How this new mapping tool can support the search for high-quality nature-based carbon credits

Strategies to work with nature to fight climate change have rapidly moved up the global agenda. As countries race to decarbonise their economies, the general consensus is that nature-based climate solutions are needed to complement decarbonisation strategies. Conserving nature through nature-based carbon projects can help to turn off the tap of emissions while helping to draw down the amount of carbon dioxide in the atmosphere, making them key to forging a path to net zero. At the same time, the advent of carbon finance has strengthened the business case for nature-based climate solutions, with demand for nature-based carbon credits in voluntary carbon markets doubling between 2020 and 2021 alone.

However, the demand for high-quality carbon credits continues to outpace the supply. The lack of timely access to reliable data on the costs and benefits of prospective projects has been a major obstacle for many nature-based carbon projects to get off the ground. With this new platform, policymakers and investors have the information they need at their fingertips.

1. Why are Nature-based Climate Solutions (NCS) essential to achieving net-zero targets?

Nature-based climate solutions (NCS) are an integral part of the path to net-zero. They are baked into?every single Intergovernmental Panel on Climate Change (IPCC) mitigation pathway for us ?to achieve the Paris Agreement’s goal of limiting the global temperature rise to below 2 degrees Celsius. Even if we manage to decarbonise, we could still fall short of our targets, unless we figure out the science and practice of implementing nature-based climate solutions.

Recent research from CNCS shows that by protecting threatened forests across the tropics, we can avoid the loss of almost 2 billion tons CO2 per year which is greater than the emissions of Indonesia and Singapore combined. Protecting our forests and reforestation are an important part of our climate change mitigation strategy.

2. Where are the opportunities for NCS and what is the potential?

?Our research shows that there are abundant opportunities in the world where one can invest in protection and restoration to avoid carbon emissions. These opportunities exist in threatened forests and threatened mangrove forests across the tropics, and also in the urban environment. Much of the potential currently lies in South America and Southeast Asia.

?If we do invest in protecting these forests as nature-based carbon projects, we have the option of generating carbon credits from these projects. Our research has shown that the financial return-on-investment from these nature-based carbon projects can be quite substantial.

?At conservative carbon market prices, tropical forest protection could yield a ROI amounting to US$46 billion per year, with the highest concentration of profitable sites located in the Asia-Pacific region. The figure below shows the global forest carbon ROI from financially viable sites over the next 30 years. The majority of financially viable sites are located in the Asia-Pacific region, followed by the Americas and Africa. Brazil, Indonesia, Malaysia, Bolivia and India are home to the largest potential for forest carbon projects.

Not only can we invest to protect forests, but biodiversity too. Within Southeast Asia, an astounding 58% of forests are under threat and could currently be protected as economically viable forest carbon projects at a conservative carbon price of US$5.8 per tonne of carbon dioxide equivalent emitted. This would not only avoid 835 million tonnes of carbon dioxide equivalent each year from deforestation—which is almost half the emissions of Indonesia in 2018—but keep supporting the dietary needs of more than 300,000 people by providing habitats for birds, bats, bees, and other wild pollinators that crop cultivation often depends on.

3. Are there any risks of nature-based carbon projects?

There have been several media reports on controversial carbon projects that have allegedly sold meaningless carbon credits to corporations. The source of the offsets were forests that were not destined for the axe. This means the carbon project did not provide any additional benefits to the climate as these existing forests that were already protected or undisturbed and trapping carbon dioxide. There have also been cases in which carbon projects that were bought by large corporations have burned down in wildfires. These cases of “low quality” carbon offset projects have drawn criticisms where large corporations have been accused of greenwashing, namely buying “low quality” offsets without considering biodiversity, human rights and displacement issues and buying?offsets without cutting their own GHG emissions. These risks highlight the need for “high quality” carbon projects. Only when carbon projects reach a certain criteria, conservation and sustainable development to reduce emissions can be achieved.

4. What are high-quality carbon credits?

In order for a carbon credit to be considered high-quality the projects need to fulfil the following criteria:

A) ?Additionality: The carbon project must help to lock up emissions that would otherwise have been released into the atmosphere. E.g. If the forest was not under threat of being destroyed, a carbon project set up to protect that area does not have additionality.

B)??Permanence: The carbon removed from the project cannot be reintroduced into the atmosphere. E.g. If a forest fire destroys trees, the carbon in them gets released, and thus undermines the integrity of the carbon credit. Carbon project developers must take steps to prevent this from occurring.

C)??Profitability: Investors should consider whether their conservation efforts can produce a good ROI for their carbon projects. This heavily relies on the price of carbon, which in 2021 went up by almost 60% from 2020 levels.

5. How does our tool help to support the search for high-quality nature-based carbon credits?

As carbon is increasingly valued as a commodity, this dashboard helps to shorten the often complicated and costly carbon prospecting process by identifying the most promising carbon project sites to deliver the greatest benefits for the climate, biodiversity and people.

This powerful tool has the ability to help investors and policymakers identify where nature-based projects can be developed as potential sources of high-quality carbon credits. Using the tool, users can calculate the estimated yield of carbon credits and their financial ROI, based on user-defined assumptions such as project duration, costs and carbon prices. They can also quantify the other positive benefits of projects, such as improving food security, ensuring clean water supply, and conserving key biodiversity areas.

This is how the interactive map works:

Step 1:?On the map, select the area of interest by drawing a polygon around it using the ‘Draw on Map’ tool. This can be done by clicking on the polygon icon to the right of the map - ‘Draw a New Polygon’ as seen in the image. ?

Click on it and draw your polygon around your area of interest!

Step 2: The benefits and co-benefits associated with the area of interest can be estimated by keying in specific parameters via the calculator icon. Assumptions such as the tenure of the carbon project, the estimated cost of establishing it, as well as the initial and projected carbon prices can be input at this stage.

Step 3: Based on the set of assumptions, the dashboard will do the calculations and provide information on (1) the amount of carbon dioxide equivalent emissions that the area can sequester and (2) the potential ROI. In this example, a carbon project established in the forests of Kalimantan, Indonesia can capture 184,126 tonnes of carbon dioxide equivalent emissions per year. This will provide a ROI of $3,435,572 per year.

Step 5: Lastly, the dashboard also quantifies the co-benefits associated with the area of interest. Such co-benefits include improving food security, ensuring clean water supply, and conserving key biodiversity areas.

The Carbon Prospecting Dashboard is a product of recently published peer-reviewed studies, and ongoing research led by CNCS researchers who are helping to fill major research and development gaps that have hampered the implementation of NCS globally. The platform will continue to be built upon to improve accuracy and expand its features for anyone who is searching for high-quality nature-based carbon credits.

As deforestation is a major contributor to greenhouse gas emissions, conserving nature through “high-quality” carbon projects can help to turn off the tap of emissions while helping to draw down the amount of carbon dioxide in the atmosphere. This dashboard has the potential to accelerate climate action by supporting governments, businesses and civil society to work with nature to address the dual global crises –of climate change and biodiversity loss.

Explore our interactive map here ?? carbonprospecting.org

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