Carbon Credits Are Evolving from Greenwashing to an Innovation Engine

As 2023 delivers one climate-change-enhanced natural disaster after another, it’s clear that carbon removal and emissions reduction are urgent priorities to limit the rise of global temperatures. 

Unless the world can slash emissions by 45% by 2030 and attain net zero by 2050, global warming will exceed the 1.5°C limit set in the Paris Agreement. 

At the same time, carbon emissions that have been in the atmosphere for years must be removed, at a pace of 6 gigatons (Gt) per year by 2050. Reaching these goals requires rapid innovation and solution deployment at scale.

Dedicated climate tech engineers are working on emissions reduction and carbon dioxide removal (CDR) solutions. Many new solutions are already delivering results on a small scale, and government incentives and venture capital continue to pour into the space to help bolster development. 

However, scaling carbon technologies requires more than upfront investment and talented engineers – it also requires standardized methods for validating results and a way to communicate to local communities that these technologies can also deliver near-term benefits. 

Those needs are why we’re seeing more discussion in climate tech around monitoring, reporting, and verification (MRV) and co-benefits. Understanding how these processes work and leveraging them wisely can help humanity make the best use of the tools we have to deal with carbon dioxide emissions.

MRV Quantifies Emissions Reduction and Carbon Removal Results 

Capturing carbon dioxide (CO2) – at the point of emission or from the atmosphere – and storing it to negate its harmful effects is essentially waste management. But unlike a dumpster full of trash that we can track to the landfill, CO2 is invisible, which means it’s hard to prove that it’s been captured and stored. 

Because the carbon credit market is a crucial lever for building CO2 reduction technology now, it’s important to create a stable, trustworthy market as fast as possible. 

So, instead of a waste-management model, CO2 reduction technologies must adopt an approach similar to the stock market. When standards and validation practices engender trust in the system, investors have confidence, and the market performs well. When trust erodes, the market becomes more volatile.

MRV gives climate tech companies (and their carbon-credit buyers) a way to authenticate their work. It also reduces the range of uncertainty within a CDR process. By reducing the uncertainty of how much carbon is captured, MRV systems can help to reduce the overall cost per tonne of captured carbon. 

MRV is also critical for helping developers and the market validate how CDR systems work and how they will deliver to the market; it is a critical part of a techno-economic analysis that should be developed from the beginning of any CDR system from concept to full-scale deployment.

MRV can be straightforward or extremely complex, depending on the solution it’s applied to.

For example, closed carbon removal systems like direct air capture (DAC) technology are comparatively easy to monitor, report on, and verify. DAC systems pull in measurable amounts of air, put it through reactions that can also be measured, and capture quantifiable amounts of CO2. 

CDR technologies that rely on natural processes like enhanced rock weathering, ocean alkalinity, soil sequestration, and forest management for carbon sequestration are trickier for MRV because these are open systems that happen on a large geographical scale. 

For these processes, there has to be a way to measure and analyze isotopes at scale, to verify that the mineralized rocks and rock dust have reacted with carbon to pull it out of the atmosphere, and to measure the amount of carbon captured. Similar MRV challenges exist for ocean-based solutions like kelp beds and acidity adjustments. 

Part of developing successful technology in these areas will be developing scalable MRV solutions. Ultimately, MRV can help climate innovators scale their solutions because investors and buyers are more likely to invest in verifiable technologies. 

Co-Benefits Can Drive Climate Technology Adoption

Co-benefits are additional positive results created by climate technology processes. Co-benefits can directly and indirectly help communities where climate tech projects are implemented. In doing so, they can help overcome community reluctance or distrust of new solutions to gain wider adoption. 

For example, a project that buys surplus limestone rock and dust from a local mine and spreads it on participating farmers’ fields might be an obviously good thing for people who understand the science behind enhanced rock weathering for carbon capture and sequestration. However, people within that community might have concerns about air quality, soil runoff, waterway pollution, and crop safety. 

By outlining the co-benefits of this process, the project can reassure the community of the safety and benefits it offers – including benefits in the near term. In this case, the rocks and dust would be slowly binding with carbon from the atmosphere anyway, just extremely slowly, putting that material where it will be churned by farm equipment and the root growth of plants speeds up the carbon capture process. 

It also clears mine sites of waste and adds minerals to the soil for better crop yields with fewer synthetic inputs. When the minerals in the soil run off into streams and rivers, they eventually reach the ocean, where they can help to counteract the climate-driven acidification of ocean waters to protect marine life. 

For smaller-scale projects, co-benefits can raise public awareness of how carbon capture can benefit local businesses–and how easy and common this kind of technology can be. 

For example, an office complex or apartment building could retrofit a carbon capture system into their existing HVAC filtration and then track the results on a digital scoreboard in the lobby so tenants can see how much carbon their building is keeping out of the atmosphere. 

Captured CO2 can also be sold to local breweries and beverage manufacturers or transformed into carbon-based materials for manufacturing at local facilities. 

These kinds of co-benefits can turn carbon capture from something that’s abstract and unfamiliar to something that directly benefits the local economy and environment. Like MRV, co-benefits are easiest to develop if they’re part of the planning process for new climate technology. 

At their core, MRV and co-benefits are ways to make climate solutions more accountable – to investors, customers, and the community at large. Designing them into climate innovation projects can make it easier for companies to find the resources and champions they need to scale their solutions quickly, and that’s an outcome that can benefit us all.