Carbon offsets turn emission savings into a financial asset. But actual savings yielded by restoration measures were colossally overblown.
The FTX moment of climate finance!
A nine-month investigation conducted by The Guardian, die Zeit and SourceMaterial revealed that Washington DC-based Verra, the industry leader in carbon standard certification, used exaggerated and unrealistic metrics to estimate the saving potentials attained by the carbon sinks they audited, e.g. reforestation projects.
Put bluntly, generously inflated counterfactual what-if figures were used for calculating the delta between modeling-based emissions without protection measures and the on-the-ground situation with protection measures in place.
However, in actuality, the intervention – i.e. reforestation – didn’t make any difference at all. 94% of the credits were “phantom credits” that had no benefit to the climate.
The threat to forests had been overstated by about 400% on average for Verra projects, according to analysis of a 2022 University of Cambridge study.
As an ecopreneur myself with a focus on mitigation of biodiversity loss, the revelations about the murky underbelly of the carbon offset markets align with my own perceptions that Impact investing should deprioritize cookie-cutter narratives about climate action riddled with misaligned incentivizes and focus on bespoke flagship initiatives with honest methodologies for battling anthropogenic ecosystem devastation.
Impact VCs – it’s time for more discretion and less frameworks!
Light pollution – right here in Brandenburg and Berlin – is where we have a sandbox for tangible and quantifiable mitigation of biodiversity loss in local ecosystems.
Retrofitting street-lights with biofriendly light sources in our very neighbourhoods coupled with attendant nowcasting data collection systems enables robust biodiversity metrics to inform decision-making processes and verify aversion of biodiversity loss in pursuit of European Nature Restoration objectives and corporate ESG milestones.
Insect biomass conservation efforts in the wetlands of Brandenburg’s Havelland utilizing novel biodiversity time-series for impact quantification could possible be better testbeds for biodiversity protection measures than shady projects in far-off lands that are audited by institutions with a proven conflict of interest!
Let’s not turn Impact into a hotbed for WeWork type of fiascos.
Mimotype Technologies is working hard on highly effective Nature-Based Solutions for biodiversity revivification that reside at the interface of Impact investing, data-driven nowcasting for ecosystem resilience monitoring and public sector biodiversity governance.
As management guru Peter Drucker famously said: “If you can't measure it, you can't manage it.”
The fight against light pollution is where meaningful biodiversity action will happen!
Stay tuned for a more thorough exposition of how this is going to happen.