Harnessing the power of nature for carbon reduction: Investments in future carbon elimination projects
In the face of the global climate and biodiversity crises, there is a growing gap in climate adaptation, particularly in highly impacted countries that are not significant emitters. However, this challenge also presents opportunities for investors, particularly in the realm of nature-based carbon removal solutions.
These investments can contribute to not only investment objectives and sustainability goals but also hedge future carbon price movements. Current opportunities in nature-based carbon removal solutions offer biodiversity enhancement, social outcomes, and attractive returns, making them particularly promising, especially in the voluntary carbon market (VCM).
One such opportunity is Biomass Carbon Removal Solutions (BiCRS). These solutions capture and store carbon by leveraging sustainable biomass waste from agriculture, forestry, and livestock, especially in tropical regions. They are cost-effective, scalable, and generate highly verifiable carbon credits with co-benefits such as biodiversity support and sustainable development. This makes them attractive to corporate buyers aiming for net-zero targets in the next decade.
Ecosystem Restoration and Nature-Based CDR is another promising investment pathway. Restoring degraded lands, wetlands, and coastal ecosystems not only removes carbon but enhances biodiversity and supports social outcomes such as community livelihoods and ecosystem services. Nature-based CDR dominates current global removals, is widely tested, scalable, and offers essential co-benefits, making it an essential investment strategy while technological methods mature.
Innovative financing structures like revolving funds, such as those by non-profit Terraset, further open attractive pathways by mitigating early-stage risks and enabling catalytic capital deployment in impactful projects. These funds pre-purchase carbon removal credits from projects focused on durable carbon storage, enabling investments that prioritise social and environmental outcomes alongside financial returns. Revenue from credit sales is recycled to strengthen the fund’s sustainability and expand project development.
Several projects, such as those supporting smallholder farmers in India, integrate carbon removal with social benefits by using locally sourced materials and creating positive community impacts. This provides investors with impact-aligned investment options.
While marine-based carbon removal is at earlier stages and faces regulatory uncertainty, it presents emerging opportunities with potential biodiversity co-benefits. However, investor risk is currently higher given technological and environmental uncertainties.
In summary, the most established and scalable investor opportunities in nature-based carbon removal are in sustainable biomass projects and ecosystem restoration initiatives that generate verifiable carbon credits while enhancing biodiversity and social outcomes. Investing in these projects can provide attractive returns through carbon credit markets and align with ESG goals.
As companies and countries make voluntary net-zero emissions commitments and outline emissions reduction plans under the Paris Agreement on Climate Change, opportunities are emerging for investors to benefit from carbon removals while partaking in measurable biodiversity and social value creation, delivered through the restoration of nature at scale. Selecting the right partner is vital to unlock these opportunities in nature-based carbon removal solutions.
References:
[1] Aviva Investors. (2021). Pathways to Net-Zero Emissions. Retrieved from Aviva Investors website
[2] Terraset. (2021). Revolving Funds for Early-Stage Carbon Removal Projects. Retrieved from Terraset website
[3] World Resources Institute. (2021). Nature-Based Solutions for Carbon Removal. Retrieved from WRI website
[4] Ocean carbon capture and storage. (2021). Retrieved from Wikipedia
[5] Climate Action Reserve. (2021). Agriculture and Forestry. Retrieved from Climate Action Reserve website
- The realm of environmental science is crucial in addressing climate change as it offers nature-based carbon removal solutions, such as Biomass Carbon Removal Solutions (BiCRS) and ecosystem restoration, which not only contribute to sustainability goals but also provide attractive returns and co-benefits like biodiversity support.
- As companies and countries aim for net-zero targets, they can invest in sustainable real-estate that prioritizes nature-based carbon removal, like BiCRS, and regenerative agriculture, thereby meeting their ESG goals while contributing to the environment.
- Investing in innovative financing structures, like revolving funds by non-profit organizations, can provide opportunities in nature-based carbon removal projects, ensuring that they prioritize social and environmental outcomes alongside financial returns.
