A CLAI working paper by Thomas Annicq, Mika Morse and Saurabh Punamiya.

Permanence and reversal concerns hold back demand for nature-based credits. We argue part of the problem is that markets bundle four distinct things together: the physical carbon stock, the registry unit, the asset or contract a company holds, and the climate claim made at retirement. Separating them opens up a more active approach to duration, valuation, reversal and replacement.

The paper sets out a fund and guarantee model for holding and actively managing these positions, how it fits the Article 6.4 reversal-risk rules and the EU CRCF, and recommendations for standards bodies, accounting institutions and market infrastructure.

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