Environmental Integrity Risk

Carbon offsets are only of any value if they have high environmental integrity. Without this the whole system will fail. This requires highly competent project developers; robust registries and offset protocols; good due diligence and well-defined contracting arrangements for risk allocation. However, we know from experience that even with best efforts, things can still go wrong. When it does it can expose a company to both reputational harm and financial loss. Parhelion is therefore developing solutions to underwrite the risk related to the environmental integrity. This will allow offset purchasers to buy with confidence, knowing that should the environmental integrity of a purchased offset be compromised, they are protected by insurance.

Permanence Risk

Carbon offsets and removal units are exposed to risks related to ‘permanence’ i.e. that the claimed for carbon sequestration remains locked away. Most carbon registry protocols use a buffer pool arrangement to address this risk. These buffer pools can be an expensive and inefficient way to finance this risk and can take an extended period to make the system whole. Parhelion is developing new solutions to more efficiently and cost effectively address these risks. Different stakeholders in the carbon offset value chain will face different risks.As a long term carbon market sector expert we work with individual stakeholders to help them clearly identify their risks and develop appropriate risk transfer solutions.