Our launch took place during the ‘Building the Foundations of Africa’s Carbon Markets with Integrity’ side event and was graced by a distinguished panel of experts across the carbon market landscape. Moderated by the the Rockefeller Foundation’s VP of Africa William Asiko, the panel included Ms. Annette Nazareth, Chair of ICVCM; Brian Nyangena our CEO; Gillian Caldwell from USAID; Tariye Gbadegesin of ARM-Harith Infrastructure Investment LTD and VCMI; Judith Simon from Verra; Paul Muthaura of the Africa Carbon Markets Initiative (ACMI); Ms. Sophie Odupoy from KOKO Networks; and Lydia Sheldrake from VCMI. Each panelist brought their unique perspective and expertise to the discussion, focusing on the development, integrity, and regulation of carbon markets in Africa.

The Verst Carbon Platform

The Verst Carbon platform is a holistic solution that convenes investors, project developers, auditors, and other key players in the carbon market ecosystem for effective collaboration. Our focus is on nurturing effective collaboration to support carbon projects in Africa, ensuring the utmost integrity and adherence to global standards, as well as the equitable distribution of benefits to communities.

As a technology enabler in the VCM, Verst Carbon’s mission is to alleviate the bottlenecks that have traditionally prevented African carbon projects from accessing global carbon finance. We have achieved this through the following innovative and pioneering solutions available on the Verst Carbon platform:

1. Bridging Access to Carbon Markets in Africa

Our solution: Project Development Support Platform

At Verst Carbon, we’re addressing the critical challenge of limited access to carbon finance for African projects. Our platform uniquely brings together diverse stakeholders in the carbon market, enabling effective collaboration. We provide project owners with real-time guidance and access to a comprehensive network of professionals, including project developers, consultants, VVBs, MRV auditors, investors, and buyers. This initiative is a vital step in unlocking Africa’s vast carbon potential.

2. Empowering New Developers with AI 

Our solution: Verstie ‘Carbon Buddy’ chatbot 

Understanding the hurdles faced by first-time carbon project developers, particularly in Africa, we developed the Verstie ‘Carbon Buddy’ AI chatbot. This AI-powered tool offers 24/7 guidance, supporting developers throughout their project development journey. It’s an essential resource for newcomers to the carbon market, providing them with critical insights and assistance.

3. Making Carbon Project Documentation Affordable 

Our solution: AI-assisted PDD Generation Tool 

Acknowledging the prohibitive costs of preparing Project Design Documents (PDD) for carbon projects, we at Verst Carbon introduced a PDD generation tool that reduces these costs by up to 90%. This dramatic cost reduction democratizes access to the carbon markets, allowing more developers to partake in these important environmental initiatives.

4. Enhancing Integrity and Reducing Monitoring Costs in Carbon Projects 

Our solution: Pioneering Digital Monitoring Reporting and Verification (dMRV)

Verst Carbon is part of the Africa Carbon Markets Initiative (ACMI) Monitoring Reporting and Verification (MRV) working group, where we are pioneering the use of technologies like IoT devices, satellite imagery, AI, and machine learning for remote impact quantification. This approach ensures the integrity of carbon projects is verifiable and reduces the costs of monitoring at scale. 

Verst Carbon stands out in its commitment to quality African carbon credit projects, offering a transparent, equitable, and inclusive platform for supporting African carbon projects. Each project on our platform is held to the highest standards, focusing not just on emission reduction or removal, but also on delivering tangible co-benefits that contribute meaningfully to the welfare of the communities involved.

Our launch marks not only a significant stride for Verst Carbon but also a major advancement for Africa’s carbon markets. We are set to be a key player in shaping the region’s carbon trading future, ensuring integrity and equitable sharing of benefits in a region grappling with the worst effects of climate change. We invite you to experience the difference Verst Carbon makes – try out our platform today and be a part of this transformative journey.

The post Verst Carbon Launches its Innovative Carbon Project Development Support Platform at COP28 first appeared on Verst Carbon.

A Closer Look at the Amendment

The Climate Change (Amendment) Bill 2023, proposed by the Ministry of Environment, Climate Change, and Forestry, offers several key improvements to Kenya’s existing environmental regulations. The proposed amendment represents an effort to ratify the Climate Change Act 2016 and to address any existing gaps within it. 

The amendment proposes the development, management, implementation, and regulation of mechanisms to enhance climate change resilience, low-carbon development, and sustainable development in Kenya. 

Some of the clauses that stood out for us in the amendment include:

1. The Focus on Carbon Markets and Inclusive Benefit-Sharing Mechanisms

The proposed amendment lays emphasis on the role of carbon markets. It provides a mechanism for public and private entities to transfer and transact emission reduction units, mitigation outcomes, or offsets generated through carbon initiatives, programmes, and projects​​. The Bill’s provision for benefit-sharing mechanisms in carbon markets ensures that the benefits of climate change initiatives are equitably distributed. This approach can serve as a model for other African countries, encouraging them to ensure that both public and private entities are appropriately rewarded for their efforts toward mitigating carbon emissions.

2. Alignment with International Goals

By aligning with the goals of the Paris Agreement, Kenya demonstrates its commitment to international climate change objectives. Not only does this foster shared responsibility and collective action to tackle global issues like climate change, but it also allows African countries to tap into international funding and technology transfers. These resources help them implement sustainable strategies and increase their resilience against climate change impacts.

3. Embracing Nature-Based Solutions

One of the standout aspects of this amendment is its focus on nature-based solutions to address climate change, human health, food and water security, and disaster risk reduction effectively. It underscores the importance of actions to protect, sustainably manage, or restore natural ecosystems, simultaneously providing human well-being and biodiversity benefits​​.

The bill also seeks to reduce emissions from deforestation and forest degradation, enhance forest carbon stock at national and sub-national levels, and includes activities that reduce greenhouse gas emissions through the sustainable management of forests and the conservation and enhancement of forest carbon stocks.

4. Public Participation

The Kenyan government’s approach of inviting public comments and inputs on the proposed amendment emphasizes the role of citizens in shaping the country’s environmental policy. This strategy encourages public ownership of climate change policies and fosters a collective responsibility towards environmental conservation.

Kenya’s Ministry of Environment, Climate Change, and Forestry set a deadline of May 26, 2023, for public participation. Virtual public meetings were held between May 10 and May 24, 2023, to discuss the proposed amendment and receive input from the public. We are pleased to add that we at Verst Carbon also submitted our views on the proposed Climate Change Amendment Bill and are awaiting the ratification of the bill. This inclusive approach ensures that the views of all stakeholders are taken into consideration in the development of climate change policies.

5. Fostering Public and Private Sector Collaboration

A key aspect of the proposed amendment is the involvement of both the public and private sectors in the implementation of non-market approaches. These approaches aim to promote mitigation and adaptation ambition, enhance public and private sector participation in the implementation of nationally determined contributions, and enable opportunities for coordination across instruments and relevant institutional arrangements​​.

Moreover, the Act will allow public and private entities to participate in carbon markets, fostering the transfer and transaction of emission reduction units, mitigation outcomes, and offsets generated through various initiatives, programs, and projects.

A Model for African Countries

The proposed Climate Change (Amendment) Bill 2023 represents a significant step forward in Kenya’s climate change mitigation and adaptation strategies. By incorporating nature-based solutions, engaging both the public and private sectors, and promoting public participation, Kenya is setting a holistic and inclusive blueprint for other nations on the continent. The success of this bill could pave the way for similar initiatives across the continent, driving Africa towards a more sustainable and resilient future in the face of climate change.

The post Kenya’s Proposed Climate Change Bill Amendment: A Blueprint for African Countries? first appeared on Verst Carbon.

Verra prohibited the practice of creating instruments or tokens based on retired credits (tokenization of carbon credits) in May 2022. This was done to give the registry ample time to consult stakeholders and set up systems for “immobilizing” credits in accounts in the Verra Registry so that they can be tokenized with the transparency and traceability that market participants demand, prevent fraud and uphold environmental integrity.

Verra’s consultation with stakeholders sought input on three main topics: measures to associate verified carbon units (VCUs) with crypto instruments or tokens, know your client (KYC) requirements, and amendments to the registry terms of use relating to anti-fraud. In summary, stakeholders provided the following main points of feedback on the three topics:

1. Measures to associate VCUs with crypto instruments or tokens

The first topic focused on the creation, transfer, and use of VCU-backed crypto instruments and tokens, and the safeguards that should be implemented by Verra to ensure environmental integrity, particularly to prevent double-issuance and double-use.

Stakeholders proposed several measures to ensure environmental integrity, such as tokenizing platforms undergoing rigorous security and accounting audits, embedding metadata into carbon tokens, and using digital measurement, reporting, and verification tools. To prevent double-issuance, stakeholders suggested embedding metadata about the underlying VCU into each carbon token and depositing metadata/hashes of each carbon token into the Verra Registry. To prevent double-use, stakeholders proposed immobilizing VCUs used to generate carbon tokens in the Verra registry and using a trust structure where Verra maintains control over the carbon tokens and holds them in trust for the beneficial owner.

In terms of infrastructure and processes, some stakeholders were not keen on immobilization at all. However, others proposed a form of linkage between the Verra Registry and the blockchain on which the carbon tokens are issued, a specialized account set up in the Verra Registry to hold immobilized VCUs, and technological/automated solutions to link the Verra Registry with the platform.

2. Know your client (KYC) requirements

The second topic focused on the KYC checks that should be applied to platforms before authorizing them to issue, market, and/or transact in crypto instruments or tokens that are backed by VCUs.

Stakeholders suggested two broad categories of KYC checks for platforms. The first category consisted of corporate KYC checks to ascertain the financial standing of the platform, as well as to check for the involvement of sanctioned entities and to run general anti-money laundering checks. The second category of KYC checks is related specifically to the processes and technical operations of the platforms, including cybersecurity audits, information about the processes and carbon footprint of the blockchain and the platform, licenses from local authorities to operate a platform, and the platform’s own KYC policies

3. Amendments to the registry terms of use relating to antifraud

On the third topic, stakeholders proposed several amendments to the Registry Terms of Use (TOU) related to anti-fraud considerations for the association of third-party crypto instruments and tokens with VCUs. Most respondents either did not respond or did not propose any text, instead making general comments on what should be included in the TOU.

These include adding a section in TOU for the approval of Authorized Tokenization Platforms, specifying that the Verra Registry shall take priority over the approved platform in cases of conflict, and stating that Verra is the sole authority capable of reactivating VCUs. Additionally, stakeholders proposed that project proponents should promise to accept a public ID allocated by Verra, use it in communications and blockchain interactions, and ensure that emission reductions can no longer be transacted and become property of the buyer.

WAY FORWARD

Based on the feedback received during the consultation, it seems that Verra will need to consider implementing a range of measures to safeguard the environmental integrity of VCU-backed crypto instruments and tokens. These measures include implementing safeguards to prevent double-issuance and double-use, such as embedding metadata into carbon tokens and linking the tokens to the actual performance of a project. Additionally, Verra will need to consider the infrastructure and processes needed for entities participating in the immobilization approach, such as setting up a specialized account in the Verra Registry to hold immobilized VCUs and possibly creating a digital public ledger built on blockchain technology to record all transactions of Carbon Tokens.

Verra will also need to consider implementing KYC requirements for platforms before authorizing them to issue, market, and/or transact in crypto instruments or tokens that are backed by VCUs. This includes both corporate KYC checks to ascertain the financial standing of the platform and anti-money laundering checks, as well as process and technical KYC checks such as cybersecurity audits, information about the processes and carbon footprint of the blockchain and the platform, and licenses from local authorities to operate a platform.

In terms of amendments to the Registry Terms of Use relating to anti-fraud, Verra will need to consider textual amendments to address anti-fraud considerations related to the association of third-party crypto instruments and tokens with VCUs. This could include clauses such as Verra being the sole authority capable of reactivating VCUs, Verra’s registry taking priority over the approved platform in cases of conflict, and a declaration that only Carbon Tokens that have real VCUs as collateralized assets are deemed valid for trading purposes on the approved platform.

Ultimately, this consultation is expected to result in clarity from Verra on the best and approved practices for players providing blockchain-based solutions in carbon markets. Other registries like Gold Standard have also shown interest in incorporating blockchain-based players in their ecosystems, a positive development for the growing number of climate start-ups that have integrated blockchain technology in their solutions.

The post What next after Verra’s consultation with blockchain players? first appeared on Verst Carbon.