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A. Finance Community Needs Presentation, excerpts from Chandra Shekhar Sinha, Adviser, Climate Change Group, World Bank. csinha@worldbank.org (See below for Chandra's presentation.)
- Buyers/ investors in the carbon markets are looking for:
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On the last point: besides direct carbon financing in VCS, is there no option for activity-based financing that we know will only provide directional (--/-/o/+/++) support (e.g. prevent carbon loss, maintain healthy soils) for now. So, not making carbon quantity claim, because still have too many uncertainties to deal with for the next 5-10 years in most tropical smallholder systems? The environmental and economic benefits (e.g. yield increase, less erosion, reduced NOx, plant/insect diversity, fertilizer response) of such directional support for soil carbon are likely many times higher than the VCS carbon value – you did mention these co-benefits. Would it not be a pity if we would miss out on the directional support (i.e. activity based) if we know it’s the good thing to do, but we just have too much uncertainty about the exact number and therefore can’t have this supported by the C-market place?
D. Other points on scope and practicability
- What investors want to account for:
- Scope of emission: soil C only, or also other agricultural emissions, landscape level emissions (e.g. forest conversion) or the value chain lifecycle?
- Methods that are affordable and practical:
- Practice-based planning or reporting is a preferred approach for many projects, e.g. “eligible practice” or “green lists.” How far does this go in accounting?
- Soil and other environmental data are often not available. Models for the tropics are often poor.
- Robustness needs:
- Aim for what is minimally necessary rather than waiting for perfection (Martin N’s recommendation).
- Accounting time and spatial scales:
- Projects usually report annually, so how do they report if changes are only detected after 3-5 years? What if an initial decline occurs, as is common?
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