Voluntary Carbon Research Articles

Blue Carbon as a Potent Strategy in the Pathway to Achieve Net Zero

Climate change and its various impacts, including extreme weather events, have recently been recognized as urgent threats to the ecosystems. The Blue Economy, as defined by the World Bank, involves the use of ocean resources to promote sustainable economic propriety, livelihood improvement and job creation while ensuring health of ocean ecosystems. Notably, investing in blue carbon, which encompasses ecosystems like mangroves, tidal and salt marshes, seagrasses can serve as a powerful tool in combatting climate change. Investing in innovative solutions to reduce carbon emissions and funding initiatives to create and expand carbon sinks worldwide are essential components of this endeavour. While technological innovations are a focus, nature-based solutions, particularly the preservation and reclamation of blue carbon ecosystems, can offer an expedient, sustainable and less expensive approach. This research article aims to establish the significance of investing in blue carbon initiatives. In this line, this study proposes that implementing blue carbon initiatives under the voluntary carbon markets would be a key strategy towards achieving the net-zero pathway.

Impacts of Carbon Sequestration Projects on Household Income, and Consumption Expenditure of Smallholder Farmers in Meru County, Kenya

Mitigation of climate change has led to the initiation of carbon sequestration projects in the developing countries in compliance with the Kyoto protocol of 1997. The protocol goal was for industrialized countries to reduce their greenhouse emission by funding carbon projects in developing countries. The study focused on voluntary carbon projects involving smallholder farmer practicing agroforestry. The impacts of these projects on farmers’ household income and consumption expenditure were evaluated. A survey and quasi-experimental research design targeting 207 smallholder farmers was conducted in three wards within Igembe South Sub- County namely Athiru Gaiti, Akachiu and Kiegoi/Antubochiu. Data was collected from secondary sources and primary sources. The data was analyzed using propensity matching techniques. The results showed participation in the carbon sequestration program has a significant impact on the income (t= -3.8081 w/df 205, p=0.0002) at a significant level 0.05. Consumption expenditure of the participant was also significant (t= -4.7034 w/df 205, p= 0.0000). Exotic tree species were more preferred to indigenous trees species. Grevillea robusta (A. Cunn. Ex R. Br) although naturalized, was the most preferred exotic tree species (33.9%) while (17%) of the respondents planted Cussonia holstii (Harms ex Engl.) - an indigenous tree species. Income status of majority (86%, f=77/90) farmers participating in the carbon program increased. Expenditure status of majority (68%, f=61/90) of participating farmers in the project also increased. Savings, inflation, alternative uses led to decrease in consumption expenditure. The study recommends the carbon sequestration project be expanded in more areas, conduction of awareness campaigns to reach more farmers, increase of the carbon credit amount paid to the farmer, the project proponent and partners to continue assisting farmers with tree seedlings for free. The study also recommends use of multipurpose exotic tree species since they have a fast growth rate

Tokenized carbon credits in voluntary carbon markets: the case of KlimaDAO

The voluntary carbon market offers a flexible and cost-effective way to reduce greenhouse gas emissions, which has led to increased interest in these markets. Within the decentralized finance ecosystem, Decentralized Autonomous Organizations leverage the tokenization of carbon credits to enhance efficiency and transparency. KlimaDAO, established in August 2021, aims to accelerate the adoption of carbon markets by integrating blockchain technology to facilitate transparent, secure, and accessible carbon trading. This study analyzes the evolution of KlimaDAO by evaluating its market capitalization, token prices, staking participation, carbon credit retirements, market participation, and concentration. The analysis reveals that while KlimaDAO initially achieved significant engagement and activity, it now faces challenges associated with market maturity and participant retention. Finally, the study highlights the importance of standardization and regulatory frameworks to enhance interoperability, transparency, and legitimacy within the tokenized carbon market.

Carbon farming in India: are the existing projects inclusive, additional, and permanent?

ABSTRACT As voluntary carbon markets gain popularity, carbon farming emerges as a win-win strategy to mitigate climate change and improve farmers’ income in developing countries. India, with over 50 active carbon farming projects and an impending domestic carbon market, forms an ideal case to explore the early-stage challenges of these initiatives. Using survey data from 841 farmers from seven carbon farming project villages in Haryana and Madhya Pradesh, this study focused on socio-economic inclusion and adherence to additionality and permanence principles, which are underexplored in the existing literature. We found that carbon farmers were predominantly large-holders and from non-marginalized castes, showing patterns of systematic exclusion. Only 4% of participants were women. Around 99% of farmers had not received any monetary benefit. While certain agricultural practices predated carbon projects, raising concerns about additionality, practices like no-tillage, alternate wetting and drying, intercropping, reduced chemical fertilizers, micro-irrigation, and tree planting aligned with additionality principles. Nonetheless, a high disadoption rate (28%) raises concerns about the permanence of emissions reduction. Our findings also indicated that companies that exclusively focus on carbon credits, termed ‘Carbon Core’ companies in this study, were more efficient in spreading regenerative agricultural practices than subsidiaries or offshoots of larger corporations whose primary businesses are unrelated to carbon credits.

Navigating the complex policy landscape for carbon farming in The Netherlands and the EU

Background The EU carbon removal and carbon farming (CRCF) framework sets the quality requirements for voluntary greenhouse gas certification schemes for i) permanent removal, ii) temporary carbon storage in long-lasting products, iii) temporary carbon storage from carbon farming, and iv) soil emission reduction. The next step is to develop “tailored certification methodologies for different types of carbon removal activities.” Via CRCF compliant certification schemes, certificates can be issued and sold to generate extra funding for carbon farming via voluntary carbon markets or other (future) performance-based incentive schemes (e.g., Agri sector Emissions Trading Scheme). Method We provide a qualitative assessment of the complex landscape of carbon farming incentive schemes and their associated monitoring, reporting, verification, and certification (MRV-C) frameworks. To illustrate these complexities, we take the farmers’ perspective of a Dutch dairy farmer that wants to implement different carbon farming activities (i.e., a portfolio), while aiming to secure a decent farm-level income. We discuss the farmers’ challenge by analyzing different options and routes for the financial valorization for several carbon farming activities. Results We find that the incremental MRV-C and incentive schemes, like the EU CRCF and potential agri-ETS are likely to add to the existing administrative burden for (carbon) farmers in the EU. Proper alignment, integration and standardization of the EU CRCF with existing MRV-C infrastructure(s) is needed to limit the administrative burden and transaction costs. Also, there is a need to provide better ex-ante clarity to (carbon) farmers and investors on the complementarity of incentive schemes from different policy domains (e.g., agriculture, climate, energy, bioeconomy). Conclusion We argue that the complexity of the MRV-C and incentives landscape ads to the administrative burden and flag this a potential source of inertia for investments in carbon farming. We conclude with recommendations to simplify and streamline the policy mix and MRV-C processes.

Unveiling the Nexus: Carbon finance and climate technology advancements

This study examines the dynamic connections between carbon finance mechanisms such as sustainable bonds and emissions trading systems and their role in advancing climate technology. It also explores direct and indirect contributions of carbon finance mechanisms to the progress of climate technology. It employs a causal mediation analysis and high-dimensional fixed-effects panel regression models to derive complex relationships governing carbon finance and climate technology. The findings highlight not only the direct influence of sustainable finance on climate technology but also the indirect pathways through which carbon finance contributes to technological advancements. The analysis demonstrates that sustainable bonds have a positive and direct influence on the advancement of climate technology, whereas a voluntary carbon market indirectly promotes climate-technology development by influencing the implementation of sustainable bonds.

Towards net zero: Comprehensive approach for voluntary carbon trading among microgrids

In the context of growing focus over climate changes and promoting sustainability across a various range of fields, microgrids can play a significant role in global decarbonization endeavors, contributing to carbon neutrality and ultimately attaining net-zero emissions in the energy sector. The objective of this paper is to address the integration of voluntary carbon trading within microgrid communities, in the perspective to mitigate greenhouse gas (GHG) emissions and boost the integration of renewable energy sources (RES). Introducing five modular algorithms managing key aspects of carbon trading, the study engineers a comprehensive framework aiming to optimally orchestrate the Voluntary Carbon Market (VCM) within microgrids. Particularly, the developed algorithms address aspects such as market enrollment decision, optimal energy dispatch, managing the market transactions, sellers-buyers matching as well as the dynamic adjustment of carbon credit prices and emission taxes. The framework has been rigorously tested across three distinct scenarios. Results show that the developed VCM, with adequate configurations, has the potential to incentivize microgrids to curtail their GHG emissions, encourage the integration of more RES into their generation mix, and rewards the more proactive microgrids with substantial financial incentives.

Relegitimising the voluntary carbon market: Visions of digital monitoring, reporting and verification

Relegitimising the voluntary carbon market: Visions of digital monitoring, reporting and verification

Mobilizing carbon offsetting to reduce energy cost burdens: a new approach for calculating and monetizing the offset value of energy efficiency upgrades to low-income housing

Energy-inefficient buildings are a major driver of climate change. The aging, energy inefficient housing occupied by low-income households in the US and other high-income countries is a driver of notable environmental and health disparities as well. Public policies for alleviating the financial and health burdens of energy inefficient housing have existed for decades, but fallen short of reaching most households in need. This paper proposes a promising new approach to filling gaps left by public programs — one that relies on mobilizing the tools of private governance, carbon offsetting and the voluntary carbon market (VCM) to finance energy upgrades for low-income households. We develop a new and readily applicable methodology for calculating energy and carbon savings from efficiency upgrades based on readily accessible publicly available data. Tailored to the needs of estimating energy and carbon savings from efficiency upgrades to low-income units, rentals in particular, this methodology can be fruitfully deployed in monetizing the carbon savings from efficiency driven reductions in household energy use. Specifically, we propose packaging the emission reductions generated through energy savings as carbon offsets, then selling these offsets on the voluntary carbon market to generate financing for energy upgrades to low-income homes not served by public energy efficiency programs. Given the multiple economic and health co-benefits from low-income energy upgrades, we expect that carbon offsets generated through such upgrades will be attractive to many corporate and institutional offset buyers, particularly those who seek to fulfill climate commitments while also advancing economic and human development in their host communities.

Factors influencing farmers' intention to participate in the voluntary carbon market: An extended theory of planned behavior

Carbon sequestration in agricultural soils is essential for sustainable agriculture, contributing to the achievement of the Sustainable Development Goals and combating climate change. The Voluntary Carbon Market (VCM), designed to encourage farmers to implement sequestration practices, is a recent innovation in Europe, in contrast to the well-established American system. Consequently, there is limited understanding of farmers' intentions to participate. The study analyzes farmers' willingness to participate in VCM and the influencing factors through the Extended Theory of Planned Behavior (ETPB). For this purpose, data were collected from 241 Italian farmers located in the Sicily region and the partial least squares structural equation model (PLS-SEM) was applied. The results show that Attitude, Perceived Behavioral Control and Knowledge of VCM have a statistically significant influence on farmers' intention to participate in VCM. In contrast, Subjective Norms and Perceived Environmental Risk do not have a statistically significant influence. Our findings suggest that farmers' intention is strongly influenced by confidence in their capabilities and knowledge of the topic. This should guide policymakers and practitioners to offer extension services and technical assistance, helping farmers understand the potential of the VCM. Indeed, limited knowledge is a major barrier to participation in this initiative.

Monitoring soil carbon in smallholder carbon projects: insights from Kenya

Voluntary carbon market schemes facilitate funding for projects promoting sustainable land management practices to sequester carbon in natural sinks such as biomass and soil, while also supporting agricultural production. The effectiveness of VCM schemes relies on accurate measurement mechanisms that can directly attribute carbon accumulation to project activities. However, measuring carbon sequestration in soils has proven to be difficult and costly, especially in fragmented smallholdings predominant in global agriculture. The cost and accuracy limitations of current methods to monitor soil organic carbon (SOC) limit the participation of smallholder farmers in global carbon markets, where they could potentially be compensated for adopting sustainable farming practices that provide ecosystem benefits. This study evaluates nine different approaches for SOC accounting in smallholder agricultural projects. The approaches involve the use of proximal and remote sensing, along with process models. Our evaluation centres on stakeholder requirements for the Measurement, Reporting, and Verification system, using the criteria of accuracy, level of standardisation, costs, adoptability, and the advancement of community benefits. By analysing these criteria, we highlight opportunities and challenges associated with each approach, presenting suggestions to enhance their applicability for smallholder SOC accounting. The contextual foundation of the research is a case study on the Western Kenya Soil Carbon Project. Remote sensing shows promise in reducing costs for direct and modelling-based carbon measurement. While it is already being used in certain carbon market applications, transparency is vital for broader integration. This demands collaborative work and investment in infrastructure like spectral libraries and user-friendly tools. Balancing community benefits against the detached nature of remote techniques is essential. Enhancing information access aids farmers, boosting income through improved soil and crop productivity, even with remote monitoring. Handheld sensors can involve smallholders, given consistent protocols. Engaging the community in monitoring can cut project costs, enhance agricultural capabilities, and generate extra income.

Tourist Behavior and Awareness in Airline Voluntary Carbon Offset Programs: A Portuguese Perspective

This study examines the attitudes and behaviors of Portuguese air travelers towards voluntary carbon offset (VCO) programs, with a focus on understanding the motivations and awareness levels that drive offsetting behaviors. An online survey conducted between February 28 and April 30, 2023, gathered responses from 534 Portuguese residents who had traveled by air in the 12-month period prior to completion of the survey The findings reveal that while the decision to participate in VCO programs is primarily driven by a fundamental environmental ethos among offsetters, tourists exhibit limited understanding of these programs and heightened concern about affordability. Notably, the study uncovers a significant cognitive dissociation among tourists, where they often overlook or fail to acknowledge VCO offers. The findings highlight the challenge of integrating sustainability into the leisure tourism experience. This suggests that future research must account for these psychological hurdles when conducting sustainability experiments. Moreover, for sustainability initiatives to be truly effective, they must first address these cognitive barriers and reshape how environmental responsibility is perceived during leisure travel.

A study on the purchase intentions of air passengers for voluntary carbon offset programs: verification of message effect

A study on the purchase intentions of air passengers for voluntary carbon offset programs: verification of message effect

Seas the opportunity: multi-criteria decision analysis to identify and prioritise blue carbon wetland restoration sites

IntroductionThe emergence of voluntary carbon markets is creating new opportunities to sustainably finance Natural Climate Solution (NCS) projects. In Australia, the federal government recently enacted the Tidal Restoration of Blue Carbon Ecosystems Methodology Determination 2022 (Tidal Reconnection Method), whereby restoration activities that reintroduce tidal flows to allow the re-establishment of coastal wetland (blue carbon) ecosystems, through the removal or modification of a tidal restriction, can be used to gain and sell Australian carbon credit units. Australia has the highest net blue carbon wealth in the world, with 5%–11% of global carbon stocks, yet there is currently a lack of large-scale feasibility assessments and supporting methodologies to identify and prioritise sites with the greatest potential for NCS project implementation to help inform investment decisions.MethodsIn this study, we applied a spatial Multi-Criteria Decision Analysis (MCDA) to identify, map, and prioritise potential sites for blue carbon coastal wetland restoration in South Australia that meet criteria outlined in the Tidal Reconnection Method. This study compared information on 1) predicted flooding extent following tidal reconnection and under sea level rise (SLR; present-day, 2050 and 2,100); 2) project implementation complexity (e.g. who possesses land tenure); and 3) carbon sequestration potential through predicted area of vegetation change under the above SLR scenarios. ResultsOur results identified 64 sites of interest, of which 32 received an overall “high” prioritisation score of 3 or more out of 5. This equates to approximately 21,114 ha of high priority potential blue carbon restoration sites.DiscussionThe MCDA enables development of a portfolio of viable restoration projects through a rapid “desktop” prioritisation of sites of interest, which can then guide investment in further detailed cost/benefit feasibility assessments. This study demonstrates an adaptable MCDA approach to map potential NCS projects at meaningful spatial scales and in-line with carbon market-based opportunities.

Balancing greenwashing risks and forest carbon sequestration benefits: A simulation model linking formal and voluntary carbon markets

Voluntary carbon markets (VCMs) offer energy-intensive firms a cost-effective means to reduce carbon mitigation expenses through promoting forest conservation. However, concerns about greenwashing may deter firms from using these options, which are susceptible to illegal forest harvesting. This study examines whether firms purchasing carbon credits from forestry-based communities can help strengthen forest conservation, mitigate project risks, improve environmental outcomes, and reduce abatement costs. We examine a large Indian steel firm, with an annual production capacity of 4 million tons, issuing green bonds to fund afforestation in Himalayan forest communities. Using industry-level average emissions, abatement costs, and output data for Indian firms, we develop a dynamic optimization model to determine optimal abatement strategies, considering the risk of future forest carbon loss from VCMs. The model, utilizing examples and data from existing carbon sequestration programs in the Himalayan states, offers insights into promoting high-integrity VCMs through formal emission market linkage. Findings suggest that firms' involvement in compliance emissions markets provides an alternative route to accessing affordable carbon credits when abatement costs are high. Additionally, engaging in the VCM reduces expenses related to emission reduction targets. However, with elevated greenwashing risks, firms reduce their use of green bonds in VCMs. Participation in the VCM positively reinforces forest conservation and enhances environmental services when greenwashing risks are absent, further lowering carbon mitigation costs. To enhance VCM integrity, further research is needed on how community conservation norms influence illegal harvesting.

Impartial policymakers prefer to impose carbon pricing to capping, especially when combined with offsets

Sustainable socio-economic development requires a global reduction of greenhouse gas emissions. We utilize an incentivized experiment to map the preferences of ‘policymakers’ over climate actions of ‘decision-makers’. Our design guarantees that these preferences are unaffected by selfish motives such as a concern about being re-elected or an unwillingness to pay for the greater good. Few of our impartial policymakers choose interventions that leave the autonomy of decision-makers' completely untouched. The choice patterns of those who intervene suggest that policymakers care not only about minimizing emissions, but also about how emissions are reduced. Policymakers strongly prefer pricing policies over capping emissions, and among the pricing policies, they prefer those that include voluntary carbon offsets, even if this leaves considerable scope for decision-makers to selfishly emit CO2. The reason is that policymakers expect decision-makers to voluntarily offset some of their emissions at their own cost, and believe that this would eventually improve the outcome in terms of both emissions and the decision-makers' profit relative to a standard carbon pricing policy (without offsetting). Our decision-making data confirm this expectation.

Design of a Digital Platform for Carbon Generalized System of Preferences Communities Based on the TAO Model of Three-Way Decisions

The increasing carbon dioxide emissions from human activities present a significant global concern, with approximately two-thirds of greenhouse gas emissions attributed to household activities. The Carbon Generalized System of Preferences (CGSP) has emerged as a pivotal mechanism to incentivize voluntary carbon reduction in community households. This paper examines the development of a community digital management platform designed to incentivize voluntary carbon reduction at the community level, highlighting the critical role of reducing emissions in urban community life to meet carbon peak and neutrality targets. This study employs the TAO model of Three-Way Decision to establish a closed-loop operational framework for the CGSP digital platform. The platform features a Trisection mechanism to record and quantify low-carbon behaviors, an Action mechanism to classify and reward community members, and an Outcome mechanism to assess overall community carbon reduction achievements. Additionally, a user interface tailored for community users is developed to enhance platform accessibility. The proposed platform presents a practical and innovative solution for exploring emission reduction potential in urban communities. By systematically recording low-carbon behaviors, providing targeted rewards, and conducting comprehensive assessments, the platform aims to guide community residents in adopting sustainable practices. This study offers a valuable reference for the digital transformation, intelligent system construction, and development of new urban functional units within communities.

Determinants of voluntary carbon emission disclosure: Does it affect firm value?

Determinants of voluntary carbon emission disclosure: Does it affect firm value?

Potential and goal conflicts in reverse auction design for bioenergy with carbon capture and storage (BECCS)

Bioenergy with carbon capture and storage (BECCS) is considered as a future key technology to provide baseload electricity, heat, pulp, paper, and biofuels, while also enabling atmospheric carbon dioxide removal (CDR). Sweden seeks to lead the way in bringing this technology up to scale, introducing a EUR 3.6 billion reverse auction scheme to facilitate market entry of companies producing BECCS. We explore instrument design preferences among politicians, regulators, and prospective BECCS operators to identify trade-offs and explore feasible policy design. Based on 35 interviews with experts in the latent BECCS sector in Sweden, we identify under which circumstances prospective operators would be willing to place bids and discuss how actor preferences both align with and challenge auction theory. The analysis concludes that at least four dilemmas need attention. These concerns how to: (1) balance the state’s demand for BECCS to be implemented already in 2030 against the prospective BECCS operators’ fear of the winner’s curse, i.e., a fear of bidding for a contract that turns out to be too costly to implement; (2) allocate contracts at the margin of the auctioneer’s demand for BECCS without driving up costs; (3) design compliance mechanism to achieve effectiveness without undermining efficiency, and; 4) integrate the auction with the voluntary carbon market—if at all—in a manner that safeguards the environmental integrity of the auctions.

No pain, no gain? Simulation of carbon reduction potential and socioeconomic effects of voluntary carbon trading in China during 2021–2060

Voluntary carbon market has become a key mechanism of stimulating carbon emission mitigation actions globally. In this study, we calculate the emission reduction potential of Carbon Generalized System of Preferences (CGSP), a dominated voluntary carbon trading mechanism in China, including on-going projects of forestry carbon sinks, waste clothes reuse, installation of distributed photovoltaic power generation system, and usage of energy-conserving devices, as well as other extended methods for their future mitigation potentials. We employ a computable general equilibrium model to delve into the effects of CGSP mechanism on carbon price, economic growth and household consumption, assessing its impact on the equitability of social welfares between urban and rural residents during 2021–2060. Our results indicate that employing the current methods for CGSP would lead to around 5.0 Mt CO2 reduction annually. since 2018, whereas adopting the extended methods would yield reductions of 157.1 Mt. Promoting forestry carbon sinks and energy-conserving appliances offers the most prominent emission reduction, while low-carbon travel shows the biggest potential going forward. CGSP will loosen carbon constraints on industries in the market and result in a lower carbon price, reducing the economic cost of carbon trading without compromising China's carbon peaking and carbon neutrality goals. Supplementing CGSP could reduce the GDP loss by up to 0.2 trillion Yuan by 2030 and 0.9 trillion Yuan by 2060, compared to the sole operation of compliance carbon trading market. Provided fiscal stimulus policies, CGSP will further reduce GDP loss by 1.1 trillion Yuan in 2060. Different fiscal stimulus scenarios have a strong implication on welfares of urban and rural residents, wherein monetary equivalent incentive will reduce urban-rural income gap by up to 718 Yuan/capita in 2060.