Context



The Importance of Rainforests to our Survival

If we are to meet our global climate, nature and biodiversity targets, we must protect rainforests globally.


Rainforest Deforestation is the third largest emitter in the world


Source: World Resources Institute-By the Numbers: The Value of Tropical Forests in the Climate Change Equation by David Gibbs, Nancy Harris and Frances Seymour https://www.wri.org/insights/numbers-value-tropical-forests-climate-change-equation. Global Forest Watch https://www.globalforestwatch.org/map/

When you protect rainforests,
you also support global:

  • Biodiversity Protection
    The largest Biodiversity protection solution in the world: >80% of the planet’s terrestrial biodiversity. 1

  • Carbon Sequestration
    The most powerful natural-based solution (NBS) carbon sequestration in the world >200Gt or 29% of CO2/yr. 2

  • Temperature Cooling
    The most effective climate cooling solution in the world: >1c temperature cooling. 3

1. UN FAO – State of Forests 2020 – https://www.fao.org/state-of-forests/en/
2. Mo, L., Zohner, C.M., Reich, P.B. et al. Integrated global assessment of the natural forest carbon potential. Nature (2023). https://doi.org/10.1038/s41586-023-06723-z
3. Front. For. Glob. Change, 24 March 2022 Sec. Forest Disturbance Volume 5 – 2022 | https://doi.org/10.3389/ffgc.2022.756115

The Paris Agreement Carbon Market
There are 3 different types of carbon markets: Regulated (ETS-Emissions Trading Schemes), Voluntary (VCM-Voluntary Carbon Market) and
the Paris Agreement Carbon Market.

The Three Types of Carbon Markets

Source: World Bank Carbon Pricing Dashboard https://carbonpricingdashboard.worldbank.org/ & Climate Focus Voluntary Carbon Market Dashboard https://climatefocus.com/initiatives/voluntary-carbon-market-dashboard/

Article 6 & ITMOs

The Paris Agreement Carbon Market was established after
Article 6 was signed by all 196 countries to establish a new 
carbon market mechanism. It allows governments to issue
Sovereign Internationally Transferable Mitigation Outcomes (ITMOs) and trade them bilaterally, or with the private sector.

The future carbon market opportunity and scalability is in this 73.8% global carbon emissions gap.

 

 

*INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS (IOSCO) defines the Paris Agreement Carbon Market as “…A compliance offset market. These are markets falling under Article 6.4 of the Paris Agreement; with the United Nations acting as the Supervisory Authority.”


What is Sovereign Carbon?

Sovereign Carbon is a carbon reduction/removal unit created under the UNFCCC Paris Agreement.
Sovereign Carbon has unique attributes compared to other carbon credits.

 

The Carbon Credit Matrix

Unlike other Carbon Credits, Sovereign Carbon is in the Top-Right corner of the Carbon Credit Matrix: (x-axis Carbon Impact & y-axis Carbon Scalability). Sovereign Carbon can only be National at scale, and a Reduction and/or Removal carbon unit.

Sovereign Carbon matrix-ITMO

Source & Credits: ITMO Ltd.

Sovereign Carbon Attributes

  • Nationally netted

    There is no leakage or double counting

  • Paris Agreement-Compliant 

    Sovereign Carbon is part of global Paris Agreement)
  • Only Reduction & Removal 

    No avoidance are allowed with Sovereign Carbon


Deutsche Bank-CIO-Special-UNFCCC REDD+ Sovereign Carbon-White Paper-ITMO Ltd

Sovereign Carbon White Paper
In October 2022, Deutsche Bank, the Coalition for Rainforest Nations, and the ITMO team published the first White Paper on Sovereign Carbon.

Download it here >>
Download press release>>

Source & Credits: Deutsche Bank, Coalition for Rainforest Nations and ITMO Ltd.