Key Impact Points:
- New Carbon Offset Standard: Amazon develops ‘Abacus’ framework to verify carbon offsets, bypassing existing global standards.
- Critics Raise Concerns: Potential for market confusion and compromised offset standards.
- Tech Giants’ Commitment: Alphabet, Meta, Microsoft, and Salesforce plan to buy 20 million metric tons of Abacus-certified credits.
Amazon has taken a significant step by sidestepping a global standard for verifying carbon offsets, opting to back a new standard called ‘Abacus.’ This move aims to address the lack of quality-labeled offsets and help Amazon meet its 2040 net-zero emissions target. Critics, however, fear this could lead to market confusion and lower offset standards.
New Development
Amazon, in collaboration with carbon registry Verra, has completed the Abacus framework, which focuses on verifying the quality of carbon offsets in reforestation and agroforestry. This new standard serves as an alternative to the one developed by the Integrity Council for the Voluntary Carbon Market (ICVCM).
The architect behind the new carbon credit label, Jamey Mulligan, gave a sneak peek of the Amazon ABACUS VCU. He said:
“It is the first carbon market label that reflects innovations in the carbon accounting itself. [We are] creating an incentive for project developers to road test new project design concepts and carbon quantification methodologies that, at the end of the day, are built to enable confidence that the credits represent what they claim.”
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Background
Jeff Bezos, through his $10-billion Earth Fund, has been a significant donor to ICVCM and its sister organization, the Voluntary Carbon Markets Integrity Initiative. Despite this, Amazon sought a more ambitious standard than what ICVCM provided. Bezos could not be reached for comment on his involvement in the decision.
Tech Giants’ Support
Major tech companies, including Alphabet, Meta, Microsoft, and Salesforce, have committed to purchasing up to 20 million metric tons of Abacus-certified credits. This collective support underscores the tech sector’s ongoing commitment to addressing climate change through innovative approaches to carbon offsetting.
How ABACUS Differs From Traditional Carbon Credits
Additionality:
ABACUS Verified Carbon Units (VCUs) stand out by requiring project developers to consider additionality from the project’s inception. Unlike existing credits, ABACUS mandates tracking changes in the project’s carbon stock over its lifetime, using a dynamic baseline for continuous comparison. Jamey Mulligan explains, “Projects have to outcompete matched control plots in the surrounding landscape to maintain additionality. This effectively transfers the risk of future non-additionality from the atmosphere to project investors, where we think it belongs.”
Leakage:
Amazon aims to address the issue of leakage, which often occurs when agricultural activities lead to indirect land use changes and carbon loss. ABACUS will support projects that make degraded land or nearby regions equally productive, maintaining agricultural production rates and ensuring carbon removal projects do not compromise food security.
Durability:
Natural climate solutions have struggled with proving durability or permanence, typically using buffer pools to cover potential losses. ABACUS will maintain this approach but with projects of higher quality, involving tree species better adapted to the project area. Additionally, the crediting period will be reduced from 50 years to 30 years. Mulligan notes that this reduction has little impact on investors’ financial outlook but creates unaccredited removals that serve as an additional buffer pool.
Testing and Refining ABACUS:
Despite the promising changes, ABACUS needs further refinement. Amazon and Verra will collaborate to test and improve the ABACUS VCU label. After a pre-consultation last October, real and pilot carbon projects are necessary for ground testing. Building trust on both sides is crucial for the success of ABACUS, according to Mulligan.
