For the successful realisation of carbon projects, it is vital that they can attract substantial investments. Investments will mainly derive from private investors, government institutions or NGOs. These investors pursue different goals, so it is important to align the projects to their objectives.
We at Bearfeldt aim to attract private and institutional investors for global afforestation projects. To realise this goal, forest projects need to be structured as “bankable assets” with initial investments and future cash flows, which ensure the future financial return for the investor.
These financial returns can be realised mainly through the sale of timber and plantation related fruits and vegetables. And they can be realised through the issuance and sale of carbon credits.
The carbon markets can be split into Compulsory Carbon Pricing initiatives (i.e. EU ETS trading scheme) and Voluntary Carbon Certificates (i.e. Verra or Gold Standard). Whereas Compulsory Carbon Pricing initiatives are restricted on their carbon project variety, Voluntary Carbon Schemes have a much wider usability for carbon projects. This makes Voluntary Standards interesting for forest carbon projects.
Voluntary Carbon Standards
Voluntary Carbon Credits can be issued from different standardisation organisations. They are non-profit organisations which follow the same target - to make emission reduction plans quantifiable and verifiable.
The main organisations are Verra with its Verified Carbon Standard (VCS), the Gold Standard and the Plan Vivo Foundation.
Gold Standard: www.goldstandard.org
Plan Vivo: www.Planvivo.org
Voluntary Carbon Pricing
Carbon pricing for voluntary carbon projects until today lacks the transparency of an open trading market. Prices of voluntary carbon credits between sellers and buyers are negotiated OTC (over the counter), depending on the project type, size, region and supply & demand.
Regular in-depth analysis of the voluntary carbon prices can be obtained via the reports from Ecosystem Marketplace.