In recent years, there has been a rising demand for voluntary carbon markets. These markets are platforms where carbon emitters (e.g., an entity with a large carbon footprint) can purchase carbon credits from carbon offsetters (e.g., an entity that might reduce carbon emissions or remove carbon emissions). For the emitters, if they cannot prevent their carbon emissions, it is a way to fund carbon emission reductions elsewhere. For the offsetters, it can act as a financing vehicle to expand, or scale their work.  In 2021, the voluntary carbon market experienced a fourfold growth compared to 2020, reaching a value of $2 billion. By 2030, the market is expected to reach between $10 billion and $40 billion¹. 

This presents an opportunity for innovators to harness these markets for various advantages:

 1) Secure additional funding for the services offered to farmers, thereby reducing costs to enhance affordability;

 2) Evaluate their environmental impact using a structured and widely accepted approach to effectively communicate impact to investors and other stakeholders; and 

3) Address business gaps to enhance climate resilience.

WE4F Guide for Carbon Financing Markets 

With support from Sculpt Partners, WE4F is publishing a guidebook for innovators keen to explore voluntary carbon markets.  Key discussions covered in this guide include:

• Relevance of carbon financing for WE4F innovators: Among other financial vehicles, carbon financing is widely used by impact and profit-oriented enterprises to fund their climate mitigation and adaptation activities. Understanding the context of the markets by sector enables innovators to assess their potential to access funds under this opportunity. This guide demonstrates the potential of voluntary carbon markets and the evolving trends in the sector.
• Decarbonization opportunities in the water-energy-food nexus: Decarbonization of the food value chain is vital to attaining global net-zero emissions; according to new data from the Food and Agriculture Organization (FAO), 31% of human-caused GHG emissions, originate from the world’s agri-food systems². This guide highlights methodologies and calculations that would allow WE4F innovators to identify the extent and depth of opportunity to offset carbon emissions from their business operations.
• Key steps for project developers to sell carbon offsets: Project developers can claim carbon offsets under different programs covering projects across multiple sectors. The guidebook provides key steps for innovators looking to enter the carbon market, understand more about the standards, and approach applicable to their business models.
• Best practices for project developers in the carbon offset market: The guide showcases best practices, providing insights from current initiatives by innovators in the sector. Additionally, it introduces stakeholders that companies interested in the water-energy-food nexus can collaborate with at different decision-making stages. The guide also highlights challenges and risks for innovators to consider when assessing their capacity and timing for entering the carbon offset market.

Why is this Guide Crucial for WE4F Innovators?

The guide equips innovators with the means to access funds for their projects and amplify their impact on smallholder farmers as well as reduce GHG emissions. By embracing carbon financing, these innovators can contribute to a greener future while driving economic growth and sustainability within their communities. The guide will also provide an overview of the steps innovators need to take to sell their credits as well as best practices to consider during their VCM entry. Case studies found at the end of the guide will help innovators assess their readiness for taking the next step forward in developing carbon credits.

Start Your Carbon Journey Today

For any questions or further assistance, you can reach out to Yogeeta Sharma (yogeeta.sharma@tetratech.com)