May 5, 2023

Your weekly Invert Invert Insights are here:

• Verra publishes draft of new consolidated REDD methodology
• New York is making history
• New fund offers investors access to energy transition infrastructure opportunities
• Trending: Can the mining industry do something to help mitigate climate change?
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Verra Publishes Draft of New Consolidated REDD Methodology

Verra, the foremost global organization for climate action and sustainable development standards, has released a draft of their new REDD (Reducing Emissions from Deforestation and Forest Degradation) methodologies to replace five separate methodologies, including Avoiding Unplanned Deforestation (AUD) activities. With the new methodology, Verra aims to improve the integrity and quality of its forest carbon credits by establishing deforestation baseline rates for all AUD projects in a particular country or region. To achieve this objective, Verra called for “crowd-sourced data” to assist the organization develop baseline information in 12 different jurisdictions. The update is expected to be finalized in Q3 of this year and by the end of 2024, jurisdictional baselines will be set in all 40+ jurisdictions with AUD projects worldwide. 

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Invert Insights:

This new initiative can assist all stakeholders, including developers and financiers, in REDD project development as they evaluate various AUD opportunities. Verra aims to utilize third-party metrics, such as satellite data and government statistics, to establish baseline rates for AUD projects where this was previously left to project developers and third party verifiers. This new approach should help address recent criticisms of some REDD projects accused of over-crediting by providing a standardized baseline approach that will bring more consistency, certainty, and transparency to REDD projects.
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New York Bans Fossil Fuels in New Buildings Starting 2026

New York is set to become the first state to ban gas stoves and heating systems in newly constructed buildings. The new budget will require all new buildings up to seven stories to phase out the use of fossil fuels by 2026 and all other new buildings by 2029, with the exception of hospitals, critical infrastructure, commercial food establishments, and buildings where the local electric grid cannot support the energy demands. The budget aims to reduce economy-wide greenhouse gas emissions by 40% by 2030 and 85% by 2050, on a 1990 basis.

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Invert Insights:

At 30% of the state’s greenhouse gas emissions, decarbonizing new and existing buildings is critical to realizing the state’s long-term reduction commitments. Adopting more sustainable building practices - including energy-efficient design, renewable energy sources, and green technologies - supports the reduction of these emissions and mitigates environmental impacts. It can also lead to cost savings, improved air quality, and increased comfort and health benefits for building occupants.

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New Fund Offers Investors Access to Energy Transition Infrastructure Opportunities

Schroders Capital, a leading global investment manager, has announced the world’s first Long-Term Asset Fund (LTAF) focused on energy transition. This innovative investment vehicle provides investors with access to illiquid and private assets, including renewable energy infrastructure. The LTAF is also designed to unlock new capital flows for infrastructure projects and enables Defined Contribution (DC) pension managers to invest in renewable energy projects while generating healthy returns.

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Invert Insights:

This new fund has the potential to finance large-scale renewable energy projects that are often challenging to fund, allowing the energy industry to keep growing by developing new projects, increasing the energy supply, and supporting the clean-energy economy.

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Trending: Can the Mining Industry Do Something to Help Mitigate Climate Change?

As Canada’s Mining Week starts, we dedicated ourselves to highlighting the mining industry’s role in addressing climate change. While the mining industry’s Scope 1 and 2 emissions account for an estimated 4% to 7% of global greenhouse gas emissions, it also plays a crucial role in the transition to clean energy, as it produces the minerals and metals needed for clean-energy technologies. Including Scope 3 emissions, the share of global emissions rises to 28%, primarily due to coal combustion, highlighting how critical the transition to cleaner energy production is. 

As the demand for critical minerals grows alongside the need for clean-energy technologies, the mining industry must continue to rise to the challenge of decarbonizing its own operations to ensure that they are helping solve the climate crisis and not contributing to it.