# Making Recycling More Attractive Than Landfill > How supply chain digitization and shared rewards can drive system change toward circularity Source: https://www.carrot.eco/en/blog/making-recycling-more-attractive Published: 2026-04-15 Updated: 2026-04-15 Author: Ian McKee **Biowaste Credit Stack—Article 2** Every actor in the waste supply chain is making a rational decision—and the vast majority of them lead to sending valuable organic waste to a local landfill. Organic waste, or biowaste, represents approximately 50% of global waste; it is nearly 100% recyclable, and yet less than 5% is biologically treated. The challenge with the circular economy is not technology; it is a lack of services, participation and economic incentives. The solutions for recycling organic waste—composting, anaerobic digestion (biogas), and insect and microbial processing—are proven and available today. They turn biowaste (e.g., food waste, park & garden waste and other biomaterials) into fertilizer, green power, and proteins—solutions that prevent roughly a quarter (25%) of total global methane production, a greenhouse gas responsible for an estimated one-third (33%) of current warming. The challenge is building the infrastructure and services for biowaste treatment at scale, maintaining it, and incentivizing proper sorting behavior. Today, unfortunately, no individual actor in the waste supply chain has an economic incentive to participate—in fact, they encourage the opposite. Think about what happens at a restaurant. Separating food waste takes effort, and more effort equates to added costs. Composting services, where they exist, are more expensive than landfilling tipping fees, and they are always pitted against free municipal hauling—just put the bags out onto the street, and they miraculously disappear. The bio-recycling industry simply cannot compete on price with the landfill or dump down the road. > “Just put the bags out onto the street and they miraculously disappear.” This is not a failure of values. It is a failure of market design. The linear economy distributes waste disposal costs uniformly across taxpayers, and that flat fee structure gives no individual participant an incentive to reduce waste, sort it, or invest in high-performance recycling solutions—while sustaining a failed linear model. The circular economy requires coordinated action from every actor in the chain. ## **Financial Incentives That Reach Every Actor** At COP30 in Belém last year and in the Trellis article earlier this year, I laid out a financing and policy roadmap for biowaste that can introduce new revenue streams in the waste economy through carbon finance and food EPR (Extended Producer Responsibility) schemes by transforming recycled biomass and prevented methane emissions into public goods (carbon credits and recycling credits). A follow-on article described the Biowaste Credit Stack, the credit mechanisms that can unlock catalytic climate capital and accelerate the introduction of EPR regulation globally, expanding producer participation in the market as part of a success-based reward mechanism that can pull demand for services and investment. However, a financing mechanism is only as useful as its ability to reach the stakeholders who actually need it and make decisions; otherwise, it becomes simply feel-good payments to an industry that does not evolve into a durable, sustainable market. And the critical decision in waste management happens at the source—at the restaurant, the factory, or the household where waste is created—where someone decides whether to separate organics and send them to recycling or throw everything into a single bin. Current recycling infrastructure schemes like those set up by Producer Responsibility Organizations (PROs)—sector-specific corporate groups who come together to fund local market-based EPR schemes—rarely meet agreed-upon targets. They blame consumers and market dysfunction, and most fail to share data with the public, making oversight impossible. The fact is that the incentives are not properly aligned—the organizations serve as lobbying fronts to commit as little as possible to increasing their financial responsibility. Data and oversight need to be managed publicly, not in silos. The solution is market-based mechanisms with public data sharing. Unfortunately, market-based EPR programs, including those in Brazil and the UK, also face early-development challenges. These programs are designed only to reward the final operator along the waste value chain, the recycler (or its representative), and they assume that the benefit will somehow trickle down the supply chain to the waste generator for improved sorting. This approach has also proven ineffective and even led to a black market for traded recycled material sales receipts, which has resulted in overcrediting and increased distrust in the market, similar to what we see in the carbon market. ## **The Circular Economy Needs Full Digitization** What the circular economy actually needs is full digitization of material recovery supply chains, tracking of the chain of custody of waste all the way down to the source of waste creation (the waste generator). This enables the key unlock: rewarding verified recycling behavior financially in a manner that encourages others to participate. The sharing of proceeds generated from verified carbon and food waste EPR credits can change the economics of the services industry—hauling, processing and recycling—attracting new investment and driving behavior change by waste generators who can be financially rewarded for contracting high-performance bio-recycling services. As identified in the global methane status report, the waste sector is the only methane category that can deliver net savings at the system level, and I believe this approach through traceability and incentives is how we can best seize that opportunity to reduce methane production all over the world, right away. There are many organizations working on waste traceability and incentive design; below I will share how we, at Carrot, are tackling this issue. ## **How Carrot Is Building Digitization and Rewarding Stakeholders** Mandatory digitization of waste supply chains is already advancing. The EU’s Digital Waste Shipment System (DIWASS) goes live on May 21. Brazil has operated digital waste transfer manifests (MTRs) as legally mandated records since 2021. These systems create a verified record of every commercial waste movement: who generated it, who moved it, where it went, and what waste classification it carries. Carrot’s Circular Economy Protocol is a digital tracking and Measurement, Reporting and Verification (dMRV) framework that ensures materials are in fact recovered and recycled and turns that public good into carbon credits and recycling credits with full traceability. Every credit is tracked to a series of real-world physical events with identified parties stored in an immutable manner. The protocol operates in three layers: tracking every waste mass from source to recovery facility in the cloud working with partnering data providers (network integrators); verifying that recycling and GHG emissions prevention actually occurred; and distributing proceeds from credit sales back to every participant who helped make it happen. At the foundation is the MassID—a unique multiparty-verified digital unit of material assigned to every waste record that enters the system. The MassID records the material type, the weight, and every participant who contributed to its recovery and effective recycling. Where government waste tracking documentation exists, it also checks to ensure the data is accurate—serving as an additional layer of verification. Carrot’s dMRV auditing system applies verification frameworks—rule sets mapped to approved third-party methodologies—that check supply chain data for each MassID against defined criteria to confirm that diversion, biological treatment, and prevented emissions actually occurred. The dMRV frameworks are developed by the scientific community and published publicly, and the facilities are accredited by independent auditors. 100% of the data must pass the verification rule tests to be eligible for credit issuance, with an additional layer of machine learning for anomaly detection and AI for analysis. This approach significantly enhances the integrity of crediting, while also accelerating the process, lowering costs, and expanding credit issuance from the circular economy. This opens up a new category of circular economy credits in the carbon market, which can be compared to existing landfill gas capture and utilization credits, but with the mission to build a new biowaste treatment industry and drive systemic change. This distinction earned it a new category at AlliedOffsets called “Circularity.” ## **How It Works** When a MassID passes verification, two independent certificates are issued: - A RecycledID, proving the material was physically recycled at an accredited facility. - A GasID, proving greenhouse gas emissions were prevented by diverting organic waste from landfill to biological treatment. From the same MassID and two certificates, two additional verified environmental credits are issued, each with separate compliance utilities certified using separate methodologies and corresponding dMRV frameworks. The issued credits include: Recycling Credits, where one credit represents one metric ton of verified recycled material, and Carbon Credits, where one credit represents one metric ton of CO₂-equivalent emissions prevented at a landfill. This is the credit stack presented in the prior article, Part 1 of the Biowaste Credit Stack, describing the role of each credit. Each Recycling Credit and Carbon Credit is traced back to a set of retired MassIDs. When a credit is purchased, the proceeds get split and submitted to all of the individual parties involved, as recorded within each chain of custody logged in each MassID. Every participant—the waste generator, the hauler, the processor, the recycler, and the technology providers that participate in the digitized supply chain—has a digital account. Each participant’s share is calculated automatically based on their verified role in the chain of custody recorded in the MassID for the given waste type and region. ## **The Buyers** - Companies with large methane footprints (technology companies running AI data centers; oil, gas, and petrochemical companies; the cattle industry; and any organization sourcing natural gas or fossil power) pay in through carbon credits. - Food producers and consumer goods companies pay in through EPR recycling credits. The proceeds are distributed to every verified participant, creating new revenue streams for service providers while delivering a direct financial reward to waste generators who separate and invest in recycling. The distribution varies based on individual circumstances. Carrot works with ecosystem partners to develop a Rewards Distribution Policy that governs the percentage splits for each stakeholder category by waste type and can be adapted for local market conditions.  _Rewards Distribution from Carbon and Recycling Credit sales on Carrot_ For organic waste composting in Brazil, the waste generator receives the largest individual share at 30%, because that is where the sorting decision happens. The recycler receives 20%. The hauler and processor each receive 10%. The ecosystem developers: standards, scientists, auditors, and network receive 30%. These are governed parameters, not fixed rules—designed to optimize resource recovery rates and ensure the largest share reaches the point where behavior change matters most. When the waste generator is not identified, all other participants receive discounted rewards, and the generator’s share flows to a community impact pool that funds waste management improvements in the local territory. Everyone earns more when the full supply chain is fully visible and data quality is high. This creates pressure to extend waste tracking all the way to the source—the waste generator—through shared financial interest. And because the policy is tunable, it can be optimized for the specific bottleneck in each geography: generator participation in one market, hauler capacity in another, recycler investment in a third. The goal is to design for outcomes, not uniformity or mandates that can’t be enforced. ## **The Market Flip** When credit revenue reaches every participant, the market flips. The green premium—that $50 to $100 per ton cost gap that has kept composting uncompetitive against landfilling in mid-development countries—does not need to be subsidized permanently. Waste generators sort better because sorting is less expensive. Service providers invest in capacity, because demand is more predictable and growing. New entrants appear—haulers that specialize in organics, community composters that can now access capital through participation in crediting programs, and technology providers that connect logistics data to verification systems. Better sorting produces higher-quality feedstock, which improves composting economics, which attracts more investment, which extends coverage to more generators. The green premium shrinks—and eventually disappears as the market reaches scale. ## **Catalytic Financing** This phase is where catalytic carbon capital serves a dual purpose. The carbon credit buyer in Phase 1 funds the infrastructure and the incentive payments. The same investment that builds bio-recycling capacity also funds the rewards distribution that changes behavior at the source. The carbon buyer is not locked in permanently—they are the catalyst. When Food EPR activates in Phase 2, the recycling credit takes over as the durable revenue stream, purchased by the food producers and consumer goods companies that generate the waste in the first place. ## **System Change Starts at the Source** The waste sector is the only methane-emitting category that can deliver net savings at the system level. Not incremental reductions — net savings. That opportunity is available right now, in every country, at every scale. The biowaste credit stack—catalytic carbon finance to build the infrastructure, recycling credits to sustain it with Food EPR, and a high-integrity rewards distribution that reaches the waste generator—is how we get there. By making recycling the rational economic choice at every point in the chain. High-integrity verification. Full supply chain traceability. Proceeds that flow back to the source and change recycling economics. In the next article, I will show what this process looks like in practice — from a restaurant in Brazil to a composter turning food waste into fertilizer, with named stakeholders, real economics, and the data trail that connects them. The architecture is here. Now I will show you that it works. --- # The Biowaste Credit Stack > The Bridge to Addressing Biowaste and Landfill Methane Emissions Source: https://www.carrot.eco/en/blog/the-biowaste-credit-stack Published: 2026-03-27 Updated: 2026-03-27 Author: Ian McKee Earlier this month, we published a piece in [Trellis](https://trellis.net/article/how-to-fund-measurable-methane-reductions-at-scale-fast/) on how to fund methane reductions at scale—a financing and policy roadmap for biowaste. That article laid out the “what” and the “why.” This article is about the “how”—the credit architecture that connects one phase of that roadmap to the next, from catalytic carbon finance to durable recycling funding—that can be introduced anywhere. ## **The Challenge** Biowaste represents approximately 50% of global waste, yet less than 2% is biologically treated despite it being nearly 100% recyclable. Methane gas that is released from food scraps, green waste, sludge, manure and other organic residues that biodegrade anaerobically (without oxygen) in landfills, dumps, and wastewater pools represents approximately 25% of total global methane emissions—a potent greenhouse gas responsible for an estimated one-third of current global warming. **The gap is not a technology problem.** The solutions exist and are proven: composting, anaerobic digestion, and insect and microbial processing. Diverting biowaste from landfills and dumps not only prevents methane at its source, but treating them produces valuable products: organic fertilizer, green power, and proteins, along with creating important local impacts such as healthier soils, cleaner and healthier communities, and green jobs. _**Incredibly, only 1% of waste-derived methane abatement funding has gone to biowaste treatment (Climate Policy Initiative).**_ The challenge is well understood. The bottleneck has been market design. Waste systems are local, fragmented, and chronically mismanaged and underfunded. Cities want to divert organics but face near-term cost increases and political risk. Developers want to build treatment capacity but cannot finance it without predictable feedstock supply and a market to sell new products into. Corporate buyers want credible methane action but have few investible projects that can be scaled across jurisdictions. What has been missing is a financing architecture that connects the interventions we already know are necessary into a sequence that scales. ## **A Financing Roadmap Has Emerged** Over the past several years, and especially the last few months, a clear financing and policy roadmap has taken shape—a convergence of work across multiple organizations and geographies. The roadmap has two catalytic phases that together form an unlocking mechanism:  _As first presented at COP30 in the Super Pollutant Pavilion_ **Phase 1: Carbon Finance.** Catalytic carbon credits fund the first wave of composting, anaerobic digestion, and other infrastructure and services. Anchor buyers — companies pursuing net-zero with methane exposure — make forward purchase commitments and direct purchases that give developers the revenue certainty needed to break ground and expand. **Phase 2: Food Extended Producer Responsibility (EPR).** As infrastructure and services mature and verified diversion data accumulates, EPR regulation shifts funding responsibility to the food producers and consumer packaged goods companies that place waste-generating products into the economy. Biowaste recycling credits — purchased by producers to meet compliance requirements — create a durable, market-based revenue stream that sustains what carbon finance started. The participation base expands. The system becomes self-financing. These phases are not speculative. The **[World Resources Institute](https://www.linkedin.com/company/world-resources-institute/)** described the framework for stacking environmental service payments as far back as 2009. **[Zero Waste Europe](https://www.linkedin.com/company/zero-waste-europe/)** and the **[Bio-based Industries Consortium (BIC)](https://www.linkedin.com/company/biobased-industries-consortium/)** published the policy case for Food EPR in January of this year, showing that financing needs to be sourced from food producers. Turkey, host country to COP31, has already launched the first Food EPR program. The **[Global Methane Hub](https://www.linkedin.com/company/global-methane-hub/)** is building national implementation plans. The Superpollutant Action Initiative—funded by the Big Techs and coordinated by **[Beyond Alliance](https://www.linkedin.com/company/beyondalliance/)**—has signaled that corporate buyers are ready to invest in superpollutant mitigation. The science, funding, and political will are all now converging. The question now is: what is the mechanism that connects Phase 1 to Phase 2 of the “Biowaste Roadmap”—that allows carbon finance to “Cold Start” the market while simultaneously pulling in the demand for EPR regulation to take effect? ## **The Biowaste Credit Stack** The Credit Stack is that mechanism. Here is how it works. When biowaste is diverted from a landfill and processed through a verified biological treatment facility, one certified waste mass unit creates two separate credits—each serving a different purpose based on the environmental impact it generated: - **A carbon credit** that represents the equivalent methane emissions prevented by diverting organic material from landfill burial. - **A recycling credit** that represents the verified recovery and biological treatment of that same organic material. This credit serves a recycling finance function: it proves that biowaste was properly diverted and processed, creating the compliance evidence that high-integrity Food EPR regulation requires.  The two credits are sold as a package, initially, but **retired separately**. This is the key design feature, and it matters for several important reasons. **It meets carbon credit buyers where they are.** Carbon credit buyers are accustomed to purchasing credits that generate additional benefits beyond the carbon claim — but those benefits are rarely independently certified or separately retirable. The Credit Stack changes that: the recycling credit is not a co-benefit attached to the carbon credit. It is an independent environmental asset with its own methodology, its own verification, and its own market destination. **It cleanly delineates two separate utilities with no risk of double counting.** Retired recycling credits make no claims on reduced methane emissions. Retired carbon credits make no claims over retired recycling benefits — or their associated co-benefits. Each serves a separate purpose: contributing to NetZero or methane reduction goals and biowaste diversion and recycling (EPR) objectives. **It commoditizes the credits.** When each credit can function independently, they become standardized units that can be aggregated, compared, and retired at scale. This has practical consequences: _**1. It enables investment in large portfolios of projects.**_ Buyers and investors can spread capital across many facilities and geographies, reducing the risk associated with any single project. Portfolio-level investment is how capital markets scale. _**2. It lowers the cost of participation for small and medium businesses.**_ Being part of a portfolio enables small and medium companies (e.g., composters) to access capital, by participating in large crediting mechanisms even as small volume providers. _**3. It enables the introduction of transparent Food EPR financing.**_ When recycling credits are standardized, independently verifiable and retired in the voluntary recycling market, regulators have a mechanism to implement EPR. Producers can now purchase credits through independently verified, outcomes-based mechanisms rather than opaque, non-public producer-led schemes managed by PROs (Producer Responsibility Organizations). The funding base expands beyond early carbon buyers to include the industries generating the waste—all settled transparently. _**4. Expanding participation reduces financing risk and creates a more resilient system.**_ More buyers, more revenue streams (Carbon + Recycling), more geographies — the system becomes less dependent on any single funding source and becomes more durable over time. It connects Phase 1 to Phase 2 in real time. In Phase 1, the carbon credit buyer purchases and retires both credits—funding the infrastructure and services needed while simultaneously building the verified diversion track record that Food EPR regulation needs to activate. As EPR takes effect, recycling credit demand shifts to mandated recycling claims (purchasing and retirement) by food producers. Carbon buyers are not locked in forever. They are catalysts—and the policy and system they helped build are what make the handoff possible. ## **The Concept Is Not New — the Execution Is** The idea of stacking payments for multiple ecosystem services from a single activity has been discussed for nearly two decades by the World Resources Institute, **[Duke University](https://www.linkedin.com/school/duke-university/)**, and the OECD. The market even prefers stacking over bundling (**[Ecosystem Marketplace](https://www.linkedin.com/company/ecosystem-marketplace/)**, 2024). What was missing was a clear execution opportunity and a policy roadmap. That has now happened. The first stacked biowaste credits have been sold (by **[Carrot](https://www.linkedin.com/company/carrot-network/)**, in fact)—from the same verified waste mass, each retired separately, with independent third-party validation by **[Bureau Veritas Brasil](https://www.linkedin.com/showcase/bureau-veritas-brasil/)** mapped to the ICVCM’s core carbon principles. ## **Biowaste Diversion Completes the Portfolio** As carbon credit buyers expand their portfolios to tackle superpollutants and methane in particular, methane prevention through biowaste diversion adds a critical and complementary dimension. Landfill gas capture and destruction address emissions from waste already buried — essential work that should continue. But they do not stop new organic waste from entering landfills every day or the fugitive emissions, estimated at ~50%, that cannot be mitigated. Investing in biological treatment infrastructure and services shifts an industry toward methane prevention and controlled biogas production (anaerobic digestion) while building the circular economy systems that make destruction and capture less necessary over time. ## **Time for Action** The roadmap is clear, and the credit stack serves as a key enabler already fully functional within a voluntary market framework. Now it needs a coalition—buyers, policymakers, philanthropic supporters and implementers—willing to invest in building the circular biowaste treatment industry. The opportunity is here. As **[Durwood Zaelke](https://www.linkedin.com/in/durwood-zaelke-344a121/)**, one of the key architects of the Montreal Treaty that tackled the ozone layer, reminds us—_**there is an urgent ‘need-for-speed in tackling methane.’**_ If you want to discuss this opportunity for your organization, reach out. I’d welcome the conversation. --- # How to fund measurable methane reductions at scale — and fast > A biowaste-focused coalition can spur methane reductions while building sustainable infrastructure. Source: https://www.carrot.eco/en/blog/how-to-fund-measurable-methane-reductions Published: 2026-03-26 Updated: 2026-03-26 Author: Ian McKee Methane is responsible for nearly a third of current global warming, yet it remains significantly underfunded relative to its climate importance. What makes methane uniquely compelling is its potency and its speed: it warms the planet far more strongly than CO₂ in the near term, and it’s short-lived in the atmosphere. That combination means reducing methane releases now can slow near-term warming quickly and help bend the temperature curve, buying time while the world undertakes the longer work of decarbonizing energy, industry and transport. But why is progress not moving faster, even when many solutions are already known? A big part of the answer isn’t technology. It’s a market design. ## **Methane headwinds** Across methane sectors, the benefits of mitigation are global and shared, while much of the costs of action are local and upfront. This mismatch produces a familiar failure mode: projects struggle to finance early deployment and policymakers struggle to move from ambition to implementation without a repeatable, bankable pathway that doesn’t bring political risk. This imbalance is compounded by an accountability gap. Most companies don’t explicitly measure a “methane footprint,” although any company that buys fossil fuels, contracts natural gas, relies on gas-fired power, produces or consumes food, or depends on methane-linked supply chains has meaningful methane exposure upstream and downstream. The issue usually isn’t a lack of concern — it’s the absence of practical market structures that make methane reductions financially viable, repeatable and durable at scale. A particularly compelling place to start is biowaste, one of the largest and most solvable methane opportunities on Earth. Biowaste accounts for approximately 50 percent of global waste and is nearly 100 percent recyclable, yet less than five percent of its material is biologically treated. When organic materials (food scraps, green waste, and other biogenic residues) are buried in landfills, they decompose without oxygen and generate methane. Diverting organics away from landfill burial and toward biological treatment — composting and anaerobic digestion — turns a major methane source into productive outputs like organic fertilizers and green power. The pathway to achieve methane reduction targets is proven. The real bottleneck lies in execution: waste systems are governed at the local level and operate through fragmented contract ecosystems, where cities, haulers, facility owners, regulators and financiers all need to move in sync—often within tight budgets and uneven operational capacity. Biowaste also stands out as a global opportunity because it can deliver absolute [cost savings at a system level](https://www.unep.org/resources/report/global-methane-status-report-2025). Landfilling frequently looks inexpensive only because costs are hidden or socialized. The system fails because the economics are often mispriced at the point of decision-making. Biological treatment requires upfront capital, reliable feedstock contracts and stable revenues. Cities may want organic diversion but hesitate if it raises near-term costs or requires contract restructuring. Developers may want to build capacity but cannot finance it without predictable demand. And corporate buyers may want credible methane action but struggle to catalyze implementation across jurisdictions. A system-wide challenge requires a coordinated effort across stakeholders — led by organizations that can fund early action. ## **The case for a coalition** This is where a coalition — a methane biowaste-focused Advanced Market Commitment (AMC) — becomes an unlocking mechanism. An AMC isn’t a pledge. It’s a market signal: credible buyers pool forward commitments for a defined outcome, creating predictable demand that makes early projects bankable and scalable. This coalition approach has already accelerated climate outcomes in adjacent domains, such as Frontier Climate, which captures carbon via high-tech solutions, and the recently launched Superpollutant Action Initiative, which will invest up to $100 million to lessen the impact of methane, soot and refrigerants. For biowaste, a coalition can move quickly because it does three things at once: it makes early projects financeable, turns fragmented local opportunities into a scalable pipeline, and drives down costs through learning and scale. Just as importantly, it can accelerate policy and corporate responsibility by making implementation easier by creating a repeatable pathway that municipalities and private operators can adopt. To make AMC-driven investments durable and compounding, a clear financing and policy roadmap is needed — one that starts with catalytic finance and then broadens responsibility and participation as systems mature, using existing mechanisms. One solid pathway includes: - Phase 1: Catalytic carbon finance for methane prevention. Anchor buyers (especially net-zero companies with material methane exposure) can pool their advance commitments tied explicitly to verified methane prevention (and mitigation) outcomes in coalitions to mitigate risks and support each other. - Phase 2: Extended Producer Responsibility (EPR). Food Waste EPR expands and stabilizes funding by aligning part of the system cost with food suppliers and consumer packaged goods companies that place waste-generating products into the economy, helping move diversion from isolated projects to standard, market-based practice. - Phase 3: Pay-As-You-Throw. This is a policy and utility model in which residents are charged for trash collection based on the amount they generate. Once infrastructure exists, this mechanism helps sustain performance by aligning everyday behavior with waste prevention and proper separation — linking fees to disposal so diversion rates persist. For buyers, the value is direct: a methane biowaste-focused coalition gives early buyers a credible, high-integrity way to fund measurable methane reductions at scale, while building infrastructure that communities and biowaste producers can sustain. It also offers a rare “triple win:” it targets near-term warming, reduces total costs, and delivers tangible co-benefits tied to sanitation, soil health, circular resource recovery and green jobs. In addition, the impact potential is substantial. The UN’s Environment Programme Global Methane Status reporting indicates that full deployment of methane-targeted measures in the waste sector can cut annual emissions by 16 percent by 2030 versus projected levels under current legislation and prevent roughly 1.8 gigatons of CO₂ equivalents per year by 2050. Superpollutant coalitions are an important and welcome development. They signal that corporate buyers are ready to move beyond carbon removal and into near-term warming reduction. What they’ll need to deploy capital effectively is exactly what’s always been missing from the waste sector: a sector-specific investment roadmap, a pipeline of bankable projects, and digital monitoring, reporting and verification infrastructure that can scale. The biowaste AMC serves as that roadmap. The question now is who moves first. _This article was originally published in [Trellis](https://trellis.net/article/how-to-fund-measurable-methane-reductions-at-scale-fast/) on March 13, 2026. It is reproduced here as it appeared._ --- # It's official—Circularity gets its own Carbon Category > Discover how Carrot and AlliedOffsets are championing Circularity as a new global carbon market category, utilizing digital MRV tools to reduce emissions. Source: https://www.carrot.eco/en/blog/it-s-official-circularity-gets-its-own-carbon-category Published: 2026-02-05 Updated: 2026-02-05 Author: Carrot Eco We are thrilled to see _Circularity_ recognized as a new category in the global carbon markets and proud to be among those supporting its development. Together with **AlliedOffsets**, we explored the importance of distinguishing circular solutions from end-of-life mitigation that occurs predominantly at landfills and incineration plants—the linear economy. Circularity tackles global warming directly by reducing the need to extract new raw materials and the emissions from transporting and processing them, while also preventing methane from being released at landfills due to improper breakdown of organic waste. This announcement is enormously important because circularity faces a significant market challenge that includes financial, technical, and technological hurdles. The new Circularity category of carbon credits will be critical in attracting investment and introducing innovation, and it could significantly help reduce emissions, potentially achieving up to 85% of the cuts needed to keep global warming below 2º Celsius (Circularity Gap Report). It tackles both long-term and short-term climate cooling needs while also delivering important social and economic benefits to green workers and communities. At **Carrot**, we understand that for integrity to be built into this category, a significant amount of supply chain and recycling data, most of which involves small and medium businesses, will need to be processed using digital tools—specifically, measurement, reporting, and verification capable of supporting auditors, VVBs, and registries devoted to the circularity credits category. We are excited to support the market in this new sector and congratulate our partners at **AlliedOffsets** for championing it. --- # COP—The Coalition of the Willing—Needs Followers > As COP negotiations continue, the coalition of willing nations must be matched by concrete action and broader participation to address the methane crisis. Source: https://www.carrot.eco/en/blog/cop-the-coalition-of-the-willing-needs-followers Published: 2025-11-18 Updated: 2025-11-18 Author: Carrot Eco The world is convening in Belém for COP to address climate change, pollution, and their growing societal impacts. The criticisms have already begun—about the venue, the process, and the outcomes. I've been a longtime critic myself. But we need a little perspective. Despite its flaws, COP continues to be the only global mechanism that facilitates large-scale, open discussions on climate change, while also fostering some degree of strategic planning and collaboration. Its limitations are structural: COP is, after all, a conference of the parties—a gathering of nations that ratified the UNFCCC—trying to develop practical solutions within independent political and economic constraints. That's it. Yet one lesser-known benefit of COP is how it spawns action-oriented "spin-offs" typically led by a "coalition of the willing" that come together precisely due to inaction. Frustration forces leaders to stand up. The Montreal Protocol was one such coalition. A few determined nations took on the challenge of phasing out CFCs to restore the ozone layer, the result of which is expected to reduce warming by 2.3ºC by 2100! That is where the real action happens. So, where do we need a "Coalition of the Willing" today? 👉 Methane. Methane is a super-pollutant responsible for 30–40% of global warming, yet it receives less than 4% of climate finance. Cutting methane emissions could cool the planet by ~0.3°C by 2050—double what can be achieved through decarbonization alone, and triple by 2100 (Climate and Clean Air Coalition). It buys us the time to catch up on building the low-carbon and carbon-removal infrastructure we need. The economics are just as compelling: Every $1 invested in methane mitigation yields $6 in avoided damages, saving roughly $1 trillion per year (Stoerk, Rising, Shindell, Dietz). For example, it is estimated to reduce Amazon dieback by 8% and stabilize the Indian monsoon by 13%! This is where we should focus our collective will. And because coalitions function like movements, we need to understand our role here. There's always a "crazy" leader (the organizations that have been working on methane for decades) and a few "brave" first followers (that should be us). (I recommend seeing Derek Sivers' classic TED Talk: How to Start a Movement.) The lighthearted diagram in this post shows a lone tugboat pushing up against a giant ship. Let's join these leading organizations and help them push. --- # Roadmap to Tackle Methane and Biowaste at Scale > Methane causes 40% of global warming, yet biowaste treatment remains chronically underfunded. We propose a decisive roadmap to turn organic waste into a climate solution. Source: https://www.carrot.eco/en/blog/roadmap-to-tackle-methane-and-biowaste-at-scale Published: 2025-11-18 Updated: 2025-11-18 Author: Carrot Eco As climate change advances more rapidly than projected, society must come together to respond quickly and decisively. Because we need to slow warming quickly, it has become imperative to prioritize investment into tackling specific greenhouse gases (GHGs) that have higher global warming potentials than others—buying our global community more time to build the low-carbon infrastructure and carbon removal solutions needed to stop and then reverse climate change. The "super pollutant" **methane** is responsible for approximately 40% of human-caused global warming, and reducing its release into the atmosphere provides one of the highest returns on climate cooling investment today. In fact, it is estimated that addressing methane emissions alone could reduce global warming by 0.5º Celsius by the year 2050. In comparison, the entire energy transition is expected to deliver just 0.1ºC in cooling over the same period. And yet, methane has attracted less than 4% of climate investment, demonstrating a lack of investment attractiveness to date. One important source of methane emissions is **biowaste** (solid waste, wastewater treatment, and manure), which represents approximately 20–25% of total methane emissions. Methane is released due to improper treatment and can be almost entirely prevented—in particular at landfills (>11% of total methane emissions). Unfortunately, while biowaste is 100% recyclable through composting or anaerobic digestion, less than 10% of it is properly recovered and biologically treated. In the global south, less than 1% is properly managed; the remainder is landfilled. Most biowaste ends up in landfills because waste management is handled by local municipalities, which often lack the financial, technical, and technological resources to manage it. Waste handling costs are distributed unfairly across taxpayers and provide no incentives for participating in high-performance sorting and recycling; in fact, they put those who do at a competitive disadvantage because of higher costs. Policies have not encouraged the private market to offer high-performance recycling services, including biowaste treatment. We need new ideas. For this reason, we propose the following roadmap, built on three proven solutions that can be implemented in a phased fashion to address biowaste recycling and prevent related methane emissions: ## **Phase 1 | Catalytic: Carbon Financing (Methane Prevention at Landfills)** **Solution:** Carbon finance uses the sale and delivery of carbon credits—certified units representing prevented or removed GHG emissions—to attract private investment into climate solutions. For biowaste, credits can be issued for preventing methane emissions at landfills through composting and anaerobic digestion. This creates an immediate revenue stream that can be reinvested into recycling infrastructure and used to attract outside investors to expand capacity. Importantly, **offtake agreements**—forward purchase commitments for future carbon credits—can provide the revenue certainty needed for developers and financiers to break ground on new projects. **Why it is necessary:** Municipal budgets are rarely sufficient to fund large-scale biowaste treatment facilities. Carbon markets, which already exist globally, provide a catalytic funding mechanism to kick-start infrastructure development quickly and at scale. By securing off-take agreements from organizations leading the push to Net-Zero, projects can de-risk investment and accelerate deployment, catalyzing the industry's development while presenting a clear path to transitioning away from carbon finance toward other funding mechanisms once the market is established. ## **Phase 2 | Hyperscale: Extended Producer Responsibility (EPR) for Organic Waste** **Solution:** Extended Producer Responsibility (EPR) requires producers to finance the recovery and recycling of their products after use. While EPR is already common for packaging, plastics, and electronics, it has not yet been applied to organic waste. By recognizing the certified co-benefits of recycling biowaste independently—recovered waste mass, reduced pollution, improved local health, clean energy, compost production, soil restoration, fertilizer replacement, etc.—we can create **Biowaste Recycling Credits** to address biowaste recovery and management. These credits are systems that give money back to people and businesses that recycle properly, encouraging them to participate and rewarding actions that help the climate. **Why it is necessary:** Carbon finance can catalyze projects, but it is not enough to sustain them over time. EPR-backed Biowaste Recycling Credits create a reliable and durable revenue stream by shifting responsibility to the industries generating biowaste (agriculture, food, and consumer goods). This policy layer provides the scale needed to ensure organics are consistently recycled rather than landfilled, while also rewarding those who contribute to circular solutions. ## **Phase 3 | Zero Waste: Pay-As-You-Throw (Utility Model)** **Solution:** Pay-As-You-Throw (PAYT) programs charge waste generators (e.g., food producers, restaurants, bars, businesses, and households) by weight, making service costs proportional to behavior and encouraging waste reduction, much like a utility bill that charges for power and water usage. When combined with rebates from recycling credits, PAYT can be started at a reasonable cost to waste generators when compared to landfilling, while the service fees support local recycling service providers. In practice, this combination turns PAYT into a balanced reward system: those who reduce waste and recycle more pay less. **Why it is necessary:** On its own, PAYT can face resistance if it increases household or business costs, making it a non-starter. But when layered with recycling credits that provide direct financial rebates, PAYT becomes a fair and effective driver of behavior change. Together, these two revenue streams—crediting systems and PAYT—make recycling financially viable, self-sustaining, and scalable for municipalities, producers, and communities. ## **Additional benefits** The additional benefits from treating biowaste include reducing discharge to land and water; generating clean energy and nutrient-rich compost to restore depleted soils; lowering the need for chemical fertilizers and pesticides; enhancing carbon capture; and creating green jobs for vulnerable communities worldwide. ## **Conclusion** Reducing methane released into the atmosphere is one of the single most effective levers to slow climate change and buy us more time. This plan, using carbon finance to boost investment in biological treatment facilities, EPR-supported biowaste recycling credits to expand the market and involve producers, and PAYT to promote behavior change—offers a practical, market-focused strategy along with policy to transform biowaste from a global issue into a useful climate solution. It accesses climate capital from investors in a phased fashion and ultimately shifts the cost to consumers from an ineffective tax to an outcomes-based model that incentivizes biowaste recycling and waste reduction. We are convinced that this is the best, if not the only, way to solve this global problem, and we invite everyone to join us on this road—beginning with catalytic investment into building composting and anaerobic digestion infrastructure. ## **Next Up** We are excited to work with industry leaders on additional roadmaps related to tackling methane emissions in other segments, including oil & gas, agriculture, and enteric emissions, as well as super pollutants in general. --- # Time's up! Who will lead us up Mt. Methane? > To combat climate change, we need two urgent steps: a Binding Methane Agreement and a $3B Advanced Market Commitment. Learn how these solutions cut warming by 0.5ºC. Source: https://www.carrot.eco/en/blog/time-s-up-who-will-lead-us-up-mt-methane Published: 2025-11-18 Updated: 2025-11-18 Author: Carrot Eco ## Two concrete steps we can take today to advance meaningfully in combating climate change The accelerated warming of the planet—and society's inability to slow its advance—require a change in course and leadership on the part of both the public and private sectors. Tackling the super pollutant **methane**, responsible for approximately **40% of global warming**, can buy us more time as we develop the long-term low-carbon infrastructure and carbon removal technologies needed to stop and ultimately reverse climate change. Methane causes **81x more warming than CO₂** but remains in the atmosphere for far less time, making its reduction particularly effective for short-term cooling. Tackling methane now could reduce warming by **0.5ºC by 2050**—by comparison, the entire energy transition is only expected to contribute about **0.1ºC** in the same timeframe. Despite its impact, methane has received **less than 4% of climate finance**, showing how climate science focused on methane still struggles to break into policy-making and capital markets. ### **The world needs two things:** - **A Binding Agreement:** A commitment by state leaders to sign by the end of next year (2026) a definitive, mandatory agreement to cut methane emissions. - **An Advanced Market Commitment (AMC):** The launch of a non-governmental "buyers' club" to invest in projects tackling methane mitigation. Both models have proven precedents we can emulate. Seeing progress in these two areas by the end of this year could mark the most consequential outcomes of this decade—and of **COP30 in Belém, Brazil**. Let's dive in. ### **🏔️ A Binding Agreement on Methane** A binding agreement is a legal instrument between states that establishes enforceable obligations to deliver on a specified goal. Unlike voluntary pledges, binding agreements include **clear timelines, measurable targets, and consequences for non-compliance.** A methane agreement could move quickly because, fortunately, we already have the playbook: **the Montreal Protocol**, signed in **1987**. That treaty phased out **99% of CFCs**, restoring the ozone layer—which is now on track to fully recover by **2050**. Its total climate benefit is estimated to equal **2.5ºC of avoided warming by 2100**. Just imagine where we would be today if we hadn't come together back then. > "We already conquered the summit once when we banned CFCs under the Montreal Protocol; now we need to conquer it again for methane." — **[Durwood Zaelke](https://www.linkedin.com/in/durwood-zaelke-344a121/)**, _President & Founder of the_ **[Institute for Governance & Sustainable Development (IGSD)](https://www.linkedin.com/company/institute-for-governance-&-sustainable-development/)** The journey began with the **Vienna Convention for the Protection of the Ozone Layer (1985)**, a voluntary framework signed by 28 countries. Two years later came the **Montreal Protocol**, a binding agreement that entered into force in 1989 with 46 initial signatories—which ultimately got ratified by every nation on Earth, becoming the only UN treaty with universal participation. Methane needs a similar story. The **Global Methane Pledge**, signed in **2021**, and the targets established at COP28 in **Dubai (2023)** were important voluntary commitments but remain insufficient—only **45% of the oil & gas industry** has signed on, and no enforcement mechanism exists. It is time we move toward a definitive **binding methane agreement signed by the end of 2026**, ideally starting with commitments made by world leaders next month at **COP30 in Belém**. These commitments should begin _independently_—outside the slow machinery of centralized entities (e.g., UNFCCC)—just as the Montreal Protocol did. Momentum is already building. At **Climate Week New York City**, investors representing **€4.75 trillion in assets** urged governments to uphold methane regulations "as adopted." Leaders including **President Emmanuel Macron (France)**, **Prime Minister Mia Mottley (Barbados)**, and **President Simina (Micronesia)** called for _mandatory methane mitigation._ The **Climate Vulnerable Forum**, representing **74 countries and 1.8 billion people**, echoed that call. The **yet-to-be-named protocol** must advance quickly—and it's up to us to ensure that it does. And as it evolves, it should quickly move beyond **oil & gas** to other large sectors that require methane mitigation, including the super-emitting landfills. ### **💰 An Advanced Market Commitment for Methane** If the **binding agreement** represents regulated action backed by political leadership, then an **Advanced Market Commitment (AMC)** represents private sector and philanthropic leadership to catalyze investment. The two should advance in parallel to accelerate impact. An AMC is a coalition of buyers—companies, financial institutions, and philanthropies—making a capital commitment that guarantees early demand for verified outcomes. It signals to innovators, developers, and investors: _if you build the solutions, there will be a buyer on the other end._ The model is borrowed from the biotech industry, where it was used to accelerate vaccine development and ensure that life-saving solutions reached the market years earlier than they otherwise would have. This model has already proven its catalytic power in driving capital towards projects that reduce or remove a different greenhouse gas—carbon. Examples include: - **LEAF Coalition**—Mobilized over **US$1.5 billion** in guaranteed payments for forest conservation. Founding participants include **[Amazon](https://www.linkedin.com/company/amazon-bestt-offers/)**, **[Salesforce](https://www.linkedin.com/company/salesforce/)**, **[Unilever](https://www.linkedin.com/company/unilever/)**, **[Nestlé](https://www.linkedin.com/company/nestle-s-a-/)** and the **governments of the United States, Norway, and the United Kingdom.** - **Frontier Climate**—A coalition led by **[Stripe](https://www.linkedin.com/company/stripetss/)**, **[Google](https://www.linkedin.com/company/google/)**, **[Shopify](https://www.linkedin.com/company/shopify/)**, **[Meta](https://www.linkedin.com/company/meta/)**, and **[McKinsey & Company](https://www.linkedin.com/company/mckinsey/)**, committing over **US$1 billion** to accelerate carbon removal technologies. - **[Symbiosis Coalition](https://www.linkedin.com/company/symbiosiscoalition/)**—Backed by **Google, Microsoft, Meta, Salesforce**, and **McKinsey & Company**, mobilizing capital for large-scale ecosystem restoration. In total, **agreements for carbon removal alone have surpassed US$10 billion in just 3-4 years**, proving that when the challenge is well defined and governance is credible, capital moves—fast. Now we need to direct that same ambition toward methane, and I would suggest even more aggressively! A **Methane AMC** could establish a **US$3 billion buyers' coalition** to guarantee verified methane reductions across the three largest emitting sectors, for example: - **US$1 billion for oil & gas—to** incentivize leak detection, repair, tapping, capture, and destruction. - **US$1 billion for agriculture—to** support innovations in enteric fermentation, rice cultivation, and manure management. - **US$1 billion for biowaste—to** fund composting and anaerobic digestion infrastructure that replaces landfilling altogether. The AMC would help to create price certainty and early demand across diverse methane sources—accelerating proven solutions while supporting innovation and regional inclusivity. The coalition on the corporate side would, ideally, expand well beyond the Big Techs and include oil and gas, the food and beverage industries, financial services, industrials and beyond. **Methane is the emergency brake we can pull right now.** A **binding agreement** can drive top-down action for large methane leakers to improve efficiency, defined as "methane intensity," while an **AMC** can unlock critical funding for low-hanging fruit and breakthrough innovations. **Together, they can get us up Mt. Methane—and fast.** I'd like to acknowledge some of the people who are incredibly dedicated to solving the methane challenge and who are doing very important work: Durwood Zaelke and the team at IGSD, **[Ilissa Ocko](https://www.linkedin.com/in/ilissa-ocko-52430b56/)** and the team at **[Spark Climate Solutions](https://www.linkedin.com/company/spark-climate/)**, **[Tom Frankiewicz](https://www.linkedin.com/in/tom-frankiewicz-b7462013/)** and **[Rose Wang](https://www.linkedin.com/in/rose-wang-342a70b/)** at **[RMI](https://www.linkedin.com/company/rocky-mountain-institute/)**, **[Carolina Urmeneta](https://www.linkedin.com/in/carolina-urmeneta-3640ab25/)** at **[Global Methane Hub](https://www.linkedin.com/company/global-methane-hub/)**, **[Jason Grillo](https://www.linkedin.com/in/jasongrillo/)** (SPECTRA AMC), **[Monica Miller Prabhu](https://www.linkedin.com/in/monicaprabhu/)** at **[Methane Mitigation Industries Council (MMIC)](https://www.linkedin.com/company/methane-mitigation-industries-council/)**, **[Janek Vähk](https://www.linkedin.com/in/janek-v%C3%A4hk-00407332/)** at **[Zero Waste Europe](https://www.linkedin.com/company/zero-waste-europe/)**, **[Dominic Hogg](https://www.linkedin.com/in/dominic-hogg/)**, **[Caio Teves Inácio](https://www.linkedin.com/in/caio-teves-in%C3%A1cio-b9615a64/)**, **[Antonio Storel](https://www.linkedin.com/in/antonio-storel-1b8b54203/)**, **[Fernando Carvalho Oliveira](https://www.linkedin.com/in/fernando-carvalho-oliveira-4a239126/)** among many others. Thank you. --- # COP30: Brazil Can Lead Beyond Its Trees > As Brazil prepares to host COP30 in Belém, the country has a unique opportunity to champion circular economy solutions alongside its forest conservation leadership. Source: https://www.carrot.eco/en/blog/cop30-brazil-can-lead-beyond-its-trees Published: 2025-07-18 Updated: 2025-07-18 Author: Ian McKee As Brazil prepares to host COP30 in Belém this November, the world's attention naturally turns to the Amazon—the planet's largest and most vital rainforest. And with good reason. The Amazon is essential to global climate stability and central to Brazil's identity. Deforestation and burning must be stopped, criminals must be prosecuted, and the bioeconomy must be strengthened. But let's be clear: as critical as the forests are, **we must move beyond trees to solve the climate crisis**. What's required is a **systemic shift that reduces emissions across industries and economies—quickly, sustainably and at scale**. The IPCC warns that we have just **2–3 years to act to avoid sustained warming above 1.5ºC** and **5–11 years to prevent surpassing 2ºC**. Meanwhile, **[McKinsey & Company](https://www.linkedin.com/company/mckinsey/)**'s _Net-Zero Transition_ estimates that fully decarbonizing the global economy will require an additional **$1 to $3 trillion USD per year through 2050**, beyond current investments. Yet, global commitments since COP29 amount to just **$300 billion per year**. **We have no time to waste.** ## **The Circular Economy: An Unrealized Opportunity** One of the most promising—yet underutilized—solutions is the **circular economy**. As the energy transition advances, **circularity presents the next frontier** of climate action. Circularity tackles major emissions sources like **methane at landfills** by incentivizing organic waste treatment. It also reduces emissions from extracting, hauling, and processing raw materials through **reuse, recycling, and improved resource utilization**. So I ask: **what if COP30 was remembered as "Amazon+"—a legacy led by Brazil that also unlocks circularity while prioritizing methane reduction?** According to the **[Circle Economy](https://www.linkedin.com/company/circle-economy/)** Foundation and **[Deloitte](https://www.linkedin.com/company/deloitte/)**, **doubling the global circularity rate could reduce up to 85% of the emissions needed to limit warming to 2ºC**—over **five times the combined impact of other solutions** within the same period. The **[World Business Council for Sustainable Development](https://www.linkedin.com/company/world-business-council-for-sustainable-development/)** suggests its Global Circularity Protocol could address 6-7% of global CO₂ equivalent emissions between 2026 and 2050 (totaling ~67-76 Gt CO₂eq)—emissions reductions that are not currently accounted for in climate models. And still, circularity remains sidelined in climate discussions—often dismissed as too complex and relegated to a subcategory within waste management. That needs to change—right away. Circularity solutions are already viable, powered by: - **Effective policies like Extended Producer Responsibility (EPR)**, especially when combined with market-based solutions like circularity credits. - **Technology to track, verify, and certify circularity.** - **Market mechanisms to direct capital into low-risk, efficient supply chains—without relying solely on government funding.** This is a **blueprint ready for global adoption**. ## **Infrastructure, Incentives—and a Breakthrough from Brazil** Scaling circularity requires more than policies and technology. It needs **physical infrastructure** and **aligned incentives across the value chain**. Brazil is showing innovation here that can serve as an example globally. In some respects, Brazil is more agile than Europe or the US, where centralized waste systems and entrenched solutions like waste-to-energy plants are common practice, as they are slow to dismantle and compete with circular models. Brazil's **decentralized waste ecosystem** and limited public resources have fueled innovation—including the emergence of **circularity credits**, a financial mechanism that rewards contributors across value chains, reshaping the economics of recovery of materials and products. Circularity credits include **Reuse Credits, Recycling Credits, and Carbon Credits** tied to **prevented emissions** from circular practices. They serve to put a price on pollution for waste producers and an incentive for value chain participants to participate in sorting, hauling and recovering materials. When these credits are sold, proceeds are **equitably distributed** among recyclers, processors, haulers, waste pickers, and cooperatives—and critically, **waste generators** (industrials, businesses, and households) who make the key decision to sort materials at the source. This system is **transparent and traceable**, giving companies and investors confidence in the impact they're funding. The solution is already being considered for inclusion in the regulated carbon market (Sistema Brasileiro de Comercio de Emissões), a cap-and-trade model that expects to include 5-20% of carbon credits. The crediting system enables **private capital to fund circular supply chains**, enabling businesses to meet ESG goals and EPR mandates—**securely, audibly, and cost-effectively**. The credits also unlock funding for **micro, small, and medium enterprises**—an area where **green bonds and sustainability-linked bonds often fall short**—expanding access and participation in a manner that can scale circular action everywhere. ## **Brazil's Potential Legacy at COP30** It's a paradox: **Brazil is deeply environmentally conscious yet ranks among the lowest globally in circularity rates**. This presents a **rare and timely opportunity to flip the narrative**. Brazil holds three distinct advantages to lead: - A **progressive National Solid Waste Policy** that encourages decentralization. - A **Central Bank globally recognized for its leadership in tokenization and open finance.** - A vibrant community of **developers building advanced supply chain tracking technologies** **It's not too late.** Brazil has the opportunity to make the **circular economy a defining legacy of COP30**—advancing a climate solution that effectively tackles methane, the super pollutant behind ~30% of global warming, while promoting a model that is **economically viable, socially inclusive, resource-efficient, and private sector-led**. It is time for action. 💡 **Should Brazil use COP30 to lead on the circular economy? I look forward to hearing your thoughts.** --- # 🌿 Takeaways from Climate Week NY 2024 > Key insights from Climate Week NYC 2024, where circular economy solutions and methane reduction emerged as central themes in the carbon market conversation. Source: https://www.carrot.eco/en/blog/takeaways-from-climate-week-ny-2024 Published: 2024-10-12 Updated: 2024-10-12 Author: Ian McKee It's been just two weeks since Climate Week New York (CWNY), and in that short period, two devastating hurricanes—Helene and Milton—have struck the US East Coast. The themes and insights from the event in NYC resonate more deeply as extreme weather continues to unfold across the globe. Here's what I took away from that week. ## 🌿 The markets are underestimating the problem According to two of the world's largest credit rating agencies, climate change is not properly factored into asset prices, and if it were, we would likely see a 40% cut in some industries. Insurance risk is also increasing as providers exit markets. This signals an even greater challenge as to how we are going to address climate costs being transferred from the private sector to the public sector (e.g., FEMA) and the political challenges that will arise. ## **🌿 Climate finance is not working well** According to Goldman Sachs, we are seeing outflows from sustainability funds and stagnation in financing dollars toward emerging markets. Despite all of the talk on the need for climate finance and a focus on the global south, we have not begun to move the needle there. While some important organizations are stepping up (the World Bank increased climate finance by 22% in fiscal '23), in absolute terms, we are a far cry from the $3 trillion additional investment required annually. The market needs new financing instruments, and I will propose some suggestions in a follow-up post. ## 🌿 The circular economy is now a key pillar for decarbonization There will be no serious discussion on climate change from here on out without the subject of the circular economy as part of the solution. It is just too big to ignore. The linear economy is responsible for more than 45% of global emissions and 90% of land and biodiversity loss, and circularity offers some of the quickest and cheapest ways to reduce emissions today. This is where the rubber is going to hit the road—for everyone. And the evidence of this "awakening" for lack of a better term? CWNY's schedule was packed with events on land use, food production, food waste, food circularity, product design, material design and engineering, reuse, recycling, refurbishment, waste management, supply chain traceability, circularity certification, circularity standards, etc. No climate event I've attended before came close to tackling these topics in the breadth, depth and quality I saw at CWNY this year. It is clear that the need for companies to understand the impact of their supply chains and, in particular, scope 3 emissions is the undercurrent driving this shift, which is understandable given that for most companies it represents between 73% and 95% of total emissions. The launch by the [WBCSD – World Business Council for Sustainable Development](https://www.linkedin.com/company/wbcsd/)—of the new Global Circularity Protocol (GCP) was a highlight of the week, and I hope it can deliver on the promise of accelerating circularity while avoiding the growing pains we saw in the voluntary carbon market. The WBCSD claims the GCP alone could reduce an additional 67 to 76 Gt CO2e over the next 25 years. This is the kind of boldness we need! ## **🌿** Methane must be top priority Methane has received only ~3% of climate finance, despite the IPCC identifying methane as a top priority given its global warming potential (84X when compared to CO2 over a 20-year period.) According to [Ilissa Ocko](https://www.linkedin.com/in/ilissa-ocko-52430b56/), Senior Advisor in the [Office of the U.S. Special Presidential Envoy for Climate](https://www.state.gov/bureaus-offices/secretary-of-state/office-of-the-u-s-special-presidential-envoy-for-climate/) at the Department of State, tackling "economically feasible" "fast mitigation" methane emissions could reduce warming by 0.23 ºC by 2100. The term "economically feasible" peaks interest. Perhaps if we can apply market solutions to push the bar higher, we could go further, potentially coming closer to the full 0.91 ºC reduction potential. Landfills and wastewater represent approximately 25% of global methane emissions and get little focus. My guess is that food waste may be taking center stage by next year as a focal point on global methane mitigation. (Full disclosure: Carrot has a product already in the market called [BOLD](https://ianmckee.substack.com/p/carrot-launches-bold-for-public-consultation) (Breakthrough in Organics Landfill Diversion) tackling this very challenge :-) ## **🌿** The carbon market needs to mature quickly While the science and standards communities are searching for consensus on the definition of "high integrity," the market still suffers from serious structural problems. The VCM (Voluntary Carbon Market) is still not actually a market. More than 93% of carbon credits are sold over the counter (i.e., from a project developer directly to a buyer.) There is no liquidity or means of obtaining a real price, and credits are valued for their co-benefits rather than the actual 1-ton equivalent of CO2 avoided or removed. A few bad actors have destroyed confidence, and lack of liquidity has caused some very concerning mispricing of carbon in the market, which has been particularly damaging for important mitigation projects that are delivering results right now. MIT Professor Desirée Plata put it best: > "We are inverted in our prioritization of how we price carbon today. We're willing to pay very high prices for technologies with limited impact, even in the long-range, whereas we are not willing to pay those same high prices for mitigation measures. We absolutely need to be incentivizing mitigation now." Everyone needs to understand that there simply will be no Net Zero without a functioning carbon market, and we really need everyone getting involved right now in helping to build it. Just don't wait. ## **🌿** A light at the end of the tunnel Something meaningful happened during Climate Week NY 2024. The caliber of attendees, particularly the tone of seriousness and determination by corporate leaders, was unlike anything I had experienced before. It signaled to me that we may finally be at an inflection point. Government officials are also openly asking the private sector to move, stating that while more sticks can and will come, it is carrots that are going to change the status quo. I (we at [Carrot](https://www.linkedin.com/company/carrot-network/)), of course, could not agree more! 🌎 LET'S WORK TOGETHER 👶 🌿 THANKS With such a great week, there are many people to thank and congratulate. Here are just a few. [Deloitte](https://www.linkedin.com/company/deloitte/) for hosting terrific panels on circularity and the VCM and for providing me with my headquarters for the week 🙏 [Steven Goldbach](https://www.linkedin.com/in/stevengoldbach/) [David Rakowski](https://www.linkedin.com/in/ACoAAAvmz2IBE5mVX_0ckgbVYHcWZZHZY4Oekx0) [Tal Viskin](https://www.linkedin.com/in/talviskin/) [John Mennel](https://www.linkedin.com/in/john-mennel-23b126/) [Kyle Tanger](https://www.linkedin.com/in/kyle-tanger-4b218015/) [Max Krasilovsky](https://www.linkedin.com/in/max-krasilovsky-81198025/) [Maria Emilia Peres](https://www.linkedin.com/in/maria-emilia-peres/) along with panelists [Ivonne Bojoh](https://www.linkedin.com/in/ivonnebojoh/) [Quentin Drewell](https://www.linkedin.com/in/quentindrewell/) [Kathryn James](https://www.linkedin.com/in/kathryn-james-raleigh/) [Robert Metzke](https://www.linkedin.com/in/robertmetzke/) [Kara Succoso Mangone](https://www.linkedin.com/in/kara-succoso-mangone-6161765a/) [Lawrence Cacciatore](https://www.linkedin.com/in/lawrencecacciatore/) [Kathy Cacciola](https://www.linkedin.com/in/kathy-cacciola-5b92514/) [Tomas Thyblad](https://www.linkedin.com/in/tomas-thyblad-493b3816/) The Methane Reduction Intensive led by [Lauren Singer](https://www.linkedin.com/in/lauren-singer-21336152/) and [Johanna Wolfson](https://www.linkedin.com/in/johannawolfson/) along with speakers not yet mentioned [Ben Ratner](https://www.linkedin.com/in/ben-ratner-96590017/) [Jon Goldstein](https://www.linkedin.com/in/jon-goldstein-41013810/) and [Kelly Levin](https://www.linkedin.com/in/kelly-levin-a47a253a/). Tech + Food Waste: [Angel Veza](https://www.linkedin.com/in/angelicaveza/) at [ReFED](https://www.linkedin.com/company/refed-rethink-food-waste/) and [Christine Moseley](https://www.linkedin.com/in/christinemoseley/) Circular Economy Futures 2050: [Diane Holdorf](https://www.linkedin.com/in/diane-holdorf/) [Filipe Camaño Garcia](https://www.linkedin.com/in/ficgarcia/) [Izabella Monica Teixeira (She/Her)](https://www.linkedin.com/in/izabella-monica-teixeira-she-her-66405812a/) [Dr Jack Barrie](https://www.linkedin.com/in/dr-jack-barrie-6a84b347/) [Adalberto Maluf](https://www.linkedin.com/in/adalberto-maluf/) [Kelsi Doran](https://www.linkedin.com/in/kelsidoran/) [Rognhaug Jacob](https://www.linkedin.com/in/rognhaug-jacob-37b60747/) [Brazil Climate Summit](https://www.linkedin.com/company/brazil-climate-summit/): Thanks to [Marina Cançado](https://www.linkedin.com/in/marina-cancado/) [Luciana Antonini Ribeiro](https://www.linkedin.com/in/luciana-antonini-ribeiro/) and our hosts [Arthur Gazzinelli Rabelo](https://www.linkedin.com/in/rabeloarthur/) [João Pedro Antunes](https://www.linkedin.com/in/joaopedro-antunes/) from [Amazon Web Services (AWS)](https://www.linkedin.com/company/amazon-web-services/) --- # Carrot launches BOLD for public consultation > A tokenized recycling credit designed to address 50% of global waste and unlock the transition to a resource-efficient, low-carbon, and inclusive circular economy. Source: https://www.carrot.eco/en/blog/carrot-launches-bold-for-public-consultation Published: 2024-03-20 Updated: 2024-03-20 Author: Ian McKee We are thrilled to announce the launch of the BOLD (Breakthrough in Organics Landfill Diversion) Recycling Credit, **[and we invite the global tech, finance and environmental communities to review and comment on the methodology](mailto:standards@carrot.eco)** presented below. ## Introduction We are living on a very inefficient planet. More than 82% of the materials we consume end up in landfills, dumps, or incinerators. Yet, more than 90% of those resources could be recycled and/or reused. The current "take > make > waste" linear economy robs our planet of its resources, pollutes our lands and waters, and is very carbon intensive, as we needlessly extract, haul, and process additional raw materials each time we create a new product. The transition to a circular economy that reutilizes resources is not only fundamental to building a sustainable future, but it is also the fastest and cheapest way to create a low-carbon planet. **It is estimated that we can address 85% of the greenhouse gas reduction needed to stay below 2 degrees Celsius (from pre-industrial levels) if we simply double our current circularity rate.** Imagine what the world could look like if recycling rates were taken beyond 90%.The BOLD Recycling Credit has been designed to do just this! **BOLD, the unlocking mechanism** Approximately 50% of global waste is organic (e.g., food waste, green waste, sludge, etc.), and while organic waste is 100% recyclable (through composting or anaerobic digestion), virtually all of it ends up in a landfill or a dump. When organic waste is mixed with other recyclables (e.g., glass, metals, plastics, etc.), those materials also become too expensive and difficult to sort, clean, and recycle in just about every part of the world. The BOLD Recycling Credit is issued for certified organic waste diverted from landfills to professional composting facilities. The purchase of tokenized BOLD Recycling Credits by individuals or companies investing in the transition to a low-carbon, circular future or in offsetting waste footprints (Extended Producer Responsibility programs) distributes rewards to all of the participants along the recycling supply chain, helping those who are doing good work to cover the costs of sorting, hauling, and treating organic waste. Rewards encourage others to participate and invest capital into recycling supply chains where they are working, helping service providers, who often cannot source funding, scale. When organic waste is sorted, recycling rates of other recyclable materials improve by multiple factors as volumes and the recyclability of resources improve. BOLD therefore becomes the tool for creating two independent circular resource streams that can each be scaled: the biological (organics/carbon) cycle and the technical (materials) cycle, capable of taking overall recycling rates to more than 90%. [The BOLD logo pays homage to the Ellen MacArthur Foundation and its wonderful visual representation of the circular economy known as "The Butterfly Diagram".] ## Transparency The BOLD Recycling Credit is a product launched on the Carrot Blockchain Network a digital, Measurement, Reporting, and Verification (dMRV) platform that tracks waste and product supply chains and enables "circularity" certification. Each BOLD credit contains specific data on a uniquely measured and verified amount of waste mass (MassID) that reached a recycling center, as well as the distribution of the rewards to each of the participants stored in the chain of custody of each MassID. We believe this introduces never-before-seen transparency to environmental markets and establishes the foundation upon which a market for recycling credits can be scaled globally. ## Conclusion The Carrot and BOLD teams are **very excited about the potential for BOLD.** We believe it can be a revolutionary tech product for the environment, one that can ultimately set us on the path to ending waste, preserving vital natural resources for future generations to use, and building a low-carbon and inclusive circular economy. We invite you, the reader, and your network to review and help us make BOLD better by sending us your feedback to [standards@carrot.eco](mailto:standards@carrot.eco). We are certain that there is room for improvement, and we would love to hear from you. Let us build this promising Zero Waste future together! For updates on BOLD and the evolution of the Carrot Blockchain network, we invite you to follow this newsletter. [View and download](https://docs.carrot.eco/en/docs/methodologies/bold-recycling) the BOLD methodology. ---