When I arrived in Nairobi, I was quickly surrounded by colleagues whose talent and breadth of expertise left me inspired. Eager to tap into this collective knowledge, we began a tradition we now call “Sip with the Expert” — relaxed gatherings over coffee, tea, a drink, or a shared meal, where one person leads us into a topic they know best. The first session, took us deep into the world of carbon markets — how they operate, the opportunities they present, and the challenges they face. Here’s a recap of the conversation, including the most thought-provoking insights and the lively Q&A that followed.
Key points of the presentation:
Carbon Project Categories
Projects are generally classified into:
Removal — Physically extracting CO₂ or other greenhouse gases from the atmosphere (e.g., Carbon Capture, Utilization, and Storage – CCUS).
Reduction — Preventing emissions that would have occurred (e.g., reducing emissions from deforestation, energy efficiency measures, or electric vehicle adoption).
Certification Principles
Recognized carbon standards require projects to meet criteria such as:
Permanence — Removals must last for decades, often 100+ years.
Additionality — Benefits must be above what would have happened without the project.
These safeguards aim to ensure environmental integrity.
Critical Decades Ahead
The coming decades are especially critical for avoiding dangerous climate tipping points.
Both nature-based solutions (NbS) and Carbon Dioxide Removal (CDR) Technologies are essential tools to stay within the 1.5°C warming limit.
REDD+ in Practice
REDD+ operates in many developing countries, generating emission reductions funded by countries and climate funds.
Major contributors: Norway, the United Kingdom, Germany, and the United States.
The Emissions Gap
The UNEP Emissions Gap Report shows that current global emissions already exceed the carbon budget for 1.5°C.
Even if all Nationally Determined Contributions (NDCs) are met, including conditional targets, a shortfall remains.
The current trajectory leaves only about six years to align with a 1.5°C pathway.
Some Questions & Answers we delved into:
So far, there are 80 jurisdictions implementing either carbon taxes or emissions trading schemes. These economies make up two-thirds of global gross domestic product and twenty-eight percent of global emissions are covered (notably, 4% is due to the expansion of the Chinese ETS to the industrial sector).
There is a growing surplus of carbon credits that push prices downwards; however, in 2024 Nature-based Solutions (NbS) and engineered removals have experienced an increase in prices.
Permanence is often backed by risk insurance — some registries hold a reserve pool of credits to compensate for reversals from events like wildfires or illegal logging. Additionality failures often occur when projects use carbon finance for activities already profitable without it — for instance, building solar farms in regions with existing strong economic incentives for renewables. Such pitfalls can lead to accusations of greenwashing and loss of buyer confidence.
While the budget defines the physical limit of CO₂ emissions to avoid passing 1.5°C, it also shapes global climate politics. Developed nations have already consumed a disproportionate share, leaving less “emissions space” for developing countries’ growth. This fuels debates about climate justice, whether richer countries should commit to net-negative targets, and how much climate finance should flow to the Global South for mitigation and adaptation.
Disclaimer: This content is shared as part of our networking discussions only and does not represent formal advice or an official position.
