Crediting standard Verra is on track to launch its nature framework towards the end of the year with a number of adjustments following its recent consultation process, and has decided to go ahead with testing nature stewardship credits or certificates as a separate unit type.

The standard late Thursday released feedback from the consultation round it arranged last year, listing a number of elements that will be changed from the previous version in order to strengthen the framework, as well as proposals that are being analysed and considered.

“The feedback showed strong support for developing the Nature Framework,” Verra said, stressing it would continue to assess elements related to demand, including insetting and the ever-controversial offsetting issue.

As well, it confirmed it will move forward with the concept of stewardship credits or certificates, after receiving what it said was strong support for the proposal in the previous draft to explore the credit type.

“This proposed unit type, which is distinct from Nature Credits, would increase the financial viability of historically well-managed areas by rewarding successful, verified nature conservation and management outcomes based on the stability and resilience of ecosystems,” it said.

“Verra will pursue and test nature stewardship credits or certificates as a mechanism to reward Indigenous Peoples and local communities for conserving essential, intact biodiversity.”

It will likely only start developing the stewardship units in 2025, but said this year it would “explore partnerships and approaching key stakeholders that could support the technical development of a pathway for nature stewardship”.

In last year’s draft, Verra said activities that could potentially qualify for stewardship units would be documented activities that protected and managed areas of high-value biodiversity, potentially including those meeting the criteria for being recognised as Other Effective area-based Conservation Measures (OECMs).

TIGHTENING UP

A number of design elements to the framework remain open to further analysis and consideration before final decisions are made, including feedback from a number of participants urging Verra to align the minimum crediting period of 20 years to the demand that any project must operate for at least 40 years in order to qualify for crediting.

However, the summary did confirm some elements that will be adjusted compared to the first draft:

• The first framework draft proposed that project start dates could be backdated to Jan. 1, 2019, a date that was supported by around halt the respondents. However, given the challenges projects would face in demonstrating compliance with safeguards and additionality criteria, Verra will now test a Jan. 1, 2023 start date for the scheme instead
• It will strengthen the benefit sharing requirements by clarifying that the mechanism is expected to be co-developed with the communities, introduce financial transparency requirements related to benefit sharing, and embedding equity and equality principles
• Verra will also strengthen the safeguards to ensure sustainable development benefits by introducing a sequential approach, such as requiring that free, prior, and informed consent (FPIC) must be in place before a benefit-sharing agreement; adding more specific criteria for evidence to demonstrate compliance; differentiating requirements on private lands or properties; and drawing up a list of ineligible project activities

On offsetting, the majority of respondents supported Verra’s initial approach to not allow the credits to be used for offsetting purposes, although several observers have said the approach would likely make it challenging for the market to scale.

However, some also said that offsetting/insetting should be allowed in some cases.

“Verra’s priority is to ensure the integrity of the Nature Framework, Nature Credits, and the broader market,” it said.

“International initiatives/forums, such as the International Advisory Panel on Biodiversity Credits (IAPB), are currently analysing concepts related to use cases and demand motivations (e.g., offsetting, insetting, offsetting residual non-attributable impacts, philanthropy). They are also developing categorisations that will be useful for these purposes, separating use cases between voluntary and compliance contexts.”

In consequence, the standard said it will continue to “listen to all voices while participating in discussions and forums”.

TIES TO CARBON

Verra is the world’s biggest private issuer of carbon credits, and intends to allow its nature framework to enable stacking of carbon and nature credits, meaning the same project can earn both credit types as long as there is no double counting of benefits.

Respondents to the consultation were split on whether that should be allowed, with opponents saying it would “disincentivise projects with multiple benefits requiring additional monitoring costs” and that it would “convey a message of reduced importance or confidence in the credits, reduce long-term viability, complicate the overall trading system, and challenge significant benefit sharing by local communities”.

In recent months, a total 31 projects have piloted Verra’s draft nature framework, and according to documents released Thursday, those projects were able to meet the additionality requirements of both the Verified Carbon Standard (VCS) programme and the Nature Framework.

Verra flagged a main takeaway from the pilots as stacked projects should align MRV for their carbon and nature elements, though the first nature verification round could be allowed to remain independent.

Meanwhile, for existing VCS projects pursuing stacking, it might be necessary to put specific guardrails in place to safeguard biodiversity and sustainable development outcomes, Verra said.

“Verra will continue to deepen our thinking and testing approaches to clarify and streamline concurrent VCUs and Nature Credits use, considering what we learned from the pilot process and the input received in the consultation,” it said.

By Stian Reklev – stian@carbon-pulse.com

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