COP27: White House's nature-based solutions roadmap eyes voluntary carbon market

As part of its effort to marshal US forests in the fight against climate change, the Biden administration released its Nature-Based Solutions Roadmap during the UN Climate Change Conference that pledges $25 billion to maximize the carbon absorption potential of natural resources.

The roadmap, released Nov. 8, is the first strategy the US has developed to scale up domestic nature-based solutions. It will be submitted to the administration's National Climate Task Force, a group of cabinet members and high-ranking White House officials to coordinate the admonition's climate agenda.

"Today's announcement affirms the critical role that the conservation of nature plays in fighting climate change, and the fact that these issues are two sides of the same coin," World Wildlife Fund VP Marcene Mitchell said in response to the White House announcement.

The White House will direct federal agencies to ensure over $25 billion in infrastructure and climate funding to support nature-based solutions. As submitted, the roadmap focuses on five areas of focus: updating policies, unlocking additional funding, leading with federal facilities and assets, training a nature-based solutions workforce and amping up research and innovation.

According to the WWF's Living Planet Report of 2022, biodiversity in North America declined by 20% between 1970 and 2018, and those losses diminish the continent's carbon capture capabilities.

"Without the power of nature-based solutions, our climate goals will be out of reach, which is why this roadmap from the administration is so welcomed and needed," Mitchell said.

Catalyzing private carbon offsets

The roadmap's goal of unlocking additional funding for nature-based solutions includes searching for more ways to leverage financing from the private sector. According to the roadmap, private sector financing comprises just 11% of all spending on nature-based projects among G20 countries, which amounts to about $14 billion per year.

The White House recognizes that there should be a role for offset markets to play in expanding this funding. The roadmap suggests that federal agencies will "explore approaches for allowing credits from private carbon offsets or other offset markets to be used to fund nature-based solution projects."

"The universe of nature-based solutions is expanding rapidly, creating opportunities for federal agencies to promote innovation," it says. "Prioritizing and expanding the focus on nature-based solutions in programs that foster innovative business opportunities will speed development of nature-based business and build the private workforce."

Nature-based solutions have become an increasingly popular vehicle through which companies with net-zero commitments finance nature-based carbon projects by purchasing carbon offsets to support their climate goals. While these markets have been growing rapidly, they have been dogged by credibility concerns.

For instance, a report released by Carbon Direct in May 2022 says that the emissions removal goals of carbon offset credits within the voluntary market "are not commonly met by projects in today's voluntary carbon market," and that "no true regulation exists" for the market.

There are various ongoing efforts to address credibility concerns from within the market. Recently, an effort to create a new carbon accounting methodology for forest-based projects was approved by Verra, the world's largest international carbon registry.

The White House's roadmap also seeks to improve offset credibility.

"Improvements in monitoring and verification of the benefits of nature-based solutions would also help unlock private sector potential," it says.

The price of Platts CNC — a basket assessment that reflects the most competitive nature-based carbon credit prices — was assessed at $5.55/mt CO2e Nov. 9 after reaching a seasonal peak of $9.77/mt CO2e in September, and a 2022 peak of over $16/mt in February.