Why transparency is key to scaling carbon removal
· 6 min read
By 2022, emissions had increased by 5%, or 2 billion tonnes, compared to 2015. However, emissions must decrease by 40-60% by 2030 to meet the Paris climate targets. It is clear the rest of this decade is crucial for climate action.
Complementary to the efforts to decarbonize the global economy, carbon dioxide removal (CDR) solutions are needed for three reasons: to offset the residual emissions that are "hard to abate" (i.e. emissions from the aviation, cement and shipping sectors); to reduce the Earth's emissions from natural feedback loops that are exacerbated by continued global warming (forest fires, methane escaping from permafrost, etc.) and to reverse the build-up of historical emissions.
Achieving global net zero by 2050 requires removing up to 10 billion tonnes of CO2 from the atmosphere every year, according to the Intergovernmental Panel on Climate Change (IPCC). Afterward, and throughout the second half of the century, global emissions must stay net-negative (more CO2 is removed than emitted).
However, the current scale of CDR is only 2 million tonnes. This highlights the pressing need to scale durable CDR by a factor of 5,000. We need to rapidly innovate, implement, and scale up carbon removal technologies to get the world moving at the pace demanded by growing climate risks. Achieving this goal hinges on companies and governments investing in carbon removal solutions today, ensuring their cost-effective deployment at scale tomorrow.
Trust in carbon removal hinges on transparency in today's evolving carbon market. It safeguards reputations, minimizes financial risks, ensures project quality, enhances market efficiency, and prepares companies for future regulations:
In carbon removal, transparency is achieved through the combined efforts of organizations responsible for setting the rules (independent third-party standards) and those overseeing the process (independent auditors) and robust Monitoring, Reporting, and Verification (MRV) systems.
Third-party standards represent an essential building block for the quality of carbon removal – they define and uphold quality and frequency criteria and provide governance with a clear separation of duties. On the other hand, MRV systems ensure accurate tracking and monitoring of the amount of CO2 removed and stored. They provide precise data collection, real-time monitoring, and efficient reporting, which enhances transparency, reliability, and accountability in the carbon market and builds trust in carbon removal initiatives. Combined, they ensure quality, verifiability, and reliability in carbon markets.
By ensuring their carbon removal investments incorporate digital MRV systems and adhere to established third-party standards, businesses can attain the transparency needed to protect their reputation, minimize financial risks, and confidently navigate the sustainability landscape.
Key attributes that an MRV system should embody to foster maximum transparency and trust in carbon removal include:
The good news is that the CDR industry is already building such systems. Carbonfuture MRV+ is one system available in the CDR market today that is working to deliver all the capabilities outlined above.
For corporate buyers looking to invest confidently in carbon removal and prepare for upcoming regulations, it is recommended that they follow these steps:
1. Invest in high-durability technologies: Prioritize investments in carbon removal approaches that offer both durability and verifiability, such as direct air capture and storage (DACS), bioenergy with carbon capture and storage (BECCS), biochar carbon removal (BCR), and enhanced rock weathering (ERW).
2. Insist on comprehensive transparency: Demand the use of digital tracking systems that provide visibility into the entire lifecycle of carbon removal projects.
3. Prioritize verified and certified carbon removal credits: Give preference to carbon credits that undergo rigorous third-party validation using digital technology. Support the establishment of digital certification systems.
4. Engage in transparent marketplaces: Participate in digital marketplaces that offer transparency in carbon credit transactions, including public reporting of prices and volumes. Additionally, support and invest in developing market infrastructure comparable to financial markets to ensure the scalability and efficiency of the carbon removal sector.
5. Consider multi-year offtake agreements: These agreements offer financial stability and can be leveraged to secure debt financing, which is crucial for achieving capital efficiency and scaling carbon removal initiatives.
Carbon removal isn't merely a choice; it's a strategic imperative for businesses, essential for their future and the well-being of our planet.
Reaching corporate net-zero commitments presents a substantial challenge, and the ability of companies to remain competitive, manage risks, access capital, and secure long-term success depends on it.
Investment in carbon removal today is critical, not only to remove emissions immediately but also to build market capacity to achieve net zero. To enable businesses to make confident investments in carbon removal, adapting robust digital MRV systems linked to third-party standards is imperative. These tools are already available, and the urgency to take action is immediate.
This article was originally published on the World Economic Forum. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
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