Specialist carbon insurance company, Kita, and UK-based carbon standard, Wilder Carbon, have announced a “first ever” insurance policy for a buffer pool, with capacity provided by specialist (re)insurer, Chaucer.
According to Wilder Carbon, the buffer is a central pool of carbon credits to which each project developer is required to contribute individually, and 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 designed to protect the buyers of carbon credits,” the firm added.
This new insurance protection for the Wilder Carbon buffer will reportedly further enhance trust and integrity by adding protection against underperformance and the risk of default.
“In the instance of losses from carbon projects in the Wilder Carbon standard that cause the buffer to deplete, the insurance policy will function as a means to ensure buyers of carbon credits remain whole,” Wilder Carbon explained.
As mentioned, Chaucer is the capacity provider for Wilder Carbon’s buffer insurance, having worked closely with Kita to design a solution supporting Wilder Carbon’s goal to provide projects with integrity and resilience.
Natalia Dorfman, CEO and co-founder, Kita, commented, “By working in partnership with Carbon Standards, carbon insurance can increase resilience and build trust in the integrity and functionality of buffer pools.
“We are thrilled to be working with Wilder Carbon on a pioneering insurance offer for their high-quality nature-based carbon credit buffer, and hope this policy helps lead the way for the wider incorporation of insurance into buffers across the Voluntary Carbon Market.”
Sarah Brownlie, Program Director, Wilder Carbon, said, “Wilder Carbon is proud to be the first Carbon Standard to incorporate “Buffer Insurance” as a safeguard against loss for Wilder Carbon’s Buffer.
“Partnering with Kita for innovative insurance solutions will complement Wilder Carbon’s already robust risk mitigation, trusted delivery partners and commercial approach to protect carbon credit investments on our validated projects.
“This will reduce barriers to market entry and secure further investment into the restoration of nature.”
Tom Graham, Head of Partnership, Chaucer, added, “Chaucer are delighted to be supporting Kita in their partnership with Wilder Carbon, backing carbon projects which seek to gain resilience and ensuring buyers of nature-based carbon credits are protected.”
