{"id":2231,"date":"2026-05-06T09:00:00","date_gmt":"2026-05-06T14:00:00","guid":{"rendered":"https:\/\/blogs.edf.org\/markets\/?p=2231"},"modified":"2026-05-05T17:54:00","modified_gmt":"2026-05-05T22:54:00","slug":"natures-market-moment-turning-ecosystems-into-economic-climate-assets","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/markets\/2026\/05\/06\/natures-market-moment-turning-ecosystems-into-economic-climate-assets\/","title":{"rendered":"Nature\u2019s Market Moment: Turning Ecosystems into Economic Climate Assets\u00a0"},"content":{"rendered":"\n
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The scale of our climate challenge is vast:\u00a0We need to cut 53 gigatons of\u00a0global\u00a0climate pollution per year.\u00a0Achieving that goal requires solutions that can meet such a scale\u2014and\u00a0nature is\u00a0possibly our\u00a0greatest untapped opportunity\u00a0to put a huge dent in this challenge.\u00a0
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In earlier posts<\/a>, I laid out the case for\u00a0compliance\u00a0carbon markets, one of the few tools proven to reduce emissions at scale by putting\u00a0a real price\u00a0on pollution.\u00a0These markets are working right now for\u00a0power, transport, and industry.\u00a0I\u2019m proposing\u00a0that\u00a0we can also use them to protect our most powerful climate asset: nature.\u00a0<\/p>\n\n\n\n

When most of us think of “nature,\u201d we think of the ecosystem services nature provides.  A healthy forest purifies water for our cities, a healthy ocean provides abundant fish, and healthy, biodiverse soils increase crop production. But in the background, nature is also a quiet economic engine driving our climate. <\/p>\n\n\n\n

By some estimates, the world\u2019s forests, oceans, and soils store 1,000 times our annual carbon emissions. But that scale cuts both ways. If these natural carbon sinks are degraded, even small percentage losses in stored carbon could significantly increase the emissions we must manage each year. This is not just theoretical. According to World Resources Institute<\/a>, the 2023 fire season in Canada released around 3 GT of carbon dioxide, around 3 times as much as all airplanes in the world. In the same year, global deforestation led to 3.7 million hectares of primary forest loss, releasing around 2.4 GT of carbon dioxide (Global Forest Review<\/a>). But the key thing is, the reverse is also true: protecting and strengthening these systems means even modest gains in storage can materially reduce the scale of the problem. <\/p>\n\n\n\n

Put simply: our ability to make major progress on climate change hinges on our ability to harness the immense potential in nature. And if we solve nature for climate change, we get to enjoy the ecosystem services that come along with it.   <\/p>\n\n\n\n

It\u2019s the climate solution I\u2019m most bullish about. <\/p>\n\n\n\n

In truth, I\u2019m hardly proposing a new idea. For decades, scientists, economists, and policymakers have pointed to nature as a central part of the climate solution. EDF itself has upheld a long\u2011standing commitment to strengthening and scaling high\u2011quality forest carbon markets. But the world hasn\u2019t yet leveraged compliance carbon markets to translate nature\u2019s climate potential into durable, large-scale action. Naturally, the question that comes to mind is \u2013 why?  <\/p>\n\n\n\n

First, there\u2019s a common belief that we need to focus first on reducing industrial emissions, and to rely on nature only after all those possibilities are exhausted.  But the evidence points in a different direction: Nature holds enormous potential because it is one of our most affordable climate solutions at scale, so my view is we should leverage it to the maximum extent possible. Second, approaches that have used nature, like offsets and project-based credits, have suffered from credibility issues stemming from concerns about additionality, permanence, and leakage. If designed right, nature-based compliance markets help solve those challenges. <\/p>\n\n\n\n

Even focusing only on forests, it may be possible to store an extra 7 gigatons<\/a> of emissions per year for under $100 per ton. A large share of that comes from reducing deforestation, a critical, relatively low-cost action that avoids emissions immediately. Forest restoration adds further potential to expand the scale (and lower the price tag) of this solution. These are some of our lowest-cost, highest-benefit climate solutions, and they are not yet being captured at scale. <\/p>\n\n\n\n

Compliance carbon markets are the key to leveraging the opportunity of nature as a climate solution. In the EU and in China, compliance markets are already reducing emissions at scale across sectors like power and transport. These markets work because they set a clear limit (or cap) on emissions and require a penalty or credited emissions reduction for every ton released above that cap. Applying that same framework to nature is, in my view, the most direct way to unlock its potential as a climate solution on a grand scale. <\/p>\n\n\n\n

 Here\u2019s how a \u201cnature-based compliance market\u201d could work<\/strong> <\/p>\n\n\n\n

A country or jurisdiction would implement a cap on net carbon emissions from nature.  I say \u201cnet\u201d because a given plot of land can both store more carbon (for example, through restoration) or release carbon (for example, through deforestation), so the cap would dictate the net total amount of emissions that is allowed in the jurisdiction (as an aside, the approach could also be used for net storage of carbon).Hypothetically, say the jurisdiction is Canada. If someone  wanted to cut down trees for timber, which released one ton of CO2, they would have to purchase one of the compliance credits from that cap. Conversely, if a cattle rancher restored a degraded Canadian grassland, thus storing one more ton, they would sell a credit and get paid.  <\/p>\n\n\n\n

This approach aligns incentives because landowners would be paid to store more and have to pay to emit more, bringing land-use decisions into the same economic framework that already applies to industrial emissions. <\/p>\n\n\n\n

For a nature-based compliance market to work, design matters.<\/strong> <\/p>\n\n\n\n

Nature-based compliance markets would need to be designed with transparency, integrity and credibility baked in. That means integrating some of the same features that make existing compliance markets around the world effective and trustworthy. <\/p>\n\n\n\n