Building credibility and gaining investors’ support for landscape projects is critical for overcoming the gap in funding needed for climate change adaptation. But how is this done? As specialists in carbon finance told a webinar, it all starts with transparent standards for carbon accounting and verification of a landscape project’s claims to climate benefits.
About 30 landscape practitioners participated in the 17 October 2022 session, the second in a training series organized through the Global Landscapes Forum’s Carbon Finance Learning Program. The program aims to improve knowledge of carbon finance and opportunities to finance nature-based solutions, including land-use projects and business models that might be suitable for generating carbon credits.
The rules and requirements of carbon crediting programs are essential for demonstrating that a project is real, measurable and permanent. Carbon accounting methodologies ensure that a particular project’s emissions reduction claims are credible, said Heather McEwan, senior manager of project developer engagement at Verra, a non-profit that operates the world’s leading carbon crediting program in voluntary carbon markets (VCMs). (A VCM is an emissions-trading system driven by private actors and initiatives rather than by governments or regulators.)
As such, a project’s certification in a trusted carbon crediting program gives buyers of carbon credits confidence that they are purchasing high-quality units. This encourages further investment and helps projects sustain and scale up their operations. It includes the rules and requirements of the verified carbon standards system, independent auditing, accounting methodologies and a registry system.
“Verra provides a trusted and robust carbon crediting program that brings quality, credibility and transparency to the voluntary carbon markets,” said McEwan during the webinar that included small-group sessions with the experts. “Verra also fosters innovation in this space, continually exploring new ways for advancing urgently needed climate action.”
The certification process confirms if implemented activities are in fact progressing, and a request for issuance of credits may be made. Subsequently, verification is required to confirm that carbon benefits claimed, and monitoring data, are all genuine. Project management is also assessed. Final steps should include a workplan that guides the project toward registration under a carbon standard and, eventually, results-based financing.
Uganda’s Trees for Global Benefits, a Plan Vivo-supported carbon-offset project, was cited by Luke Howard, technical coordinator of Plan Vivo, to demonstrate the many steps in project carbon certification. Those can include concept notes; financial feasibility plans; risk assessments; monitoring for social, environmental and community co-benefits; and validation of project documents by a third-party auditing body. Plan Vivo, a charitable foundation, is community-focused, centered on restoring ecosystems, benefit sharing and land-use projects on community or smallholder land and works primarily with projects in the Global South, said Howard.
But to begin a project, support is necessary, including guidance on possible methodologies for carbon accounting and finding relevant comparisons to previous similar projects, participants agreed. “It’s quite important for people to be able to talk to people,” said McEwan.
Then, a feasibility study can be a crucial move toward establishing whether a project can even start to access carbon markets. That study should include choosing a methodology for carbon accounting, developing preliminary estimates of carbon credit potential, plus project design recommendations. However, participants said online tools to assess project feasibility before investing in a professional feasibility study – and having capacity to use such tools – are barriers to be addressed.
Other agencies involved in the training highlighted tools to help participants prepare their projects to navigate carbon accounting processes.
The EX-Ante Carbon Balance Tool (EX-ACT), a suite of tools from the Food and Agriculture Organization of the UN (FAO), allows users to quantify the amount of greenhouse gas released or sequestered from agricultural production, analyze the environmental and socio-economic outcomes of activities from agrifood investments, and assess the impact of agricultural activities on local biodiversity, said Joanna Ilicic, an economist in FAO’s Agrifood Economics Division. EX-ACT can be applied across many sectors and ecosystems, but it doesn’t offer certification itself; it is instead available for guidance and provides an online training module that is now being updated, said Ilicic.
The Open Forest Protocol (OFP) offers an open-source platform for collecting and uploading data from forest projects for verification, which is subsequently used to support bids for financing, said Luke Schubert, project development lead at OFP. The protocol works around a free mobile application for smartphones that can be downloaded and used offline in the field, to collect data to be uploaded later when Internet is available. The OFP approach is particularly supportive of developers with smaller projects, or less experience.
“With this field app, people will have easy access to information and will be able to get started,” added Joe Ferris, coordinator of forest projects for OFP. Projects can also start with small amounts of data and baseline information “as a sort of pilot,” added Ferris. “That’s a model that has worked nicely for us.” A carbon credit and results-based financing incentive mechanism for forest projects to raise and receive support is in development.
The GLF webinar series on carbon finance continues with sessions in 2023 and aims to increase understanding on key carbon finance concepts, while highlighting opportunities for local action.
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