Search Results

Renewable energy projects can sell carbon offsets, but the offsets may not always make an impact on emissions. Grid Renewable Energy // BACK This report was last updated in November 2020. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Adding renewable energy capacity to the electricity grid is a critical part of the energy transition and almost certainly contributes to reduced greenhouse gas emissions. However, it is very difficult to prove the additionality of renewable energy offsets, since many projects would be built regardless of their ability to sell carbon credits. Since renewable energy projects are frequently large and complex, project developers can’t rely on the uncertain voluntary offset market to justify new projects. Projects likely to be additional are ones in locations where renewable energy is unprofitable and not mandatory, where offsets provide a large proportion of the funding, and where the developer is continuing to develop new projects. Giving Green has done an initial assessment of many renewable energy offsets sold directly to consumers, and we have not found any that meet our criteria. Therefore, we do not recommend any renewable energy offsets at this time. However, we are continuing to assess the market for renewable energy offsets that we can recommend, as we believe that some grid renewable energy offsets are likely additional. Grid renewable energy as a carbon offset Decarbonizing the power grid is a key part of the energy transition, so electricity production is a natural place donors look to support. Investing directly into building new plants is unattainable for most climate-conscious consumers, but instead, they can support these projects through purchasing offsets. Offsets for the renewable energy field are a bit more complex than other types of offsets, as there are many different types of credit available. There are at least 5 major players in the field and each NGO has its own name/acronym to refer to offset credit [1]. To make matters even more confusing, some credits do not actually claim to reduce greenhouse gases (GHGs). In this report, we try our best to demystify this complex field. We will focus on the terminology used by Gold Standard for this review since they are one of the more respected certifiers in the field. There are two types of offset instruments for renewable energy: Renewable Energy Credits (REC) and Verified Emission Reductions (VER). “[RECs] are tradable, non-tangible energy commodities that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource ( renewable electricity ) and was fed into the shared system of power lines which transport energy” [2]. By purchasing RECs, consumers can claim to contribute a “direct and quantifiable impact on increasing the share of renewable energy in the global energy mix” [3]. They are sold on renewable energy markets. RECs do not require demonstration of additionality, and therefore are not meant to equate to a reduction in emissions. Verified Emission Reductions (VER), in contrast, go through a more robust verification process that seeks to verify additionality, and therefore guarantee reduction in GHG emissions. Since the focus of our review is to find instruments that cause reduction in emissions, we will be focusing on VERs. Theoretically, this market is a win-win-win situation: creators of renewable energy projects can fundraise money for their investments, consumers of VERs get to claim reduction in emissions, and active steps are taken towards reduction in GHG emissions. But do investments into VERs actually cause reduction of GHGs? Let’s take a closer look at the certification process and how complex it can become. Causality Adding renewable energy to the grid will reduce GHGs if it is replacing generation (either current or planned) that would have taken place using fossil fuels. This is likely true in most circumstances, since fossil energy is the most common source of grid generation. However, this might vary based on the circumstance. For instance, if renewable energy is used to replace nuclear energy (which may happen in countries that are phasing out nuclear power), then the renewable energy may not actually have an effect on GHGs. Overall, it is important to know the dynamics of the specific electricity market to understand causality of renewable grid energy projects. Project-level additionality A grid electricity project satisfies project-level additionality if it only would have been developed due to the ability to sell VERs. Depending on the specifics of the local power market, this assumption may or may not hold for a number of reasons. First, renewable energy technologies such as wind and solar are becoming comparable in cost to fossil fuel generation of power without the sales of VERs [4], making investments into renewable energy a potentially attractive option in the absence of carbon offset markets. In places where they are not profitable on their own, they are frequently supported by government subsidies that attract project developers. So VERs may not be a strong factor in a project developer’s decision to invest or not invest into renewable energy (Broekhoff et al. 2019). This may not hold in all places: region-specific assessments for energy generation profitability may improve one’s ability to determine additionality more accurately. For example, Cames et al. 2016 highlight that additionality is unlikely to hold in India due to high profitability of on-shore wind generation. Second, the problem lies in the market itself. Once projects receive certified VERs, they need to sell them in order to realize any value. Project developers who sell their VERs on voluntary markets cannot be sure that anyone will buy them. Also, prices are driven by market forces, so project developers will be unsure about future revenues from offsets even if they are purchased. This creates uncertainty in the revenue stream for investors. Anticipating high unpredictability of fundraising on the voluntary market makes potential project developers heavily discount the outcomes from the market, and hedge against the volatility by relying on different sources of funding. One potential solution to this is to secure the purchase of the VER prior to implementation through emission reduction purchase agreements, or ERPAs (Broekhoff et al. 2019). Offsets purchased as part of ERPAs, therefore, have a higher chance of being additional, but these are generally not purchasable in small quantities by individuals. Timing is a critical issue. VERs are only issued by certifying agencies after a plant is up and running. Therefore, in a very literal sense buying VERs that are not part of an ERPA cannot possibly cause a project to be executed. It arguably makes sense to take a wider view of causality: by creating demand for VERs through the purchase of an offset, you can spur future projects that rely on offset sales to be profitable. If projects are being developed due to the belief that the project developers will be able to sell VERs in the future, they need to see active demand in the VER market. Therefore, by buying VERs for a past project, you may cause future projects to be developed. There is a much more direct link if the organization selling the VERs is continuing to develop more renewable energy projects, and can use the income from offsets to fuel these new investments. Another problem is that the voluntary markets cover only a small fraction of total costs, which further demonstrates that VERs may not alter the decisions of investors (Gillenwater 2008). In the case of the Belen plant, generated VER revenue per year is projected to be 584,010 euros per year, or about 10% of yearly revenue from electricity sales. While this is not a trivial amount, it is unclear if this was really enough to swing the initial investment decision. Marginal additionality Marginal additionality is achieved if each offset/VER sale can lead to additional GHG removal. Renewable energy generation projects are large, capital-intensive projects. They tend to have high up-front costs, and then relatively low operational costs that should be easily covered by electricity sales. Therefore, VER income is generally not necessary to keep projects running once they are already built. Also, in most cases, a developer is managing just one project. This means that if they receive VER income above their capital and operations cost for the project, it will likely go towards profits as opposed to developing additional renewable energy projects. This means that at some point, VERs will not have any effect on emissions. Overall, we believe the marginal additionality for renewable electricity plants is likely to be low, even if project-level is satisfied. Permanence When polluting electricity is replaced by clean energy, this permanently avoids emissions. Therefore, there is no concern about permanence in renewable energy projects. Co-benefits Fossil energy plants can cause air and water pollution, which has detrimental effects on human health and natural ecosystems. If renewable energy plants cause fossil fuel plants to go offline (or not be built), then it can achieve these co-benefits. However, these can be difficult to measure because it’s difficult to know the exact health and environmental counterfactual. Overall, we believe that renewable energy plants likely do have some co-benefits, though they are difficult to quantify. Assessment of grid renewable energy projects In summary, while we acknowledge that adding renewable energy to the grid is a key part of the energy transition, we believe that it is very difficult to verify the additionality of renewable energy offsets. Therefore, it is difficult to find reliable offsets. Offsets are more likely to be additional for projects with the following characteristics: They are in a context wherein increase in renewable energy is not required by mandates. They are in a context where renewable energy projects are unlikely to be profitable, even after taking into account government subsidies Offset revenue makes up a large proportion of a project’s revenue. The project developer is continuing to develop more renewable energy projects. Giving Green has done an initial assessment of many renewable energy offsets sold directly to consumers, and have not found any projects in which we are confident that they meet the above criteria. Therefore, we do not recommend any renewable energy offsets at this time. However, we are continuing to assess the market for renewable energy offsets that we can recommend, as we believe that some offsets are likely additional. [1] Table 1 in http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [2] https://www.goldstandard.org/articles/gold-standard-renewable-energy-labels [3] https://www.goldstandard.org/impact-quantification/renewable-energy-markets [4] US energy information administration compares costs electricity generation, concluding that, on average pre-tax costs of operating/building a wind plant are comparable with non-green technologies ( link ). References Gillenwater, Michael. "Redefining RECs—part 1: untangling attributes and offsets." Energy Policy 36, no. 6 (2008): 2109-2119. Gillenwater, Michael. "Redefining RECs—Part 2: Untangling certificates and emission markets." Energy Policy 36, no. 6 (2008): 2120-2129. Gillenwater, Michael. "Probabilistic decision model of wind power investment and influence of green power market." Energy Policy 63 (2013): 1111-1125. Broekhoff, Derik Gillenwater, Michael Colbert-Sangree, Tani Cage, Patrick “Securing Climate Benefit: A Guide to Using Carbon Offsets”, November 2019, http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2018 https://www.eia.gov/outlooks/archive/aeo18/pdf/electricity_generation.pdf Cames, Martin, Ralph O. Harthan, Jürg Füssler, Michael Lazarus, Carrie M. Lee, Peter Erickson, and Randall Spalding-Fecher. "How additional is the clean development mechanism." Analysis of the application of current tools and proposed alternatives (2016). https://ec.europa.eu/clima/system/files/2017-04/clean_dev_mechanism_en.pdf

Giving Green's guide to higher impact climate strategies for visionary businesses both large and small. How to Think Beyond Net Zero // BACK Pressure is mounting for companies to develop and implement climate strategies. This call to action comes from a growing list of both internal and external stakeholders – employees, investors, customers, civil society, other companies, government, and more. And, increasingly, climate strategies are being scrutinized to ensure good faith, viability, and adherence to rigorous standards. As a result of this scrutiny, more companies are looking to go beyond conventional approaches to elevate true impact over ineffectual claims. Instead of assuming conventional frameworks like "net-zero" are optimal, we explore the following question: given a set of available resources, how can a business maximize its climate impact? This new framing allows for nuance, creativity, and the reality that, in some instances, carbon accounting may limit the impact of a company’s strategy. While each company will inevitably face its own set of challenges and constraints when devising a climate plan, it will also have a unique set of opportunities. In this white paper, we provide 4 concrete, high-impact strategies your business can take to maximize its climate impact. Download our white paper, How to Think Beyond Net Zero: How To Think Beyond Net Zero - 2024 .pdf Download PDF • 4.68MB Do you work for a company that is considering a “beyond net zero” climate strategy? We’d love to hear from you! Get in touch with us here .

Giving Green recommended the Mash Makes Maharashtra Model as one of the top carbon removal opportunities for businesses in 2022. MASH Makes // BACK This recommendation was last updated in November 2022. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We do not have plans to update this recommendation in the foreseeable future as we have paused our work assessing direct carbon removal and offset projects. Questions and comments are welcome. Giving Green believes that donating to our top recommendations is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these recommendations do) may not be tenable for all donors, especially businesses. Taking this into consideration, we recommend Mash Makes specifically for businesses given its more direct alignment with corporate net-zero ambitions. We believe Mash Makes to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top recommendations Summary Overview of Mash Makes Mechanism Causality Project Additionality Marginal Additionality Permanence Co-Benefits Cost-Effectiveness Conclusion How to contribute to Mash Makes Summary Giving Green recommends the Mash Makes Maharashtra Model as one of the top carbon removal opportunities for businesses. Mash Makes is an Indo-Danish carbon-negative energy company. It aims to convert waste streams (primarily residue biomass) into energy products (biofuel, hydrogen, and electricity), of which biochar is a byproduct. Mash Makes partners with farmers, NGOs, and organizations w orking in agriculture in India to convert crop residue that would have otherwise been burnt into biochar, with the possibility of expanding to other locations. Applying biochar to soil securely stores carbon that plants have removed from the atmosphere with medium-term permanence, preventing carbon emissions and air pollution. We have identified the Mash Makes Maharashtra Model as a high-quality, medium-term-permanence carbon removal option. Overview of Mash Makes Mash Makes is an Indo-Danish carbon-negative energy company. It began as a project at the Technological University of Denmark, converting waste streams (primarily waste agricultural residues and woody biomass) into energy products (biofuel, hydrogen, and electricity) and biochar, a natural by-product. The promising results of this work led to the funding of a company to commercialize the technology. Mash Make s now partners with farmers, NGOs, and organizations working in agriculture in India to convert crop residue that would have otherwise been burnt into biochar, with the possibility of expanding to other locations. [1] Applying biochar to soil securely stores the carbon that plants have removed from the atmosphere with medium-term permanence, preventing carbon emissions and air pollution. Mash Makes does this through the use of Special Purpose Vehicle (SPV) units, the fundamental unit of which is Mash Make’s pyrolysis machine. This machine features a unique heat principle that enables efficient feedstock heating by only using residual pyro-gas produced as a byproduct of the process. Feedstock is fed into a pyrolysis unit and heated at temperatures of 550°C in the absence of oxygen to produce biochar, which stores carbon in a more stable form more than the original biomass. Each SPV will consist of at least four such pyrolysis units containing Mash Makes technology tailored t o the local supply chain energy needs and feedstock availability. [2] Mash Makes intends to utilize a modular franchise model by rolling out a series of SPVs; efforts are currently focused in India, though other areas in South Asia and sub-Saharan Africa are under consideration. [3] Mash Makes biochar is certified by the European Biochar Certificate. Figure 1. Modular pyrolysis machine designed by Mash Makes Figure 2. Representation of upcoming commercial Mash Makes facility for launch in 2023 Mechanism Removed emissions. Giving Green views the biochar production process as emissions removal. As crops grow, they draw carbon out of the atmosphere and store it in their biomass. Mash Makes intercepts the residue of this biomass material post-harvest, converting it into biochar before it can re-emit the stored carbon back into the atmosphere. This cycle is a carbon-negative process, resulting in less carbon in the atmosphere overall. We acknowledge that the line between removed and avoided carbon emissions can be a gray area. Some evaluations do not consider crop growth part of the biochar product cycle unless organizations grow it themselves, or they view biochar as an imperfect form of carbon removal due to its impermanence. Considering these views, we assess the biochar produced by Mash Makes to be a medium-permanence emissions removal project. Causality High causality. Biochar uses post-harvest agricultural biomass residues (feedstock). These would have often been left to decompose, but can also be burnt or put to alternative uses. The dry weight of biochar is easily measured before and after burning to determine fixed carbon content. [4] A high fixed carbon content translates to efficient feedstock use for carbon storage, showing a large proportion of feedstock is converted into stable carbon rather than ash or volatile compounds. Mash Makes biochar has a fixed carbon content of 84.9%. We believe that almost all of the carbon stored in the feedstock used by Mash Makes would be released into the atmosphere within a short amount of time if it weren’t converted to biochar. If the feedstock is left in the field, 20% of the carbon from plant biomass is stored over a 5-10 year period. [5] More likely, it would be burned, converting the carbon into CO 2 right away as the soil only retains 3% of carbon during crop burning. Karnataka state, the location of Mash Makes’ first commercial facility, has one of the highest rates of crop residue burning in India. [6] In other cases, organizations could purchase feedstock before it is burnt, putting it towards alternative uses such as biofuel, paper-based or packing materials, or animal feed. [7] However, these products will all re-release their carbon as they are used or discarded and so are carbon-neutral processes at best. Project Additionality Medium project additionality. Project-level additionality seeks to answer the following question: would Mash Makes exist and sell biochar in the absence of offsets? We rate the additionality of Mash Makes as medium. Mash Makes wants to keep the prices of its biochar as low as possible, depending upon the funds produced from the sale of carbon removal certificates, to keep operations feasible. Mash Makes currently sells its biochar at below-market prices (<$0.1/kg) to NGO afforestation or reforestation projects, with the sale price set to recover transport costs only. Producing 323kg of Mash Makes biochar will remove one ton of CO 2 equivalent, meaning that biochar sales / transport costs are equivalent to roughly 20% of the price of a credit. It is our impression that this cost recovery does not substantially reduce the additionality of offsets. Further, it provides biochar to farmers for free to participate in field trials. Mash Makes uses a modular franchise model to expand the number of SPVs, with investors funding individual SPVs that use the Mash Makes technology. To ensure the model attracts investor interest, bio-oil (a byproduct of the pyrolysis process) is sold at market rate as a carbon-neutral fuel source to shipping and transportation operators, with profits returning to investors. [8] We are comfortable with this aspect of Mash Makes operations, as (i) Mash Makes told us the model still depends on carbon credits to be feasible, (ii) Mash Makes does not directly profit from this, (iii) this increases the rate at which Mash Makes can expand, leading to the removal of more carbon, and (iv) the bio-oil replaces carbon-intensive fossil fuel use, assisting with industry decarbonization. [9] If project products generate profit, this can decrease our confidence in whether projects need carbon credits to operate, calling additionality into question. However, Mash Makes told us that carbon credits are a vital part of its operations and that it aims to keep its biochar prices as low as possible while selling bio-oil to expand. Marginal Additionality High marginal additionality. Marginal additionality ensures that each credit purchase goes towards removing additional greenhouse gas emissions, rather than generating profit. We also rate the marginal additionality of Mash Makes as high. As Mash Makes is a for-profit company, there could be concerns about carbon credit revenue generating profit rather than sequestering additional carbon. However, Mash Makes aims to be a business for impact, using a profitable business model to attract investors and remove carbon at a pace it believes would not be possible as a non-profit. [10] As the revenue from carbon credits goes towards operational costs and assisting with expansion, leading to additional carbon sequestration, we feel confident in the additionality claims of Mash Makes. [11] The modular design of Mash Makes’s SPVs allows for the quick and efficient setup of facilities near biomass residues that commercial operators would typically be unable to reach, also reducing costs associated with the transport of the feedstock. This also creates higher confidence in additionality, as rural feedstock is less likely to be accessible for other climate-related purposes. Permanence Medium permanence. The biochar produced through pyrolysis is more stable than the original feedstock. However, biochar permanence can be highly variable depending upon the feedstock type and pyrolysis temperature, which influence biochar characteristics, and the post-production conditions, which impact how quickly biochar will degrade. Mash Makes biochar has an oxygen-to-organic carbon ratio of 0.056, a hydrogen-to-organic carbon ratio of 0.4, and pyrolysis production temperatures of 550°C. Mash Makes biochar feedstock is currently primarily agricultural residues such as nutshells, but it may expand to other feedstocks in the future. [12] Due to these characteristics, we estimate the theoretical quality of Mash Makes biochar to be extremely high, with a >1000-year half-life under laboratory conditions. [13] MASH Makes recommends that its biochar is first mixed with compost, manure or an organic fertilizer before it is applied to the soil. This ensures that the biochar forms a stable sink and no biochar is lost to wind erosion. Research has shown that laboratory estimates are relatively accurate in temperate climates, but there is less confidence in the accuracy of laboratory estimates in tropical or subtropical areas. [14] At the moment, Mash Makes primarily operates in India, which has a tropical semi-arid climate. Differences are likely to be greatest between laboratory estimates and field results where low-quality biochar contains high amounts of unstable carbon, as it is unstable carbon that will be primarily affected by post-production conditions. For example, one study found that only biochar produced at pyrolysis temperatures >550°C could persist for >100 years in high soil temperatures of 40°C - 60°C. [15] Due to this, we think it is unlikely that the >1000-year half-life of Mash Makes biochar will change in field conditions. However, we acknowledge the uncertainty around this estimate and the need for further research. As a result, we categorize the permanence of Mash Makes biochar to be in the 100-1000+ year half-life range. We hope to receive further information from Mash Makes field trials within a year to clarify this further. Co-Benefits Mash Makes offers two co-benefit streams: those from the avoided burning of crop waste and those from increased food security based on improved soil quality due to biochar addition. Mash Makes aims to use feedstock that would have otherwise been burnt. Converting this biomass into biochar instead prevents air pollutants from being released. These air pollutants enhance climate warming and are harmful to human health, alongside having subsequent impacts on tourism and the socioeconomic status of farmers. [16] It also contributes to climate warming by releasing black and brown carbon, which absorbs incoming solar radiation as heat and warms the air, changing rain and cloud patterns. [17] We have high certainty that the prevention of feedstock burning positively impacts human health through decreased air pollution, which likely has other flow-on environmental and socioeconomic benefits. [18] The co-benefits from improved soil quality are more difficult to quantify. Field research has shown that in some conditions, biochar can help to remediate soils, improving soil water holding capacity and nutrient availability, decreasing plant susceptibility to disease, and increasing crop yields. Increases in crop yield could benefit the food security of those living in regions with depleting soil quality and a rapidly increasing population. However, the co-benefits depend on several environmental and biochar characteristics. MASH Makes recommends that its biochar is first mixed with compost, manure or an organic fertilizer before it is applied to the soil to benefit soil health and crop productivity by charging the biochar with nutrients. [19] However, we will have higher certainty of this claim once Mash Makes field trials are complete. Overall, the geographic location of Mash Makes seems suitable for using biochar to improve soil quality and crop yields, as field trials with biochar have shown positive increases related to improved crop productivity in regions with weathered soils. [20] However, we are unsure whether optimizing Mash Makes biochar for carbon sequestration will prevent this effect. We will rely on the results from its field trials to be certain about the benefit of its biochar for soil quality. Mash Makes is currently partnering with local universities to undertake field trials on the impact of its biochar on soil quality, which will help us to increase our certainty in this area. Cost-Effectiveness Mash Makes carbon credits will be available for pre-purchase on its website for $160/ton of CO 2 by the end of 2022, with delivery in Q2 2023. Buyers can also get in touch with Mash Makes directly; credit prices are variable based on volume of purchases. We believe that this price reflects the actual cost of producing biochar. It is in the lower range of the price spectrum of other biochar projects we evaluated, which sold credits at prices between $98 and $524/ ton of CO 2 removed (average $265, median $200). Mash Makes’s price per ton is also significantly lower than other removal projects, such as Charm bio-oil , which sells carbon credits for $600/ton of CO 2 ; we note that these more expensive pathways generally have higher permanence. Mash Makes is more expensive than t he avoided emissions credits we recommend (which can be as low as $17/ton of CO 2 ). Much of the cost of the Maharashtra Model comes from the purchase of feedstock and operating costs (such as wages and electricity), as well as the initial production and deployment of the SPVs. The market determines feedstock prices, making them hard to predict, while operating costs will likely rise with inflation. Credit prices are currently not anticipated to drop further, though ways to make the technology more cost-effective are being investigated. Mash Makes is expanding from one SPV in 2022 to 50 SPVs over the next five years, meaning there is substantial room for more funding. Key uncertainties/open questions We have medium uncertainty around the permanence of biochar in field conditions. Mash Makes is currently undertaking field trials that will help us address this concern. As Mash Makes is unlikely to experience further price drops due to technological breakthroughs, we are uncertain whether it will remain cost-effective compared to our other recommendations. Supporting developing technologies, such as direct air capture, or purchasing already cheap offset credits, such as those sold by Tradewater, may prove to be a more cost-effective way of reducing or removing emissions in the long run. We are unsure as to whether carbon credits will continue to be additional in the future as Mash Makes scales up to commercial-level operations and uses investment to explore other revenue streams. This could reduce the likelihood that a removal project would not have happened without an offset purchase, but Mash Makes has informed us that carbon credits are an essential part of their model for all future ventures. We plan to re-evaluate additionality as the company expands. As Mash Makes is a for-profit company we have limited access to publicly available financial information, making it difficult to confidently assess project additionality. However, for the reasons stated above, we are not concerned by this due to our impression that offset purchases are still a core component of their funding. Conclusion Overall we have identified the Mash Makes Maharashtra Model as a high-quality, medium-permanence carbon removal project. The scalable, modular technology (the SPV model) will be tailored to the local context, allowing for more cost-effective carbon removal. The company addresses typical concerns around biochar project additionality by currently providing biochar to farmers for free to conduct field trials. Supporting Mash Makes will assist in producing more SPVs to scale up biochar production. Its team has been transparent with data and financial information; we look forward to seeing the results from its current field trials to address our uncertainty around biochar permanence and crop yield co-benefits. How to contribute to Mash Makes These credits are available for purchase through Patch here , or by contacting Mash Makes directly through its website . We thank Srikanth Vishwanath, Test and Development Engineer at Mash Makes, for the conversations that informed this document. Endnotes [1] See ‘Maharashtra Model’. Mash Makes. n.d. [2] Correspondence with Mash Makes, 2022-11-15. [3] S ee ‘Who are we?’. Mash Makes. N.d ; Correspondence with Mash Makes, 2022-11-15. [4] “...the crucible is heated over the Bunsen burner until all the carbon is burned. The residue is weighed, and the difference in weight from the previous weighing is the fixed carbon.” Speight, 2015 . [5] See abstract. Gaunt & Rondon, 2006. [6] “The top ten states that showed maximum amount of crop residues burning in our estimations are Uttar Pradesh (34.38 MT), Punjab (19.45 MT), Maharashtra (11.81 MT), Madhya Pradesh (11.77 MT), Haryana (10.51 MT), Karnataka (8.45 MT), Bihar (8.30 MT), Rajasthan (7.67 MT) and West Bengal (6.44 MT)”. Sahu et al., 2021. [7] See section 5.2. National Policy for Management of Crop Residues. 2014. [8] “An SPV is a financial instrument rather than a physical machine, made up of four container units. The money is not raised for these through Mash Makes, but instead through investors that fund individual SVPs.” Mash Makes call notes, 2022-11-15. [9] Correspondence with Mash Makes, 2022-11-15. [10] Correspondence with Mash Makes, 2022-11-15. [11] “Our projects still depend on finance based on the sale of carbon removal certificates for it to be feasible.” Mash Makes email correspondence, 2022-09-20. [12] “The state of Maharashtra itself burns about seven million tonnes of crop residue yearly – which is 80% of its total annual crop residue generated. Of this, sugarcane leaves, along with cotton, soy and wheat residue make up the bulk of the burnt stubble.” Mash Makes. n.d. [13] See “Permanence” section of Biochar Sector Overview. Giving Green, 2022. [14] “However, at elevated temperatures (40 or 60 °C), which may be experienced in tropical environments at certain times and especially in surface soil, only the biochars produced at a higher pyrolysis temperature (e.g. 550 °C) may persist for more than 100 years.” Fang et al., 2014 ; See “Conclusions” section. Kuzyakov, 2014. [15] “However, at elevated temperatures (40 or 60 °C), which may be experienced in tropical environments at certain times and especially in surface soil, only the biochars produced at a higher pyrolysis temperature (e.g. 550 °C) may persist for more than 100 years.” Fang et al., 2014. [16] “These particulate matters pose a higher health risk, monetary losses, and socioeconomic losses.” Singh et al., 2022. [17] “One contributor to global climate change is the release of fine black and also brown carbon (primary and secondary) that contributes to the change in light absorption.” Bhuvaneshwari et al. 2019. [18] “The impact of stubble-burning is not limited to human health, soil, and ambient air quality. Stubble-burning has a range of effects on economic growth and causes other social problems such as adverse effects on tourism, agricultural productivity, farmer’s socioeconomic condition, and climate effects”. Singh et al. 2022 . [19] Correspondence with Mash Makes, 2022-11-15. [20] “The greatest (positive) effects with regard to soil analyses were seen in acidic (14%) and neutral pH soils (13%), and in soils with a coarse (10%) or medium texture (13%). This suggests that two of the main mechanisms for yield increase may be a liming effect and an improved water holding capacity of the soil, along with improved crop nutrient availability.” Jeffery et al., 2011.

How can wetlands play a role in the fight against climate change? Read our latest research. Restoring and Protecting Wetlands // BACK Download the report: Restoring and Protecting Wetlands .pdf Download PDF • 8.28MB Image: Mohmed Nazeeh Summary Wetlands can store large amounts of carbon for thousands of years if left undisturbed. However, when drained or dried, they release carbon dioxide, contributing to global greenhouse gas emissions. Protecting wetlands helps prevent these emissions and supports ongoing carbon storage. Wetland restoration also aids in long-term climate change mitigation, but it's a more complex process. In particular, wetlands naturally emit nitrous oxide and methane, and during the early stages of restoration, the warming effects of these gases often outweigh the cooling effects of carbon storage. Over time, methane and nitrous oxide break down in the atmosphere, and their warming impact stabilizes. Because wetlands continue to absorb carbon dioxide, their cooling effects may eventually surpass the warming from methane and nitrous oxide emissions. However, restored wetlands may take decades or even centuries to fully reduce warming, even as they store carbon. We have prioritized further research into other impact areas that we think have a higher scale, feasibility, and funding need than restoring and protecting wetlands. However, we think there could still possibly be highly impactful philanthropic opportunities within this impact area. In general, we are most optimistic about funding policy-based and research-centric approaches to conserving and restoring wetlands because we think they can achieve a higher scale in reducing emissions than funding direct efforts. We also think initiatives to protect and restore wetlands are probably more effective when they consider the root causes of wetland conversion, such as resource extraction or land development. In general, we favor wetland conservation over restoration because of the former’s immediate and clear climate benefits of preventing carbon loss. In terms of wetland restoration, we think climate-focused donors may want to take a nuanced approach depending on their personal preferences. We think those who value long-term impact and co-benefits like biodiversity might be interested in organizations focused on restoring all wetlands. Donors who are concerned about climate impacts over the next hundred years may favor coastal wetland restoration because other types of restored wetlands may not yield climate benefits until much later.

Giving Green recommends Frontier as one of the top donation opportunities for businesses. Frontier // BACK Frontier Recommendation This report was last updated in October 2022. Giving Green believes that donating to our top recommended nonprofits is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these nonprofits do) may not be tenable for all donors, especially businesses. Taking this into consideration, we recommend Frontier specifically for businesses given its focus on carbon removal and more direct alignment with corporate net-zero ambitions. We believe Frontier to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top nonprofits. Table of Contents 1 Summary 2 Overview of Frontier 3 Theory of Change 4 Additionality 5 Co-Benefits 6 Cost-Effectiveness 7 Room for more funding 8 Conclusion 9 How to contribute to Frontier 1 Summary Giving Green recommends Frontier as one of the top donation opportunities for businesses. F rontier is a private sector-led advance market commitment (AMC) intended to support and accelerate the development and deployment of carbon removal technologies. Climate models indicate that in order to limit warming to 2°C, emissions reductions alone may not suffice; reaching net-zero in the necessary timeframe will likely require gigaton (billion ton)-scale deployment of carbon removal by midcentury. The carbon removal sector is in its early stages, both in terms of technological readiness as well as supply; available carbon removal supply is too expensive to create broad demand. Frontier’s AMC model allows companies to maximize impact by pulling forward their carbon removal demand in order to catalyze the market. 2 Overview of Frontier F rontier [1] is an advance market commitment (AMC), intended to support and accelerate the development and deployment of carbon removal technologies. Stripe led the creation of Frontier in collaboration with the founding members: Alphabet, Shopify, Meta, and McKinsey & Company. Frontier’s initial commitment to invest $925 million toward carbon removal by 2030 is funded by its founding members and businesses using Stripe Climate. The fund is currently open to more buyers in an effort to build demand and encourage supply. Given that the carbon removal sector is both nascent and varied, initial allocations of the fund take two forms: (i) Prepurchases target early-stage sellers, like startups, and provide an on-ramp into the market through either one-time, $500,000 purchases of carbon removal tons to be delivered in the future or research and development (R&D) grants. This track is widely accessible and flexible; contributions of any size can be made on a rolling basis and do not necessitate long-term contracts. (ii) Offtakes target commercial-stage suppliers, suppliers that use more developed technologies and are ready to remove tons on a commercial scale, via longer-term, pay-on-delivery agreements.This track is a great fit for organizations that are looking to commit to carbon removal on a multi-year basis and can contribute ~$1M/year through 2030. Figure 1 shows how Frontier connects buyers and suppliers of carbon removal. Figure 1: How Frontier works . Frontier plans to phase out prepurchases over time, eventually concentrating only on offtakes (see Figure 2 ). Figure 2: Illustration of projected future of Frontier's allocation between pre-purchases vs offtakes . Frontier’s first round of funding was recently announced, funneling $2.4 million to six early-stage companies in the form of prepurchases. [2] Carbon removal pathways supported in this first round of funding include direct air capture (DAC), mineralization, enhanced weathering, and synthetic biology. Frontier is the first customer for all six companies. The selection process for carbon removal sellers consists of both science and governance reviews, and the panel of technical reviewers represents a broad range of expertise. During the science review, projects must satisfy stringent criteria, including carbon storage durability of more than 1000 years, minimization of arable land use, a cost trajectory leading to less than $100 per ton, [3] scalability to more than half a gigaton of removal per year, net-negativity, additionality, and verifiability. [4] This criterion narrows eligibility to exclude less durable pathways like biochar or forestry . The governance review assesses criteria such as public engagement, environmental justice, and legal compliance, as well as issues including moral hazard, involvement of the oil and gas industry, environmental health impacts, and workforce development. [5] Frontier shares resources such as science and governance review forms, project applications, and purchase agreements through its GitHub . It does not share the completed reviews. 3 Theory of Change Carbon Removal Climate models indicate that in order to limit warming to 2°C, emissions reductions alone may not suffice; reaching net-zero in the necessary timeframe will likely require gigaton-scale deployment of carbon removal by midcentury. [6] Carbon removal will be especially useful in balancing emissions from hard-to-abate sectors like aviation, shipping, and industry. [7] In addition, it is our impression that removing more carbon than we emit via net-negative goals may be an important strategy to curb future climate damage. This is a view shared by some members of the private sector, [8] government, [9] and scientific community, [10] and would only be made possible through the development and deployment of carbon removal. Carbon removal as a sector is quite varied both in terms of the types of pathways as well as the technological readiness of each pathway. In addition, not much carbon removal is available, [11] and that which is available is too expensive to create broad demand. In fact, we have only reached about 0.0062% of a projected 10 gigaton by 2050 deployment goal, and only ~4.3% of the carbon removal purchases ever made have been delivered. [12] Much of the carbon removal sector remains in the R&D phase, and projects that have higher technological maturity are still navigating economic viability and the logistics for deployment at scale. In short, the current market is young, small, [13] and relatively uncertain; it does not yet reflect the size or certain longevity required to ensure gigaton-scale removal – a benchmark for what is needed for substantial climate change mitigation. Commercialization trajectory The first AMC, launched in 2009, was used in the development and distribution of the pneumococcal vaccine (PCV). It has been credited with substantially accelerating availability and, consequently, saving lives. [14] Subsequently, different models of AMCs have been proposed and implemented in various contexts. One salient feature of AMCs is that they appear preferable when “there is a diversity of products with different characteristics that might be appropriate to support and it is unclear which might be superior.” [15] This is especially relevant given the complexity of the carbon removal portfolio. Based on factors such as urgency, efficacy, and relevance, we see Frontier’s AMC model as potentially playing a valuable role in the growth of a robust and durable carbon removal market. The innovation trajectory of renewable energy can serve as a helpful analog to carbon removal development and deployment. The success of solar PV, in particular, was due to a combination of important interventions. These interventions included continued R&D, procurement, and the creation of certainty for future markets [16] – all three of which are present in the Frontier theory of change. Monitoring, reporting, and verification In addition, a significant challenge for carbon removal is the lack of standards for monitoring, reporting, and verification (MRV). [17] To this end, Frontier has collaborated with CarbonPlan to create a framework for quantifying and mapping uncertainties in the context of carbon removal pathways represented in Frontier’s portfolio. Not only will this allow for better facilitation between buyers and sellers within the context of Frontier, but it will also serve as a model for the larger carbon removal market. Our take on Frontier’s theory of change Figure 3 represents our take on Frontier's theory of change: Figure 3: Frontier Theory of Change We have high certainty that Frontier will have a significant impact in supporting carbon removal R&D, increasing the amount of deployed carbon removal, enabling more technologies and sellers to enter the market, and providing longer-term certainty about the carbon removal market. This is because it gives directly to R&D projects, procures tons of removed carbon directly, enters into long-term purchase agreements with carbon removal sellers, and proactively supports the development of MRV frameworks. We have medium certainty that the projects supported by Frontier will continue to durably remove carbon in the future. Since Frontier supports early-stage companies through either R&D funding or low-volume purchase agreements, there is inherent risk in its strategy. [18] Not only is there uncertainty as to whether the companies will succeed as business entities, but there is also uncertainty as to whether certain technologies will work and effectively scale. Given the complexity of parameters that will determine the trajectory of carbon removal at large, we are uncertain as to when and if the carbon removal market will develop to the size and scale required to meet global climate goals. Consequently, we have low certainty regarding the magnitude of Frontier’s influence on the market’s evolution. 4 Additionality There are multiple layers of additionality: In terms of specific carbon removal projects, we have high confidence that projects chosen by Frontier remove carbon that would not otherwise have been removed, as this is one of the main criteria assessed in the selection process. [19] To ensure additionality in the context of a given carbon removal pathway, Frontier includes the question, “If this project is within a removal pathway that we have purchased from previously, what compelling, differentiated innovation does this project bring?” in its project evaluation process. [20] Regarding the carbon removal sector in general, Frontier constitutes one of the largest private investment commitments in carbon removal. According to a platform continuously monitoring the carbon removal sector , as of August 30, 2022, around $172 million has been spent on carbon removal; [21] Frontier’s first funding wave is around sixfold this amount. Given how substantial this investment is, we believe that the timely development and deployment of carbon removal technology would be less tractable in the absence of Frontier. Although Frontier plays an important role in the carbon removal ecosystem, there are other efforts to aggregate private sector investment for carbon removal. One example is First Movers Coalition , a global effort to unite companies to advance decarbonization of the industrial sector. Companies may choose to participate in various sectors, including aluminum, aviation, carbon removal (launched in May 2022), shipping, steel, and trucking. Companies participating in carbon removal must pledge to either contract for at least 50,000 tons of durable, scalable carbon removal or commit at least $25 million to carbon removal by 2030. [22] A second example is South Pole , an initiative to help companies plan and implement emissions reduction projects and strategies. One of the options for financing climate action is carbon removal through its Next Generation Carbon Removal Purchase Facility. This facility, developed in collaboration with Mitsubishi, aims to direct $300-800 million toward carbon removal by 2030. [23] Companies can currently make “forward commitments” to purchase carbon removal through this facility. While we think that both of the above examples may have the potential to generate significant impact, from the information we have gathered, the eligibility criteria seem too narrow to include most businesses. We find Frontier to be more widely accessible, especially given that any size contribution can be made toward the prepurchase track. In addition, we do not see these efforts as duplicative or as negatively impacting additionality; the combination of these still constitutes only a small portion of what is needed to sustain a gigaton-scale carbon removal market. [24] 5 Co-Benefits We acknowledge that co-benefits will vary across the different carbon removal projects selected by Frontier. However, we note that Frontier’s review process includes a governance review. The governance review includes considerations such as environmental justice, public engagement, and safety, legal, and regulatory compliance. [25] 6 Cost-Effectiveness We did not find it useful to develop a quantitative model for cost-effectiveness because we are highly uncertain regarding assumptions and estimates for parameters that we deem central to Frontier’s AMC model. In particular, given that we are providing this recommendation in the specific context of a business looking to make a catalytic investment toward carbon removal, we believe that Frontier is highly likely to be cost-effective as it provides the prospect of amplifying a contribution to carbon removal through both its acceleration and deployment potential; we find this to be a notable value-add considering that both timing and scale are critical for the deployment of carbon removal technologies. We devote the remainder of this section to expanding on this. Historically, the cost-effectiveness of AMCs has been difficult to determine. In the aforementioned case of the pneumococcal vaccine (PCV), while the vaccine itself was deemed cost-effective, the cost-effectiveness of the AMC is unclear given a lack of counterfactual. [26] However, retroactive comparison to other vaccines, such as those for the rotavirus, suggests that significant acceleration of distribution might be attributable to the AMC; see Figure 4: Figure 4: Comparison of country coverage of PCV and rotavirus vaccine, from Kremer et al. 2020 . One of the major barriers to scaling durable carbon removal is cost; accelerated deployment is expected to result in a more rapid price decrease and, thus, a bigger and stronger market sooner. [27] Figure 5: Solar PV vs DAC learning ranges, from Lackner et al. 2021 . In a paper using the learning rates of solar photovoltaic (PV) to project a potential learning rate for modular direct air capture (DAC), a specific carbon removal technology, it was determined that “if DAC follows a path similar to that of comparable, successful technologies, a capital investment of several hundred million dollars could buy down the cost of DAC.” [28] In the context of this paper, this amount corresponds to about 1.5 megatons (million tons) of DAC deployment. As demonstrated by the above figure, even if the cost of DAC seems high, it is still closer to the relative price target than solar PV was early in its innovation cycle. More conservative analyses that use slower learning rates – rates closer to what have been observed empirically for DAC – estimate that deployment of 9 megatons of DAC by 2030 is needed to enable substantial learning by doing and cost reduction. [29] Given that Frontier intends to invest toward longer-term impact over choosing the lowest cost solutions available, it is unclear exactly how many tons the fund will directly purchase. However, even under the worst-case scenario of prices stagnating at the current average across the current Frontier portfolio, ~$1200, the first round of funding could result in about 770,000 tons of carbon removal. We have high confidence that through the addition of subsequent funding rounds and the highly probable decrease in price across carbon removal pathways, Frontier will catalyze enough investment to facilitate deployment capacity on the order of millions of tons. Although this investment will be spread across carbon removal pathways, we project the dynamics across the portfolio to be similar to that of DAC. (For reference, here is an example of our cost-effectiveness analysis model in the context of DAC.) We think that this magnitude of deployment is likely to contribute substantially to the growth of the carbon removal market in the next decade. 7 Room for more funding To the best of our knowledge, Frontier, through its first funding wave, has committed to one of the largest purchases into the carbon removal market to date. However, it remains orders of magnitude away from the trillions of dollars [30] needed to achieve and sustain gigaton-scale deployment by midcentury. Frontier is currently accepting contributions for its second wave of funding, demonstrating an intention and ability to absorb more money effectively. The impact of additional funds will manifest more immediately (~3 years) through prepurchases, as well as through the signaling effect of additional buyers entering the space. [31] In the longer term (~4-8 years), the impact will largely be made through offtake agreements. Hence, we expect Frontier to continue to be an effective pathway toward building a carbon removal market. 8 Key uncertainties/open questions AMCs are temporary strategies; Frontier’s plans for phasing out have not yet been shared. Given that some of the barriers to scaling carbon removal may require more than private sector intervention, [32] it is unclear whether Frontier, under current market and policy conditions, will be able to elicit a substantial supply-side response. It is unclear whether or not the carbon removal companies supported by Frontier, especially those receiving contributions through prepurchases, will successfully scale or survive in the longer term. We are uncertain that the investment from Frontier will result in a sufficient reduction in cost and scaling of deployment to substantially contribute to climate change mitigation. 9 Conclusion Setting net-zero and, eventually, net-negative goals are important, but we do not believe that they are achievable in the necessary timeline given the current state of technology, infrastructure, systems, and policies in place today. Therefore, we think that supporting the change and advancement to make these goals possible is among the most effective ways to contribute directly to robust climate action and, when possible, should be favored over ton-ton accounting; catalytic investment in emerging yet valuable technologies like carbon removal is one such way to contribute. Frontier’s AMC model provides an accessible, anticipatory investment toward enabling future net-zero pledges by supporting the growth and development of a carbon removal market. How to contribute to Frontier If your business can commit at least $500,000 per year from 2023-2030, consider becoming a Frontier member. This includes offtake agreements and a variety of other benefits depending on your contribution amount. The $500,000/year cutoff is not a sharp cutoff, but indicative of the amount that Frontier expects from its members. Companies that want to purchase offtakes at lower amounts should contact Frontier to understand the possibilities. For more details, see Frontier’s information for potential buyers . If your business has less than $500,000 per year to commit to carbon removal, consider contributing to Frontier through the prepurchase track. Contributions to this track can be made directly through the Frontier website . Note: Contributions to Frontier can be made through the 501(c)(3) arm by contacting Hannah Bebbington, hannah [at] frontierclimate [dot] com. We thank Hannah Bebbington, Strategy Lead at Stripe Climate + Frontier, for a series of conversations that informed this document. Endnotes [1] Frontier began as a public benefit LLC owned by Stripe but has recently added a 501(c)(3) arm. [2] For more information, see “Frontier facilitates first carbon removal purchases.” https://frontierclimate.com/writing/spring-2022-purchases . June 29, 2022 [3] “It’s the point at which carbon removal services become affordable at the scale needed to make it a meaningful tool to reach net zero emissions.” https://www.protocol.com/bulletins/carbon-removal-cost-per-ton [4] CDR Application: Science Review Criteria 1-6, 8.. https://github.com/frontierclimate/carbon-removal-source-materials/blob/main/TEMPLATE%20Expert%20Review%20Forms/2022/Science%20Review%20Form.pdf [5] CDR Application: Governance Review Criteria 7, Questions 1-4 and Quantitative Assessment Question 5. https://github.com/frontierclimate/carbon-removal-source-materials/blob/main/TEMPLATE%20Expert%20Review%20Forms/2022/Governance%20Review%20Form.pdf [6] “All available studies require at least some kind of carbon dioxide removal to reach net zero; that is, there are no studies where absolute zero GHG or even CO2 emissions are reached by deep emissions reductions alone.” IPCC Sixth Assessment Report, Chapter 3 [7] “These difficult-to-decarbonize energy services include aviation…production of carbon-intensive structural materials such as steel and cement…To the extent that carbon remains involved in these services in the future, net-zero emissions will also entail active management of carbon.” Davis et al. 2018. [8] “While the world will need to reach net zero, those of us who can afford to move faster and go further should do so.“ https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030/ [9] “I believe that it’s important for all the developed countries to talk about, not net zero, but about removing more carbon from the atmosphere than they are adding — net negative is what they need to talk about.” Minister Singh, IEA-COP26 Net Zero Summit [10] “The world will be net negative once removal exceeds emissions. If it takes us more than a decade or two to lower the level of CO2, we definitely will have overshot our targets and will need to maintain net negative emissions for decades into the future. Therefore, time is of the essence.” https://www.forbes.com/sites/feliciajackson/2021/08/30/net-zero-is-no-longer-enough--its-time-for-net-negative-policy-coherence-and-robust-esg/?sh=73c495c06a34 [11] “There is an extremely limited supply of reliable, permanent carbon removal available, and what exists is extremely expensive.” Stanford Social Innovation Review. Racing to Net-Zero: A Captivating but Distant Ambition (2022) [12] As of August 30, 2022, see cdr.fyi for live updates. [13] “The market for durable carbon removal does not exist. Yet. What we have is a heterogenous space consisting of hundreds of companies with ideas on how to remove carbon.“ https://roberthoglund.medium.com/the-carbon-removal-market-doesnt-exist-3e28b9ed14cc [14] “Three vaccines have been developed and more than 150 million children immunized, saving an estimated 700,000 lives.” Kremer et al 2020 [15] “there is a diversity of products with different characteristics that might be appropriate to support and it is unclear which might be superior.” Vivid Economics. Advance Market Commitments for low-carbon development: an economic assessment (2010) [16] “There is nothing inevitable about the rapid development and wide- spread adoption of low-carbon technologies. Rather, intentional policy and pur- posive investment will be needed and sustained over many years.” Nemet, G. F. (2019). How solar energy became cheap: A model for low-carbon innovation. Routledge [17] “... a more systematic approach to CDR MRV will be needed in the years ahead to track the performance of different CDR approaches and maintain high-quality standards as the market grows.” https://carbonplan.org/research/cdr-verification-explainer [18] See Table 7. Survival of private sector establishments by opening year. Bureau of Labor Statistics. https://www.bls.gov/bdm/us_age_naics_00_table7.txt [19] Criteria 6, Questions 14, 15. https://github.com/frontierclimate/carbon-removal-source-materials/blob/main/TEMPLATE%20Expert%20Review%20Forms/2022/Science%20Review%20Form.pdf [20] Holistic Question 18. https://github.com/frontierclimate/carbon-removal-source-materials/blob/main/TEMPLATE%20Expert%20Review%20Forms/2022/Science%20Review%20Form.pdf [21] Note that this includes carbon removal pathways outside of Frontier’s portfolio. [22] “Members may choose to contract for at least 50,000 tons of durable and scalable net carbon dioxide removal removals to be achieved by the end of 2030, or as an alternative may choose to contract for at least $25 million of durable and scalable net carbon dioxide removal removals to be achieved by the end of 2030.” https://www.weforum.org/first-movers-coalition/sectors [23] “South Pole today announced the development of the Next Generation Carbon Removal Purchase Facility together with Mitsubishi Corporation. The facility aims to procure at least US$300-800 million worth of certified carbon removal credits by 2030.” https://www.southpole.com/news/south-pole-announces-development-of-new-facility-to-scale-up-the-next-generation-of-carbon-removals-together-with-mitsubishi-corporation [24] “Cumulative global DAC demand is estimated to be ~3 Gt, reflecting a cumulative global market value of $3 – 4T…The U.S. market for DAC projects is expected to be substantial, with ~1.9 Gt/yr capacity reached by 2050 and a domestic market through 2050 of ~$1T, calculated as value of sales of carbon credits and CO2 for utilization.” https://thirdway.imgix.net/pdfs/override/Potential-for-US-Competitiveness-in-Emerging-Clean-Technologies.pdf [25] Criteria 7, Question 1-4. https://github.com/frontierclimate/carbon-removal-source-materials/blob/main/TEMPLATE%20Expert%20Review%20Forms/2022/Governance%20Review%20Form.pdf [26] “Evidence on the cost effectiveness of PCV does not prove the cost effectiveness of the overall AMC because we lack a valid counterfactual.” Kremer et al 2020 [27] “Currently, the primary limiting factor to DAC is its high cost, which will decrease as it is deployed.” https://www.breakthroughenergy.org/us-policy-overview/carbon-removal/technological-solutions [28] Lackner, Klaus S., and Habib Azarabadi. "Buying down the cost of direct air capture." Industrial & Engineering Chemistry Research 60.22 (2021): 8196-8208 [29] “We estimate that at least nine million tons of DAC capacity need to be operational in 2030 to get the US on track for meeting mid-century carbon removal requirements.“ Rhodium Group. Capturing Leadership: Policies for the US To Advance Direct Air Capture Technology. (2019) [30] “The carbon-removal market will probably need to reach $1 trillion a year, Ransohoff told me, a figure that places it well outside any company’s reach.” https://www.theatlantic.com/science/archive/2022/04/big-tech-investment-carbon-removal/629545/ [31] “The more we can do to stack demand through Frontier, the better it’s going to be for the ecosystem...We need to bring in those other buyers so that we can accelerate.” https://fortune.com/2022/09/19/these-tech-companies-are-accelerating-permanent-carbon-removal-to-save-the-planet/ [32] “Second, stakeholder perspectives also converged around the view that public sector support is the most important factor for scaling up long-duration CDR.” https://carbonplan.org/research/cdr-scale-barriers

Do soil carbon offsets sequester CO2 emissions? Our independent analysis finds the best offsets and carbon removals. Enhanced Soil Carbon Management // BACK Soil carbon sequestration (SCS) refers to long-term carbon storage in soil. Although SCS occurs naturally, it has been disrupted by human activity, particularly farming. Farmers can enhance SCS by adopting soil carbon management practices that add carbon back into the soil and/or avoid carbon loss. Typical practices include the following: livestock grazing management, cover cropping, organic and synthetic inputs, and tillage practices. Although enhanced soil carbon management is one of the only carbon dioxide removal practices that can already be deployed at large-scale, Giving Green does not recommend soil carbon offsets. It is challenging to measure whether soil carbon management practices are increasing stored carbon, and most soil carbon projects do not have a plan for ensuring permanence. This report last updated April 19, 2022. Questions and comments are welcome. Download the full report to access the appendix, detailing methods for measurement of changes in soil carbon, and the full list of works cited. 2022-04 Enhanced Soil Carbon Management .pdf Download PDF • 6.76MB Image: Dan Meyers What is soil carbon? There are two types of soil carbon: soil organic carbon (SOC) and soil inorganic carbon (SIC). Soil organic carbon – SOC is “composed of soil microbes including bacteria and fungi, decaying material from once-living organisms such as plant and animal tissues, fecal material, and products formed from their decomposition” (Ontl & Schulte, 2012). SOC levels depend on interactions between ecosystem processes such as photosynthesis, respiration, and decomposition. These processes are influenced by climatic conditions, especially soil temperature and soil moisture. For example, dry regions tend to have lower SOC levels than temperature and tropical regions. Soil inorganic carbon – SIC, primarily found as carbonate minerals such as calcite and dolomite, is formed either through the wearing-away of rocks or from soil minerals reacting with atmospheric CO2. How is carbon stored in soil, and how is it lost? Soil gains and loses carbon as part of the carbon cycle, which involves the travel of carbon atoms between several different carbon pools (e.g., the Earth’s crust, the atmosphere, the biosphere). For example, carbon can enter the soil from the atmosphere when plants fix CO2 from the air and release fixed carbon into the soil via their roots. Carbon can also enter the soil when leaf and root litter and non-living microbial biomass become part of the soil. SOC leaves the soil when microorganisms break down organic carbon sources and release CO2 during cellular respiration. Although SIC is generally considered more stable as a carbon stock than SOC, it can still decrease due to agricultural practices that affect water flow, land use, and soil acidification (Raza et al., 2021). What determines whether soil is a carbon source or sink? Soil can either be a net sink or source of carbon, depending on the balance between the soil’s carbon inputs and outputs. This balance is influenced by factors such as types of above-ground plants present, types of substances released by plant roots, types of microorganisms present in the soil, and environmental variables (e.g., soil moisture, soil temperature, and nitrogen levels in the soil). Turning soil into a net sink of CO2 typically means increasing the amount of carbon input (e.g., increasing above- and below-ground biomass) and/or reducing carbon losses (e.g., restricting soil disturbance). What accelerates carbon loss from soil? Soil degradation has been accelerated by human activities, such as deforestation, overgrazing, and intensive agriculture (Lemus & Lal, 2005). These activities can affect carbon loss in various ways: Disrupting the soil structure – Soil disturbances can increase soil erosion and run-off, transporting carbon-rich material away from a field (Starr et al., 1999). Exposing soil carbon to oxidative processes – Practices such as tilling exposes soil carbon to oxygen and facilitates oxidation, releasing CO2 in the process. Reducing plant roots and residues – Deforestation and overgrazing decrease how much plant roots and residues are in the soil. These activities reduce carbon inputs and negatively affect how much organic matter can accumulate in the soil (Jastrow, 1996). Increasing temperature – Deforestation can raise soil temperature by changing solar radiation, wind speed, and air temperature (Hashimoto & Suzuki, 2004). Because microbial activity generally increases with soil temperature up to a point, increased temperatures can increase soil microorganisms’ rate of cellular respiration and how much CO2 they produce (Walker et al., 2018). It is estimated that soil degradation due to agricultural land use has led to a loss of about 133 billion metric tons of carbon over the past 12,000 years, with carbon loss accelerating over the past 200 years (Sanderman et al., 2017). How much CO2 can enhanced soil carbon management mitigate? The Intergovernmental Panel on Climate Change (IPCC) has medium confidence that enhanced soil carbon management for croplands has a technical mitigation potential of 0.4 to 6.8 billion metric tons of CO2- equivalent per year (Pathak et al., 2022). This wide range may be representative of how much uncertainty there is over how much agriculture practices improve SCS. Its economic mitigation potential, or how much carbon can be sequestered at a cost less than or equal to $100 per ton of CO2-equivalent, is closer to the lower end of this range. Enhanced soil carbon management as a carbon offset Mechanism Practices that improve SCS can either remove carbon and/or avoid emissions. For example, growing perennial crops instead of annual crops may increase carbon capture via photosynthesis throughout the year and reduce soil disturbances, which helps prevent carbon loss. For more information, please see Table 1. The rate at which soil can sequester carbon decreases as the soil becomes saturated with carbon (e.g., carbon inputs become balanced with outputs) (Stewart et al., 2007). After a new agricultural practice is adopted to increase soil carbon storage, it may take decades before the soil reaches carbon saturation; the amount of time depends on the practice, soil type, and climate zone (Hatzell & Wilcox, 2021). The IPCC uses a default saturation time of 20 years. Stored carbon may be lost after SCS management is reversed (Figure 1). For example, going from no-till methods to conventional tillage would lead to carbon loss. Figure 1: Stylized dynamics of carbon sequestration (Thamo & Pannell, 2016) Causality Soil carbon management practices that can improve SCS Soil carbon management practices that can enhance SCS include but are not limited to the following: Livestock grazing management: Livestock grazing can be rotated between pastures to stimulate plant regrowth and add manure to the soil, enhancing plant growth and soil productivity. Rotating livestock between fields also reduces soil compaction; compaction limits air and water permeability in the soil (Whalley et al., 1995) and can reduce root growth (Pandey et al., 2021). Primary mechanism(s) for increased SCS: Increased carbon input, Reduced carbon losses Increasing the amount of time that plants remain in the ground: Cover crops are meant to cover the soil and are not meant for harvest. They may be grown outside of the primary growing season (e.g., winter instead of summer). Perennial crops are intended to be grown year-round. Cover crops and perennial crops protect soil from erosion and increase carbon inputs to the soil. Primary mechanism(s) for increased SCS: Increased carbon input, Reduced carbon losses Organic and synthetic inputs: Inputs such as biochar (charcoal produced in the absence of oxygen), crop residues (plant materials left in a field after harvest), and fertilizer add nutrients and/or carbon to the soil. Inputs can enhance plant and root growth. Primary mechanism(s) for increased SCS: Increased carbon input Tillage practices: Conservation tillage practices such as no-till and strip tillage are considered less intense than conventional tillage (UC Sustainable Agriculture Research and Education Program, 2017). These practices minimize soil disturbance and can lead to improved soil carbon retention. Leaving land unused for farming can also reduce soil erosion. Primary mechanism(s) for increased SCS: Reduced carbon losses Non-agricultural practices that can improve SCS include forest management, peatland restoration, coastal wetland restoration, and grassland fire management. Uncertainties related to causality Enhanced soil carbon management can reduce levels of CO2 in the atmosphere, but it is unclear to what degree and for how long. Uncertainties related to causality include the following: Dependence on local context – The degree to which soil carbon management practices can improve SCS depends on baseline practices, initial levels of SOC, and location-specific factors such as geographic, soil, and climatic conditions (Moore et al., 2021). These factors determine how much additional carbon can be stored in the soil and when the soil will reach its saturation point. Challenges in measuring soil carbon accurately It is challenging to separate the ‘signal’ of management effects on soil carbon from local ‘noise’ given that (1) the total amount of stored carbon in steady-state changes very slowly over time, (2) levels of SOC can vary significantly across a single field (Bradford et al., 2019) (3) weather can cause short-term fluctuations in COS. Additionally, the net addition of soil carbon per hectare is very small (Pathak et al., 2022). Accurate direct measurements of SOC require sampling at high spatial density, which can be expensive and time-consuming. Although soil crediting projects can rely on modeling instead of direct measurements to quantify soil carbon gains, this is probably less accurate given the various assumptions that the models must make. Unknowns in soil science – There are still considerable unknowns in soil science. For example, few studies on SCS have included soil carbon samples taken at depths beyond 30 cm; it is possible that no-till practices have been overvalued given the lack of sampling at greater depths (Meurer et al., 2018). Lack of differentiation between soil carbon management projects – It is unclear how the efficacy of different soil carbon management projects compare against one another. There needs to be further work on disaggregating the various practices that contribute to SCS (Meurer et al., 2018). It is essential to differentiate between the various methods because they use different mechanisms (e.g., increasing carbon input and/or reducing carbon loss) to increase stored carbon and vary in feasibility. For example, farmers may view some practices as more acceptable than others. Potential increase in other greenhouse gases (GHGs) – Soil carbon management projects involving nitrogen fertilizers can increase nitrous oxide emissions if the fertilizer is not appropriately managed. Potential for carbon leakage – Soil carbon management projects can lead to carbon leakage where increases in GHGs occur outside of project boundaries (Murray et al., 2007). For example, if farmers who practice no-till had lower corn yields, this decreased supply could increase corn prices and encourage other farmers to grow more corn using conventional tilling practices. In general, causality is uncertain for soil carbon offsets. A project would need to have excellent data supporting causality for us to be confident in it. Project additionality It seems likely that many soil carbon management practices have project additionality, meaning they must be enabled by carbon offsets. Namely, there are enough upfront capital costs, operational costs, and other obstacles (e.g., access to new markets) that most farmers probably need financing to maintain these practices. Furthermore, these new agricultural practices would need to be maintained indefinitely to prevent stored carbon from being released. At the same time, however, some farmers have already adopted certain practices without any need for offsets given their co-benefits, such as potentially higher crop yields. This raises some questions as to these practices’ additionality if farmers are willing to adopt new practices without carbon offset credits. Finally, it is unclear how project additionality varies between different soil carbon management practices. Marginal additionality Marginal additionality is achieved if each soil carbon offset leads to additional GHG removal. SCS scores high on marginal additionality because SCS practices can be expanded to more and more farmers and land. Permanence SCS is impermanent. Because soil carbon loss depends on the balance between carbon inputs and outputs, sites can lose soil carbon naturally outside of farming practices (Murray et al., 2007). Severe droughts, for example, can make an environment inhospitable to plants and therefore reduce carbon inputs. Soil carbon loss can also occur after farmers stop soil carbon management practices and switch to conventional methods. Therefore, farmers would likely need to be paid to continue soil carbon management practices over the long term even after the soil has reached its saturation point to maintain gains in soil carbon storage. Switching from soil carbon management practices to conventional methods is unlikely to lead to immediate carbon loss. For example, a synthesis report on periodic tillage found that a single tillage event is unlikely to eliminate carbon gains immediately (Conant et al., 2007). Instead, a single tillage event could lead to a decline in soil carbon of 1-11%, and losses increase as tillage frequency increases. Additionally, one study found that when farmyard manure was applied to a cereal cropping system for twenty years and then halted, the soil still contained about 2.5 times more soil organic matter (a source of soil carbon) 150 years later than soil that never received manure (Johnston et al., 2009, p. 1). Finally, decay kinetics predict that it would take at least several years for soil to lose all newly gained carbon (Schimel et al., 1994). Co-benefits Benefits to soil, plant, and ecological health In addition to its climate benefits, soil carbon also provides multiple benefits to soil, plant, and ecological health (Milne et al., 2015). These benefits include the following: Maintaining soil structure – Soil carbon helps maintain soil structure by forming larger groups of soil particles (aggregates). These larger aggregates increase the soil’s water storage capacity by creating larger pores between aggregates. Larger pore space also improves aeration and drainage. Supporting microbial activity – Soil carbon provides substrate and energy for microorganisms. Microorganisms play a role in promoting plant growth by influencing root development (Verbon & Liberman, 2016), outcompeting harmful microorganisms (Mendes et al., 2013), and increasing the bioavailability of nutrients (van der Heijden et al., 2008). Supporting plant productivity – Soil carbon can improve retention of organic nitrogen, phosphorus, and other nutrients that support plant productivity. Resisting erosion – Soil carbon helps keep the soil more physically cohesive, which can help prevent erosion and have positive effects on both water quality and local ecology. Benefits to farmers Improvements to soil health due to improved SCS can potentially benefit farmers in numerous ways: Increased crop yield – Because soil carbon improves soil health, adding one ton of carbon per hectare on degraded cropland soil can potentially increase crop yield by a range from 0.5 kg per hectare for cowpeas to 40 kg per hectare for wheat (Lal, 2004). However, the degree to which increased soil carbon impacts crop yield relies on the field’s existing soil health and crop type. Improved climate resilience – Increased soil carbon content can make soil more resilient against droughts (Iizumi & Wagai, 2019) and heavy rainfall (Rabot et al., 2018). Reduced need for fertilizer – Healthy soil can reduce farmers’ fertilizer needs, leading to cost savings and reduced environmental impact (Oldfield et al., 2019). Negative co-benefits to farmers Farmers may not want to adopt soil carbon management practices if they do not fit their preferences. Risks or setbacks related to these practices include the following (Marland et al., 2001): Increased risk – Conventional tillage kills weeds by burying them. Less intensive tillage methods, which are better for SCS, may decrease crop yield by increasing the number of weeds. More intensive management practices – Some practices may increase farmers’ workloads. Less intensive tillage methods, for example, may increase the amount of weeding that farmers need to do and/or lead to increased herbicide use. Additionally, rotating livestock between fields is more work than letting livestock graze in the same area. Need for long-term commitment – Farmers may be unwilling to commit to soil carbon management practices over the long term. Furthermore, it is unclear how this liability would be passed on between farmers when farm ownership changes. Notably, nearly 40% of US farmland in 2012 was operated by renters (Amundson & Biardeau, 2018). Cost-effectiveness According to the literature on SCS, practices that enhance SCS can cost between -$45 to $100 per ton of CO2 (de Coninck et al., 2018); negative costs are associated with co-benefits such as improved productivity and resilience. There is a wide range of possible costs because SCS potential varies from place to place. For instance, degraded soils have a higher potential for soil carbon gain than healthier soils. Additionally, the costs of soil carbon management practices differ. The IPCC reports that land management for cropland and grazing land has a cost of $20 per ton of CO2-equivalent while restoring organic soils costs $100 per ton of CO2-equivalent (Nabuurs et al., 2022). In 2021, Microsoft spent $2 million on soil carbon credits from Truterra/Land O’Lakes at a contracted volume of 100,000 metric tons of CO2 removed and a contracted durability of 20 years (Microsoft, 2021; Vasquez, 2021). The cost of this project, which focuses on science-based crop management, was $20 per ton of CO2. Using CarbonPlan’s permanence calculator, the cost of permanent CO2 removal ranges from $73 to $123 per metric ton when we assume a project duration of 20 years, discount rate of 3%, risk of project failure of 10% per year, and permanent cost of $500 per metric ton of CO2. It is unclear what agricultural practices are involved in this particular project; it may include some combination of cover crops, reduced tillage, and reduced usage of fertilizer and chemicals (Plume, 2021). Microsoft has also purchased soil carbon credits related to cattle grazing management at a contracted volume of almost 100,000 metric tons of CO2 removed, but this cost is not publicly available. Giving Green’s assessment of SCS We are concerned about SCS’s permanence and the high uncertainty over whether agricultural practices are improving SCS. In particular, it is challenging to measure changes in stored carbon over the long term accurately, and there are still open questions on what SCS practices are most effective and where. Therefore, although we view SCS’ co-benefits and additionality positively, we are generally skeptical about soil carbon credits overall. In order to be considered for our recommendation, a project would need especially good data on actual increase in soil sequestration, and a plan to maintain permanence.

Giving Green recommends Milkywire’s carbon removal portfolio as one of the top donation opportunities for businesses. Milkywire // BACK Milkywire’s Carbon Removal Portfolio This report was last updated in November 2022. Giving Green believes that donating to our top recommended nonprofits is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these nonprofits do) may not be tenable for all donors, especially businesses. Taking this into consideration, we recommend Milkywire specifically for businesses given its focus on carbon removal and more direct alignment with corporate net-zero ambitions. We believe Milkywire to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top nonprofits. Summary Overview of Milkywire Theory of Change Additionality Co-Benefits Cost-Effectiveness Room for more funding Key uncertainties/open questions Conclusion How to contribute to Milkywire’s carbon removal portfolio Summary Giving Green recommends Milkywire’s carbon removal portfolio as one of the top donation opportunities for businesses. Climate models indicate that emissions reductions alone may not be adequate to mitigate climate change; studies by the IPCC demonstrate a need for carbon removal to grow to the gigaton (billions of tons) scale by 2050 in order to limit warming to 2°C. The carbon removal sector is in its early stages, both in terms of technological readiness as well as supply; available carbon removal supply is too expensive to create broad demand. Milkywire’s carbon removal portfolio provides a widely accessible, catalytic investment opportunity to enable future net-zero pledges by supporting the growth and development of carbon removal. Overview of Milkywire Milkywire is a platform [1] that hosts and manages the Climate Transformation Fund , a fund for businesses that consists of a portfolio of climate projects within three areas: restoring and protecting nature, carbon removal, and decarbonization. Given that Giving Green has developed a distinct set of recommendations for top climate nonprofits, we restrict our recommendation of Milkywire to the carbon removal portion of the Climate Transformation Fund. The fund is described as an “impact first approach… an alternative to traditional carbon offsetting solutions. ” [2] Klarna , a Swedish fintech company, has contributed $2.7 million to projects selected for the fund as part of its climate strategy . Other contributors include SilverLake, Pangaia, Wastebox and BioGaia. Projects in the carbon removal portion of the portfolio are assessed based on additionality, social and environmental sustainability, durability, scaling potential, and consideration for catalytic effect and co-benefits. [3] An independent advisory group consisting of experts in decarbonization solutions, equity issues, nature- and technology-based carbon removal solutions, and carbon markets provides feedback on the selection of projects; [4] Giving Green is part of this group. While the Milkywire team holds the decision-making power, it largely follows the guidance of the advisory group. [5] Milkywire chooses carbon removal projects with medium- to long-term durability (100-1000+ years). As a result, it includes pathways such as biochar in addition to more permanent technological carbon removal like DAC and mineralization. Carbon removal included in the fund’s first cycle (2021) consisted of two biochar projects – Mash Makes and HUSK , two direct air capture (DAC) projects – Climeworks and Heirloom , and the Carbon Removal ClimAccelerator , an initiative to help European carbon removal start ups. During the next cycle (2022), Silicate – a company using returned concrete to capture CO 2 , and Inter.Earth – a company that removes and stores carbon through biomass burial, will be added to the portfolio. Climeworks [6] and the Carbon Removal ClimAccelerator will no longer be included as these projects have a higher relative level of funding and consequently the impact of additional contributions is lower. Milkywire divides its support for carbon removal projects into two categories, which it describes as ‘research tons’ or ‘scale tons,’. Research tons support carbon removal projects that are in the earlier stages of the innovation cycle, while scale tons support projects that have been tested and are ready to grow supply. Milkywire releases an annual report to provide updates on the progress of projects within the portfolio as well as how funds have been spent. Our Take on Milkywire’s Theory of Change Climate models indicate that in order to limit warming to 2°C, emissions reductions alone may not suffice; reaching net-zero in the necessary timeframe will likely require gigaton-scale deployment of carbon removal by midcentury. [7] Carbon removal may be especially useful in balancing emissions from hard-to-abate sectors like aviation, shipping, and industry. [8] In addition, it is our impression that removing more carbon than we emit via net-negative goals may be a important strategy to curb future climate damage. This is a view shared by some members of the private sector, [9] government, [10] and scientific community, [11] and would only be made possible through the development and deployment of carbon removal. Carbon removal as a sector is quite varied both in terms of the types of pathways as well as the technological readiness of each pathway. In addition, not much carbon removal is available, [12] and that which is available is too expensive to create broad demand. In fact, we have only reached about 0.0062% of a projected 10 gigaton by 2050 deployment goal, and only around 4% of the carbon removal purchases ever made have been delivered. [13] Much of the carbon removal sector remains in the R&D phase, and projects that have higher technological maturity are still navigating economic viability and the logistics for deployment at scale. In short, the current market is young, small, [14] and relatively uncertain. As a reflection of this, Milkywire supports carbon removal through “research tons” or “scale tons,” depending on the technological readiness of a particular pathway or project. Through this approach, Milkywire aims to catalyze the development of carbon removal projects and pathways and enable carbon removal to become cheaper so that it can be scaled effectively as a climate mitigation tool. Milkywire is not prescriptive regarding the number of research vs scale tons for any given year; in this way it can remain agile and reflect the most current needs of the quickly evolving carbon removal market. Below, we discuss and evaluate each of the assumptions related to Milkywire’s theory of change. For each of the assumptions identified, we rank whether we have high , medium , or low certainty. [15] Importantly, a number of the stages of Milkywire’s theory of change are not amenable to easy measurement or quantification, or are expected to occur in the future but have not occurred as of yet. For each assumption, we assess whether the best available evidence, primary or secondary, suggests whether the assumption will plausibly hold or not. We have high certainty that Milkywire will help advance carbon removal research, development, and demonstration (RD&D) as it intentionally directs funds towards projects in earlier stages of innovation. We have medium certainty that Milkywire will catalyze more mature technologies to scale. While the fund will purchase scale tons to incentivize increased supply, these purchases are decided upon annually; we believe that longer-term demand certainty at this stage may be important for the timely scale-up of carbon removal deployment. We have low certainty regarding the extent to which Milkywire will influence the price trajectory of carbon removal. We believe the magnitude of Milkywire’s impact will depend on its ability to secure substantially more investment, how strategically the research tons are distributed to improve existing technologies, and the quantity of scale tons that are funded. Additionality Project-level additionality is satisfied if a project would not have happened without the sales of offsets. This requirement tends to be satisfied by projects run by non-profits who solely rely on offset revenue in order to operate. However, it can be very difficult to determine for projects with multiple revenue streams such as those undertaken by carbon removal companies. We have high confidence in Milkywire’s assessment of additionality in its process of selecting carbon removal projects. In terms of the larger carbon removal sector, we believe Milkywire’s carbon removal portfolio to be additional in that we find it to be a uniquely accessible, catalytic investment opportunity for businesses. As far as we are aware, it is the only opportunity for businesses to contribute to both research and scale tons without requirements on the minimum size of the contribution or length of the contract. This is distinct from other aggregators of private sector investment for carbon removal such as Frontier (also recommended by Giving Green ), First Movers Coalition , and South Pole . Additionally, in contrast to Frontier, Milkywire’s medium to long term durability criteria enables the inclusion of a broader array of carbon removal pathways such as biochar into its portfolio. Co-Benefits Projects selected by Milkywire must demonstrate that they do not cause social or environmental harm. In addition, “projects are given a higher priority if they create benefits for people in poverty, or if they help ecosystems in other ways beyond storing more carbon.” [16] In order to ensure that this criteria is faithfully evaluated during the selection process, the advisory board includes experts in equity issues. Cost-Effectiveness We tried to develop a quantitative model for cost-effectiveness, but decided that it would not be useful given our high uncertainty regarding assumptions and estimates for parameters that we deem central to Milkywire’s theory of change. In particular, given that we are providing this recommendation in the specific context of a business looking to make an investment toward carbon removal, we believe that Milkywire is highly likely to be relatively cost-effective as we think that supporting its model of funding research and scale tons across pathways will have higher impact than purchasing tons from just one carbon removal project. We find the emphasis of catalytic investment over quantity of tons purchased to be a notable value-add considering the early stage of the carbon removal market at present. For reference on how we have attempted to account for catalytic potential, see our cost-effectiveness analysis model in the context of DAC . Room for more funding Investment in carbon removal remains orders of magnitude away from the trillions of dollars [17] needed to achieve and sustain gigaton-scale deployment by midcentury. [18] We have confidence that Milkywire is positioned to absorb more funding effectively by increasing support of selected carbon removal projects and/or expanding the list of selected projects. Key uncertainties/open questions We are uncertain to what extent, if any, the absence of longer-term purchase agreements will affect Milkywire’s impact on growing the carbon removal market. We are uncertain that the investment from Milkywire’s carbon removal portfolio will result in sufficient reduction in cost and scaling of deployment to substantially contribute to climate change mitigation. Although we are aware that co-benefits are taken into account during the selection process, we are unsure to the extent to which they are weighted in the final decision making. Conclusion Setting net-zero and, eventually, net-negative goals are important, but we do not believe that they are achievable at present [19] given the current state of technology, infrastructure, systems, and policies in place today. Therefore, we think that supporting the change and advancement to make these goals possible is among the most effective ways to contribute directly to robust climate action and, when possible, should be favored over ton-ton accounting; investment in emerging yet valuable technologies like carbon removal is one such way to contribute. We believe that Milkywire’s carbon removal portfolio provides a widely accessible catalytic investment opportunity to enable future net-zero pledges by supporting the growth and development of carbon removal. How to contribute to Milkywire’s carbon removal portfolio Given that Milkywire’s theory of change centers around spurring innovation in the carbon removal field and lowering prices for the future, it encourages businesses to contribute to its carbon removal portfolio outside of any net-zero framework. [20] Businesses will be able to contribute directly through a forthcoming direct link where credit card payments are accepted; for bank transfers email partnerships [at] milkywire [dot] com . We thank Robert Höglund, Climate Transformation Fund Manager at Milkywire, for a series of conversations that informed this document. Endnotes [1] Donations to Milkywire are distributed to projects through the WRLD Foundation , a registered nonprofit [2] “ An impact-first approach opens possibilities to support pioneering solutions.” https://www.milkywire.com/climate-transformation-fund [3] See Requirements and Criteria https://www.milkywire.com/giveone/climateinitiative-readmore [4] “ In the selection, we have worked with an advisory group to help us choose the most impactful and sustainable climate projects for the portfolio.” https://www.milkywire.com/giveone/climateinitiative-readmore [5] “ In the selection, we have worked with an advisory group to help us choose the most impactful and sustainable climate projects for the portfolio. Final decisions on chosen projects are made by Milkywire but the ambition is to follow the advisory group’s guidance as far as possible.” https://www.milkywire.com/giveone/climateinitiative-readmore [6] Giving Green recommends Climeworks as a carbon removal supplier; see here for our recommendation . [7] “All available studies require at least some kind of carbon dioxide removal to reach net zero; that is, there are no studies where absolute zero GHG or even CO2 emissions are reached by deep emissions reductions alone.” IPCC Sixth Assessment Report, Chapter 3 [8] “ These difficult-to-decarbonize energy services include aviation…production of carbon-intensive structural materials such as steel and cement…To the extent that carbon remains involved in these services in the future, net-zero emissions will also entail active management of carbon.” Davis et al. 2018. [9] “ While the world will need to reach net zero, those of us who can afford to move faster and go further should do so.“ https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030/ [10] “I believe that it’s important for all the developed countries to talk about, not net zero, but about removing more carbon from the atmosphere than they are adding — net negative is what they need to talk about.” Minister Singh, IEA-COP26 Net Zero Summit [11] “The world will be net negative once removal exceeds emissions. If it takes us more than a decade or two to lower the level of CO2, we definitely will have overshot our targets and will need to maintain net negative emissions for decades into the future. Therefore, time is of the essence.” https://www.forbes.com/sites/feliciajackson/2021/08/30/net-zero-is-no-longer-enough--its-time-for-net-negative-policy-coherence-and-robust-esg/?sh=73c495c06a34 [12] “ There is an extremely limited supply of reliable, permanent carbon removal available, and what exists is extremely expensive.” Stanford Social Innovation Review. Racing to Net-Zero: A Captivating but Distant Ambition (2022) [13] As of August 30, 2022; see cdr.fyi for live updates. [14] “The market for durable carbon removal does not exist. Yet. What we have is a heterogenous space consisting of hundreds of companies with ideas on how to remove carbon.” https://roberthoglund.medium.com/the-carbon-removal-market-doesnt-exist-3e28b9ed14cc [15] We describe our certainty as low/medium/high to increase readability and avoid false precision. Since these terms can be interpreted differently, we use rough heuristics to define them as percentage likelihoods the assumption is, on average, correct. Low = 0-70%, medium = 70-90%, high = 90-100%. [16] “Sustainable from a social and local environmental perspective. The deployment of the project does not cause harm to people or local ecosystems…Projects are given a higher priority if they create benefits for people in poverty, or if they help ecosystems in other ways beyond storing more carbon.” https://www.milkywire.com/giveone/climateinitiative-readmore [17] “The carbon-removal market will probably need to reach $1 trillion a year, Ransohoff told me, a figure that places it well outside any company’s reach.” https://www.theatlantic.com/science/archive/2022/04/big-tech-investment-carbon-removal/629545/ [18] “ The carbon-removal industry is tiny, with less than $5 million in revenue last year. That figure will need to reach about $1 trillion by midcentury, scientists say.” https://www.wsj.com/articles/carbon-removal-industry-draws-billions-to-fight-climate-change-11654640329 [19] “All available studies require at least some kind of carbon dioxide removal to reach net zero; that is, there are no studies where absolute zero GHG or even CO2 emissions are reached by deep emissions reductions alone.” IPCC Sixth Assessment Report, Chapter 3 [20] Milkywire encourages donating to its wider Climate Transformation Fund as a first option, but accepts donations earmarked for carbon removal.

Giving Green recommended Charm Industrial as one of the most effective carbon removal providers in 2022. Charm Industrial // BACK This recommendation was last updated in November 2022, with pricing details updated in May 2023. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We do not have plans to update this recommendation in the foreseeable future as we have paused our work assessing direct carbon removal and offset projects. Questions and comments are welcome. Giving Green believes that donating to our top recommendations is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these recommendations do) may not be tenable for all donors, especially businesses. Taking this into consideration, we recommend Charm Industrial specifically for businesses given its focus on carbon removal and more direct alignment with corporate net-zero ambitions. We believe Charm Industrial to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top recommendations. Overview of Charm Industrial Mechanism Causality Project Additionality Marginal Additionality Permanence Cost Co-benefits and potential adverse effects Conclusion Overview of Charm Industrial Charm Industrial is a US-based company that converts agriculture residues into bio-oil through a process known as fast pyrolysis. Charm collects agriculture residues (such as corn stover and wheat straw) from farmers in Kansas, as well as forestry operators and wildlife prevention organizations in California. [1] These are fed into a pyrolysis unit and heated at very high temperatures (> 500° C) in the absence of oxygen for a matter of seconds, creating bio-oil. Instead of slowly decomposing and releasing greenhouse gases, the bio-oil locks up the carbon from the original biomass and is injected into EPA-regulated wells, sinking to the bottom of the geological formation where it remains for thousands or millions of years. Charm’s business model is currently entirely dependent on the sale of removals to individual and corporate buyers. The company uses these funds to build small, mobile pyrolysis units at its factory in San Francisco or purchase pyrolysis units that can be deployed near farms or in forestry settings where agriculture or forestry residues are collected. Charm’s theory of change is that using modular, distributed pyrolysis units instead of centralized biomass processing plants can help drive down capital and transportation costs over time. Lower costs would make this technology more affordable in combating climate change, and make biomass residues economically accessible for use. The use of biomass feedstocks as a climate mitigation strategy has traditionally been associated with using biomass for energy production (bioenergy). However, as interest in removals has increased and the cost of other renewable energy technologies like solar and wind have decreased, more emphasis has been placed on the carbon value of biomass and the potential for long-term storage. This pathway is known as biomass carbon removal and storage (BiCRS). Its proponents believe it will play an important role in global efforts to achieve net-zero emissions, and that it has global potential to capture and store 2.5 gigatons of CO 2 annually by mid-century. Having sequestered thousands of tons of carbon to date, Charm is a pioneer in actively demonstrating how to scale up this important climate mitigation pathway responsibly and sustainably. Mechanism Giving Green views the bio-oil production process as removed emissions, though we acknowledge this can be a gray area depending on which parts of the process are considered. As crops grow, they draw carbon out of the atmosphere and store it in their biomass. Charm’s process intercepts agricultural residues left behind after harvest before the biomass can decompose and re-emit carbon, heating the residue to create a highly stable product called bio-oil. As this cycle is a carbon-negative process, resulting in less CO 2 in the atmosphere overall, we consider these emissions as removed rather than avoided. Causality High causality. Charm collects agriculture residues that would have otherwise been left on the field and broken down by microorganisms. This process of decomposition would return some of the nutrients from the residues back into the soil, but would have also resulted in the release of greenhouse gases including CO 2 and nitrous oxide. Heating up these agriculture residues through fast pyrolysis locks much of this carbon into place in the form of bio-oil, which is then injected into EPA-regulated injection wells. Heating up biomass through the process of pyrolysis creates an end product that is much more difficult for bacteria and microbes to break down, resulting in lower CO 2 emissions. The carbon content of the bio-oil that is injected underground is easily measurable, making it possible to accurately quantify carbon reductions because of the process. Project Additionality High project additionality. Charm’s only revenue stream is from the sale of carbon removals to individual and corporate buyers. Unlike other companies that convert biomass into biochar or bio-oil through pyrolysis, the company does not sell the end product for commercial uses. While the fast pyrolysis process also produces a small amount of biochar, this is returned to the field for the nutrient value and is not included as part of the purchasable removals. Based on our research and conversations with Charm, there is a strong case that the bio-oil would not be produced and injected into wells without revenues from the sale of removals. Compared to conventional fuels, bio-oil has a lower energy density and higher viscosity and easily hardens on contact with air. In the absence of additional refining, these properties make it a poor substitute for conventional fossil fuels. Charm has determined that bio-oil has potentially greater value as a carbon store than an energy carrier and has therefore pursued a commercialization path that depends entirely on revenues from the sale of removals. This may change in the future, as the cost of the process comes down. The company is hopeful that once the price reaches $250/ton of CO 2 , the company may be eligible for revenues from federal 45Q and state LCFS incentives and crediting systems. At the <$100/ton range, the company expects to be exploring commercial use cases, like the production of industrial syngas or iron for use in steelmaking. For the foreseeable future, we assess Charm’s process as high project additionality. Marginal Additionality High marginal additionality. According to the company, a single pyrolysis unit is approximately the size of a shipping container. One of these units can capture (as bio-oil) the equivalent of several thousand tons of CO 2 annually. Charm’s revenue from the sale of removals will go toward operational costs and the procurement of these pyrolysis units that are small and mobile enough to be moved along the boundary of farmlands, reducing the costs associated with transporting biomass feedstock. [2] We consider this to be a modular system that lends itself well to high marginal additionality. Charm was able to walk us through how new removal revenues contribute to procurement and deployment of new pyrolysis units that become increasingly mobile and cost-effective over time. Permanence High Permanence. The bio-oil produced through Charm’s pyrolysis process is more stable than the original biomass. This is true for other products created through pyrolysis like biochar. However, biochar is typically applied to soils, where it undergoes complex interactions with soil microbes and other microorganisms and is further affected by environmental conditions and soil properties. This makes it difficult to measure real-world biochar decomposition rates – and, in turn, the permanence or durability of carbon fixed to the biochar. Charm has attempted to avoid this problem by injecting the resulting bio-oil into EPA-regulated injection wells. Injection wells are “used to place fluids underground into porous geologic formations”. Charm claims that the highly viscous bio-oil sinks to the bottom of the well and solidifies over time, eliminating any chance that the carbon locked in the bio-oil could be re-released into the atmosphere. The wells used are regulated by the EPA under the Underground Injection Control program to ensure that injection activities do not endanger underground sources of drinking water. The over 680,000 injection wells in the United States have a number of uses including disposing of brine generated during oil production, disposal of other liquid wastes, and storing carbon dioxide. These wells must be rigorously separated from underground sources of drinking water; once filled, they are capped by an impermeable cap rock called the “confining layer.” Charm has conducted initial studies comparing bio-oil before and after injection that demonstrate the bio-oil solidifies within 48 hours. Testing and monitoring programmes are currently underway for in-field bio-oil solidification; Charm will share these results once available. [3] Given the high stability of bio-oil relative to existing biomass, and the sinking of bio-oil thousands of feet below the surface, we assess permanence as high. We also note that Charm is working with Carbon Direct and EcoEngineers to create a bio-oil sequestration protocol [4] to develop life cycle analyses, carbon management, and monitoring, reporting, and verification (MRV) standards for bio-oil projects on the voluntary and regulatory carbon markets. Cost When considering the price per ton of CO 2 removed, Charm does not seem to be among the most cost-effective options on the voluntary carbon market: it currently costs hundreds of dollars per ton, depending on the purchaser's commitment duration, to remove a ton of CO 2 through Charm. However, we believe that comparing costs directly can be misleading and that the true value of purchasing a removal from Charm extends beyond the tons removed. Investing in Charm offers long term durability (10,000+ years) of stored carbon as well as support for the development of carbon removal technology and markets. Much of Charm’s cost is associated with the development and deployment of pyrolysis units and the transportation of biomass feedstock to pyrolysis units. The company expects that removal purchases made today will help mass-manufacture pyrolysis units to reduce unit costs, capitalize on internal supply chain efficiencies, and reduce biomass transportation costs by developing and deploying more mobile pyrolysis units. While current costs are high, the company has a roadmap for bringing costs down in the coming years. Co-benefits and potential adverse effects High co-benefits. Charm has identified multiple co-benefit streams: wildfire reduction, abandoned well leak prevention, and economic benefits to local communities. While there could be the risk of leakage associated with bio-oil storage, we believe that this is unlikely. [5] The company also aims to reduce the risk of wildfire by strategically collecting forest slash to minimize forest fuel load. Reducing the frequency and intensity of wildfires also increases air quality, which has flow-on impacts to the health of the local communities. [6] There are hundreds of thousands of abandoned oil and gas wells across the US slowly leaking toxic chemicals and methane. Charm can utilize these wells for bio-oil storage and then permanently cap them while actively engaging with local environmental justice communities in the area. [7] Further, Charm's technology provides employment and additional income for farmers, forest managers, and fuel injection operators, bringing direct benefits to groups who might otherwise be opposed to aggressive climate action. [8] A share of the purchase price also goes towards third parties, such as farmers or fuel injection operators. [9] We have identified one potential adverse effect. It is important to note the potential risks with the structural integrity or leakage of injection wells. However, the bio-oil is expected to solidify shortly after injection into its storage point thousands of feet below water tables. The EPA has determined risks to be low, and far more buoyant materials including CO 2 gas have been injected into geologic formations for decades without issue. We therefore believe that risks associated with injecting bio-oils must be monitored, but are not disqualifying in any way. Conclusion Charm has developed and is beginning to scale up a process that can measurably and permanently keep CO 2 from agriculture and forest residues from entering the atmosphere. It avoids some of the permanence and additionality concerns associated with biochar providers. It has made the purchase process streamlined for purchasers of removals, and is currently working on a public dashboard to further improve transparency. The company's process is measurable, additional, and permanent. The only drawbacks are its current price and the need for more data on the solidification of bio-oil in injection wells. We have determined that supporting Charm Industrial at this juncture can have a significant effect on scaling up its climate mitigation solution by reducing costs and helping improve its technology. More broadly, this can help shape a relatively new climate mitigation pathway. You can pre-purchase removals from Charm Industrial on its website with expected fulfillment by 2026 (at time of writing). We thank Peter Reinhardt, CEO of Charm Industrial, and Harris Cohn, Sales Lead at Charm Industrial, for the conversations that informed this document. Endnotes [1] “operating in forestry areas and utility wildfire operation in California.” Charm Industrial call notes, 2022-10-27; “Charm will…help reduce the intensity and scale of wildfires.” Charm, 2022. [2] “Funding goes towards operations, as well as the new modular pyrolysis machines.” Charm Industrial call notes, 2022-10-27 [3] “We have a petroleum engineer to design testing and monitoring programmes and will share results when available.” Charm Industrial call notes, 2022-10-27 [4] A new proto-protocol for bio-oil sequestration. https://www.carbon-direct.com/insights/a-new-proto-protocol-for-bio-oil-sequestration [5] See “Community Benefits” section. Charm, 2022 . [6] See “Taming Wildfires” subheading. Charm, 2022 . [7] See “Fixing Abandoned Wells” subheading. Charm, 2022 . [8] See “Economic Opportunities for Agricultural and Rural Communities” and “A Just Transition For Energy Communities” subheadings. Charm, 2022 . [9] Email correspondence with Charm Industrial, 2023-05-04

Searching for the best carbon offsets? Read about Giving Green's approach to recommending offsets. Giving Green's approach to recommending offsets // BACK This report was last updated in November 2021. Summary In this document, we explain our approach to assessing carbon offsets and determining which ones to recommend. We are searching for offsets where there is a direct, causal, and verifiable link between someone purchasing an offset and a decreased amount of greenhouse gases (GHGs) in the atmosphere. First, we look at the offset market sector by sector, to determine which sectors are most likely to provide reliable offsets. For sectors that we determine to be likely to produce high-quality offsets, we then search through available projects and recommend those that meet our criteria. We rate offsets using five categories: causality, project-level additionality, marginal additionality, permanence, and co-benefits. Note that our offset recommendations are not comprehensive - we have not assessed all offsets in the market. (In fact, many offsets do not have any publicly-available information!) We have developed a systematic approach to assessing offsets, and recommend the best ones we find. As our research continues, we expect to find more offsets to recommend. If any offset providers believe that their project would meet our quality bar using the methods described below, please reach out to us! Sector-level analysis We begin by conducting offset analyses at the sector-level, since offsets in the same sector tend to have similar strengths and weaknesses. For each sector (such as forestry, renewable energy, etc.), we have produced a sector research report, in which we discuss the logic for offsets in the sector, and determine whether we believe the offsets are likely to be reliable. We generally proceed by working through the certification process for an example offset. In this process, we show what data must be provided by the project developers, and what assumptions are accepted by the certification agencies. We then discuss whether we believe these assumptions, consulting the literature to validate them. Based on this analysis, we determine if the sector appears to be promising for high-certainty offsets. If so, we search for specific offsets to recommend. If we determine that a sector is not promising, that does not necessarily mean that there are no high-quality offsets in the sector. But given our limited research resources, we have simply concentrated our search for offsets on what we consider to be the most promising sectors. We are open to finding high-quality offsets in all sectors, and will even consider offsets in less promising sectors if they seem to be of exceptional quality. Offset ratings After performing sector-level analyses, we then analyze and rate specific offsets in promising sectors. We searched for offsets to consider by searching publicly-available websites selling offsets, as well as offset registries. We concentrated our search among offsets that were easy to purchase online and where detailed information on the projects they support was available online. We rated offsets using five main categories: causality, project-level additionality, marginal additionality, permanence, and co-benefits. These are summarized in the below table. For each offset that we analyze, we rate each of these categories as ‘ High ’, ‘ Medium ’, or ‘ Low ’. In order to be recommended, offset projects need to make a compelling overall case that purchasing the offsets reduces emissions. However, they do not have to score highly in all categories to do this. We elaborate on this in our explanations of each metric below. Causality Causality refers to the extent to which the project actually causes reduced GHGs in the atmosphere. Determination of causality comes from understanding the “counterfactual”, which is what the state of the world would have been like without the project. However, this can be difficult to determine. For instance, consider a project that protects an area of jungle from being deforested. Determining causality requires answering two questions. First, does avoiding deforestation lead to reduced GHGs? This is a purely scientific question, which can be answered by consulting the literature. It is well-established that cutting down a forest leads to more GHGs in the atmosphere, since the trees no longer absorb CO2, and they eventually decompose, emitting CO2 in the process. This part of causality is relatively easy to establish in this example. Secondly, would the trees would have been cut down in the absence of the project? If not, then the project is not avoiding emissions. This is more difficult, as it is not possible to know with certainty what would have happened without the project. Offset projects must make the case that their project leads to fewer trees being cut down, and they generally use data concerning deforestation rates before the project or in similar areas. This type of analysis is difficult for an offset certifier to validate, especially since the project developer has an incentive to exaggerate the amount of causality. Causality is central to an offset being valid, and an offset must have high certainty of causality to be recommended by Giving Green. In cases (such as the forestry example) where changes in human behavior are needed to guarantee causality, Giving Green requires evidence from a rigorous impact evaluation to validate this behavior change. A rigorous impact evaluation provides a convincing measurement of the counterfactual, and calculates the change in GHGs compared to this counterfactual scenario. Project-level additionality An offset satisfies project-level additionality if the project it is supporting would not happen without the sales of offsets. This requirement tends to be satisfied for projects run by non-profits who solely rely on offset revenue in order to operate. However, it can be very difficult to determine for projects with multiple revenue streams. For instance, consider a wind energy project that is considering selling carbon offsets. In many markets, wind energy is cost-competitive with other kinds of energy, and wind energy plants are built and profitable without the need for carbon offsets. In this case, a wind energy project does not satisfy project-level additionality. However, in other markets, a wind energy plant may not be profitable, and therefore would not have been built without an additional revenue stream from offsets. In this case, the offsets would have project-level additionality. The problem is that in a case like this, it is very difficult to verify the actual financial circumstances of the project. In order to get certified, project developers need to provide a financial model where they show that with offset revenue they would be profitable, but without the offsets they would not be. However, the projections of future flows of costs and revenues necessary for such a model rely on a significant amount of guesswork. Additionally, project developers have huge incentives to make a case for additionality. The offset certifiers likely have no way to validate these models, and also must rely on their own guesswork to decide if they believe the project developers’ case. In our assessments at Giving Green, we accept claims of project-level additionality only when projects rely on offsets for most or all of their revenue stream, or when offsets are crucial to raising private sector capital. Also, the project must not be required by regulations. That being said, we may recommend projects that do not satisfy project-level additionality if they satisfy marginal additionality, as described below. Marginal additionality A project satisfies marginal additionality if each additional offset purchased leads to more GHGs being reduced. This is an important requirement for offsets to work as advertised: the purchase of every single offset must cause extra GHG reduction. To explain the difference between project-level additionality and marginal additionality, we will use a few examples. Consider a landfill gas capture project. In areas where they are not required by law, landfill gas projects generally satisfy project-level additionality since there are no economic incentives besides offset revenues to build them. In general, the project developer foots the bill for the up-front costs of building the system, and then recoups these costs by selling offsets for the emissions avoided each year. Taking the concept very literally, no offsets generated from this project actually have marginal additionality, since the project has already been built. But given that the project was likely built only due to the expectation of being able to sell offsets, one could argue that offsets sold shortly after the project are really contributing to reduced GHGs. The issue is that the project developer can sell offsets as long as the gas collection system is still operational, and this may continue long after the project costs are paid off. After project costs (including opportunity costs) are covered, additional offset revenue just goes to pad the profits of the project developer. Additional offsets absolutely do not contribute to additional reduced GHGs. The opposite can also be true: projects can have marginal additionality without having project-level additionality. For instance, consider a for-profit provider of clean cookstoves. The company may have a viable business model, and would exist and sell cookstoves even if offsets were not available. Therefore, they do not exhibit project-level additionality. However, if they do sell offsets, this allows them to lower their prices, therefore selling more stoves. In this case, each additional offset can contribute to additional lowering of stove costs, resulting in more stoves being sold. Therefore, the offsets satisfy marginal additionality. A significant factor determining whether projects have marginal additionality, is whether they have ongoing activities that can continually be ramped up to remove more emissions, versus being composed of a single large project. For example, a cookstove manufacturer can always use offset revenue to distribute more cookstoves, but a large landfill gas capture project generally can not just expand its operations. Also, a project developer that makes profits is less likely to satisfy marginal additionality, since any offset revenue going to profits cannot be additional. Another factor that can play into marginal additionality is profits. If the project developer is a for-profit company and is actually booking profits above the opportunity costs of its founders and investors, this is a reason to question marginal additionality. This is because in this case, additional offset purchases simply increase profits and are unrelated to decreasing GHG emissions. At Giving Green, we view marginal additionality to be critical to the validity of an offset, though we admit it can sometimes be difficult to ascertain. We need to have high confidence in the marginal additionality of an offset to be able to recommend it. Note that this is a higher bar than required by the offset certifiers, whose definition of additionality only includes project-level additionality. Permanence An offset provides permanent emissions reduction if there is no chance of undoing the project’s activities. In projects that avoid emissions, this is frequently satisfied in a trivial manner. For instance, if a project incinerates a refrigerant, the GHG is destroyed and emissions are avoided permanently. But permanence can be more difficult to establish for forestry or other land-use projects. For instance, consider an offset project that prevents a portion of forest from being logged. These gains can be completely undone if, in the future, the jungle is logged or burns down. This is known as a “reversal”. Offset certifiers have tried to deal with this risk by requiring project developers to keep a certain percentage of offsets unsold in a so-called “buffer pool”. This acts as insurance, and is drawn down when there are demonstrated reversals. But it is difficult to be certain if reversals will actually be reported in the future, and if there will be enough offsets in the buffer pool. For instance, by some estimates , the size of the buffer pool in the offset scheme in California’s cap and trade is insufficient due to increased fire risk. Giving Green views permanence as an important component of an offset’s validity, and therefore we need a high degree of certainty in permanence to recommend an offset. However, since land-use projects are important and it is impossible to completely verify permanence for these, we may recommend projects with some permanence uncertainty as long as strong, proven methods are put in place to guard against reversals. Co-benefits Some offset projects offer additional benefits besides GHG reductions, known as “co-benefits”. For instance, these could include improving the income of poor families, or improving biodiversity. Giving Green only uses GHG reductions to determine which offsets to recommend, and therefore it is not necessary for an offset to have co-benefits to gain our recommendation. However, as many offset purchasers would like to buy offsets with co-benefits, we highlight them in the analysis of our recommended offsets.

Do waste biogas capture carbon offsets avoid CO2 emissions? Read our independent analysis. Waste Biogas Capture // BACK This report was last updated in November 2020. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We may revise this report in the future, depending on our research capacity and research priorities. Questions and comments are welcome. Summary Waste sites (such as landfills and agricultural waste storage) produce biogas from the decomposition of organic materials, including the powerful greenhouse gas methane. With the right infrastructure and systems, companies and municipalities can capture this methane and either destroy it or convert it into energy. Biogas capture projects cause a clear reduction in greenhouse gas (GHG) emission, but it is unclear whether waste biogas carbon offsets actually cause the projects to be implemented. While we have not yet found any biogas-related carbon offsets to recommend, we do believe that there are likely circumstances where these offsets do cause real emissions reductions. Better biogas offsets are in places where methane capture is not mandated by regulation (either current or future), and in sites where the electricity generated by biogas is not enough to make the project profitable. Overall, we believe that there are likely good biogas offsets that are additional, but thus far we have been unable to find any that meet our criteria. As not all offsets are offered online, it is possible that these high-quality offsets are being directly sold to corporate buyers or are only transacted through brokers. Giving Green will continue searching for biogas projects we can recommend with confidence. Waste biogas capture as a carbon offset Landfills and agricultural waste sites produce biogas from the decomposition of organic materials. Biogas is composed of primarily methane and carbon dioxide (CO2), along with a small amount of other organic compounds. Both methane and CO2 are greenhouse gases that trap heat in the atmosphere. Methane is 28-36 times better at trapping heat in the atmosphere than CO2 over a 100 year period, making it a particularly potent GHG [1]. Of all methane produced in the United States, landfills are the third-largest source with approximately 14% of overall emissions [2]. Reducing methane emissions is a key priority in combating climate change. Waste sites emit methane through an anaerobic process. Large amounts of organic material (e.g. food, wood) are deposited into landfills, and agricultural waste sites contain production byproducts (such as plant husks or animal excrement). Bacteria decompose these materials and produce a mixture of gases, which is then emitted into our atmosphere and contributes to global warming. Biogas normally escapes from waste sites into the atmosphere soon after it is produced. However, if the right infrastructure and systems are put in place at waste sites, companies and municipalities can capture the methane and either destroy it or convert it into energy. Gas extraction wells and piping systems can be set up at waste sites and used to move biogas from the production site to treatment locations. At the treatment locations, biogas is either flared (burned to convert methane into a less harmful gas) [3] or converted into energy like electricity or car fuel. To encourage biogas flaring or capture, the US Government regulates large emitters of GHG through the Clean Air Act and through reporting requirements to the Environmental Protection Agency (EPA). Regulations require landfill emissions to be measured and publicly documented. Large emitters are required to either capture and destroy or convert their landfill gas into a reusable resource [4]. However, biogas emissions from agricultural operations and smaller landfills are more lightly regulated, if at all. Carbon offsets fund the construction and upkeep of biogas capture and treatment infrastructure. In the absence of regulation or profitable circumstances, biogas capture and treatment is unlikely to occur. Causality Overall, if projects are executed correctly, then waste biogas capture is highly likely to cause reductions in atmospheric greenhouse gas emissions. Project-level additionality In the absence of regulation or profitable circumstances, biogas capture and treatment is unlikely to happen. As such, carbon offsets can be catalytic for these projects in cases in which they are additional. The cost of biogas projects depends on the size, location, and configuration of the site. There are significant capital outlays at the start of a project, as the physical infrastructure is designed and created. After the initial expenditure, there are routine costs to upkeep equipment and oversee operations. For projects that are not profitable and exempt from government regulation (e.g. too small), carbon offsets can provide a financial incentive to capture and use the biogas. The EPA estimates that a privately owned and operated project with a 3 megawatt turbine and no previously installed capture system costs approximately $8.5 million to install and will lose approximately $3.5 million over a 15-year lifetime [5]. While the above cost does not factor in tax credits or exemptions or the ability to use the electricity produced for on-site operations, the cost of biogas capture and treatment systems are often prohibitive for companies and municipalities [6]. Marginal additionality The marginal additionality of waste biogas carbon offset projects varies based on where the project is in the project lifecycle. Before construction, while trying to achieve sufficient financing for the project to go ahead, carbon offsets are likely to be marginally additional (as long as the target goal is eventually reached). After construction, however, the marginal additionality of waste biogas capture projects is relatively low as the binding financial outlay is for the construction of the initial system. In some cases carbon offsets might continue to fund operational expenses, which would satisfy marginal additionality; we have not yet found any projects in this space that make a compelling claim to use carbon offsets in that way. Permanence Some waste biogas projects destroy emissions; these have high permanence. Once the emissions are captured and destroyed, they are not at risk of leaking back into the atmosphere. We do not think that the capture of these emissions is likely to increase emissions elsewhere. For projects that use captured emissions to produce energy, we see the permanence as lower. These projects often use the gases to create energy through a process that eventually emits them, meaning that they are not permanently removed from the atmosphere. In these projects, the benefit is more “clean” energy created by gases that would otherwise have just leaked into the atmosphere without any additional benefit. Co-benefits With projects that use waste biogas to create electricity or other energy, the co-benefits are more energy produced for the surrounding regions. We view this co-benefit as fairly weak as most of the surrounding where these projects are happening have other sources of energy. Assessment of waste biogas capture projects Carbon offsets for biogas are most “impactful” when they meet the best-in-class standards for carbon offsets - additional, not overestimated, permanent, not claimed by another entity, and not associated with significant social or environmental harms - along with meeting the following conditions [7]: Project is not required by regulation to implement biogas capture and treatment Project is not profitable from the sale of renewable resources from biogas treatment Project is capital constrained and will not happen without carbon offsets Carbon offsets go directly to purchasing biogas project infrastructure or maintenance, as opposed to non-essential inputs When reviewing projects for this report, we found that it was difficult to get enough information to determine whether projects met the above conditions. Simply being certified by one of the major certifying agencies did not give us confidence that the project was indeed additional. We expect that some biogas projects will meet these conditions, and some will not. This appears to be confirmed by what others have concluded [8][9]. For example, the GHG Management Institute and Stockholm Environment Institute say that the usefulness of landfill gas projects and associated carbon offsets depends on the project. They state: “Varies by location. Projects are likely additional in most parts of the developing world. In developed countries, including the United States, some projects are pursued to avoid triggering regulatory requirements, and projects that generate energy can be economical without carbon revenue.” The report also describes how there is uncertainty in baseline levels of methane output with these projects, which further adds to the difficulty of quantifying their impact [10][11]. We therefore focused the remainder of our research on waste biogas projects in developing countries and projects involving small landfills in the US. Developing countries: Unfortunately, we found few offsets in developing countries available for sale online. The UN offers two such projects, capturing biogas from agricultural waste in India and Thailand. However, after further consideration, we didn’t feel comfortable recommending either. The Ratchaburi Farms Biogas Project in Thailand is a biogas capture system that generates energy for use on a large pig farm. The first issue with additionality is that the system may be profitable, and as a large company it’s plausible that the farm could and would have made the investment without the carbon credits. But more worrisome is that the project is quite old. It started operating in 2008, and in its original application for offset certification, it requested credits for 10 years. The project was a partnership with the Government of Denmark, who committed to buying some of the credits as part of their commitment under the Kyoto accord. So as far as we can tell, the current offsets for sale were generated before 2018 but were not part of the purchase agreement with Denmark. Given this, it is quite hard to believe that expectation of voluntary offsets purchases 10 years in the future actually contribute to additionality. The Mabagas Power Plant in India is somewhat more promising. It generates energy by procuring animal waste from nearby farmers and feeding this waste into its digesters. Without this plant, this waste would degrade and release biogas into the air. There are no regulations requiring the construction of the plant. However, a couple of worries have prevented us from recommending these offsets. First, the project seems plausibly profitable. Although the IRR documents submitted as part of the offset certification procedure claim that selling carbon credits is necessary to achieve viability, these numbers are hard to verify. Next, there is a question of who precisely is on the receiving end of these offsets. Mabagas was launched as a joint venture between two companies that mainly deal in (petroleum-based) oil and gas: the state-owned Indian Oil Company, and the German company Marquard & Bahls. As revenue from offsets will ultimately flow to these companies or their subsidiaries, it is unlikely that this capital will fuel more green projects. Overall, we cannot recommend these offsets given the information available at this time. US-based projects: Although large emitters are required to install methane capture systems, small landfills are not covered by these regulations, and carbon credits may certainly spur them to build capture systems. However, regulations are constantly changing [12], and plants may install landfill gas capture systems in anticipation of coming under regulatory authority (due to expansion or changing regulations). We explored US landfill gas offset options and, at least given the data available, felt unable to confidently recommend any of them. For instance, this landfill in Massachusetts seems to be a project that was very much spurred by carbon credits, with credits originally issued for ten years. However, the offsets available for purchase now are for the second issuance of offsets, while the actual infrastructure seems to only have been modestly updated. It is unclear what additionality these new offsets are providing. The Hilltop Landfill in Virginia was a small landfill that installed methane capture financed with carbon credits. But the landfill closed in 2013, and it seems like the investment has already been refunded from previous carbon credit sales [13]. So further sales are likely not additional. Other options we explored are larger landfills that seem likely to fall under methane capture regulations as they grow or as new regulations are put into place. Overall, we believe that there are likely good biogas offsets that are additional, but currently, we have been unable to find any that meet our criteria. As not all offsets are offered online, it is possible that these high-quality offsets are being directly sold to corporate buyers or are only transacted through brokers. Giving Green will continue searching for biogas projects we can recommend with confidence. [1] https://www.sepa.org.uk/media/28988/guidance-on-landfill-gas-flaring.pdf [2] https://www.epa.gov/lmop/frequent-questions-about-landfill-gas [3] https://www.epa.gov/lmop/basic-information-about-landfill-gas [4] https://www.epa.gov/lmop/basic-information-about-landfill-gas#methane [5] https://www.eesi.org/papers/view/fact-sheet-landfill-methane [6] Direct-use projects (i.e. where the energy created is used to power upkeep of the landfill) cost less and have a slightly higher ROI, but are less common because they require their facilities to be nearby. [7] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [8] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [9] https://www.drawdown.org/solutions/buildings-and-cities/landfill-methane [10] http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf [11] https://www.drawdown.org/solutions/buildings-and-cities/landfill-methane [12] http://biomassmagazine.com/articles/16424/epa-proposes-federal-plan-under-2016-landfill-gas-regulations [13] https://www.ecosystemmarketplace.com/articles/offsetting-local-inside-landfill-gas-project/ References https://www.epa.gov/lmop/basic-information-about-landfill-gas https://www.epa.gov/sites/production/files/2017-04/documents/lmop_2017_special_session_cowan.pd https://www.r-e-a.net/work/biowaste-recycling/ https://wasteadvantagemag.com/business-case-carbon-offsets-waste-diversion-waste-digestion-composting/ https://sustainability.wm.com/downloads/WM_CDP_Climate_Change_Response.pdf https://earthworks.org/issues/flaring_and_venting/ https://en.wikipedia.org/wiki/Landfill_gas_utilization https://www.eesi.org/papers/view/fact-sheet-landfill-methane https://www.terrapass.com/project/flathead-county-landfill-gas-to-energy http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf https://www.sepa.org.uk/media/28988/guidance-on-landfill-gas-flaring.pdf http://www.aqmd.gov/docs/default-source/permitting/toxics-emission-factors-from-combustion-process-.pdf?sfvrsn=0 https://www.eesi.org/papers/view/fact-sheet-landfill-methane https://www.co2offsetresearch.org/consumer/Methane.html https://americancarbonregistry.org/carbon-accounting/standards-methodologies/landfill-gas-destruction-and-beneficial-use-projects https://americancarbonregistry.org/carbon-accounting/standards-methodologies/landfill-gas-destruction-and-beneficial-use-projects/landfill-gas-destruction-and-beneficial-use-methodology-v1-0-march-2017.pdf

Giving Green recommended Burn Manufacturing as one of the most effective carbon offset providers in 2022. BURN // BACK This recommendation was last updated in November 2022. It may no longer be accurate, both with respect to the evidence it presents and our assessment of the evidence. We do not have plans to update this recommendation in the foreseeable future as we have paused our work assessing direct carbon removal and offset projects. Questions and comments are welcome. Giving Green believes that donating to our top recommendations is likely to be the most impactful giving strategy for supporting climate action. However, we recognize that contributing to policy advocacy (as most of these recommendations do) may not be tenable for all donors, especially busines s es. Taking this into consideration, we recommend BURN specifically for businesses given its focus on carbon removal and more direct alignment with corporate net-zero ambitions. We believe BURN to be a high-impact option, but we are unsure of the extent to which its cost-effectiveness approaches that of our top recommendations. Overview of BURN stoves Theory of Change Mechanism Causality Project-level additionality Marginal additionality Permanence Co-benefits Cost-effectiveness Conclusions Overview of BURN stoves BURN Manufacturing designs, manufactures, and distributes a line of fuel-efficient cookstoves in nine countries across Africa. With two solar-powered manufacturing facilities in Kenya, BURN describes itself as “the only vertically integrated modern cookstove company in Sub-Saharan Africa”. It has distributed over two million stoves through several channels. The models it primarily uses for carbon credit purposes are the charcoal-burning Jikokoa Classic and the wood-burning Kuniokoa stoves, which are directly distributed or delivered through partnerships. [1] Giving Green recommends BURN stoves on the weight of randomized controlled trial (RCT) evidence demonstrating high causality of emissions reductions. BURN stoves also have the co-benefit of reducing household spending on cooking fuel, improving health outcomes, and reducing time spent cooking. Theory of Change The following theory of change maps the link between BURN stoves and reduced GHG emissions. While BURN primarily sells its stoves in the market, its offsets fund projects that provide stoves to households at heavily reduced prices or for free. [2] BURN stoves are designed to increase the fuel efficiency of households that use biomass as their primary cooking fuel source. Offsets contribute to all facets of these projects, including production, consumer engagement, and stove distribution. Increased stove usage over time leads to reduced GHGs over time as consumers switch from their traditional cookstoves to BURN’s fuel-efficient cookstoves. Figure 1: Theory of change for reducing GHGs via purchasing BURN's offsets. We also lay out key parameters we use to model the cost-effectiveness of purchasing offsets from BURN: Assumptions (relevant stage of theory of change as described above in parentheses): Offsets increase stove production and distribution. (2) There is marginal additionality in the number of BURN stoves being used due to offset money. (3) Stoves are fuel efficient. (4) Consumer behavior is modified. (4) Money saved by consumers doesn't lead to GHG emitted elsewhere. (4) Model parameters: How many offset dollars are needed for one additional stove? (3) What is the reduction in fuel use over time? (4) How is reduction in fuel converted to GHGs averted? (4) What % of GHG reduction is maintained? (4) Mechanism The use of BURN’s cookstoves avoids emissions that would have been released by less fuel-efficient methods of cooking. Causality As mentioned in our overview of cookstove offsets , the academic literature on the link between efficient cookstoves and reduced emissions is mixed. The amount of credits a stove generates is highly variable, depending on the methodology, geography, profile of households receiving products, fuel usage (which is measured pre- and post-intervention), cooking practices, and product specs. For example, stoves in Somalia are credited more due to the less efficient standard baseline stoves, larger household size, higher rate of deforestation, and lower fuel-stacking. [3] Berkouwer and Dean (2022) conducted a rigorous RCT trial on the impact of BURN stoves and found that charcoal fuel usage, as measured by weighing of ashes and by self-reported use, declined by around 39%. [4] This is close to BURN’s claims of a 50% reduction in fuel usage. Additionally, a smaller experiment involving 154 stove users confirmed that these reductions in fuel use persisted 18 months later. We would have liked to see long-term usage data from their larger RCT sample to verify the persistence of fuel use reduction, but we view these results as encouraging. The stove model studied in this RCT was the Jikokoa Classic, which is still primarily used for most credit-producing projects alongside the Kuniokoa model. [5] Target markets remain similar to the context used within the study. [6] Overall, we view the evidence on the causality of BURN stoves in reducing GHG emissions to be quite strong. However, our assessment of the exact greenhouse gas reduction is less certain now that BURN has expanded to different geographies and stove types. Project-level additionality Project-level additionality seeks to answer the following question: would BURN exist and sell stoves in the absence of offsets? The majority of BURN’s revenues are from stove sales. Offsets are just a small part of its income, estimated at roughly 2-3% of total revenues. Representatives from BURN claim that offsets are an unreliable source of income, and therefore they cannot rely on income from offsets to fund their core business. However, offset money is generally tied to specific projects that distribute stoves among populations that normally would not have access to them. Carbon credit revenue allows Jikokoa and Kuniokoa stoves to be sold at a subsidized, more affordable price; we believe these projects would likely not exist without donor money. Overall, we assess that BURN offsets have a medium level of project-level additionality, as it’s difficult to verify whether offset money is directly going to projects that distribute stoves for free or reduced prices. However, from 2022, BURN has lowered prices for all stoves in all markets, meaning that every stove sold is now subsidized by carbon offsetting. BURN claims that as a consequence, the vast majority of BURN's distribution would now not be feasible without the sale of credits . Marginal additionality To achieve marginal additionality, each offset purchased must lead directly to additional emission reductions. For BURN, there is certainly potential for each additional offset sold to lead to more stoves being sold or used. While offsets are generated from previous projects, showing a market for offsets allows BURN to continue developing and marketing new projects with subsidized stoves. However, money is fungible. BURN could book money from offset sales as profits or raise salaries. It could also invest in marketing strategies that do not work. BURN, however, is a social enterprise with multiple impact investors on its board. BURN’s mission is “saving lives and forests.” It also claims that all of its offset projects are “break-even” and do not contribute to other parts of BURN’s business. While we cannot verify its claim of using offset revenues to increase stove distribution, we find the claim consistent with BURN’s expansion strategy and believe that the additional income earned will help put more stoves in the hands of families. Overall, it is not possible to verify with certainty that an additional offset purchased leads directly to the purchase of additional stoves and, therefore, to the reduction of GHGs in the atmosphere. However, BURN is a social enterprise, and we believe that it is likely that with more revenue, it will increase stove distribution. Permanence Fuel use reduction from clean cookstoves represents permanent decreases in emissions. Co-benefits Beyond reducing GHG emissions, Berkouwer and Dean (2022) also found clear economic benefits for households using BURN stoves. Berkouwer and Dean (2022) estimate that for the study population, purchasing a BURN stove resulted in fuel savings of $119/year, roughly equivalent to one month of income. They conclude that relative to a $40 unit price, the internal rate of return for one household is 295% per year, and “larger than most relevant alternative investments likely available to households.” BURN stoves can make a real difference in a family’s spending power. In addition, BURN stoves reduce the time spent cooking – a burden predominantly borne by women. Berkouwer and Dean (2022) find an average reduction of 54 minutes per day, for households using the BURN stoves. Using improved cookstoves also improves health, as better indoor air quality could decrease the incidence and severity of respiratory diseases. [7] Berkouwer and Dean (2022) find that BURN stove users self-report better respiratory health than those who did not use BURN stoves. BURN research finds that the Jikokoa reduces indoor air pollution (PM2.5 and CO) by 65%, and that the Kuniokoa reduces smoke by 82%. Cost-effectiveness Giving Green conducted a cost-effectiveness analysis to estimate the cost per ton of CO2 removed from using BURN’s fuel-efficient cookstoves. Our goal is to validate our recommendation of BURN as a highly effective agent in reducing GHG emissions. The data we use comes primarily from project-level data from BURN alongside impact estimates from Berkouwer and Dean (2022). View our model here . The RCT conducted by Berkouwer and Dean (2022) concluded that study households annually spent 39% less on charcoal, which translated to a reduction of 331 kg in charcoal per household per year, given local charcoal prices at the time of the study. The Food and Agriculture Organization of the United Nations (2017) estimates that kg of charcoal emits 7.2–9.0 kg of CO2e from the production process alone; combustion adds 2.36 kg of CO2e. [8] Taking the midpoint of the former range, we estimate that each stove avoids 3.46 metric tons of CO2e per household annually. BURN lifetime analyses based on testing data and field data suggest that the lifetime of stoves subsidized by carbon credits may be around 5-7 years. [9] BURN told us that field survey data have an approximate 6% annual attrition rate (i.e., BURN is no longer able to reach around 25% of initially-surveyed cookstove owners by the fifth year of surveys). [10] If unreachable households are more likely to no longer use BURN stoves, relative to households that BURN is able to reach for surveys in subsequent years, it’s possible that we have overestimated the cookstove lifetime. As a rough adjustment for this, we use BURN’s lower-bound estimate of a five-year stove lifetime. Adding a 3% future carbon discount, our final estimate of GHGs avoided per household is 17.31 tCO2e over the lifetime of the stove. To then obtain the offset dollars required per tCO2e avoided, we incorporate BURN’s production-to-delivery cost of $76.28 USD, [11] which is its estimate for certain offset-funded projects. Dividing this quantity by 17.31 tCO2e, we estimate that $4.81 in offsets avoids 1 ton of CO2e. This number is less than the price at which BURN sells an offset for a ton of CO2 on its website—which varies over time but is $30/ton as of November 2022—and suggests that offsets from BURN are highly cost-effective. There are multiple reasons why our final estimate is not equal to the costs stated on BURN’s website. First, despite the stove’s estimated lifetime of 5-7 years, the crediting period for BURN is shorter because not all stoves will last this long. As a result, it does not make financial sense to conduct the validation exercises needed to issue credits once a non-negligible proportion of stoves have failed. Next, there may be differences in which parts of the charcoal life cycle are accounted for in the estimation of GHG averted — combustion, or combustion plus production. According to BURN, it was conservative in its submissions to offset certifiers, and once these parameters have been submitted to a crediting body, they are difficult to change. It is important to realize that supply and demand determine the price of offsets on the market rather than the program cost. BURN sells its carbon credits to different buyers at different prices, providing lower prices to corporate purchasers who buy in bulk. As the sale of one credit or 1,000 credits requires the same amount of administration, the recently increased prices on its website ensure the total cost of offset projects is covered, reflecting that most website sales are for one credit only. However, in this case, the marketed price of the credit is not meaningful: what matters is the total amount of money spent. Buyers who spend $100 on low-priced credits contribute the same amount to a project as those who spend $100 on high-priced credits. As a result, our calculations show a discrepancy between BURN’s sale price and the actual cost per CO2e averted, meaning that per Giving Green’s analysis, each offset sold by BURN avoids more than 1 ton of CO2e. Conclusions We believe that BURN stoves are strongly linked to reduced GHG emissions and improve the well-being of their owners. As with almost all offsets, we do not think offset purchases viably translate to a specific amount of CO2 removed. However, we believe that purchasing offsets enables BURN to distribute more stoves and directionally leads to fewer emissions. You can purchase offsets directly from BURN off their website through a corporate or individual option. We thank Peter Scott, CEO/Founder, Chris McKinney, Chief Commerce Officer, Andrew Weiner, Strategic Associate, and Molly Brown, Strategic Associate to Carbon at BURN Manufacturing for a series of conversations that informed this document. Endnotes [1] “The vast majority of the crediting is using flagship products, the Jikokoa Classic and the Kuniokoa.” “Distribution itself is done through a mix of direct and via partnerships.” BURN email correspondence, 2022-10-04 [2] “Carbon revenue is used to subsidize the cost of our stoves to a price that is affordable for the majority of families. We are targeting prices of $15-25 for Jikokoas and $0-10 for Kuniokoas.” BURN email correspondence, 2022-10-04 [3] “In Somalia for instance, we credit more per stove due to the less efficient baseline stoves, larger household size, higher rate of deforestation, and lower fuel-stacking.” BURN email correspondence, 2022-10-04 [4] https://www.aeaweb.org/articles?id=10.1257/aer.20210766 [5] “The vast majority of the crediting is using flagship products, the Jikokoa Classic and the Kuniokoa.” BURN email correspondence, 2022-10-04 [6] " Yes, in general our target markets remain the same across geographies” BURN email correspondence, 2022-10-04 [7] “The burning of such fuels, particularly in poor households, results in air pollution that leads to respiratory diseases which can result in premature death.” Ritchie and Roser, 2022. [8] Production: https://www.fao.org/3/i6934e/i6934e.pdf ; combustion: https://www.sciencedirect.com/science/article/abs/pii/S0961953402000089?via%3Dihub [9] BURN correspondence, 2022-11-15 [10] BURN correspondence, 2022-11-15 [11] In 2021 we used $50.85, which reflected the average cost in urban Kenya. BURN has begun expanding its operations to other countries and contexts and has noted that while it does not yet have an updated estimate for average cost, distribution in rural areas is significantly more expensive. To account for this, we have increased the cost by 50%, but we will revise this number when BURN generates an updated estimate.

Giving Green Fund What is the Giving Green Fund? The Giving Green Fund is a climate grantmaking fund designed to maximize the impact of your charitable donations. When you donate to the Fund, your gifts are then disbursed to a portfolio of high-impact climate projects identified by the Giving Green team. We believe giving to the Fund is our highest-impact climate donation option . Why choose the Giving Green Fund Impact We continuously update our disbursement strategies based on the evolving landscape of climate action, so your donations can have an outsized impact. Speed We make disbursement recommendations every quarter, and donations to the Fund are usually disbursed to high-impact climate projects in six months. Ease The Fund offers a convenient way for you to support several climate initiatives with a single transaction. How does the Giving Green Fund work? Thorough research Giving Green’s researchers recommend disbursements based on our understanding of the highest-impact available giving opportunities. The majority of the Fund goes to supporting our current top climate charities , but the Fund also makes grants to other organizations working on high-priority climate projects . Transparency We publish all Fund disbursements regularly and transparently, so you can track where your money is going. Independent management Your climate donations to the Fund are held by Giving What We Can , a separate effective-giving nonprofit organization, and disbursed based on recommendations from Giving Green’s research team. 100% for climate action Giving Green’s team never takes a cut from the Fund. 100% of your charitable gifts will be disbursed to systems-changing climate initiatives. For more questions on the Giving Green Fund, visit Giving Green’s FAQ page . The Giving Green Fund’s past disbursements Note that the relative amount disbursed to an organization is not an endorsement of donating to any one nonprofit above others. Rather, it is based on our assessment of the funding needs of the organizations at the time.