The voluntary carbon market is a powerful tool, not just for climate actions, but for driving ecological benefits and community opportunities. Sustainable Development Through High-Integrity Carbon Markets
As the market has evolved over the past decade and particularly over the past two or three years, buyers are becoming more discerning about how they consider quality and what attributes they want their credits to have – be that tech-based CDR (Carbon Dioxide Removal), renewable energy, or NBS. Why VCM Buyers Will Pay for Quality | BCG
Still, certain received wisdom continues to shape market demand and determine credit prices, whilst not always accurately reflecting the true value behind a particular credit.
A good example of this is the premium paid for newer vintages. The assumption is that older credits are worth less than newer ones. Whilst the argument might reasonably be made for a credit generated from rapidly improving technologies, the same cannot necessarily be said for NBS credits.
Older credits from high-quality forest projects can demonstrate greater cumulative climatic, biodiversity and community impacts. How the market is undervaluing older vintage nature-based credits – Permian Global.
Like the old adage, when is the best time to plant a tree…20 years ago, when is the next, today, a credit that avoided or removed a tonne of greenhouse gas emissions several years will have had that many more years of climate mitigation benefit compared with one generated this year.
These credits can also represent a more reliable and established project, one that has been able to achieve more positive benefits and can better indicate permanence.
Of course, the quality of the project must always be assessed to ensure it meets the most scientifically robust standards, but perhaps an older credit vintage, far from depreciating in value like last year’s must-have, should appreciate with the passing years, as we let millions of years of forest evolution do its job.
Read Dr Leonardo Sáenz‘s white paper HERE
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