Disentangling carbon credits and offsets with contributions / Feb 2025
The terms carbon credits and carbon offsets are often used interchangeably, but are in fact two distinct concepts. I've spent a nice Sunday morning reading up on some recent articles that Bhaskar Vira sent me which introduce a third term, known as "carbon contributions". Rather than this adding confusion, I found it helped me clarify my own thoughts on the matter, which I note down here in draft form. (Update 7th Feb: I've revised this several times after many discussions this week, especially with David A Coomes and Srinivasan Keshav, with full list of credits in the end) […3552 words]
notesPosition paper on scientifically credible carbon credits (via 4C) / Jan 2025
My colleagues Thomas Swinfield and Eleanor Toye Scott lead the publication of a comprehensive report of the steps the voluntary carbon market needs to take to restore its scientific credibility, with input from many of us in 4C and beyond.
- establishing common standards for carbon quantification and accounting, to cover additionality, leakage and permanence.
- avoiding perverse incentives and align the motivations of all stakeholders with high-integrity outcomes. [...]
- issuing all carbon credits based on trusted primary observations.
- making all the data needed to reproduce carbon calculations available in standard file formats.
- [...] reporting social and biodiversity dimensions of projects separately from carbon calculations.
- integrating DMRV methods into carbon and biodiversity accounting standards to reduce the financial and administrative burdens on nature-based projects and the local communities participating in or affected by them. […186 words]
Published a legal perspective on high integrity forest carbon credits / Nov 2024
Sophie Chapman lead an effort to explore a novel legal framework for forest carbon credits that separates carbon tenure (i.e. title and associated property rights to the land and trees which store the carbon) from the carbon rights (i.e. title and associated rights to monetise and manage the credits which symbolically represent the carbon stored in the trees), while also specifying the relationship between the carbon tenure and the carbon rights.
The resulting paper has just been published in the Climate and Carbon Law Review journal, and is available as open access for your perusal.
A Legal Perspective on Supply-side Integrity Issues in the Forest Carbon Market
Sophie Chapman, Eleanor Toye Scott, Thomas Swinfield, Robin Daniels and Anil Madhavapeddy.
Journal paper in Carbon & Climate Law Review (vol 18 issue 3).
papersMitigating credit reversal risks in nature-based solutions / Sep 2024
Many of the questions around our recent Nature Sustainability commentary on NbS credits revolve around how to finance new projects if credible credits need to be ex-post. Our latest paper published in Carbon Management on "Mitigating risk of credit reversal in nature-based climate solutions by optimally anticipating carbon release" tries to address this.
The problem with selling ex-ante (future) carbon credits for (e.g.) a deforestation avoidance scheme is that project reversals can happen in the future ("deforestation has increased") thus rendering any credits issued previously useless. On the flip side though, an overly conservative view of the future ("the entire forest will disappear overnight!") is clearly so conservative that it doesn't serve the best interests of the project developer. So ideally, a project would make realistic but conservative ex-ante predictions that is safe for both project developer (who gets more funds upfront) and a carbon credit purchasers (who needs to account for impermanence of nature credits).
Our paper shows how to do this by calculating a "release schedule" to predict future drawdowns, and then issuing extra credits when the release at some future date is less than predicted by the release schedule. We use verified ex-post observations to construct these release schedules, and design them to bound the risk of the project becoming negative overall (that is, net drawdown is negative) and thus failing. […355 words]
Paper published on ex-ante forecasts of nature-based solutions / Aug 2024
Our paper on ex-ante projection for nature-based solutions has been published in the Journal of Carbon Management. I also wrote up some long-form thoughts on it here.
E.-Ping Rau, James Gross, David A Coomes, Thomas Swinfield, Anil Madhavapeddy, Andrew Balmford and Srinivasan Keshav.
Journal paper in Carbon Management (vol 15 issue 1).
PACT Tropical Moist Forest Accreditation Methodology / Aug 2024
We have just released the Tropical Moist Forest v2.1 specification, to follow up the now-expired v2.0 from six months ago. The key updates are a new high-level explainer, as well as clarifiations for buffer zones and base tiles.
PACT Tropical Moist Forest Accreditation Methodology v2.1
Andrew Balmford, David A Coomes, Michael Dales, Patrick Ferris, James Hartup, Sadiq Jaffer, Srinivasan Keshav, Miranda Lam, Anil Madhavapeddy, Robin Message, E.-Ping Rau, Thomas Swinfield, Charlotte Wheeler and Abby Williams.
Working paper at Cambridge Open Engage.
Nature Sustainability commentary on carbon and biodiversity credits / Aug 2024
Our commentary on nature-based credits has been published in Nature Sustainability, lead expertly by my colleagues Thomas Swinfield and Sophus zu Ermgassen.
In our view the carbon credits markets are vitally important for forest conservation, but the key is to only transact these credits after they have been proven to be demonstrably additional using robust statistical techniques, so that we know before a sale that each credit represents real gains that would not otherwise have occurred without the carbon finance.
A more scientific approach that supports transparent, third-party validation could absolutely transform these markets. And given the rapid rate of tropical forest loss, such upscaling of credibility is vitally necessary to raise investor confidence in protecting nature, since we can now be confident that every "credit" sold is resulting in real climate benefit. There are real questions remaining about this reform, of course. […509 words]
Nature Sustainability article on carbon/biodiversity credits / Aug 2024
Our commentary on nature-based credits has been published in Nature Sustainability. I wrote some thoughts about it here as well.
Global, robust and comparable digital carbon assets / Apr 2024
Paper on smart contracts for carbon credits at ICBC 2024 in Dublin
Preprint available on insuring against variability of NbS / Mar 2024
A new preprint is available on our work on ex-ante pricing models for nature-based solutions. It is currently under review, so any feedback is most welcome!
E.-Ping Rau, James Gross, David A Coomes, Thomas Swinfield, Anil Madhavapeddy, Andrew Balmford and Srinivasan Keshav.
Journal paper in Carbon Management (vol 15 issue 1).
Legal perspectives on integrity issues in forest carbon / Jan 2024
This is an idea proposed as a postdoctoral project, and has been completed by Sophie Chapman. It was supervised by Anil Madhavapeddy and Eleanor Toye Scott.
Carbon finance offers a vital way to fund urgently needed forest conservation, but there are integrity issues on the supply side.[1] Besides the known issues with carbon quantification,[2] carbon credits are often poorly designed and implemented from a legal perspective. Specifically, in the absence of a clear legal framework for forest carbon credits, contracts tend to conceptualise credits in similar terms to the products of extractive industries, such as mineral mining. This is a factually inaccurate model for carbon credits, since the carbon is not extracted but on the contrary is stored in the trees which remain part of the landscape. This inappropriate model then leads to misunderstandings and misallocations of the rights of the various stakeholders in carbon finance projects and militates against just benefit-sharing arrangements.
This project is exploring a novel legal framework for forest carbon credits which separates carbon tenure (i.e. title and associated property rights to the land and trees which store the carbon) from the carbon rights (i.e. title and associated rights to monetise, sell, count and retire the credits which symbolically represent the carbon stored in the trees), while also specifying the relationship between the carbon tenure and the carbon rights.
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See the note on Nature Sustainability commentary on carbon and biodiversity credits
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See the Trusted Carbon Credits project and related papers. […227 words]
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ideasPACT Tropical Moist Forest Accreditation Methodology / Dec 2023
We have just released the Tropical Moist Forest v2.0 specification, to update the v1.1 released earlier in the year. There are significant updates to the methodology to better match the scheme described in Realizing the social value of impermanent carbon credits.
PACT Tropical Moist Forest Accreditation Methodology v2.1
Andrew Balmford, David A Coomes, Michael Dales, Patrick Ferris, James Hartup, Sadiq Jaffer, Srinivasan Keshav, Miranda Lam, Anil Madhavapeddy, Robin Message, E.-Ping Rau, Thomas Swinfield, Charlotte Wheeler and Abby Williams.
Working paper at Cambridge Open Engage.
Nature Climate Change paper on impermanent carbon credits / Nov 2023
Our paper on valuing impermanent carbon credits has been published at Nature Climate Change. It has received a bunch of press coverage, including phys.org, cam.ac.uk, and Mirage.
Realizing the social value of impermanent carbon credits
Andrew Balmford, Srinivasan Keshav, Frank Venmans, David A Coomes, Ben Groom, Anil Madhavapeddy and Thomas Swinfield.
Journal paper in Nature Climate Change (vol 13 issue 11).
Preprint on the social value of impermanent carbon credits / Jul 2023
We have uploaded a preprint of our 4C paper on valuing impermanent carbon credits, by using the Social Cost of Carbon as a basis for a discount function into the future. Comments and feedback are most welcome.
Realizing the social value of impermanent carbon credits
Andrew Balmford, Srinivasan Keshav, Frank Venmans, David A Coomes, Ben Groom, Anil Madhavapeddy and Thomas Swinfield.
Journal paper in Nature Climate Change (vol 13 issue 11).
PACT Tropical Moist Forest Accreditation Methodology / Jun 2023
We have just published the Tropical Moist Forest v1.0 specification, which is a detailed description of the methodology we are using for counterfactual dynamic baselines to calculate the additionality, leakage and permanence behind REDD+ projects. I explained some of the background behind this in a seminar last year.
PACT Tropical Moist Forest Accreditation Methodology v2.1
Andrew Balmford, David A Coomes, Michael Dales, Patrick Ferris, James Hartup, Sadiq Jaffer, Srinivasan Keshav, Miranda Lam, Anil Madhavapeddy, Robin Message, E.-Ping Rau, Thomas Swinfield, Charlotte Wheeler and Abby Williams.
Working paper at Cambridge Open Engage.
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