Flowcarbon was delighted to participate in Gold Standard's Grow to Zero Conference held in London, England. The two-day event brought together leaders in the carbon market to discuss the current challenges, solutions, and opportunities for scaling the market. Here are the key takeaways from Flowcarbon's experience at the conference:
- Massive Scaling Needed: The urgent need to massively scale the carbon market was a dominant theme throughout the conference. Maggie Kim, the CEO of Gold Standard, emphasized the importance of shifting our mindset from "Billions" to "Trillions." The international community's continued focus on the 2020 $100 billion annual funding target, initially set in 2009, was met with disappointment, given the estimation of more than $4 trillion needed annually. To mobilize finance effectively, an ‘all hands on deck’ strategy encompassing blended finance, debt-for-climate swaps, the voluntary carbon market (VCM) , and more is imperative.
- Unlocking Institutional Finance: To achieve the necessary scale, it is crucial to adopt innovative approaches and enhance project "bankability." During the conference, there was extensive discussion on the concept of blended finance, which involves institutions with impact mandates contributing to de-risking early-stage investments. While some Multilateral Development Banks are still in the process of adapting to the required speed and innovation, progress is being made. In the coming months and years, we can expect a growing emphasis on this approach. Additionally, it was evident that many institutional financiers are seeking greater certainty and stability in the VCM. Consequently, many are requesting non-carbon credit revenue or exploring innovative partnerships, such as leveraging lower reinsurance rates for high-value coastal regions, made possible by the resilience benefits of carbon projects. Offering clear guidance to corporations regarding engagement in the VCM is vital as it enables them to develop long-term strategies, establish offtake agreements, and significantly enhance project bankability.
- Project vs. Programmatic and Jurisdictional Scale Projects: Achieving scale necessitates a shift towards larger programmatic and jurisdictional projects. However, it was emphasized that smaller projects should not be overlooked as they can be actioned quickly and contribute to a just transition for local communities. Gold Standard's collaboration with the Global Green Growth Institute to study certifying climate impact for policy-level interventions was seen as a potential game-changer, although some skepticism was expressed given implementation challenges. Discussions on blockchain-based digital monitoring, reporting, and verification (DMRV), as well as tokenization, underscored how these technological advancements can enhance the efficiency, speed, transparency and profitability of project development, particularly for smaller projects.
- Government Intervention and Challenges: Countries are taking the necessary time to devise thoughtful strategies on optimizing their carbon resources for the benefit of their populations. One prominent carbon developer acknowledged that there is currently “no project without host government involvement”, leading to some degree of “chaos”. Another prominent carbon developer emphasized the importance of resilient project design to accommodate inevitable government intervention. At an international level, challenges arise from differences of opinion regarding the stringency versus flexibility of the new Article 6 rulebook, the substantial amount of infrastructure building required, and the need for more financing to support host country capacity building.
Flowcarbon expresses deep gratitude to the Gold Standard team for hosting an outstanding conference. The enthusiasm and dedication demonstrated by all speakers and attendees give us confidence that, by working together, we can transition from Billions to Trillions in tackling the climate crisis.
