- A new variation of carbon credits, which puts more focus on biodiversity protection and income generation, is attempting to get the carbon market back on track.
- The methodology for the new initiative called Balance focuses on climate mitigation by making sure that the biodiversity and social aspects of carbon projects succeed first.
- The voluntary carbon market has faced widespread criticism in recent years for a lack of transparency as well as allegations of greenwashing and human rights abuses.
How can the beleaguered carbon market be saved?
Carbon market pioneer Daniel Morrell’s solution is straightforward: Go back to the market’s roots by focusing less on carbon and more on biodiversity generation and community welfare. It might be easier said than done; nonetheless, he is giving it a shot.
Morrell recently launched Balance, a new avatar of the carbon credit that puts the focus primarily on biodiversity protection and generating new sources of income for local communities. With a three-pillared methodology, he plans to address biodiversity loss, poverty and climate breakdown with the aim of keeping forests intact long after projects have wrapped up.
“Tackling any one of these in isolation is ineffective as they are structurally linked,” Morrell, CEO of Balance and climate advisor to the U.K. Prime Minister’s Office, 10 Downing Street, told Mongabay in an email interview. He said he wants Balance units to address these issues simultaneously rather than allowing people and companies to purchase “a ‘get out of jail free’ card to excuse emissions.”
For years, carbon offset projects have allowed people and companies to invest in forest restoration projects to cancel out, or offset, emissions they produce. However, the voluntary carbon market has faced widespread scrutiny for lacking transparency on how it measures the success of projects, leading to allegations of greenwashing. Many projects have also faced criticism over alleged human rights abuses.
“There’s a lack of trust regarding the carbon credit system,” Morrell said. Even as there’s ongoing work to make the mechanism more transparent, “the purchase of carbon credits is still stuck in the offset paradigm,” which doesn’t necessarily always take biodiversity protection and welfare of local communities into the fold, he said.
That’s the gap Morrell aims to fill with Balance.
The methodology behind Balance focuses on climate mitigation by ensuring that the biodiversity and social aspects of a project succeeds first. Carbon removal, Morrell said, would then follow as a co-benefit. By putting the focus on biodiversity conservation and community welfare, Morrell said he hopes to establish protected ecosystems designed to last for more than 100 years.
The traditional approach adopted by carbon offsets projects issues credits based on emissions that have been avoided, but Balance focuses on getting local communities to increase carbon stocks by restoring and rewilding deteriorated and deforested forests.
It does this by “funding planting partners to transition land into regenerative systems such as afforestation, reforestation and rewilding to create biodiverse, long-lasting ecosystems,” Morrell said. Each project also focuses on generating income for the communities in the area through initiatives such as permaculture, beekeeping, sustainable firewood management, agroforestry and the production of biochar, a cheaper and more sustainable alternative to charcoal. Putting the spotlight on generating income, Morrell said, was key to ensuring that local communities are not evicted from their lands for projects.
To ensure transparency, Morrell said, payments for biodiversity generation are made only after the biodiversity has been created. Balance has also put in place a mandate to ensure that a minimum of 40% of the funding goes directly to the communities, with annual reporting to track the progress of projects.
Karl Burkart who has been monitoring the carbon markets for years says Balance’s methodology falls under the broad umbrella of ARR (afforestation, reforestation and revegetation) credits which also focuses on increasing carbon stocks. “Balance appears to be reskinning existing ARR credits with an additional vetting layer, and then adds insurance to cover potential reversals,” Burkart, deputy director at climate non profit OneEarth, told Mongabay in an email interview. “We don’t even have the slightest chance of achieving the 1.5C goal [under the Paris Climate Agreement] without a massive investment in nature-based ARR. So initiatives like Balance, if they help build confidence amongst potential buyers, are a good thing.”
Work is already underway.
For example, in the La Mosquitia rainforest in Honduras, Balance is collaborating on a project that aims to make the ecosystem more resilient under community stewardship. For years, the forests there have borne the brunt of logging as well as wildfires that have slowed down natural regeneration. Since 2021, the project has worked with local communities to help them plant mixed-tree species and trained them to control wildfires.
Morrell admits that Balance cannot possibly fix the problems plaguing carbon markets, but said he hopes it will be part of a suite of solutions.
“We can move into the era of mass participation,” he said. “And that would give us a greater chance to take on this interconnected global problem of biodiversity loss, poverty and climate breakdown simultaneously.”
Banner image: The forest of Marston Vale in Bedfordshire in the U.K. where restoration efforts have yielded positive results for biodiversity and the community. Image courtesy of John Nguyen.
Abhishyant Kidangoor is a staff writer at Mongabay. Find him on 𝕏 @AbhishyantPK.
Cite this article
Abhishyant Kidangoor (2026). Can a new methodology save the carbon market?. Mongabay Conservation news. DOI: https://doi.org/10.66709/news-321423Credits
