Sliced: ABACUS – Verra’s New High-Quality Label

Listen to this Sliced essay on any of the streaming platforms below.

Last week, Verra launched a new label that they hope will represent high-quality carbon credits generated specifically from projects utilizing Verra’s Afforestation, Reforestation, and Revegetation (ARR) methodology, VM0047, within its Verified Carbon Standard (VCS) Program.

Although we have been aware of the development of ABACUS for some time, its official release has prompted us to think about a couple of key points. Before diving into these, let’s briefly summarize the label. 

As is the case with the other emerging voluntary carbon market labels, ABACUS is aiming for a few specific outcomes – continuing the push towards greater market trust and transparency, boosting the integrity of nature-based greenhouse gas removal efforts, and catalyzing finance for superior carbon credit projects.

The ABACUS label is now accessible via the Verra Registry and provides project proponents with the guidance needed to apply this label to their Verified Carbon Units (VCUs). ARR projects hoping to receive the new ABACUS label must surpass existing VCS Program standards. Projects must demonstrate dynamic additionality with real-time measurements, ensure transparency by publishing inventory data and modeling justifications, focus on permanence by restoring ecosystems and updating carbon stock strategies, and maintain or enhance agricultural productivity in the project areas and surrounding landscapes.

The development of ABACUS was part of a collaborative working group effort that included organizations such as Amazon, Conservation International, The Nature Conservancy, and various academic institutions. Additionally, the Symbiosis Coalition, which is made up of tech giants including Google, Meta, Microsoft, and Salesforce, has cited ABACUS as an inspiration for their principles on high-integrity nature-based carbon removals.

Now, let’s look at the key points.

The first is about the backing and support of ABACUS.

Amazon helped develop ABACUS as part of its strategy to achieve net-zero greenhouse gas emissions by 2040. Simultaneously, Jeff Bezos, the founder and executive chair of Amazon, has been a major donor to the Integrity Council for the Voluntary Carbon Market (ICVCM) through his $10 billion Earth Fund. For the past few years, ICVCM has been trailblazing a path towards higher-integrity carbon standards and carbon credits via its Core Carbon Principles (CCP). Its intention (which is very closely aligned to that of ABACUS) is to raise the quality of carbon credit projects and make it easier for buyers to identify top-shelf credits. Amazon has opted to bypass the ICVCM’s standard. On one hand, this is a head-scratcher and could lead to confusion for market players who are still learning the ins-and-outs of the market. On the other, one could argue that Amazon is attempting to raise the tide to lift all boats. How this shakes out is yet to be seen. 

Second, ABACUS only applies to ARR projects.

ARR is a type of nature-based carbon removal project. Over the past twelve months, the market has pivoted towards removal credits versus avoidance credits. In line with that, there has been no shortage of attention-grabbing credit transaction headlines. Microsoft alone has entered into purchase agreements with a variety of project developers for a total of millions of nature-based removal credits from forests (Improved Forest Management), agricultural, and grasslands project types.

It is also worth noting that ARR credits represent a tiny fraction of carbon credit issuances in the VCM, comprising just 3% of the total market and 8% of nature-based project types as of 2023. These figures encompass all standards, not just Verra. While Verra leads in the number of registered ARR projects compared to other standards like Gold Standard, Climate Action Reserve, and ACR, the ABACUS label could apply to even less than 3% of the market since it cannot be applied to credits outside of Verra. This contrasts with the CCP label, which can be applied to projects from any ICVCM-approved standard.

However, according to BeZero, in the six months leading up to March 2023, credit issuance in the ARR sector surged by over 320% which made it the fastest-growing project type among nature-based solutions. Perhaps by backing ABACUS, Amazon et al. may be attempting to steer the market toward this specific project type.

The third point raises questions about the reasoning behind the ABACUS label.

Why create a label for a specific project type within a single methodology instead of revising the methodology itself to require all projects to meet the newer, higher standard?

Additionally, what impact might this have on projects that do not earn the ABACUS label? Could these projects be perceived as inferior, even if they still meet the qualifications of the VM0047 methodology set out by Verra?

Perhaps this label will create helpful competition, or maybe it will allow for projects to gradually transition to the higher standard. Perhaps it will offer a testing ground for new criteria and best practices which could ensure they are practical and effective before integrating them into the broader methodology.

These questions and potential answers are currently being discussed at Gordian Knot Strategies. We are eager to hear your perspective – will ABACUS enhance the quality of ARR carbon projects, or will it create confusion in the market? We would love to hear your thoughts.

Disclaimer: Hi there, you are receiving this update from Gordian Knot Strategies based on your previous engagement with us in some capacity. If you wish to unsubscribe, please use the link below, and we promise you that your contact details will be permanently removed from our distribution list. Thanks!

Want to unsubscribe?

Click here.

Want to receive the Sliced weekly dispatch?

Click here.

If you want to see more of our content, check out our monthly newsletter, Virtus.

Click here.