CO2eco is delighted to be partnering with Future of the Amazon Foundation and the people of Arariboia to develop a pioneering reforestation project. We have developed a structured contract to fund the project and deliver long-term income to enable the community to protect and restore their rainforest and preserve their culture.
More news soon – but contact us if you want to know more.
The CO2eco team has been very patient while financial markets and global climate proto-regulation continue their existential battle between the forces of internalised capitalism and the drive for a just economic transition. At stake? Only the survival of the human race and much other life on Earth.
But this week came a major step forward when the climate market’s alphabet soup got a new poster child: the VCMI Claims Code of Practice. Within the techie detail there are really significant investment demand drivers and supply-side flexibilities which boost confidence in climate finance. A silver-gold-platinum incentive scheme for corporates. The linkage with Science-based Targets Initiative for near term target-setting. The marriage with the Integrity Council (ICVCM) project quality standards. The inclusion of avoidance as well as removals – and better still, acknowledgement of beyond value chain offsets.
And the promise of more to come, including an “on-ramp” for companies who haven’t yet worked through all the data and supply chain complexity.
CO2eco applauds the clarity and transparency of the Foundational Criteria and the developmental, incremental approach which recognises that perfection is the enemy of urgent and massive climate transition investment. It promotes investment right now. It avoids the bear-trap of building duplicating rule-sets by working with the grain of the Core Carbon Principles, GHG Protocol, SBTI and others.
There is more work to do, much of it acknowledged by VCMI. CO2eco would like to see GFANZ and its various member bodies in the financial sector throw their full support behind the Claims Code of Practice – this will galvanise contractual commitment to investment and start meaningful progress towards the $trillions AUM that will eventually be needed to turn the tide of climate and nature recovery. And to back up this commitment, we believe two issues need to be addressed.
Firstly, we want to see VCMI and ICVCM working with the accounting and legal professions and UNFCCC to quickly clarify carbon accounting rules. It’s not only the Article 6 international transfers (ITMOs) that need to rapidly be put to bed but also the rigour of corporate carbon accounting treatments – we need to see the matching principle applied to carbon as it does for financial assets & liabilities and income/expenditure. What does this matter? For science-based net zero claims and targets to mean anything, residual emissions in a given accounting period should only be offset with removals that match that vintage, otherwise all sorts of silly games can be played – as they are at the moment when current year emissions are offset with historic REDD+ purchases in the secondary market. If carbon is to become an authentic commodity – insurable, rateable, tradeable (spot/forward/derivative) – it needs to have credibility with mainstream financial reporting and auditing cycles. The matching principle in financial accounting must be applied to emissions and offsets.
Secondly, CO2eco wants to see corporate net zero claims being honestly and transparently supported by contractual commitment, whereby a forecast to deliver net zero must be supported by reporting of the proportion of the plan that has been legally committed to. Foundational Criteria 3 should require the percentage of future reductions and removals targets that have been contracted for (capex and opex). Only this level of commitment demonstrates that the transition plan is credible. And it has the benefit of driving early investment in mitigation projects.
The various organisations* on the carbon market field of play need to hold hands and work as a team to solve these loose ends as soon as humanly possible, because capital needs to flow in its $trillions to mitigate and adapt to the climate and nature crises.
*alphabet soup time…. team members include (but not limited to): VCMI, ICVCM, HLEG, SBTI, GRI, SASB, FRC & ISSB, GFANZ and all its constituents, CDP, ICROA and its members, IETA, TCFD, TNFD, and Article 6 negotiators in the run-up to COP28.
Imagine a not-too-distant future where humans have become a wholly urban species. Eleven billion of us crammed into mega-cities, divorced from a rewilded rural environment.
Science fiction? Perhaps it’s not that far-fetched given the pace of change — our insatiable appetite for growth, our reliance on technology and our need to find solutions to ever-decreasing natural resources.
Indeed, I think this scenario could be only a few short decades away. Think back 30 years to the early 1990s… pre-internet, pre-globalisation, pre-pandemic. And during that time, urbanisation in China witnessed the largest migration in human history.
And now imagine 30 years forward, but with an exponential pace of change. The growth of the global population between now and 2050 will necessitate the construction of cities the size of New York every month*. Yes, every month — that’s a lot of concrete and steel.
Perhaps in this scenario we have solved the climate crisis and, in order to feed eleven billion urban dwellers, all our food is synthetic. Our carbohydrates, proteins, fats, micro-nutrients and minerals are produced in factories — perhaps with some fresh fruit and veg from urban indoor farms. No more farmland, no more farmers. No need to fish the oceans. We will only venture out into the new non-urban “wilderness” to mine raw materials and for our own enjoyment.
Many believe that technology will provide the solutions to planetary limits to growth. Bill Gates and others argue persuasively that technical fixes to our social and environmental challenges are within our grasp.
But unless and until we achieve this utopian sustainable future, we have to work out how to feed that growing population while our stocks of natural resources are running dry. As a species, we are living beyond our means in spectacular style — and this trend is accelerating. The excellent and terrifying Seaspiracy — essential viewing on Netflix — quotes academic study that the oceans will be totally fished-out by 2048. Other scientists, quoted in the also excellent Kiss The Ground, forecast that soils in several parts of the world have fewer than 60 harvests left, many a lot less. Destruction of habitat is also destroying pollinators. And of course, we are polluting the air with greenhouse gasses. We are stoking the fires of our own extinction.
Will tech will save us? Which side are you on? Take a test — an elephant is charging you… do you; a) run like hell and put as much distance as possible between you and it to ensure your safety, or b) get out your laptop to calculate how fast and far you will have to run?
a) is what science and economics calls the precautionary principle, and it seems pretty sensible to me. Of course, we must also invest hard on the technical fixes — but let’s also make some “no regrets” changes, and quickly.
The changes I’m thinking of include those specifically related to agriculture and food: enforceable international agreements to protect and recover rainforests and fish stocks, and implement taxes to reduce global demand for high-emissions and ecosystem-damaging foodstuffs such as beef. Courageous leadership by politicians is needed to reduce our consumption of poorly farmed products. The corporate supply chain needs to inject massive investment in regenerative agriculture and fisheries — it’s in their business interests to manage these risks. In fact all of the above is good business, being far more cost effective and profitable than acting later — or too late.
And let’s look at ourselves too — change only happens if people demand it. People only demand it if they believe it, and they only believe it if they see it. So change starts at home, with you and me.
Resources referenced in the text:
Bill Gates: “How to Avoid a Climate Disaster” (2021)
