The interesting thing about Voluntary Carbon Markets

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I have spent some time recently with people who talk a lot about Voluntary Carbon Markets (VCM) and Digital Measurement, Reporting and Verification (dMRV). It’s a new area for me, and it’s proving really interesting.

The backdrop to this is that the IPCC’s 2023 Report on Climate Change warns “that there is a more than 50% chance that global temperature rise will reach or surpass 1.5 degrees C between 2021 and 2040 across studied scenarios, and under a high-emissions pathway, specifically, the world may hit this threshold even sooner —between 2018 and 2037.”  This is scary stuff, as it means it is increasingly hard for us to restore our habitat.

VCMs are Voluntary Carbon Markets – you have probably come across this concept when you pay a bit extra on your airline ticket to plant some number of trees to offset the carbon impact of your flight. They are marketplaces where individuals or organisations can buy credits to voluntarily offset their carbon footprint. These carbon credits are “voluntary” in the sense that the use of carbon credits for reducing emissions is not legally required or regulated (yet!).

In this context, dMRV is the hard work that’s done behind those carbon credits, to make sure they are what they are claimed to be, and to use agreed methodologies for assessing the amount of carbon that your flight-offsetting trees have actually taken out of circulation. Digital Measurement, Reporting and Verification (dMRV) is the blanket term for the measurement, modelling, estimation, checking, validating and reporting of this carbon sequestration data from the various ways carbon can be captured and stored.

An additional concept to note is ABG – Above Ground Biomass – that is one of the most popular ways to capture carbon for use in VCMs for carbon offsetting. It includes all living vegetation above the soil, including stem, stump, branches, bark, seeds, and foliage. Trees, basically. There is also a lot of interest in sea-floor biomass such as coral, kelp and sea grass.

The most interesting aspect of this story is assessing which paths we can take to integrate everything and create a solution with real impact, for both business and the environment. I am involved in a project in Lisbon, Portugal, with Quellia, a subsidiary of Wonder Investments, who are a pioneering company in monitoring the Voluntary Carbon Markets. They are working with IBM to develop an innovative platform aimed at transforming the global carbon market landscape, encompassing dMRV. The collaboration comes at a crucial moment, as both companies are committed to addressing environmental challenges and promoting sustainability, which are both areas in which I have a great personal interest and passion.

In collaboration with IBM, Quellia aims to develop tools that leverage data-driven decisions and technology for the rigorous and effective quantification of carbon capture projects, ensuring credibility and trust. The central aim of this collaboration is to create a secure, transparent, and reliable platform aligned with existing carbon credit certification methodologies available in the market, including a certified carbon credit model. This platform serves as the foundation for the carbon project ecosystem, providing comprehensive and transparent information, digitising, and tracking the entire process from the creation of the carbon credit project to its commercialisation on VCMs.

In practical terms, this encompasses tasks such as Above Ground Biomass calculation, scenario estimation, auditing, certification processes, and translation of captured carbon into tradable units.

It is clear that this is a long-term programme – you can’t just do this once: it’s ongoing. It is important to include permanence in the projects, in the sense that carbon sequestration over a long period can be assured, as Climate Change is very much a (very!) long-term effect, and the impact on humanity and our habitable ecosystem even more far-reaching.

My colleagues in IBM Consulting are helping Quellia by providing expertise and support in various areas of platform development: creating algorithms and protocols to accurately track and verify carbon credit projects, ensuring transparency and reliability in the certification process, developing data management systems that securely store and analyse project-related information, enabling efficient auditing and reporting. Through this technical expertise and experience, we are helping Quellia establish a platform that meets industry standards and fosters trust among stakeholders in the carbon credit market.

As part of the project, The Environmental Intelligence Geospatial and IBM Data Science teams collaborated to deliver a generic Above Ground Biomass integrated platform for IBM Consulting to leverage in Quellia’s dMRV. In addition, the teams processed large volumes of data, validated results, and ensured high-quality insights. The platform now allows access to new features and more data, aiding informed decision-making and offering additional analytics capabilities and climate data for specific use cases.

It is early days for this technology and the methodologies that underpin it, so it is not too surprising that carbon capture measurement is primarily done manually, often relying on statistical methods, and is quite time-consuming as it requires frequent site visits for all stages of the process. There is a lot of scope for improvement. For instance, using IBM’s AI-based technologies allows for streamlining and simplifying the entire process of carbon capture calculation and monitoring.

Quellia’s innovative dMRV platform uses IBM Environmental Intelligence, which makes it possible to remotely monitor the Above Ground Biomass of forests and vegetation using satellite images that feed geospatial models developed by IBM. The use of these models accelerates land analysis and allows “baseline” and “additionality” assessments created by each project, with the potential to study it anywhere in the world. The platform also uses scientific methods that consider various factors such as tree species, maturity, climate projections, soil data and more to provide species-specific carbon results and predict the growth of carbon sequestration into the future, ensuring that the platform can provide consistent and comparable project analysis across the planet.

Built on IBM Cloud, the Quellia platform enables the establishment of a secure, transparent and reliable ecosystem for the management of programs and projects aimed at the production and certification of carbon units.

The platform allows communication between end customers and stakeholders involved in the project management and certification of carbon units. Participants are supported by reliable data, transparency, and traceability throughout the life cycle of the carbon unit, ensuring that these carbon units can be unequivocally identified in a simple and clear manner, and assuring that there is no double counting of carbon units – a common criticism of the earlier generation of such systems.

Mr Filipe Vila Nova, President of Quellia, said “With this initiative, we aim to fill a gap that existed in the market: a tool based on scientific methods that allows all sectors – public or private – to combat greenwashing practices. IBM, with its industry expertise, global reach, and security, makes it the ideal partner for this journey of digitisation transparency, and credibility in the carbon market.”

Our collaboration with Quellia aims to democratise access to carbon credit projects around the world by revolutionising the way carbon capture is measured and reported. By promoting transparency and contributing to biodiversity, with a social impact on communities, we aim to align with the United Nations Social Development Goals.

I hope you will agree this is a great project to be involved with – I’m finding it fascinating, learning much, and feel like we’re doing something tangible to help organisations in their energy transition journey.