2024 Could Be a Year of Redemption for Carbon Credits
by Diego Saez-Gil, Founder & CEO of Pachama
It’s no secret 2023 was an annus horribilis for the carbon credit market. The sector was battered by high-profile accusations of over-crediting (projects overstating their environmental impact), implementation failures and misleading claims. Many people lost confidence in the quality and rigor of the carbon credits they were buying, leading the voluntary carbon markets (VCM) to shrink for the first time in seven years.
Yet 2024 is shaping up to be a year of redemption for carbon markets. The UN’s recent climate conference, COP28, gave the market exactly what it needed: A hard reset, and a chance to win back trust. Among other benefits, a carbon credit renaissance would channel more money from companies that emit the most carbon to developing countries facing the worst impacts of climate change. Carbon markets aren't perfect, but they’re the best mechanism we have for funding carbon sequestration and nature restoration projects.
A handful of companies -including the one I lead- have long advocated for more rigor and transparency in the market. And in the sweltering Expo City outside Dubai that hosted the climate event, we finally got our wish. For the first time, industry players put aside infighting and announced end-to-end integrity frameworks to ensure carbon credits are high quality and give companies guidance on how to correctly make carbon-related claims.
US Special Climate Envoy John Kerry echoed many leaders when he declared,
"I have become a firm believer in the power of carbon markets to drive increased climate ambition and action…Let's not waste any more time or let the perfect be the enemy of the good.” Indeed, a landmark analysis published earlier this year found that “…global use of carbon markets could allow the world to nearly double climate ambition relative to current Paris pledges…”
So what’s changing going forward? In short, the rules and the tools. New governance bodies including the ICVCM (Integrity Council for the Voluntary Carbon Markets) and the VCMI (Voluntary Carbon Markets Integrity Initiative) have aligned on tightening and clarifying rules that were too lax and confusing. An “End to End Integrity Frameworks” for voluntary corporate climate action was developed that defines roles and responsibilities so companies that want to invest in offsets can do so with confidence in the environmental impact and integrity of their claims. This is critical to ensure companies know the credits they’re buying are high-quality and deliver the benefits they promised.
Meanwhile, tech players like Pachama, CTrees and Sylvera are replacing rudimentary tools with far more powerful ones, and making them broadly accessible. For example, Pachama uses satellite and lidar, as well as data gathered from the field, to give customers ongoing updates that allow them to visualize the progress of projects they've invested in. New technology, especially satellite data combined with AI, makes it possible to standardize carbon accounting and monitoring for nature-based carbon projects.
Until recently, flexible rules and ad-hoc tools allowed each project to create its own estimates for carbon sequestration, leading to inconsistent quality and abuse. That’s about to change as new remote sensing data allows us to look through space and time to consistently quantify projects’ impact, removing subjectivity and providing more transparent updates over time.
Everyone agrees carbon markets need to evolve. To restore trust and integrity to carbon offsets at scale, customers need visibility into where their funds are going and the impact projects are having on local communities and wildlife, as well as real-time measurements of how much carbon was sequestered. Technology is the key to providing that visibility and restoring confidence. A year’s worth of criticism has produced a rare moment of clarity and unity. We can’t let the mistakes of the past happen again. Carbon credits are entering a reform period that can revive our industry – let’s not squander it.
🍿 The Lean Back
Learn about the role of storytelling as a lever for climate action from Dr. Denise Baden.
🎙️ My Climate Journey Podcast
🏗️ Ben Hubbard, CEO and Co-founder of Nexus PMG, shared valuable insights into project finance for sustainable infrastructure, including advice for infrastructure-heavy startups as they scale, the role of insurance, first-of-a-kind project finance, and how the next five years of infrastructure deployment could play out. Listen to the episode here.
💧 Prakash Govindan is COO and Co-founder at Gradiant, which develops technology for industrial wastewater treatment. Prakash discusses his background, experiences with water scarcity during his childhood in India, how he met his co-founder during his doctoral work at MIT, how the company started, and the problem of industrial wastewater today. Listen to the Startup Series here.
✨ MCJ Community Highlights
🚨 We are thrilled to share in the excitement of Climate Club's transformation into Clarasight! Clarasight’s AI-driven platform promises better data, smart scenario modeling, and clear decision-making for sustainability and financial targets. Kudos to Adam Braun and Philip Charm on assembling an impressive advisory board. Here's to an exciting chapter ahead at Clarasight! Learn more here.
👩💻 Climate Jobs
Electrical Engineer, Instrumentation at Air Company (Brooklyn, NY)
Procurement Specialist at Crusoe (Arvada, CO)
Technical Product Manager at Floodbase (Remote)
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Senior Technical Program Manager at LevelTen Energy (Seattle, WA)
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🗓 Climate Events
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♻️ TODAY at 9 am PST! How to Make Sustainability Part of Everybody’s Job: 2-hour interactive workshop with Drew Wilkinson that will give you the skills and resources needed to develop an effective workplace sustainability community. Participants will learn the fundamentals of employee community organizing through expert lectures followed by individual workbook assignments, and small group breakouts.
🚀 TODAY at 9:30 am PST! Ask-Me-Anything with Tisha Schuller, founding CEO of Adamantine Energy: With a background as the former president and CEO of the Colorado Oil and Gas Association and as a strategic advisor for Stanford University's Natural Gas Initiative, Tisha offers valuable insights into the energy sector. Listen to her MCJ podcast here and get your questions ready!
⚡️ MCJ Monthly Idea Jams: This month’s theme is industrial energy / AI energy needs. Two presenters pitch their ideas to the group and attending community members provide feedback ranging from the presentation style to thoughts on the idea or market. (Feb 9)
👩💻 MCJ x Climate People Career Advancement Meetup: If you have one resume that you use for every job application, this workshop is for you The Climate People and MCJ teams are thrilled to host climate recruiter and founder of Jellicorse Talent Solutions, Kat Jellicorse, for an engaging resume and cover letter workshop. (Feb 14)
🍻 MCJ Minneapolis / St. Paul Climate Meetup: Monthly meetup for the local climate community. (Feb 15)
🇫🇷 MCJ Paris Winter Social: Lighten up the winter gloom by gathering around beers for our first meetup of the year. Come network, socialize, meet new people and see familiar faces at our February meetup for all things climate and nature tech! (Feb 28)
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