As the world deals with the worsening impacts of climate change, curbing greenhouse gas emissions is critical to reducing the frequency and severity of climate-induced catastrophes and natural disasters like forest fires and floods. Our lands and oceans absorb over half of the carbon dioxide (CO2) humans produce, making their protection a necessity to our survival.
Nature-positive initiatives can help protect the environment and support organizations in meeting their net-zero emissions goals. The voluntary carbon markets — where carbon credits representing certified removals or reductions of greenhouse gases in the atmosphere are bought and sold — provide a unique opportunity to scale investment in the mitigation of the climate and biodiversity crises. Acting as a revenue source for nature conservation and restoration projects, these markets can not only rebuild global carbon sinks, but also provide a host of additional benefits as well to surrounding biodiversity and local communities.
Voluntary carbon credit sales are projected to reach $50 billion by 2030. These markets represent a growing source of funding for nature. Given their importance in solving climate and biodiversity challenges, how can we enhance the integrity of these markets and improve them, so they are maximizing impact and attracting greater investment?
One of the improvements needed is reducing risks associated with carbon credit purchases. For example, pest infestations and natural disasters that may cause damage and destruction of forests or political risks can prevent some investors from doing business in certain jurisdictions.
How Insurance Can Protect and Encourage Nature-Based Solutions
On September 20, 2022, Aon hosted an event in New York City with participants involved in the voluntary carbon market and nature-based projects, including the Institute of International Finance (IIF), Revalue Nature, Sylvera and Carbonplace. Speakers discussed several key topic areas, including: