"CMIA helped to explain the potential for project-based mechanisms across a variety of constituencies and is a key voice driving the conversation on results-based finance and sector approaches for scaling-up emission reduction investments. We urgently need input from organisations like CMIA to operationalise Art 6 of the Paris Agreement."

Mr. Franz-Josef Schafhausen, former Director General Climate Change, European and International Affairs, Federal German Ministry of the Environment, Nature Conservation, Building and Nuclear Safety

S&P Global Platts to launch AI-driven carbon credit indices

12th March 2021 by CMIA

S&P Global Platts has announced a partnership with environmental investment company Viridios Capital to use artificial intelligence to bring transparency to the voluntary carbon market.

The move aims to drive price transparency in the rapidly-growing market for greenhouse gas emissions credits — particularly where projects deliver benefits that are additional to the underlying emissions reductions.

“The complex voluntary carbon markets are evolving at a rapid rate,” said Jonty Rushforth, head of price group at Platts, in a statement Feb. 24.

“Combining Platts robust and trusted price assessment data insight alongside Viridios Capital’s proven environmental AI technology will provide market participants with greater transparency into the market value of voluntary carbon credits and their associated co-benefits,” he said in a statement.

The co-benefits relate to 17 United Nations Sustainable Development Goals, for example gender equality, clean water and biodiversity.

Carbon credits are generated by specific projects that avoid, reduce or remove greenhouse gas emissions, and are verified and validated by a set of independent standards that have been created by coalitions of non-governmental organizations and market participants over the last few decades.

The large number of differentiating factors associated with emissions reduction or removal projects — such as project technology, geography and the UN’s SDGs — present significant challenges in determining the value of the credits they generate.

A robust AI-modelled approach will bring a new level of clarity to voluntary carbon market participants, Platts said.

The two companies signed a memorandum of understanding that will involve a series of AI-driven carbon indices to enhance transparency into the co-benefits that projects deliver, providing market participants with a greater understanding of their market value.

The new indices will leverage environmental AI expertise provided by Viridios Capital, which has been trained on over 20,000 data points representing transactions from across the range of carbon projects around the world.

The model will also include daily inputs from a range of Platts price assessment data to produce evaluations for sets of credits with specified co-benefits including project types, vintages, locations and standards.

The new indices will complement Platts’ growing suite of voluntary carbon price assessments including the Platts CEC, launched in January 2021, which reflects the daily value of CORSIA-eligible carbon credits from the UN’s global aviation carbon offsetting program.

Global demand for carbon offset credits is expected to increase significantly as a growing number of companies and governments are setting targets to cut greenhouse gas emissions to net-zero by 2050.

Source: http://bit.ly/PlattsAI