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How stakeholders can unlock the full potential of natural climate solutions
McKinsey & Company highlighted six ways organisations can create more certainty in this space.
Natural climate solutions (NCS) are emerging as vital tools to combat climate change whilst preserving the ecosystem; however, significant challenges remain in scaling their impact.
According to McKinsey & Company’s report, there are six ways organisations can start to overcome these challenges and unlock the full potential of NCS.
To effectively leverage NCS, the report emphasised the need for organisations to clarify the exact role that NCS can play for them in their journeys. By defining this, businesses can create a clear transition toward a net-zero pathway and achieve net zero.
Sharing success stories is also important, as highlighting effective practices encourages supply.
Aside from this, McKinsey also noted that high emitters should come together to prioritise NCS credits with high co-benefits, showing their willingness to pay more to drive demand.
Improving carbon market architecture is also an essential step. Improvements could include creating reference contracts that define the attributes of carbon credits to be priced alongside avoided emissions.
Creating regulatory clarity is also important, with McKinsey noting that overcoming political barriers requires stakeholder collaboration, international consensus building, and coherent policy frameworks that are in line with international climate goals.
Lastly, building trust through coalitions of high-level champions could amplify best practices, highlight the advances in measurement and verification to increase the credibility of NCS, and endorse scientific advances toward net-zero certification.
“Science shows that to achieve the 1.5° pathway outlined in the Paris Agreement, by 2030 we would need to reduce emissions by 50% of 2019 levels,” the report noted. “Natural climate solutions, says McKinsey partner Joshua Katz, are an “important piece of the portfolio we need to achieve the 1.5° pathway”.”
Moreover, the report also noted that NCS can remove carbon from the atmosphere, potentially up to seven gigatonnes per year by the end of this decade, which is nearly one-third of the target required to achieve a 1.5° pathway.
