Permanence Trust aims to address non-permanence risk for carbon projects

WASHINGTON, D.C. – The American Forest Foundation announced today the launch of their partnership with carbon insurance specialist Kita to conduct a design and feasibility study for a new system-wide approach to addressing permanence for carbon markets. The partnership will assess the feasibility of a new facility, named the Permanence Trust, to provide long-term, pooled permanence assurance services for participating members of the voluntary carbon market.

“Natural climate solutions are a critical component in tackling the climate crisis—but nature inherently comes with risk,” said Nathan Truitt, executive vice president of climate funding at the American Forest Foundation. “In order to fully maximize the climate potential of nature through the voluntary carbon market, we need the right tools to measure, track, and mitigate this risk. Conducting this feasibility study on the Permanence Trust will shine light on how we can confidently use nature-based credits to fight climate change, empowering project developers, corporations, and communities to conserve nature and protect our planet.”

For decades, natural climate solutions (NCS) projects have wrestled with permanence through tools like buffer pools, tonne-year accounting, and liability management. While these methods provide some assurance, they have clear limitations. The partnership between Kita and AFF will test the feasibility of an entirely new approach to permanence: instead of setting aside credits predicted to be at risk, proceeds from credit sales are invested in a long-term Trust. The Trust grows over time, providing the resources to prevent and respond to carbon reversals, manage liabilities, and, if needed, backstop NCS with geologic storage. This structure is designed to give buyers confidence that NCS credits can meet the same permanence standard as fossil emissions.

“Kita recognizes the need for all types of carbon projects to achieve global climate mitigation goals,” said Rachael Notto, Head of Carbon Markets at Kita. “We hope developing a Permanence Trust will solve some issues around permanence and support deeper engagement with NBS projects.”

Kita will work on the Permanence Trust feasibility study in various capacities including framework development, stakeholder engagement, and risk modeling. This will involve entity structure and design, financial planning, reversal risk assessments, carbon portfolio management, and mapping loss recourse options.

A key part of this feasibility study is growing broad knowledge and acceptance of the Permanence Trust concept. Without growing stakeholder buy-in, there is a chance the feasibility study yields positive results with no room for real world application. That’s why the partnership also includes the development of an advisory group of experts across the climate, carbon, and conservation spaces to gather valuable and diverse input into the assessment framework. Advisory group members will contribute expertise through focused working groups on topics such as governance, capitalization, reversal definitions, and long-term monitoring.

AFF is currently accepting requests for participation in the feasibility study’s advisory group. For those interested, please contact Kristina Hughes at khughes@forestfoundation.org.

 

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About The American Forest Foundation

The American Forest Foundation is a national organization that empowers family forest owners to deliver meaningful conservation impact. The organization’s programs, the Family Forest Carbon Program and the American Tree Farm System, help landowners implement forest management practices to care for the health and productivity of their woodlands. To learn more about the American Forest Foundation and the Family Forest Carbon Program, visit www.forestfoundation.org.