This article is part of Carbon Academy, a new illuminem series exploring the essential concepts within the world of carbon. 

1. Introduction

 Navigating the realm of carbon markets is a very complex task. As we saw in these articles, carbon credits can be looked at from a variety of angles, depending on the timing of their issuance (in which case they can be distinguished in ex-ante, ex-post, pre-purchase) or the climate benefit they contribute (reduction vs. removal).

In this article, we explore a further categorization within the carbon credits landscape, namely the one between tech-based and nature-based carbon solutions. Below we provide a comprehensive list of these solutions (with a brief description attached), clarifying which one of them falls under the carbon reduction or removal category. 

2. Nature-based solutions

2.1. Afforestation & Reforestation (Removal)

• Afforestation: establishing a forest or stand of trees in an area where there was no forest, contributing to environmental conservation and ecosystem restoration
• Reforestation: systematic replanting of trees in deforested or degraded areas, aimed at restoring and replenishing forest ecosystems

 2.2. REDD+ (Reduction)

Description: REDD+ initiative designed to mitigate climate change by incentivizing the preservation and sustainable management of forests. 

 2.4. Blue Carbon (Removal)

Description: revitalizing and protecting coastal and marine ecosystems, such as mangroves, seagrasses, and salt marshes, acknowledged for their substantial carbon sequestration capabilities.

3. Tech-based solutions

3.1. Renewable Energy Sources (Reduction)

Description: initiatives that replace emissions from fossil fuel power plants by supplying renewable energy to the grid

3.2. Improved Cookstoves (Reduction)

Description: implementing fuel-efficiency programs and providing developing nations with cookstoves operating, so that they no longer have to use fuels like wood, coal, or agricultural residues which lead to substantial emissions of smoke

 3.3. Carbon Capture Utilization and Storage (Reduction)

Description: capturing carbon dioxide (CO2) emissions produced from industrial processes, power plants, or other sources before they are released into the atmosphere. This is often stored in depleted oil fields or reservoirs to maximize the extraction of crude oil, a practice called enhanced oil recovery. 
Note: "Carbon removal" and "carbon capture" are related concepts, but differ in one important respect:

• For a project to be considered CDR, it needs to capture CO2 directly from the atmosphere
• Carbon Capture and Storage involves capturing and storing carbon from fossil/mineral sources, thereby counting as an emission reduction rather than a removal. 

3.4. Enhanced Weathering (Removal)

Description: A geoengineering technique that involves accelerating the natural process of mineral weathering to capture and store carbon dioxide from the atmosphere

3.5. BECCS (Removal)

Description: A technology that involves generating energy (biofuels, electricity, heat) from burning biomass, such as feedstock or waste, capturing the emitted carbon dioxide, and permanently storing it underground.

3.6. DACCS - Direct Air Carbon Capture & Storage (Removal)

Description: an advanced technology that actively removes carbon dioxide from the ambient air and subsequently stores it in geological formations.

3.7. Biochar (Removal)

Description: A type of charcoal, derived from heating organic matter in the absence of oxygen, used to improve soil quality and store carbon.

4. General overview

Let us conclude this article with a brief comparison of tech-based and nature-based solutions

4.1. Nature-based

Pros

• Cost-effectiveness: One of the primary advantages of nature-based solutions is their cost-effectiveness. Utilizing natural processes such as reforestation, afforestation, and soil carbon sequestration often requires less investment compared to high-tech solutions
• Strong co-benefits: Nature-based solutions offer a wide range of co-benefits beyond carbon sequestration. For instance, reforestation efforts not only capture carbon but also promote biodiversity, improve air and water quality, and enhance soil health. Protecting and restoring natural ecosystems can have far-reaching positive impacts on the environment and communities

 Cons

• Measurement and verification issues: One major challenge with nature-based solutions lies in accurately measuring and verifying their carbon sequestration potential. Unlike technology-driven solutions with precise monitoring systems, assessing the carbon stored in forests or soils can be complex and prone to uncertainties

4.2. Tech-based

Pros

• Easier to measure: Precision and Control: Technology-driven carbon solutions offer precise monitoring and control mechanisms, ensuring a reliable and measurable reduction in greenhouse gas emissions
• High permanence: Tech-based carbon solutions can offer high permanence in carbon storage, primarily because they store carbon underground, which minimizes the risk of carbon re-release into the atmosphere
• Significant economic promise with
 growth potential: Technology-driven solutions offer promising economic opportunities to channel funds towards potentially high-return investments 

Cons

• Low supply of viable and scalable solutions: While technology offers promising solutions, many of these technologies demand substantial financial commitment and differ in levels of maturity. The implementation of carbon capture and storage systems, for example, requires substantial investment in infrastructure and operational expenses, making it financially challenging for some industries or regions

5. Conclusion

Both carbon removal and avoidance projects provide effective and diverse strategies in addressing climate change. Both present distinctive challenges, strengths, and limitations, which makes banking on either impractical. It thus becomes crucial that each individual investor thoroughly assesses the pitfalls within each project prior to investment.

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