Addressing the climate crisis and reaching a 1.5° or 2°C pathway by 2030 will require about a 50% net-emission reduction of annual emissions to around 23 gigatons of carbon dioxide (Gt CO2) from 2019 levels. (Nature and Net Zero).

 

While reduction of emissions through improved technologies and business processes should remain the top priority, these alone will not be able to drive the level of reductions needed fast enough to achieve global climate goals. In industries such as transportation and heavy manufacturing, for example, low-emission technologies may not yet be mature enough for widespread adoption.

 

When done right, carbon credits can help companies compensate and increasingly neutralise their hard-to-reduce emissions in the short term. A carbon credit is a verified emission reduction (measured in tonnes of CO2 or the equivalent amount of a different greenhouse gas) used to compensate for emissions made elsewhere.

 

Natural climate solutions (NCS), involve protection and restoration of natural ecosystems such as forests, wetlands and mangroves. NCS have the potential to provide 1/3 of the emission reduction targets by 2030 (equal 7Gt CO2). NCS are both cost effective and provide significant additional benefits by supporting biodiversity and generating income for rural communities. Asia is set to become one of the largest suppliers of NCS globally as the region houses a third of the global supply potential (Nature and Net Zero).

 

Although demand for carbon offsets is growing (hundreds of major companies have already made ambitious climate pledges), a number of challenges surrounding NbS are limiting their further development. Two key challenges include:

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1. An inefficient approach to monitoring, reporting and verification (MRV) – Today’s verification process, which ensures that the amount of carbon sequestered by each NbS project is accurately measured, is highly manual. The process, which is based on in-person audits that may only take place every 2-3 years, is also costly.
    

2. Limited transparency for NBS buyers and investors – Given the manual and unstructured documentation, there is also limited transparency and comparability around the risks and impacts of NbS projects. Investors and companies looking to offset their emissions must perform significant due diligence to build trust for individual projects and their developers.

 

The Sustaintech Xcelerator will accelerate technology solutions that help to transform NbS verification from a manual, in-frequent and fragmented process into one that is continuous – transparently monitoring the performance and impacts of an NbS project and enabling ongoing issuance of carbon credits. Importantly, these technologies should complement necessary ground work required for verifying the more intricate social impacts of a project.