ClearBlue and Kita collaborate to enhance voluntary carbon market integrity and risk management
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According to a press release, ClearBlue and Kita are collaborating to “increase precision and integrity of carbon insurance models”. They plan to do so by providing stakeholders of the Voluntary Carbon Market (VCM) with enhanced data, risk mitigation, and transparency related to the procurement, management, and valuation of carbon credits.
The project will come to life by combining the strengths of the two organisations. ClearBlue, a leading expert in carbon markets, will provide analysis related to the carbon markets. Kita, a leading player in carbon credit insurance, will bring nuanced carbon credit insurance solutions to the table. The organisations believe this combined effort will increase participants’ confidence in market transactions.
Capitalising on the strength of Clearblue Vantage, a technology platform owned by ClearBlue, paired with abundant data, ClearBlue reviewed hundreds of nature-based project methodologies.
ClearBlue’s Delivery Risk Assessment (DRA) manages the challenges of investing in and managing carbon project development by reducing project failures and discrepancies in estimated versus issued credit volumes.
The DRA uses historical data to assess project delivery risk and predict the likelihood and amount of issuance mitigation strategies. It also enhances the transparency and integrity of the Voluntary Carbon Market (VCM).
The results of this process are then integrated into Kita’s underwriting model for the development of its core product, Carbon Purchase Protection Cover (CPCC). The addition of this analysis strengthens Kita’s capacity to approach delivery risk more precisely.
Launched in 2023, CPCC is a customised insurance product to safeguard against delivery failure, shortfall, and sometimes delays resulting from counterparty risk, natural disasters, and carbon standard or methodology level changes.
The collaboration is reported to focus on the analytical and risk management components of meeting climate goals by investing in voluntary carbon credits.
This partnership can facilitate the well-informed purchase of voluntary carbon credits and the development of risk-reduction strategies, thereby improving the transparency and trustworthiness of the Voluntary Carbon Market (VCM).
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