Key Takeaways From NACW
by: Greg Cesare | May 25, 2022
Why Should You Know About North American Carbon World?
Along with several ClimeCo colleagues, I had the pleasure of attending the nineteenth annual North American Carbon World (NACW) conference held April 6-9th in Anaheim, California. As we have in the past, ClimeCo was one of the event’s corporate sponsors. While the 2021 virtual NACW conference offered a unique opportunity for attendees to learn and participate, we were excited to be in person again. NACW provides a fantastic opportunity for participants in the carbon markets to experience great panels of speakers and catch up with old friends and make some new ones.
For those unfamiliar with NACW, it is a premier event in North America focused on climate policy and carbon markets. This year’s conference included over 720 attendees, representing 14 countries. The conference attracts stakeholders from various backgrounds and industries, including project developers, verification bodies, non-profits, international carbon registries, government, community members, academia, carbon finance, technology startups, and Fortune 500 companies. The conference attendees share a common goal of addressing the climate crisis through innovative solutions.
It was an incredible couple of days spent meeting with stakeholders in the carbon markets. Truly one of the most rewarding aspects of the conference was getting to know what drives these stakeholders and their interest in various aspects of the market. The wide range of topics, including natural climate solutions, digital assets, and policy outlooks, brought together a diverse group of experts. Reflecting on the conference, I have a few key takeaways:
Supporting Voluntary Carbon Market Growth
The voluntary carbon market continues to grow significantly, and much of the growth is driven by corporate sustainability goals. How the voluntary market responds to the demands from corporate buyers will be of critical importance to sustain its momentum. While country-level commitments made through the Paris Agreement, for example, play a vital role, the voluntary market provides a tremendous opportunity to utilize the financial power of the private sector to address the climate crisis at the urgent pace required.
As highlighted in the panel discussion, “State and Future of the North American Voluntary Carbon Market,” whom ClimeCo’s Director of Program Management, Lauren Mechak participated, the voluntary market is well designed to support innovation to capitalize on the financial power of the private sector. Many innovations are being developed that require carbon finance to be commercially viable. For example, unique project types and emerging technologies in remote sensing and blockchain technology are being explored for implementation in carbon projects and the carbon market. The flexibility of the voluntary market is built to support these innovations, but it is vitally important that it’s done correctly by adhering to the principles and standards required for high-quality offsets.
Projects Must Deliver Quality, Transparency, and Accountability
A key aspect of supporting the market growth is the demand from credit buyers and the public for a transparent and high-quality process. Investors demand projects that ensure real and permanent greenhouse gas emission reductions. Transparency in how carbon offset methodologies are created, projects are developed, and credits are verified is vitally important to ensuring the continued growth of the voluntary market.
One of my favorite panel discussions focused on Driving High-Quality Standards in Carbon Markets. This panel highlighted initiatives in the carbon market focused on bringing increased transparency into project activities. Efforts to develop tools that assist market participants with evaluating what a “good” offset project looks like are underway, such as the Carbon Credit Quality Initiative. These initiatives aim to enhance the integrity of carbon credits by providing independent and easily understood scoring of carbon credits.
Corporate buyers also provided their perspectives regarding the challenges they face in evaluating carbon offset projects. Many simply do not have the expertise to adequately review lengthy project description documents and understand the underlying assumptions of the project and the methodology upon which the project was established. The level of detail provided in the publicly available documentation can be challenging for buyers and much of the general population to understand on their own. Some individual companies can bring expertise in-house to evaluate the quality of an offset credit. However, experts within the carbon market have an opportunity to provide simplified guidance on what a “good” carbon credit looks like. Initiatives that create tools and simplify access to information make it easier to understand what’s behind a given project, which provides the confidence for projects they are supporting – delivering real and permanent climate impacts.
As a project developer, ClimeCo always strives to provide as much transparency as possible. We participate in widely trusted and recognized carbon registries, such as the Climate Action Reserve, Verra, Gold Standard, and the American Carbon Registry. Carbon registries play an essential role in addressing transparency and quality. The voluntary market relies heavily on registries and verifiers to demonstrate the validity of an offset. These registries provide the public opportunities to comment on our projects and review summary information about their design and performance. I believe the discussions regarding simplifying publicly available information will lead to an even more transparent and trusted process. Our projects must also undergo independent verification before issuing carbon offset credits. The independence of verification bodies and carbon registries is vital for ensuring the quality of carbon offset projects and maintaining the integrity of the growing carbon market.
Co-Benefits of Carbon Projects
My final takeaway from the conference is that the projects being developed worldwide provide value beyond their carbon impact. It’s sometimes easy to be consumed by the impact a particular project will have on the climate; however, there are many co-benefits to carbon projects which improve the lives of the community members in which they are situated.
The inspiring story of the Yurok Tribe highlighted the co-benefits of these projects. Panelist Javier Kinney of the Yurok Tribe described the important impacts that offset revenues provided to their local communities. The tribe has been able to finance the repurchase of ancestral territory by utilizing carbon revenues. They have also used revenues from carbon sequestration projects to support the reintroduction of two condors (North America’s largest terrestrial bird) back into their ancestral lands. The condor is a sacred species to the Yurok Tribe, and this was the first time the birds will have taken flight in their former range since 18921. Their incredible story demonstrates the power carbon projects have to change the environment and support community building.
Being in a room with over 700 people interested in carbon markets and how they can shape the future of the climate crisis was inspirational. Participants from all across the world and from diverse industry backgrounds highlighted the increasing interest in the market. As highlighted at the conference, with increased interest comes increased scrutiny.
NACW was a great reminder of the importance of the fundamentals of project development in the carbon market. To ensure market integrity, we must remain vigilant regarding the types of projects we engage in. Demonstration of additionality, leakage considerations, and carbon storage permanence are always key factors in our decision to develop a project. The conference also highlighted aspects such as co-benefits that project developers should be searching for and creating through their project implementation.
As our project portfolio expands, ClimeCo’s project development team continues to implement processes to ensure high quality and transparency. This includes registering projects with highly trusted carbon registries, engaging with broad stakeholder groups, developing publicly available project description documents, and verifications through independent auditing bodies. These fundamentals were always the core of our project development, and the conference confirmed their importance to market integrity.
Our projects have the potential to improve the communities and ecosystems of so many places around the world. ClimeCo’s Project Development Team is committed to developing high-quality carbon projects. Our core value of strong engagement with our project partners, local stakeholders, carbon registries, and credit buyers elevates the quality and transparency in which our projects operate. We’re looking forward to participating in the growth to come and supporting initiatives that maintain the integrity of the markets.
About the Author
Greg Cesare is the Director of Project Management within ClimeCo’s Project Development Team. He is located in State College, PA. Greg and the Project Management team provide implementation and long-term management of ClimeCo’s portfolio of environmental commodity projects.