A New Credit On The Block

 December 17, 2022

A New Credit On The Block

Experts at COP15 said that reversing nature loss and restoring biodiversity also deserves payments they call biocredits.  

The rest of this week’s stories are all about climate, carbon removal, and carbon credits. 

Bezos Earth Fund offers $110M grants, the U.S. DOE invests $3.7B in carbon removal, and Amazon launches a new carbon credit label.

Let's get to know all these stories.

The Cost of Protecting Biodiversity

Governments are working on more robust laws to prohibit nature degradation. But same with fighting climate change, efforts from the private sector also play a critical role.

Enter biodiversity credits, a.k.a. biocredits.

Negotiators at Montreal's UN Biodiversity Conference (COP15) summit have focused their talks on the potential voluntary markets for biocredits.

Some organizations believe that biodiversity credits can drive financing toward nature conservation. But there's currently no unified approach or methodology to quantify the gains of conserving biodiversity.

Still, this new credit shows a promising trend.

The U.N. estimates that the planet needs $674 billion a year by 2050 to protect biodiversity.

An ABACUS Test

Trust has been at the center of issues plaguing the carbon market.

There are good and bad carbon credits -  the challenge is spotting the difference. This is exactly what Amazon’s new carbon credit label "ABACUS" aims to fix.

ABACUS goes above and beyond Verra’s methodology and will focus on ensuring additionality, leakage, and durability standards in the market.

Amazon is currently testing and refining the ABACUS, designed to improve public trust in the integrity of carbon credits. This is critical if we all want to see the carbon market grow as expected. 

DOE’s $3.7B Bet on Carbon Removal

There are plenty of efforts made to reduce carbon emissions, yet they’re not enough to bring the U.S. to its 2050 net zero targets.

The U.S. Department of Energy (DOE) recognizes this and is investing a whopping $3.7 billion into the large-scale deployment of carbon removal technologies.

The funding comes from President Biden’s Bipartisan Infrastructure Law which supports four carbon removal programs:

 

Direct Air Capture (DAC) Commercial and Pre-Commercial Prize

Regional DAC Hubs

Carbon Utilization Procurement Grants

Bipartisan Infrastructure Law Technology Commercialization Fund (TCF)

Altogether, they’re meant to bolster innovations in carbon removal, which scientists say is vital in slashing GHG emissions.

Bezos’ $110M Early Giveaways

Jeff Bezos has been criticized for the tremendous amount of carbon that Amazon emits yearly.

The retail giant pumped ~71 million metric tons in 2021.

Personally, Bezos is trying to reverse that through the Bezos Earth Fund that he founded in 2020.

The Fund recently announced it’s giving away a total of $110 million in grants as part of its $10 billion commitment to drive climate and nature-based solutions.

This funding will be for restoration efforts in Africa and the United States as well as advancing climate science, monitoring, and governance in carbon markets.

Carbon Fact of the Week

To date, ~41 billion metric tons or gigatonnes of carbon are emitted into the atmosphere globally this year.

To capture 30% of carbon emissions in 2050 to reach net zero, the carbon removal industry needs to scale up to about 5x larger than the petrochemical industry today.

The current cost of carbon removal technologies ranges between $250 and $600 per tonne of CO2. To become commercially viable, that cost must fall below $100/tonne.

In the U.S., carbon removal needs up to $6 billion/year in federal funding over the next 10 years. By comparison, direct subsidies to the fossil fuel industry are about $20 billion/year.

Source: https://carboncredits.com/