Leveraging nature-based solutions to maximize environmental impact

As organizations work toward decarbonization targets, many are also looking to deliver additional environmental benefits as part of broader climate strategies. For example, a growing number of organizations have begun to set ‘net-nature positive’ commitments including targets to drive the protection and restoration of natural capital—ecosystem functions, species, and ecosystem services. 

The voluntary carbon market (VCM) is one avenue for organizations to deliver on these objectives, through carbon projects that provide benefits beyond carbon. These are generally called co-benefits. For high-quality carbon projects that also deliver environmental co-benefits, these benefits may include enhancing ecosystem services and underlying ecological and environmental functions, such as biodiversity. 

While many carbon reduction and removal pathways on the voluntary carbon market can generate environmental co-benefits, nature-based solutions may be well positioned to help organizations deliver on dual carbon and net-nature positive goals. For organizations aiming to maximize these objectives in their voluntary carbon market purchases, it's important to establish clear quality criteria and create frameworks for monitoring and evaluating environmental outcomes.

The role of nature-based solutions in climate goals 

Nature-based solutions to climate change, sometimes known as natural climate solutions, aim to promote sustainable land use by protecting, restoring, and managing natural ecosystems such as forests, mangroves, croplands, grasslands, and peatlands through stewardship of the landscape. Importantly, nature-based projects should not move ecosystems further from their natural state. When done well, these solutions recognize the interdependence of healthy ecosystems with climate mitigation and adaptation. 

Nature-based solutions to climate change also support climate change mitigation by reducing and removing carbon dioxide from the atmosphere. According to some estimates, these solutions could deliver 37% of the cost-effective carbon dioxide mitigation needed through 2030 to ensure a greater than 66% chance of limiting warming to below 2°C, with a potential to reduce up to 23.8 gigatons of carbon dioxide annually by 2030. Investment in these solutions as part of an organizations’ climate strategy, including through purchases of carbon credits, therefore plays an important role in contributing to global climate goals while also promoting broader environmental objectives and ecosystem integrity.

Environmental co-benefits of nature-based solutions 

Alongside their role in climate mitigation, nature-based solutions have the potential to generate valuable environmental co-benefits that drive meaningful impact beyond carbon removal and sequestration. At a minimum, these solutions should result in no net harm. When properly implemented, they also have the potential to enhance ecosystem services and underlying ecological and environmental functions, including flood and erosion control, maintenance of genetic and biological diversity, water filtration, and soil health. Importantly, by enhancing these services, nature-based solutions can also bolster climate resilience by enabling ecosystems to be more stable and adapt to changing conditions. 

For example, carbon projects that utilize agroforestry practices help contribute to improved food security and provisioning of wood products by planting trees in agricultural landscapes. Similarly, projects that focus on mixed native-species reforestation can improve water quality and quantity.  

Nature-based carbon projects also contribute to regulating services such as flood and erosion control and the regulation of local climate, air, and soil quality. Projects planting mangroves can lead to disaster risk reduction by buffering against sea level rise.

Delivering nature-positive targets through the voluntary carbon market 

While nature-based projects on the voluntary carbon market have the potential to deliver important co-benefits, shared climate and recovery goals do not always manifest as aligned priorities for project design and implementation. Carbon Direct finds that this is in part driven by misaligned priorities in existing carbon market protocols and frameworks that may incentivize the prioritization of carbon storage and sequestration over other ecosystem services.

In afforestation, reforestation, and revegetation projects, trade-offs may exist between carbon sequestration and biodiversity. An example would be projects that prioritize fast-growing exotic species or monoculture tree plantations to sequester carbon more quickly, over diverse, native-species plantings that may accumulate carbon more slowly but may better contribute to longer term biodiversity recovery.

Fortunately, market-based mechanisms are emerging that encourage the financing of nature-based solutions with stronger environmental co-benefits. These include the Symbiosis Coalition of buyers targeting high-impact restoration carbon projects, emerging voluntary carbon market methodologies and certifications that privilege environmental co-benefits and creative financing to mitigate risks from biodiversity-forward projects.

Adapting your decarbonization strategy for maximum impact 

As organizations increasingly look to the voluntary carbon market to maximize dual carbon and net-nature positive objectives, three considerations can help ensure maximum impact.

1. Understanding local context: Environmental co-benefits will depend on the project's context. For example, agroforestry projects may be better positioned to provide provisioning services such as food and water, whereas soil projects may be better positioned to improve water quality and support erosion control. Ensuring that projects are aligned with local context is critical and can give more buyers confidence to support these projects as part of their climate plans.

2. Defining relevant reporting outcomes: Depending on investment objectives and local context, reporting outcomes may differ across project types. For example, organizations that prioritize pollination may choose to report against outcomes focused on pollinator health, abundance, diversity, and habitat, whereas organizations prioritizing climate resilience and adaptation may choose to report against genetic diversity and functional redundancies in species and populations.

3. Aligning with relevant emerging frameworks: Organizations may consider nature positive attributes of voluntary carbon market projects and associated metrics based on desired alignment with emerging standards and disclosures, including those from the Taskforce on Nature-related Financial Disclosures, International Sustainability Standards Board, Global Reporting Initiative, and European Sustainability Reporting Standards.

To dive deeper into the role of nature-based solutions in driving ecological restoration and achieving net-nature positive goals, explore our report: Ecological Restoration in the Voluntary Carbon Market.