New approach to carbon credits valuation
A new way to price carbon credits could encourage investment in forest preservation and boost progress towards net zero.
Current methods to value the carbon storage potential for forest conservation projects have led to a crisis of confidence in carbon markets, with recent research revealing as little as 6% of carbon credits from voluntary REDD+ schemes result in preserved forests.
This is hampering efforts to offset unavoidable carbon footprints, mitigate climate change, and scale up urgently needed investment in tropical forest conservation.
Now, a team led by the University of Cambridge including researchers from the Dragon Capital Team and the London School of Economics and Political Science, has invented a more reliable and transparent way of estimating the benefit of carbon stored because of forest conservation.
Professor Ben Groom, said: “Investors face trade-offs when deciding which offsets to buy. Well-designed nature-based solutions projects present singular opportunities for benefitting biodiversity and rural livelihoods and while these schemes may be more vulnerable to impermanence than some other offset classes, they mitigate the social costs of climate change considerably. Our new approach suggests how this contribution can be valued, enabling the direct comparison of nature-based and technological offset options for progressing towards net zero.”
15 November 2023
