Virtus: Turning Trials into Triumphs: Carbon Markets on the Rise
Welcome to our April edition of Virtus!
This month, our focus shifts to resilience and transformation. In “Our Take,” titled “Stumbling Blocks to Steppingstones,” we explore how nascent markets beset with trials and blockades persisted to become leading industry segments and offer conviction that carbon markets are following in those footsteps.
In this month’s “Untangling Climate Finance” episode, Jay connects with Max DuBuisson from Indigo Ag. They talk about Indigo’s agriculture-based soil carbon credit projects.
Our content selection for April was a balance of in-depth reports and light entertainment, with some insights into carbon markets and nature investments, as well as a new Netflix series to unwind with.
We spotlight climate finance deals worldwide, including a big one for sustainable aviation fuel and a potential tax on billionaires to raise money for mitigation and adaptation.
Happy reading and listening!
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
How nascent markets that are plagued with trials and blockades persisted to become leading industry segments and offer conviction that carbon markets are following in those footsteps.
“Renewables cannot do it. …. They are just low-density power sources. You can’t run a modern economy on wind farms and rooftop solar.” This was the outlook of a prominent economist in 2012. He shared this opinion in a book he published in 2012. To be fair, Sir Dieter Robin Helm is on the right side of addressing climate change. Helm had grown frustrated that, despite more than two decades of international climate negotiations, the world had failed to tackle climate change. So he wrote a book about it: The Carbon Crunch: How We’re Getting Climate Change Wrong — and How to Fix It.
To read the rest of this article, click here.
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Client Served in the United States
A well-regarded policy think tank engaged us to help their forest carbon task force understand existing carbon accounting frameworks, market protocols, the business and investor landscape for carbon sequestration, and all the associated policy issues. During the engagement, we worked closely with the staff and the small technical advisory group of experts in the fields of quantification, durability, and effectiveness of natural climate solutions for farms, forests, and ranchlands. The output of the expert group was shared with the task force to identify actionable solutions that could address skepticism or concerns regarding verifiability, transparency, permanence, and additionality.
Our work supported the development of actionable policy recommendations for new public and private investments in carbon storage and GHG emissions reductions on natural and working lands.
“It has been an immense pleasure to work with the GKS team: they are incredibly knowledgeable, comprehensive and, importantly, have always been able to explain complex climate topics to our team in an approachable way. The strategy development work GKS has done for us will serve us well as we work toward meeting our climate targets.”
Ruby Stocklin-Weinberg – Carbon Neutrality Specialist, De Beers Group
🎙️ In this episode, Jay connects with Max DuBuisson, the Vice President of Sustainability, Policy & Engagement at Indigo Ag, an ag-tech company based in Boston.
Max discusses Indigo Ag’s role in sustainable agriculture, detailing their carbon credit project which engages about 1,000 farmers across 30 states to manage over 7 million acres. He highlights the project’s benefits, including significant profit sharing that has yielded over $12 million for farmers, and touches on Indigo Ag’s use of advanced technologies and strategic partnerships to promote global sustainable practices.
Click any of the links below to listen!
This month, we tried to find a good mix of content digestion between flexing our brain muscles with some serious reports and chilling out with a fun TV series.
✍️ A new report from The World Bank and others – Blueprints for Private Investment in Ecosystem Restoration: Lessons from Case Studies – showcases private investment drivers and funding pathways for ecosystem by investigating real examples. Given the extent of environmental degradation, restoring ecosystem productivity is vital for biodiversity, communities, and the economy. Traditionally seen as a public sector domain, the report emphasizes that restoration finance extends beyond public grants, and that restoration now offers significant opportunities for private sector investment.
📺 Netflix’s new release, “Our Living World,” is a stunning exploration of the Earth’s beauty and the vibrant life that thrives across its delicate green-blue surface. This nature series, narrated by Cate Blanchett, dives into the planet’s intricate ecosystems, shedding light on their intelligence, resourcefulness, and interconnectivity. Through breathtaking cinematography and groundbreaking scientific insights, “Our Living World” serves as a poignant reminder of the wonders of nature and what we’re striving to protect.
✍️ This report isn’t a light read, clocking in at around 250 pages, but for those interested in the current state of the market on emissions trading, it is a must-read. Emissions Trading Worldwide: Status Report 2024 from the International Carbon Action Partnership writes that governments are increasingly using emissions trading systems (ETSs) to address the climate crisis, with a surge in adoption among emerging economies. ETSs now cover 58% of the global GDP, with 36 systems in operation and 22 more in development. Countries such as Argentina, Brazil, India, Türkiye, and Vietnam are joining the trend. At the same time, Canada and the European Union are expanding carbon pricing into new sectors to help drive down emissions. In 2023, global revenue from ETSs exceeded USD 74 billion. That’s big money.
Each month, we see climate finance deals worldwide, which is great news. We enjoy tracking these developments to see what deals are taking place and where the funds are being directed. Here are some of the recent headlines that grabbed our attention. Click the article title for the full article.
Mongolia Signs Landmark Climate Finance Deal for its Grasslands
Mongolia’s government, along with a coalition of partners, signed a major nature finance agreement to protect 35.6 million acres (144,000 square km) of land and water, including the world’s last extensive temperate grassland. The agreement, called “Eternal Mongolia,” involves a global donor-supported fund of $71 million USD and a government pledge to invest $127 million USD in conservation over the next 15 years. This initiative is expected to be one of Asia’s largest climate finance agreements, significantly expanding Mongolia’s National Protected Area network and potentially offering a model for other countries.
Decarbonizing aviation is one of the biggest challenges in the race to net zero. Limited viable options exist and the ones that do are expensive, including SAF. The industry needs leaders to step up to the purchasing plate. Boeing is doing just that as it committed to buying 7.5 million gallons of blended Neste MY Sustainable Aviation Fuel™ in 2024. This is part of Boeing’s largest SAF purchase to date, totaling 9.4 million gallons – a 60% increase from 2023. The blend contains 30% SAF, derived from renewable waste and residue materials like used cooking oil, with the remaining 70% from conventional jet fuel. EPIC Fuels and Avfuel will supply the fuel to support Boeing’s ecoDemonstrator program and U.S. commercial flights through 2024.
‘A good start’: Germany, Spain and France Propose Billionaire Tax to Help Tackle Climate Crisis
This isn’t a done deal but it’s definitely worth mentioning. Germany and Spain are advocating for a global tax on billionaires to fund climate crisis mitigation. This idea, originally proposed by Brazil at a G20 finance ministers meeting, suggests a 2% levy on the wealth of the world’s 3,000 billionaires. Germany, Spain, and South Africa are now supporting Brazil’s proposal to implement this tax. A 2% minimum wealth tax could potentially generate an additional $250 billion in global tax revenues each year. Activists estimate that it could cover about half of the annual costs for addressing climate-related damages.
Climate Change Will Cost $38 Trillion a Year. Who Will Pay for It?
That 2% tax on billionaire’s might come in handy because climate change could cause $38 trillion in global damages by 2049. A recent Nature study from Germany’s Potsdam Institute for Climate Impact Research points out that the level of damage is expected regardless of how quickly emissions are reduced, as the benefits of mitigation will only become apparent in the latter half of the century. Inadequate action before midcentury could triple the costs of climate-related damage, reducing global incomes by 60% compared to a scenario without rising temperatures.
EU Announces €28.5m in Funding for Small Scale CDR projects
The European Commission launched a €28.5 million funding opportunity to support carbon dioxide removal projects in the EU, forming part of a broader $66 million (€62 million) Programme for Environment and Climate Action (#LIFE). The funding aims to promote technologies like biochar and bio-energy with carbon capture while advancing carbon farming practices and encouraging involvement across the entire value chain.
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