Credit categories

This category consists of projects that aim to reduce and avoid emissions with technology-based solutions.

Examples include: Landfill gas capture, Ozone-Depleting Substance (ODS) destruction, and renewable energy.

Actively curbing potent greenhouse gas emissions where they otherwise would occur is one of the most effective actions we can take today. Avoided emissions from this category are typically irreversible, and it’s often straightforward to measure the exact amount of CO2 emissions avoided through project activity.

Additionality: Carbon credits only count as additional when the project requires carbon credit funding to operate. If a project is already profitable without credit financing or is mandated by law, it's not additional. We are invariably cautious of projects that don't meet this criterion (for ex. renewable energy projects).
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Potential overestimation: Some projects might exaggerate their emission reductions by overestimating emissions that would have been emitted without the program (for ex. cookstove projects). We focus on choosing projects that have clear & transparent metrics.

This category consists of projects that remove and store existing atmospheric carbon with nature-based solutions.

Examples include: Planting trees in an area that has been destroyed, or restoring plant life to tidal wetlands.

Ecosystems, especially plants, are the most efficient tools we have for atmospheric carbon removal. By investing in restoring degraded ecosystems around the world, we can harness nature's power to eliminate millions of tons of carbon.

Difficulty of Implementation: Put simply, implementing an effective restoration or afforestation project is hard. Projects can face setbacks if new trees don’t survive and need to be replanted. What’s more, new plantings can take years to start removing carbon at scale.
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Durability: Nature-based projects are susceptible to natural risks like fire and infestations. They also run the risk of having their impacts reversed once the project ends. Young forests are far more susceptible to natural risks than healthy, mature forests. We focus on projects that invest in risk reduction strategies, like fire prevention and community stewardship.

This category typically consists of industrial projects that capture carbon at the source, which is then stored for the long-term. Examples include: Capturing carbon at a smokestack and storing it in an underground cave. These projects tend to be very expensive and there are no credits available on the market right now.

CNaught portfolios are currently a blend of categories I, II, IV, and V as category III projects start to scale. Over time, we will add category III projects as they become more available.

Capturing and sequestering CO2 at major point sources of emissions is an efficient way to remove meaningful amounts of carbon from the atmosphere and thereby drive meaningful impact.

Additionality: Many of these projects, particularly in the United States, benefit from tax credits, which means they likely would have occurred even without carbon credit revenue, making them non-additional.
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Efficacy: This technology is still in development and thus far no single carbon capture and storage project has managed to reach its target CO2 capture rate.

Cost: These projects are incredibly expensive to implement as the technology is still in development and these projects have complex infrastructure requirements. Because of this, there are very few of these projects and when their credits are available, they will be very expensive.