“My biggest piece of advice for business leaders looking to invest in high-quality carbon credits, particularly nature-based credits, is to invest now. Many companies wait until the end of the year to purchase tonnes, but there will be greater demand and limited selection as businesses compete. Despite indications of an economic downturn, prices may rise in the voluntary carbon market, so if you’re considering purchasing carbon credits, do not wait.” Dee Lawrence, Forbes Councils Member*
This is a great intro and difficult to argue with. High-quality nature-based carbon credits are in high demand and in low supply especially for carbon dioxide removal (CDR) and there are several compelling reasons for this:
1. Effectiveness and Scalability: Nature-based CDR projects, such as reforestation, afforestation, and habitat conservation, have proven to be highly effective in removing carbon dioxide from the atmosphere. These projects leverage natural processes and ecosystems, which have evolved over millions of years to sequester carbon. The scalability of nature-based solutions makes them attractive for large-scale carbon removal efforts.
2. Co-Benefits: Nature-based CDR projects offer a range of co-benefits beyond carbon sequestration. They contribute to biodiversity conservation, protect critical habitats, enhance ecosystem services, and support local communities. The holistic approach of nature-based solutions aligns with broader sustainability goals, making them an attractive option for businesses, governments, and individuals seeking comprehensive environmental solutions.
3. Complementary Yet Crucial Approach to Emission Reduction: While reducing greenhouse gas emissions is vital, it alone is insufficient to meet climate targets. Nature-based CDR provides a complementary strategy to capture and store carbon already present in the atmosphere. By investing in high-quality nature-based CDR, companies can address their residual emissions that are challenging to eliminate through direct emission reduction efforts alone.
4. Regulatory Drivers and Policy Support: Governments and regulatory bodies are increasingly recognizing the importance of nature-based solutions as part of their climate change mitigation strategies. Many countries are incorporating nature-based CDR approaches into their national climate plans and policies. The inclusion of nature-based CDR in international agreements, such as the Paris Agreement, has further amplified the demand for high-quality credits.
5. Investor and Consumer Preferences: There is a growing demand from investors and consumers for businesses to demonstrate their commitment to sustainability and climate action. Investors are increasingly incorporating environmental, social, and governance (ESG) factors into their investment decisions, favoring companies that show a proactive approach to carbon offsetting. Similarly, consumers are seeking products and services from companies that prioritize environmental responsibility, leading to increased demand for nature-based CDR.
6. Carbon Market Development: The development of carbon markets and mechanisms has created a demand for high-quality nature-based CDR credits. Businesses and individuals seeking to offset their emissions are actively looking for credible and verified nature-based projects to invest in. This market-driven demand is driving the growth of high-quality nature-based CDR initiatives.
7. Urgency of Climate Action: The urgency to address climate change and achieve global climate goals is becoming increasingly apparent. The Intergovernmental Panel on Climate Change (IPCC) and other scientific bodies have highlighted the need for immediate action to limit global temperature rise. Nature-based CDR offers a readily available and proven solution that can be implemented now to make significant contributions to carbon removal and climate stabilization.
The high demand for high-quality nature-based CDR arises from its effectiveness, scalability, co-benefits, alignment with sustainability goals, regulatory support, investor and consumer preferences, carbon market development, and the urgent need to address climate change. Investing in these credits allows stakeholders to make meaningful contributions to carbon removal and play an active role in combating climate change.
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*Source: https://www.forbes.com/sites/forbesnonprofitcouncil/2022/09/30/high-quality-nature-based-carbon-credits-what-you-need-to-know/