What Is The Difference Between Carbon And Nature Credits?
Are carbon credits a tool to regenerate the planet or an opaque distraction? The 2016 Paris Agreement on fighting global warming set a looming deadline in 2030. For that year, humanity must cut global carbon pollution in half, or face irreversible damage from runaway heating. Under this spotlight, carbon credits have become a trending buzzword, but how do these tools align with a planet-forward mindset?
Handprint delivers transparent solutions for businesses to make good on a dynamic and sustainable, planet-positive mindset. We’re committed to staying up-to-date on current environmental discussions and technology trends, because it helps us craft the best innovations for teams to realise a global regenerative vision. Debate and science cross in the topic of “nature credits” vs. “carbon credits”, two tools with attractive use cases for best practice and corporate leadership.
The Great Credit Debate
Companies buy carbon credits to retire them, like punching a ticket to get into a movie. Each credit retired allows the retiring company to offset, or zero-out, a ton of climate pollution, measured in tonnes of CO2 equivalent. Firms in tech, auto, oil, and gas retire credits to balance their carbon footprints, lowering their environmental impact by funding climate action outside their company. But critics argue that carbon credits too often fall short in terms of achieving holistic, planet restoration, of the longevity of impacts, and sometimes, of the credibility of the estimated carbon value (e.g. 1 tonne) of each credit.
Alternatively, nature credits, or biodiversity credits, put a market value on protecting nature. Nature credits are issued to organisations and communities delivering nature-positive outcomes, and their sale and retirement funds the activities that produce those outcomes. Proponents of nature credits celebrate the use of these tools to create a sustainable funding stream for work that creates holistic biodiversity gains, as result from projects focused on habitat restoration and conservation, silvofishery, and sustainable agroforestry. Critics of nature credits complain that these assets are complicated because biodiversity gains are multi-vector (they come from lots of species in complex food webs) and have different values for different people (some people love frogs, some people think they’re icky). So compared to carbon credits, which just talk about climate impacts, nature credits require more thinking by buyers to determine the value of a credit to their communities.
At Handprint, we believe planetary regeneration should be the primary focus for leaders. Instead of focusing on past pollution and trying to balance out the damage that has already been done, we celebrate projects work that regenerate, regrow and rewild towards a brighter future. Carbon credits rarely satisfy these parameters, while nature credits show very high potential for serving the holistic, nature focused approach we embrace each day.
See Also: Why we’re so over offsetting
It Starts With Regenerative Vision
Handprint works to provide transparent environmental-focused tools to all our clients. One of our founders, Simon Schillebeeckx, highlights the benefits of carbon credits but cautions putting all your trust in this system. Simon believes in data-backed, science-based regeneration as the way forward. With this goal in mind, he highlights three key differences between carbon and nature credits.
1. A Limited Scope
The foundation of a carbon credit is to prove that one credit equals one tonne of CO2 removed from the atmosphere or avoided entirely. This claim shapes the first hurdle for teams working to generate credits through climate action. To give buyers confidence in the underlying environmental value of carbon credits, teams must prove that the climate actions are accurately measured, and durable through time. As result, project developers focus exclusively on the local outcomes that translate into credits, and deprioritize other work, such as mixed-habitat restoration and conservation or social justice reforms. These other activities creates large environmental and social benefits for biodiversity and communities, but their outcomes are entirely absent from the quantified climate impacts used for crediting. As such, project developers have incentives not to invest energies towards these positive results.
2. The Shell Game
While in theory, carbon credits should help in the battle against global warming, critics voice concerned that they alone cannot prevent it. There are simply not enough quality credit producing projects on earth to offset the pollution generated by fossil fuels and industrial livestock (cows and pigs). On the contrary, carbon credits may allow polluting industries to purchase a better reputation, while continuing to generate the first-order pollution that warms the planet. In key industries like industrial agriculture and oil and gas, critics argue carbon credits may create a false sense of security, and may distract reformers from the true sources of global warming. A reliance on carbon credits threatens to endanger implementation of more encompassing solutions – such as abruptly phasing out subsidies for fossil fuel production and cattle ranching – fast enough to make a difference.
3. Limited Accountability
On top of the aforementioned limitations, critiques further highlight that carbon credits may also simply prove deflective. Once a company retires a credit on a public registry, on-paper at least, it appears the firm has made a green decision. Yet true accountability for the underlying project can take years to calculate. In many cases, credits are issued, purchased, and retired at the beginning of projects to fund both initial work and provide a return for investors who often pay the high costs of registering a project with an international verifier. Yet sometimes, durable impacts prove elusive, while developers and consultants have an interest in keeping credits flowing. Recent research summarised in the Guardian shows that many carbon-credit producing forest projects have continued to secure and sell carbon credits from international verifiers, despite having failed to materially reduce deforestation in the medium and long term! In extreme cases of project failure, retiring carbon credits may only appear to slow the rate of global warming, while actually allowing companies to persist in polluting while diverting resources away from concrete, positive action.
What is a Nature Credit?
A Nature Credit represents the restoration and protection of one square meter of a natural ecosystem that is critical for planetary health. Each Nature Credit is uniquely identified to ensure protection of the buyer against double accounting.
Unlike carbon credits from compliance carbon markets, Nature Credits are not designed as an offset. Rather, they are a mechanism to support net nature ecosystem services gain as well as net biodiversity gains and contribute towards the global 30×30 target set by the United Nations.
How Nature Credits Align With The Handprint Ethos
Handprint brings companies peer-to-peer connections with high quality regeneration team working across sustainability domains. These teams work in real-time to regenerate the planet through work aligned with a wide range of UN Sustainable Development Goals (SDGs). In 2023, Handprint partners are working in mangrove reforestation, habitat regeneration, coral reef reconstruction, river clean ups, ocean clean ups, social justice work, education for vulnerable youth, orphanage support, clean water initiatives and much more.
Handprint also enables its clients to capture business value from doing good. Value comes from integrating direct regeneration into sales and other employee-and customer-facing processes. As leaders use regeneration to improve stakeholder loyalty and brand value, they increasingly report an attraction to positive impact work beyond climate and carbon, and often embrace efforts in marine restoration, social justice, and support for children.
As Handprint progresses in its mission to help corporate leaders grow with the planet, we increasingly appreciate the potential of nature credits to serve a wider range of use cases than just carbon offsetting, and to do so with an equal and even greater degree of credibility. To this end, we are increasing our investment in a “trust scaffolding”, a multi-layered set of reporting technologies that will help diverse impact teams across sustainability domains track and report their impact to a global network of sponsors.
We are committed to ensure that when leaders partner with Handprint, they will never have to question the integrity of actions taken in the name of regeneration. At any time, Handprint will deliver access to transparent auditing and reporting and constantly improve our tools for leaders to track their commitments and impacts in real-time. We invite our readers to connect with Handprint today to invest in solutions that solidify the future, ignite innovation, and align with the regeneration movement.
Contact Handprint today to learn how your company can start making a positive impact tomorrow.