When you think of Article 6 of the Paris Agreement, you probably aren't thinking about carbon removal. But should you be?
Today's guest is Victoria Harvey, CDR Strategy Lead at ClimeFi. ClimeFi just structured the world's first Article 6.2 international transfer of durable carbon removal credits between Norway and Switzerland, and there's a lot to discuss!
What is the relationship between corporate climate action and national obligations? Do NDCs (Nationally Determined Contributions) impact corporate net-zero targets? Can corporate action satisfy national goals? Does that somehow leave us double-counting carbon removal?
This and so many more questions about the mechanics of CDR and climate action get discussed! Tune in to learn more and hear about ClimeFi's important work.
This Episode's Sponsors
Listen to the RCC episode I did about CDRjobs' Salary Survey and why carbon removers should fill it out
Fill out the 2025 CDRjobs Salary Survey HERE
Listen to the RCC episode with Lisett Luik from Arbonics
Become a sponsor by emailing carbon.removal.strategies[at]gmail.com
Use this affiliate link to use Descript's transcripting and podcast editing service
Use this affiliate link to use Riverside to record your podcasts
Sign up for the 9Zero climate coworking space with my referral code
Resources
Become a paid subscriber of Reversing Climate Change
"CDR Market Review: trends and transactions that shaped Q2 2025" blogpost from ClimeFi
CDR Market Review: Q2 2025 report from ClimeFi
Mr. Show's "Pre-Taped Call-In Show" sketch
Full Transcript
Ross Kenyon: You have found yourself at the Reversing Climate Change podcast. I’m Ross Kenyon, I’m the host. Before we get started today, I want to tell you about the sponsors of this episode. I’m so grateful we have a new one, which is cool: CDRjobs. Surely if you work in carbon removal or aspire to, you have been on the CDRjobs website. They are the place to find all of the CDR jobs. No adulteration, no other adjacency. It’s carbon removal. So that’s the place to look. One of the things that is very cool about being a CDR job posting site is that they get a lot of data on employment in CDR, and they have not slept on their data duties.
In fact, last year they did a CDR salary report, which details how much people make in the space, if there’s any discrepancies across gender or race, of which countries, where are jobs being created in carbon removal. They gathered over 800 data points, 400 individual responses, and 400 salaries from job openings, which represents only a partial sample size. But even still, that report generated a four-figure amount, which is a lot of times to download a report. People want this information, and they’re doing another survey this year.
So recently I put out a small episode about why I think this kind of work is important, about HR decisions, about pay transparency. Why I think that’s on net a good strategy if you are an employer, and also if you’re an employee, why you should talk to your colleagues about salary and destigmatize conversations around that topic, and why they can be really useful. And I think the CDRjobs 2025 salary survey is a really powerful way to anchor that conversation, to give you something to talk about, because it makes sure that employers are creating a trustful environment. And it’s also making sure that employees are not being taken advantage of in any way.
I don’t suspect that is happening. CDR is a small place that is very mission driven, but it is beneficial for us to work together to make sure that, you know, our peers are taken care of, or we ourselves are taken care of. And if you are in a position of power, that you are creating a kind of environment where people really want to love the company that they’re at. And this is potentially one way that you can do that. So I would say if you are already working inside of carbon removal, please go fill out the 2025 salary survey. The link is in the show notes. And also if you’re looking for a job in carbon removal, CDRjobs.earth — that’s where they are.
Go look through them, go apply for them. If you’re at a company and you want to sponsor their work, that’s also a possibility, where you can get better visibility for your jobs. So thank you. New sponsor means a lot. Thank you, CDRjobs team. I appreciate your work and hope it continues for a long time. We also have our beloved longtime sponsor, Arbonics, back again. Arbonics is fascinating forestry work in the EU, primarily in the Baltic States, and they just released a new report on the state of European forest carbon credits in 2025. It’s a practical guide to how forest credits are generated, verified, and how developers handle permanence, leakage, and social integrity in a European context.
What’s cool about it is that it also breaks down how methodologies differ and how pricing differs between these methodologies, and why the timing matters in a supply-constrained market. Unless you are a deep, very special type of nerd, this content is hard to parse. But I think the work that Arbonics is doing to try to make this easily graspable by busy people is really important. And, you know, there’s really just not that many European forest carbon credits. With demand rising and afforestation projects taking years to mature, many high-quality credits are sold out before issuance, which I’m sure you’ve seen or at least heard about. This report is a timely overview of bottlenecks in the space and the actors who are looking to solve it. You can find this report in the show notes. In any case, thank you, CDRjobs and Arbonics, for your sponsorship. Means so much to me. And now we will allow the show to begin in earnest.
Hey, thanks for listening to the Reversing Climate Change podcast. I’m the host, Ross Kenyon. I sometimes describe myself as a carbon removal obsessive, but I’m all over the place. I just think climate is the most interesting place to spend one’s time. I’m going to switch the order of this today. Before I get into the intro of the show, what we’re talking about — if you could please do me a favor and give the show a great rating and review on Apple Podcasts and Spotify, or wherever you listen that has a rating or review function, please do so. It is one of those high-leverage things you can do that takes you only like 30 seconds but actually helps the show a lot. Please do that if you at all can.
We also have paid subscriptions for $5 a month. It gets rid of the ads that Spotify puts in at the beginning of each show. There’s bonus content. There’s a small, like two-minute question that I have from today’s episode that didn’t really fit into the rest of the flow, but I still want to preserve it. So there’s a bonus episode coming out later this week from this episode. And you just get to be a super fan who helps make this show go. Links to all those things for how to support the show are in the show notes if you’d like to do so. And now I’m going to tell you about what we’re talking about.
So I don’t know if you’ve caught the news about this, but ClimeFi, which refers to itself as the leading portfolio manager for durable carbon removals — they put together some really fascinating deals, and they helped instrument the deal that just took place that was the world’s first Article 6.2 international transfer of durable carbon removals. I spoke with Victoria Harvey, who is ClimeFi’s CDR strategy lead. She’s formerly at [unclear]. Someone who’s really close in to engineered carbon removal and evaluating projects like that. Normally carbon removal people — I’m making some assumptions here, but most carbon removal people are not thinking purely at the level of policy, because not that much policy has actually hit carbon removal in a market-shaping kind of way.
Most of the discussions in carbon removal tend to be about receiving big offtake agreements. Who’s getting them, who’s not, which standards are going to apply against which family of methodologies, does X offtaker accept biochar or not? Those are a lot of the big questions. And most of the discussions about regulation, with the exceptions of things like 45Q, tend to be much more future oriented, like which carbon credits are going to fit into which compliance market, as it tends to be something that we know will be epoch making when it happens, but it’s still a long way away. There’s old jokes about this. I’ve heard this attributed to Charles de Gaulle. I don’t know if it is. It’s a little mean to Brazil, but you could say it about basically any place. The old joke is Brazil is the country of the future and always will be.
I’ve heard that same joke said about fusion. Fusion is the technology of the future and always will be. You know, conceivably that’s changing now. They’ve got to change the joke. Essentially, policy is the future of carbon removal and it always will be. Hopefully not. Hopefully at some point it will become present and more of it will exist. The Paris Agreement is about the obligations that countries have to meeting their climate goals, and 6.2 is the part of the Paris Agreement that deals with the transferability of carbon credits across country boundaries, so that countries that are net emitters can buy credits from net negative countries. Broadly speaking — I’m sure an expert in international climate policy could duly school me on this — but we’ve not seen this for carbon removal yet.
And one of the most fascinating parts of this show is Victoria and I talking about what does it mean when countries are meeting their goals, and they’re meeting their goals at least partially by corporate commitments like this deal that ClimeFi structured. It has private companies on the buying and selling side, and yet countries are involved in the negotiations too. We get into the trade-offs of this way of structuring these deals. I do not think it’s going to be the final word on this. There’s still a lot more that I’d like to know and learn about. And I suspect this show serves as an excellent whetting of your appetite. It’s certainly whet mine, to investigate exactly how some of these mechanisms that haven’t much interacted with carbon removal or impacted the marketplace may begin to play a bigger role as time goes on.
So good job, ClimeFi, on helping make this happen. ClimeFi’s also just got great written content. I’ve long admired their ability to produce thoughtful written content about various facets of CDR. I’ll put some links in the show notes. Thanks for being on, Victoria, and here is your show. Thanks for being here, Victoria.
Victoria Harvey: Well, thank you for having me. [unclear] to be here.
Ross Kenyon: I’m happy to have you. I saw the news about ClimeFi like everyone else. I suspect for a number of people in carbon removal, they maybe haven’t paid the closest of attention to what Article 6 has to do with carbon removal. I think we feel kind of left out of it overall, to be honest. Maybe we’ve slept on it longer than we need to, or maybe I’m projecting out of my own psyche, or maybe both — could be all of those things at the same time. In any case, though, I wanted to give people a nice freebie to revisit this topic, to understand it as if from scratch. And I’m thus tasking you to help us understand what happened with the Paris Agreement, what’s its current status, and then we’ll go downstream from there. What is this big deal that ClimeFi helped orchestrate? You’re laughing. Sorry, I’m putting you on the spot in some terrible way.
Victoria Harvey: Well, then, happy to go into this. I think it was a pretty exciting announcement on our side at ClimeFi. So definitely important to go back to the beginning and what this means and what it means for CDR. So I’m more than happy to do that, and hopefully get to a bit of the juicy bit about how more people can get involved with it as well, at the end. So, Article 6.2 of the Paris Agreement — and I’m going to caveat this by saying I’ve been in the CDR space for a long time, but I am by no means the greatest policy expert in the world, but I’m happy to give as close a look into it as possible.
So Article 6 of the Paris Agreement, so obviously the mechanism that allows for international cooperation around each country’s nationally determined contributions, so each country’s targets to their net zero of some kind. And within that there’s lots of different developing articles. Article 6.2 and 6.4 we certainly hear about the most. I’m also secretly excited for Article 6.8 in the future, but time will tell on that one.
But for now, where we are is we have been able — ClimeFi was involved in facilitating and structuring the first Article 6.2 transaction of engineered carbon removal credits between Norway and Switzerland. And what is that? You know, that’s the announcement. So Article 6.2 was established in 2021 at COP 21. And within Article 6.2, this is the article that allows for bilateral or multilateral agreements between countries for the transfer of emissions reductions or emissions removals credits.
And I think it’s something that we have more commonly been hearing about, as exactly as you said at the top, that we’ve been hearing about more on the avoidance and reduction side of things. I think, you know, my perspective is because that’s a market that we’ve seen — these are technologies we’ve seen for a longer amount of time, so we feel a little bit more confident in using those technologies in this market. But what we’ve been able to do is show that this is an opportunity for durable, innovative, engineered carbon removal technologies as well.
And so, to take it back: within this transfer of emissions reductions or removals, what it means is essentially that there are two countries that are able to transfer these credits, these removals, between the countries, by essentially having an agreement between them that allows a host country to give off — not sure the exactly correct term here — their credits to the buying country. And in doing so allows the CO2 removal that happened in that host country to then be associated with the NDCs of the buying country.
And there’s a lot of things that come involved in the middle, and, you know, a lot of steps to talk through, which I think today is a great time to do that. But I think a key thing to establish at the very top is that within each transaction, both countries are defining what is the corresponding adjustment. So these are the key levers that essentially prevent any double counting of credits, so that the host country and buying country are not both putting this on their nationally determined contributions. So that it’s really clear where the CO2 removal is actually being attributed to, which buyer it is being attributed to. So yeah, that’s kind of the very high-level intro to it.
Ross Kenyon: Is it the case that Norway is a net removing country and they’re able to sell some of their net removals to Switzerland? Is that a layperson’s way of understanding it?
Victoria Harvey: It’s definitely one way that it could be put. I think Norway is certainly removing more, and there are more — there are CDR, large-scale CDR projects that are able to scale up in Norway in quite an attractive way as well, just given the natural resources that are there. Makes it very appropriate for a lot of sequestration technologies: your direct air capture with carbon storage, your BioCCS technologies, and those that have injection. You know, the project that we looked at was injecting into Northern Lights, one of the largest operational injection sites in Europe. And those resources make it really easy to work with Norway as that host country, if you will. And Switzerland on the other side here, the buying country — it’s a smaller country, it doesn’t have the same resources, but what it does have is a lot of really motivated actors who want to be the buyers and who want to be helping to build and motivate this market.
Ross Kenyon: What’s the relationship between nationally determined contributions and what countries have to do? And then what happens with all of these corporate deals that we hear about? Do those corporate deals interact at all with NDCs? Do 6.2 deals affect corporate deals at all? Are they entirely different? How should people understand those things?
Victoria Harvey: Yeah. It’s — I think an important thing to note here is that there is a real opportunity right now to help clarify some of this confusion with these deals that are taking place. And essentially these companies are working with government organizations, or developing, you know, a clear understanding between the government and these corporate actors. So if we’re taking the case of the deal that we just did with the Swiss buyers in Switzerland — and more than happy to go into more detail on the ins and outs of that — but we have this coalition of Swiss buyers who we’ve brought together, who want to help facilitate the first pilot transaction of the Article 6.2 transfer between Switzerland and Norway.
In this case, you know, it was an interesting use case. These two countries are fairly advanced in the Article 6.2 developments. So we were able to bring this coalition of buyers together, and we’re able as well to bring in the Swiss government to come on and recognize this transaction as essentially a transaction that can feed into the nationally determined contribution. So what that means is that we were able to bring together the corporate action and bring together the government to say, yes, if this deal is moved forward, it will feed into our nationally determined contribution. And then it’s just important to get that into the contracting and get that into the terms of the agreement.
Ross Kenyon: Holy crap, that didn’t help at all. So the companies are buying the carbon removal from a Norwegian company, but then also Norway and Switzerland are each claiming accounting credits or debits for their NDCs off of this deal. Is that correct?
Victoria Harvey: Yes.
Ross Kenyon: Huh. It sounds like corporate purchases are going to be driving the NDC. So it’s like private action is determining the public outcomes. Is that kind of the model for how this works?
Victoria Harvey: I think a great parallel to be made here is: where are we seeing all the action in engineered CDR right now? We’re seeing it in the voluntary carbon market. We’re seeing — this is where the innovation is happening. This is where the buys are happening. This is where all the momentum is developing. But ultimately we know that this is going to transfer into, you know, at the large scale, into more compliance markets, and this will be something that is managed at the national scale, the federal scale, depending on your country or jurisdiction. So we have this ability to really help be innovative in the technologies, but also innovative in the transactions that take place.
And I am a firm believer that the political environment is rightfully so slow moving — building the standards, building the frameworks, ensuring that there’s safeguards in place. But at the same time, they’re picking up all the different innovations and, you know, advancements that are taking place in more this private land. So in the same way for these transactions, that is really the ability to see a lot of the innovation in CDR come from the corporate side. And hopefully it is a way to really motivate or inform or develop more of this understanding and scale of these transactions in these more compliance and international markets as well.
And I think something to really take back here is, you know, this is a pilot transaction. And it’s really something that has been learned by all parties — by the corporate side, but also by the governments working in Switzerland, Norway — as is how this can develop in the future and how this can be scaled up to support both countries.
Ross Kenyon: Is the intention medium or long term for 6.2 to be country-to-country deals, or will 6.2 transfers essentially always have corporate money, where like corporate carbon accounting books are being affected and country-level NDCs are being affected simultaneously? Is there an attempt in the future to untangle this? Is this a pilot-level thing, or is this always the way it’s going to be?
Victoria Harvey: I’m gonna, I’m gonna, you know, give my take and know that there’s hundreds of others who have a better understanding of this and—
Ross Kenyon: This is a podcast. You don’t have to be well informed to have an opinion about anything.
Victoria Harvey: No, but I like to come with — I’m a scientist and engineer by training. I like to come with facts and figures and be cognizant of that kind of stuff. I think that in the short term, and honestly the medium term, this is going to be really driven by corporate demand and corporate action, and there’s a lot of lessons to be learned. I think a lot on the contracting side that we were able to do here — I think that we’ve learned a lot ourselves on how to set these limitations, how to be agile, how to set the terms, but also create the ability for some flexibility if new specifications arise in, for example, the EU or in other areas that would inform the transaction at play. So that agility is really going to be something that is the short and medium term.
But in the long term, this is something that I do see will be driven — well, it just has to be. Maybe this is my naivety coming through. It’s something that needs to be driven by the national level. You know, we’re not going to get that alone through corporate action. It’s just not possible. So we need this to motivate government officials, government actors in this space, on: OK, this is one way to do it. Is this the right way to do it? How can we learn? How can we scale? How can we implement so that we can get to the sector we need?
Ross Kenyon: Yeah, it’s an interesting design decision, because I’ve seen criticism of: if you allow for the carbon accounting books to count for both the corporate layer and the NDC layer for countries, you could end up in some case where multiple people are claiming a negative emission where only one existed. And so like the country of Switzerland and companies within Switzerland who may also operate in lots of other places should not all be claiming the same negative emission on their books. But I can also see this as a very effective public-private partnership, where if you just had a direct purchase from a government to another government, that represents a net outflow of taxpayer funds to a foreign government for a mark on a carbon accounting ledger.
Pretty bad value, I would say, overall for the taxpayers. Be like, cool, that was a lot of money. It went somewhere else and we just have — like we get to feel kind of good about it. I could see that being politically very unpopular. Having private subsidy into a public NDC like this might de-risk climate action, although it will also cause its own problems, because how couldn’t it? Because that’s just everything in the world. It has a consequence to it. Feel free to tear me into shreds. By the way, I don’t know to what degree this is true or not.
Victoria Harvey: I think de-risking, I mean, is huge, and it’s, you know, extremely important. I think right now with removals as well, we’re predominantly, you know, the majority of the time dealing with ex ante future projects. We’re dealing with projects that haven’t been developed. We’re dealing with projects where they might not have the partners they need, they might not have the logistics they need. This is a risky business. And an interesting thing that we found at ClimeFi is, of our portfolio, over 40% of the projects we’re currently transacting with are delayed to some extent.
Ross Kenyon: So 40 percent. 40%. Wow, interesting.
Victoria Harvey: And I think we have some buyers who are comfortable with that, and that’s great. And that’s what it needs to be in the near term. We need people who are engaging in this market to understand that delays are inevitable, because this is a sector that has some risks. But the thing with risk is that we can often identify them, and we can identify where safeguards have been implemented. We can identify where there’s a clear plan and there’s clear targets that the project is aiming to meet. And there’s really a lot of things that project developers can do to mitigate risk. So with all that, some form of due diligence on these projects, some sort of unpacking, de-risking of these projects is going to be important for these projects being able to really integrate into these Article 6 markets and into these movements.
These are future projects that are high risk. Unpacking the risk is important, and there will be some level of delay, and some actors are going to be mad, and some are not going to understand why all this money is going somewhere that — and it’s not seen an outcome straight away. But given the gravity of really what you and I get to work in every day in the CDR world, it really feels like an important step in seeing things work properly, learning from it, developing it, improving it, and implementing it again. So I don’t think you’re wrong, but I don’t see it as necessarily that concerning right now when there’re just a lot of things to learn and a lot of things to improve.
Ross Kenyon: Yeah, that makes sense. Although one counterpoint there: I did a show with Peter Minor from Absolute Climate recently, and we were talking about how essentially any sort of rule structure that is set up will agglomerate vested interests around it, because they built businesses around the presumption that those stable rules will persist. You know, they’re bad rules — they might just be there because people do not want them to change. So that puts the pressure on not merely to be scrappy, move fast and break things, but actually getting things really right really early might be important. I have a follow-up on that, but you probably — the bait is too good. Like, you have to respond.
Victoria Harvey: I mean, that’s the world we live in. Like, it would be great if we get it perfect at the beginning. We should strive for that. But if we can get it as close to possible as well, and let the people who are running it understand that there has to be some flexibility for changes — not drastic changes because we made huge mistakes, but changes of, OK, this term was not the right one to use, we need to reframe it to this. And I think with a lot of this contracting stuff as well, there’s the ability to define that in the early stage of, like, this is something that we have to monitor over time. In six months’ time, if it’s not at this stage or this hasn’t been done, we have to better define this term or something like that.
Like, that is something that can be done if you’re monitoring these projects as they go forward. So I think it’s a trade-off, but we can’t just say it’s one and done. We have to monitor it as it develops, and then that way it doesn’t expand into ways that make us a bad story of the VCM, you know, 1.0, 2.0, whatever you want to call it.
Ross Kenyon: Well, as someone who identifies as an engineer, is that evolutionary, incomplete-by-definition way of behaving difficult for your brain?
Victoria Harvey: No.
Ross Kenyon: No, you like it that way.
Victoria Harvey: I like it that way because as an engineer you’ve got to build new things, and you’ve got to reverse engineer things, and you’ve got to take them down to the beginning and build them back up again and build them better. So that’s something that I feel like I can be comfortable with.
Ross Kenyon: OK, that’s cool. I feel like engineers are maybe attracted to fewer open system problems, but maybe I’m working off of a stereotype.
Victoria Harvey: Maybe. I’m definitely not opposed to them. I think maybe it was the dive into climate engineering at an early stage and realizing it’s crazy and exciting and a real opportunity, and there’s no easy way forward.
Ross Kenyon: OK, fair enough. Regarding 6.2, one of the old fights about it — I’m pretty sure they fixed it at this point, but there was an accounting issue where countries like Brazil that were net removing from forestry were wanting to sell forestry credits but also not deduct the carbon off of the carbon accounting balance sheet. So they would still remain a carbon negative country even though they were selling real interest in the carbon negativity. Was that ever fixed?
Victoria Harvey: You know, don’t know, but that’s very clearly a problem, so I’m hoping so. I mean, I feel like the corresponding adjustments came in to mitigate that problem exactly. Again, this is something that we see in the voluntary market with some people who sell products that then get to claim that they’re carbon neutral when they’re not, because they haven’t sold the credits into it. So it’s a problem we’ve seen in the VCM space, and we’re able to mitigate that with clear reporting or registries and better, you know, tagging of credits and where they go on that side of things.
So in the same way with 6.2, the corresponding adjustments have come in as a mechanism that allows the host country — one that is creating the carbon removal — to subtract the CO2 from their national ledger, and then the buying country is able to add it to their ledger. So what this all comes down to is just transparency of countries and them clearly working with the supplier on the host side to make it really clear, working as well with the registry partner, whoever the supplier is working with, to be very transparent and really clear about all of that. So I’m hoping that problem’s been fixed, and, you know, that otherwise we’ve got some problems ahead.
Ross Kenyon: Why now? Is there some sort of deadline coming up for getting these deals done? Is it just it finally materialized? Why is this happening right now?
Victoria Harvey: Yeah. I mean, for us, we are a European company and we’ve got a big base in Zurich and in Paris as well. But with that, being in Zurich and being in Switzerland, we are able to work with a lot of [unclear] actors who have been interested in this for a while and have really been having all the kernels, you know, of: this is something that we want to do, makes sense for us as Switzerland. We need to work with a country where we already have bilateral agreements in place. Norway is a clear option for that, with what’s already been laid down. So the kernels have all been, you know, pre-popping in different places.
And I think it made a lot of sense to bring these different actors who have interests but aren’t able to go the whole way alone, or, you know, have some hesitancy to engage in the first mission alone, to bring them together in this coalition of buyers, which we did. So by bringing all these actors together, there’s almost — it’s another way to de-risk. No, it’s more support coming together for this transaction, and it’s something then that allows the host country — I’m sorry, the buying country, Switzerland in this case — who really approve it, is like, these are Swiss buyers, we’re the Swiss company, this is Swiss government even, this is something we really want to recognize as a real opportunity for us as a country.
So that was all happening with the buyers and the government, and the thing for us just being that facilitator and being someone that can provide the due diligence against, you know, a framework that we feel really strongly about, and unpacking these risks from carbon to delivery to beyond carbon. And then as well being someone who has done a lot of contracting for CDR purchases — it really felt like this was an innovative opportunity for us to be able to get more informed by what was happening at this [unclear], working with these actors.
But I think it’s less about — hi, I’m going to say something that I feel like everyone always says, so I apologize, but it’s “why now?” But why not now? We have the buyers, we have the suppliers, we have credits, you know, that can be available in the next few years. It made a lot of sense. And yeah, I think for us, we felt like we were the right people to get involved, to help facilitate.
Ross Kenyon: I would have been quicker with a witty remark, but it broke my brain a little bit. I think there’s several reasons why not now, but whatever, I don’t know. Well, maybe just the European context. There’s so much policy activity happening in Europe right now. And I was also just reflecting a little bit on how direct procurement may affect the marketplace over there too, and how that interacts with NDCs too. So direct procurement happening in Germany — that’s an interesting case where German taxpayers pay directly for NDCs for something that in Switzerland they had corporate subsidy for. But maybe in Germany that’s seen just as an internal subsidy for their carbon removal industry, and maybe it’s worth it for economic development reasons more so than just meeting their Article 6 obligations.
I’m also just thinking about all of the cap-and-trade markets that are getting set up right now in places like Vietnam and China, and of course Japan’s GX League coming online. I’m wondering if that’s going to see more of these types of country-level deals taking place. It’s not just going to be — everyone in carbon removal thinks of Frontier and Microsoft and Google and things like that. Five years from now, are we going to be saying that countries are tending to be involved in these deals? I mean, alternatively, we’re heading into a trade war environment where maybe there’s less international trade and people are much more protective of exporting their carbon removals. I could see that happening as well. What’s your sense on momentum in geopolitics? No small questions here. Sorry, Victoria, good luck.
Victoria Harvey: No, I mean, my perspective on it is that there is going to be motivation, interest at the bare minimum, from many different countries. I think Japan, as you said, is a great one that can get involved in this. I think there are a few others, such as Canada and, you know, even Kenya, who want to be involved in this and who have great resources and great projects to contribute. So I think there are a lot of exciting opportunities. And I think ultimately, you know, there is a lot of complexities around this discussion, as can be seen in this very confusing conversation that we’re having. But now that we’ve done it, I think that it actually makes it a lot easier. I think we now have a framework for how we can do this, and we now have learnings from the first time.
And I think with each — as I’ve already said this — but with each time it gets easier. And I think that the hurdle is getting actors interested. And Microsoft and Frontier won’t be there forever. But we’re increasingly understanding that this is going to be a necessary part of our future to some degree. And the motivation will not always be there from governments — you know, administrations and politics aren’t there forever — but some of the risks that we’re seeing are. So I think that if we’re able to withstand elections and we’re able to get past all that, I do think this motivation is going to be there.
And I think it’s important just to reflect and say, like, it might seem more scary than it is, but this is very similar to a lot of what we’ve seen in the VCM around CDRs for recent years. And it’s just a bit further, a bit more that needs to be recognized at the national level. And if you’re working with the right actors and you have the right connections to these government officials, there’s really a path to be trodden. And it can be implemented relatively quickly and carefully at the same time.
Ross Kenyon: What are you seeing from where you sit that someone working in CDR might not know about?
Victoria Harvey: Interesting question. Well, I think — something, you know, I joined ClimeFi in October, and I’ve been in the space for a long time as a researcher and [unclear]. So been a lot of looking at further documents and unpacking the rest, and then on the ground coming here.
The most interesting thing to me is understanding really a lot of the commercial opportunities — I’m going to call them the contractual opportunities — for buyers. [unclear] There’s a lot to be built, there’s a lot of opportunity ahead, and there’s a lot of things around options. And, you know, that meaning that you can buy CDRs today and you can reserve options for future ventures of CDRs from the same developer, and putting those terms into contracts and understanding how to really scale up commitment with one company, with a portfolio of companies, with whatever it may be. I think that that’s so exciting, and it really paves the way for a lot of different opportunities for new actors, maybe smaller actors, to get involved if they can be an option for [unclear], and if there is really a lot of innovation around that.
So options is really exciting. But beyond that, there’s — right, so for the first few years, all these contractual things that you can really — like, you can really step into the space now, learn a lot, de-risk these projects through these contractual mechanisms, and do the due diligence on the project. Seems fine. [unclear] And hopefully, you know, that really supports the scaling in this early stage. So that’s what’s exciting me right now.
Ross Kenyon: That’s so funny that you went in a direction of financial engineering and contracting and legal as a realm for innovation. I might have expected you to look elsewhere. Why that? But you’re not a lawyer, like business law person, by trade.
Victoria Harvey: I think there’s a lot of exciting things around these technologies. You know, there’s a lot of innovations and cost optimizations. We’re seeing really innovative methods of DAC or of biochar, new methodologies on different standards bodies that are really helping, you know, mitigate some of the risks — not all the risks, but some of the risks. So we’re seeing a lot of innovation on the technology side. We’ve been seeing that for years. So if we’re going to want to scale the market, I think, you know, this whole chicken-and-egg thing that we always talk about, I think making it easier for buyers to get in and making it exciting for them to get in is really interesting.
And that’s definitely something that we really aim to provide by, you know, working with them throughout all this and being that partner that can do the end-to-end services, so that they can benefit from the opportunities of engaging in this new sector and can do it in a way that, you know, hopefully is sustainable and, at the large scale, very equitable as well for every actor involved.
Ross Kenyon: What’s next for ClimeFi? Are you able to say much about the deals you’ve got in the pipeline, or something else? Throw me a little tidbit here.
Victoria Harvey: Yeah. So we are currently running, or in the later stages of running, an RFP — request for proposal — for two CDR buyers. So these are large-scale offtakes for portfolios of projects across durable CDR pathways. So that will be an exciting announcement later this year, once it’s all announced and, you know, gone through the due diligence and the contracting and all that fun stuff. And so that’s something to look out for. But on a more near-term note, we have a Q2 market report coming out this week, so that we’ll have all the insights on all the big buys of the last year, all the big policy movements. But this year as well, what we’ve done is a bit on what does it look like if we take Microsoft out of the equation as well. So I think that that’s an interesting one to look at.
Ross Kenyon: So what does it look like? I mean, they’re increasingly dominant at this point, but can you say anything about the trends that happen if you remove Microsoft from the equation?
Victoria Harvey: Yeah. I mean, it’s still a positive sign in terms of what engagements look like for the quarter. So I think that that’s the key takeaway. I think it’s not just one actor, that there are other actors, and it’s across pathways as well. It’s not just in one area. So we’re still seeing the portfolio develop, which is all good signs.
Ross Kenyon: My default lately has been much more pessimistic than I used to be. Am I wrong? Can you talk me into optimism?
Victoria Harvey: OK, yes, I’m way too optimistic sometimes to a default. I’ll meet you in the middle, like, try like a little bit closer. OK, what should we be optimistic about? Not only do we have Article 6.2 deals now happening and really this motivation on the international market, we have new buyers entering the space. I think a number of new large-scale deals that happened in the last quarter, you know, new companies coming through, [unclear] being won, and more developments happening with projects — you know, big innovative projects such as Deep Sky in Canada moving forward and getting started on construction, registries having first-of-a-kind issuance under new methodologies. I mean, that to me keeps me going. It’s exciting to see. I think more people trying these methodologies and seeing where to learn — I think that that’s really exciting.
So ways to be optimistic is that the policy is moving forward, the targets are scaling, issuance and retirement is happening, new buyers are coming in. I think we’re building a market and we’re building the foundations right now, and I think that that’s really exciting. But again, that’s overly optimistic on my side, potentially.
Ross Kenyon: Is solar radiation management coming?
Victoria Harvey: Well, I think it’s going to — I think it’s going to have to. At this stage, you know, we can’t ignore it. I think, you know, we just — I’m sitting in the UK, my colleagues are in Europe. We just had an intense heat wave. We’ve got another one coming this week. That is not something to be optimistic about. But I think that, let’s see what happens. I don’t think it’s happening this decade, but we know that there’s some great people working on it and doing some exciting research. So again, safeguards are in place, they’re doing it in the right way, they’re having community engagement, they’re having that sort of development. I think I’m right. Why not?
Ross Kenyon: I’m seeing more people talk about that openly. For a while it was much more theoretical, and now it’s doing much more — like, we’re so deep in the overshoot that it’s almost an issue of when, not if.
Victoria Harvey: Yeah. To me, I find it so crazy that when I first joined the CDR space and was talking about it in a research lens, like, you couldn’t mention geoengineering. You had to organize arenas where people had to like have personas, they couldn’t say they’re a part of a specific company. Like, we really just couldn’t say things. And now we’re at a stage where we’re like, or not — you want to be a buyer, you want to be a supplier, like, let’s go. So yeah, I think it’s probably easier to talk about. And that should — yeah, [unclear].
Ross Kenyon: Yeah, I told this on a show that hasn’t been released yet but has already been recorded, so it’s not like it’s a weird time loop problem. But we were talking about this, where when I started in carbon removal — was about eight years ago; you said yours, your five years — OK, so eight years ago, CDR was still like… I see David Keith as being that intellectual godfather, who’s like the main person in both of those fields in major capacities. And now it’s funny to see, it’s kind of like creeping back, and now we’re like, OK, we’re now a part of the climate intervention crew.
Victoria Harvey: I mean, there definitely is no denying it. We’re all a little bit crazy, and that’s OK. But I think it’s nice that carbon removal is kind of like this bucket of exciting opportunities, as I said. And as an engineer, I think that bringing nature and tech together is awesome if we do it in the right way. So a bit of craziness managed is not too bad.
Ross Kenyon: Oh man, I don’t even know what to say about it. It’s intellectually stimulating, emotionally, spiritually, I don’t know. Look, like I messed up my hair saying it. That’s how strongly I feel about it. Victoria, thank you [unclear] for sharing. I appreciate your thoughts on all of what’s happening with 6.2, Article 6 in the Paris Agreement. Just generally, thanks for helping explain that to people. I’m a big fan of ClimeFi. I think you guys put out amazing written content. I always make sure to read those when they come out, so thanks for working on that. Thanks for the thought leadership, and thanks for doing such amazing deals.
