Wilder Carbon introduces the world’s first “buffer insurance” for carbon credits
UK-based carbon standard Wilder Carbon and specialist carbon insurance company Kita announced the world’s first “Buffer Insurance” policy for Wilder Carbon’s buffer pool.
According to a press release by the company, the buffer is a central pool of carbon credits to which each project developer is required to contribute individually. These credits are not allowed to be sold.
The Wilder Carbon buffer is intended to ensure the integrity of the carbon scheme regarding permanence and performance and is designed to protect the buyers of carbon credits.
It adds that the insurance protection for the Wilder Carbon buffer will boost trust and integrity by providing an extra layer of security against underperformance and default risks. If losses from carbon projects under the Wilder Carbon standard deplete the buffer, the insurance policy will ensure that buyers of carbon credits are fully compensated.
Read more: Integrity Council announces first high-integrity CCP-labelled carbon credits
The involvement of a regulated insurance entity in mitigating this risk will enhance confidence in the carbon market and help attract significant funding for high-quality carbon projects.
Sarah Brownlie, Program Director at Wilder Carbon, said, “Partnering with Kita for innovative insurance solutions will complement Wilder Carbon’s already robust risk mitigation, trusted delivery partners, and commercial approach to protecting carbon credit investments on our validated projects.”
Natalia Dorfman, CEO and co-founder of Kita, added that the company hopes this policy will help lead the way for the wider incorporation of insurance into buffers across the voluntary carbon market.
Adding insurance, a common risk management tool in high-value markets increases protection against setbacks and failures and shows market participants that they can trust the system.
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