Transparency Drives Trust in Carbon Credit Quality: Announcing the NCX Next Generation Harvest Deferral Methodology
Dr. Nan Pond
Dr. Nan Pond
3 November, 2022 min read

A new approach to carbon methodologies

The market has spoken: when it comes to forest and other nature-based carbon credits, quality is key. Carbon methodologies exist to create real, accountable, high-quality benefits for the planet, but it hasn’t always been easy to understand or trust how much of a difference they’re making. Many operate on antiquated approaches where if a buyer wants to understand what goes into the carbon credit they’re purchasing, the process is often opaque and confusing. 

When NCX envisioned what the next generation of carbon credits could be, we drew upon the latest advances in science and technology and coupled that with transparent and rigorous processes. The result is a methodology that builds upon our previous work to set a new standard for quality in forest carbon credits. We’re thrilled to now share it with the world.

How this new approach increases quality

The NCX harvest deferral methodology is designed for projects that deliver climate benefits at scale using working forests owned by family, corporate, and government landowners. Our original methodology already incorporated key aspects to support this approach including acre-by-acre baselines and the use of satellite data for measuring and monitoring forests.

Our new generation makes it easier to understand and trust the resulting carbon credits produced by incorporating:

  • Greater transparency and insight: Our GitHub repository provides reproducible code to implement crediting math, and line by line tracking of changes to the methodology. This provides a deep look into how NCX carbon credits are made, and lets readers see how our approach evolves over time. 
  • Design for continuous improvement: One of the big advantages of short term harvest deferral is that we can constantly evaluate and improve our work one year at a time as we learn more and as science advances. This methodology provides a better framework for incorporating those improvements, and ensuring resulting changes are visible to everyone. 
  • Science that works for working forests: Predicting how many carbon credits will result from specific interventions in working forests requires detailed understanding of biology, such as the growth of trees, as well as economic and other factors that influence when and how landowners harvest. It’s challenging, but not impossible! It requires acknowledging this complexity, rather than making overly simple assumptions. Our new methodology accounts for this reality in several important ways, discussed in detail below. 

Taken all together, this set of innovations provides a framework for providing the trust in carbon credits that buyers and the planet deserve. 

What’s new and improved

In addition to the higher level changes described above, our new methodology includes several key updates reflecting both the latest in forest carbon science and feedback from dozens of experts in forestry, climate science, and carbon markets. Here’s a summary of what’s changing, and why it’s an improvement over the status quo:

This table shows changes in format, evaluation approach, and key deductions (%) from original methodology (submitted to Verra in November 2021) to our next generation methodology:

These are all changes that help advance the standard for quality in the carbon credit industry. In addition, we have also opted to increase our market-shifting leakage deduction from 10% to 20%, adopting a more conservative approach recommended by experts. We’re excited to work on new methods for quantifying and accounting for leakage in the future. Finally, in order to appropriately value urgent action on climate, we have also introduced a 3% discount rate. For more on that approach, see our recently published peer-reviewed paper, “The Time Value of Carbon”. 

Together, these changes represent a big leap forward in how carbon crediting methodologies are designed. This is a critical decade for efforts to combat climate change, and urgent action is needed to avoid its worst impacts. The rigor and transparency of this new approach allow us to take action at the speed and scale we need to reduce the scope of damages from peak warming. 

Want to learn more?

Join Dr. Spencer Meyer and me for our webinar on November 30, 2022 at 10:00 a.m. PST, where we will provide a deep dive on our next generation methodology. 

For more details on underlying methods and our response to public feedback, please visit our methodology launch education webpage. You can also read the full methodology on GitHub.

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about the author

Dr. Nan Pond

Dr. Nan Pond

Director of Certification
Dr. Nan Pond serves as the Director of Certification at NCX. She is responsible for ensuring that our natural capital products reflect the highest quality science as we hone our existing methods and expand into new credit types and new geographies. She is the recipient of the 2020 SAF Young Forester Leadership Award and has held multiple leadership roles within the Society of American Foresters. Dr. Pond earned a PhD in forest biometrics from Michigan Technological University and a Bachelor of Science in forest ecosystem science from SUNY ESF.