At the heart of Nori is the “Carbon Removal Certificate” or CRC. Each CRC represents one tonne of carbon dioxide removed from the atmosphere, plus or minus 10%. In my last post, I wrote about the different participants in the Nori ecosystem who are involved with originating, verifying, or buying of CRCs. One of them is the Peer Review Committee.
Similar to peer review committees for academic journals, Peer Reviewers are a collection of scientists, policy advisors, and industry experts who independently review, provide input into, and approve the Nori methodologies for quantifying and verifying claims that CO2 has been removed from the atmosphere. Members currently hail from government departments like the US Department of Agriculture, nonprofits like The Nature Conservancy, The Land Institute, and academic institutions like Arizona State University and Duke University.
This is a key point of Nori market decentralization for the future. We want the peers to act independently of Nori founders and employees to achieve maximum acceptance of the Nori methodologies.
Peer Review + Verifiers + Baseline Generators = Independence
It is critical to note that it is not Nori who decides how much carbon dioxide has been removed from the atmosphere. Along with the Peer Review Committee, there are two other important groups of participants in the Nori market whose independence is critical to the integrity of the ecosystem. First, there are the Baseline Generators who must be independent, open source, peer reviewed, and committed to continuous improvement. Nori’s first Baseline Generator is COMET Farm, a USDA-developed cropland, livestock production and agroforestry greenhouse gas estimation tool, which will maintain uniformity across projects. The other group, Verifiers, must be independent fiduciaries and cannot play any other role in the Nori market.
It’s worth noting that unlike the roles they play in traditional carbon markets, Verifiers do not validate project baselines but rather only provide assurance that the inputs provided by the project owner are reasonably accurate and reliable. While Nori respects the data privacy rights of the project owners, and only the project owner’s selected Verifier will see private or confidential data, the processes employed to establish Nori project baselines from project owner-supplied data will always be open source and subject to continuous scrutiny.
This approach should result in multiple benefits. Verification and other transaction costs in the Nori marketplace should be less than they are in traditional CO2 offset markets. At the same time, CO2 removal quantification should be more reliable and transparent. The Peer Review Committee will have ongoing input into how verification might evolve in the Nori market, particularly as technologies evolve to enable more and more automation of the verification process.
Yet another reason why we are starting with soil: the CRC Score
The primary reason we’re starting with carbon removal and storage in agricultural soils is that in addition to reducing climate change risk, these projects also typically improve water quality, agricultural land productivity, and over time increase food producer profitability. These are very important co-benefits of a successful dedicated carbon removal market.
Another reason to launch the Nori market with soil carbon sequestration is because there is a great opportunity, in so doing, to design the market that — while technology neutral — incents market participants to exchange data and innovate in ways that could quickly improve soil health monitoring and reporting methods. More incentive to share data should not only reduce uncertainty associated with estimates of the amount of CO2 being removed from the atmosphere, as carbon cycle models improve. It should also create new demand for more and better tools to monitor and report changes in soil health.
One of the unique elements about the Nori design is the ability to score CRCs. The lower the uncertainty range associated with a CO2 removal claim, the higher the resulting CRCs score. When suppliers sell their CRCs, they are paid in a combination of NORI tokens and cash. The tokens are, in turn, convertible into cash. But tokens paid for CRCs are split into two separate project owner accounts: the “unrestricted” and “restricted” account. Tokens in the “restricted” account still show up as assets on the project owner’s balance sheet, but cannot be exchanged for cash unless/until the score for that CRC improves, which happens when the uncertainty associated with the carbon removal estimate underlying the CRC is reduced. Owners that generate CRCs with high scores are able to convert their NORI tokens into cash faster than those who generate CRCs with lower scores. The score improves when additional data is provided that provides greater certainty for the CRC Claims. Not only does this approach allow for common languages in peer reviewed literature, but it also accelerates new methods for proving statistical significance to move through an iterative process.
So what will the Peer Review Committee actually do?
The first activity is to give input into Nori’s design to improve the pilot methodology for US croplands. Once the methodology and market launches, Peer Reviewers will be involved with the following areas.
- Input on the statistical significance of existing and new techniques to estimate and quantify carbon dioxide removal to improve CRC scores / estimation error.
- Assessment of new techniques to measure and quantify changes in soil organic carbon stocks.
- Appeals for CRC scores from market participants.
- Access and share knowledge with/from broader community.
How will the Peer Review Committee Evolve?
Long term, we expect to have a number of subject specific peer review committees. Methodologies are versioned like code, where changes will be public and open for comment. In the future, we expect to expand the methodology from the United States to other regions as well as incorporate more advanced systems to add carbon to soils — i.e. through holistic grazing, biochar, or other soil amendments. We will also add new methodologies to include blue carbon, forestry, carbon stored in the built environment, bio-energy and direct air capture with carbon sequestration. Nori’s commitment is to be constantly iterative and contribute to the broader open source effort to improve systems to estimate and quantify carbon dioxide removal.
At Nori, we often like to say that “we’re all on the same team”. What that really means is if there are others out there who are in the business of estimating and quantifying carbon dioxide removal from any approach, we want to be dogmatically open source about all the ways of doing that and let our marketplace surface these ideas out in the open. We’ve been growing the initial committee slowly and tactically, we are now growing the initial group and have opened applications to join the Peer Review Committee here. Will you join us?