Executive Summary

The Terra Carta serves as the guiding mandate for HRH The Prince of Wales’ Sustainable Markets Initiative (SMI). It calls for urgent action to build a sustainable future for Nature, People and Planet. Investments in natural climate solutions can simultaneously address each of these pillars. The SMI Science Working Group aims to connect nature, science, and technology in addressing root-challenges to scaling natural climate solutions.

The need for urgent action on global warming is now widely considered one of the most critical environmental issues of our time, alongside biodiversity loss. While rapid decarbonisation of the global economy is an essential condition for limiting the rise in global temperatures to no more than 1.5°C above pre-industrial levels, it is also increasingly recognised that well-designed natural climate solutions can make an important contribution to limiting climate change, while concurrently providing valuable community and biodiversity benefits, if deployed early enough and at scale.

Despite the potential these solutions offer, investments in natural climate solutions fall far short of that required to make a meaningful contribution to climate change mitigation. The lack of investment can, at least in part, be attributed to uncertainties and risks concerning both the role of natural climate solutions and the integrity of credits traded in voluntary carbon markets.

This paper argues that recent advances in scientific understanding and technological developments have resulted in substantial improvements in the scale, frequency and accuracy with which the extent and condition of natural capital assets and their actual carbon performance can be assessed. This is particularly the case with respect to forests, which is where a lot of the technological assessment improvements have been achieved recently. The full potential of these technology platforms for natural climate solutions assessment cannot be fully realised without the primary field data necessary to support model calibration.

We therefore recommend:

1. The mobilisation of an international taskforce for “ground truthing” global above- and below-ground carbon stocks i.e. carbon stored in forests and soils. Ground-truthed forest data would provide greater confidence in the performance of individual natural climate solutions, strengthen the integrity and size of the voluntary carbon market, and ultimately support the inclusion of natural climate solutions in the global carbon compliance market. We will be closely monitoring the outcome of Article 6 negotiations at the forthcoming Conference of the Parties of the United Nations Framework Convention on Climate Change (COP26), in this regard.

2. That methodologies for carbon credits in voluntary carbon markets are updated to reflect both advances in scientific understanding concerning carbon measurement, as well as technological developments that could revolutionise approaches to monitoring, reporting and verification. These methodologies need to be broadly applicable and supported by clear and consistent guidance in order to eliminate the confusion and uncertainty for potential investors in natural climate solutions. In particular, new approaches are needed to help streamline and accurately account for multiple above- and below-ground carbon pools in existing and new carbon projects. This is especially important given that it could both bring added value and incentives to better understand the carbon dynamics within carbon projects, while also addressing potential issues with long-term (decadal) projects, given the uncertainties introduced by climate change itself.

3. Related to recommendation two, the accounting rules that define the relationship between voluntary carbon market transactions and efforts by countries to reduce national emissions in line with their Nationally Determined Contributions need to be urgently agreed to avoid confusion and in a way that stimulates climate action rather than stifles it. To this end, we recommend convening an international summit of policy leaders and implementers, including the relevant standards bodies, to resolve outstanding barriers and advance innovation in assessment of natural climate solutions. We are in discussions with several leading corporate groups who are interested in supporting the MRV campaign financially.

Acknowledgements

This note was produced by the Science Working Group of the Nature-Based Solutions Taskforce within HRH The Prince of Wales’ Sustainable Markets Initiative (SMI). The Group was chaired by Robert Spencer (AECOM) and guided by Nigel Grinyer (HSBC and SMI). Editorial support was provided by the Secretariat George Hubbard (AECOM) and Lead Technical Editor Petrina Rowcroft (AECOM).

Thanks are due to the many experts who gave freely of their time and expertise: Jean-Éric Baribeau (AECOM), Gordon Bennett (ICE), Philippe Ciais (Laboratoire des Sciences du Climat et de l’Environnement (LSCE), Institut Pierre-Simon Laplace), Claire Carver (Bank of America), Juan Chang (Permian), Sam Gill (Sylvera), John Peachey (HSBC), Christopher Phillipson (Permian), Ingo Puhl (South Pole), Philip Rooney (AECOM), Stephen Rumsey (Permian), Martin Siegert (Grantham Institute, Imperial College London), Tim Tear (Biodiversity Research Institute) and Peter Young (Global Surface Intelligence).