recently launched the Epoch Evaluation Platform™, which enables us to develop reliable and scalable projects to reduce atmospheric greenhouse gas concentrations using cutting edge satellite imagery, artificial intelligence, ground-level data collection, and on-going economic evaluation to establish truly dynamic baseline models that ensure carbon credits meet the highest standards of additionality and durability.

As a relatively young industry, the carbon market is not without challenges. Not all credits meet the standards required to move the VCM forward. We must address the concerns about the integrity of carbon projects and ensure that project impact is accurately quantified to reflect genuine results in carbon dioxide removals and avoided emissions. This new level of accuracy and transparency is imperative for the successful future of the VCM.

Trees are the oldest technology for sequestering carbon

Carbon markets provide financial incentives for forest conservation and reforestation efforts, and forests play a crucial role in sequestering carbon dioxide from the atmosphere. By valuing the carbon stored in trees, carbon markets can make it economically viable to protect our forest ecosystems. We must work together to quickly create and adopt consistent and improved standards to enable the VCM to move forward and evolve into the decarbonization accelerator it is meant to be.

The future of the VCM depends on the integrity of carbon credits, and integrity drives value. I believe we are on the right path for a robust market going forward. The advancements that we are making in project development, reporting, and transparency allow companies to be sure that the carbon projects they support are creating meaningful climate impacts and are effectively allowing them to meet their climate action plan commitments.

On this Earth Day 2024, I am confident in our ability to be part of the solution for addressing climate change and sanguine about our future.

^{1 Scaling Voluntary Carbon Markets, a Playbook for Corporate Action World Economic Forum. September 2023.WEF cites: European Parliament, Background information for the BUDG-CONT joint workshop on ‘The Role of the EU Budget in International Climate Finance’, January 2023.}