Wilder Carbon and Kita announce world first “Buffer Insurance” policy for Wilder Carbon’s buffer pool

4 min read
  • This insurance policy will protect the integrity of Wilder Carbon’s buffer pool against depletion events, for example in the instance of unexpected levels of reversal in the underlying carbon projects.
  • The provision of buffer insurance aims to increase confidence and integrity for Wilder Carbon’s stakeholders by providing a credit-worthy safeguard against loss and complement to Wilder Carbon’s existing strong risk mitigation tools.
  • In the instance of losses from carbon projects in the Wilder Carbon standard that cause the buffer to deplete, the insurance policy will function as a means to ensure buyers of carbon credits remain whole.
  • This announcement signifies the evolution of carbon buffer pools: the integration of insurance – a risk management mechanism common to most high-value markets – enables increased resilience against reversal and default and acts as a signal of confidence for market participants.

UK-based carbon standard, Wilder Carbon, and specialist carbon insurance company, Kita, are delighted to announce what is believed to be the first ever insurance policy for a buffer pool, with capacity provided by specialist (re)insurer, Chaucer.  

The buffer is a central pool of carbon credits to which each project developer is required to individually contribute, and these credits are not allowed to be sold. The Wilder Carbon buffer is intended to ensure integrity of the carbon scheme regarding permanence and performance and designed to protect the buyers of carbon credits. 

Insurance protection for the Wilder Carbon buffer will further enhance trust and integrity by adding an additional level of protection against underperformance and the risk of default. In the instance of losses from carbon projects in the Wilder Carbon standard that cause the buffer to deplete, the insurance policy will function as a means to ensure buyers of carbon credits remain whole. The increased trust evidenced by the backing of a regulated insurance entity protecting this risk will bolster carbon market confidence and help drive meaningful streams of finance towards high-quality carbon projects.

Wilder Carbon is committed to restoring nature on a massive scale, by enabling high quality conservation projects in the UK with multiple benefits: sequestering carbon, biodiversity gains, benefiting people and communities. Wilder Carbon works with wilding professionals who have a track record of safeguarding land in the UK for the long-term. The Wilder Carbon Standard seeks to achieve the greatest possible degree of additionality and permanence and the lowest possible risk of carbon leakage.

Kita is the carbon insurance specialist with a core mission to accelerate investment in high-quality carbon projects in line with the urgency of the climate crisis. With insurance products and services that reduce transaction risk and safeguard performance, Kita removes barriers to action by giving market participants the stamp of confidence to act now.

Chaucer are the capacity provider for Wilder Carbon’s buffer insurance and have worked closely with Kita to design a solution supporting Wilder Carbon’s goal to provide projects with integrity and resilience.

Wilder Carbon, Kita and Chaucer have a shared vision around providing transparency, quality and protection to buyers, sellers and intermediaries in the VCM. The organisations see buffer insurance as an essential mechanism to instill confidence and drive investment towards high-integrity nature-based solutions.

“By working in partnership with Carbon Standards, carbon insurance can increase resilience and build trust in the integrity and functionality of buffer pools. We are thrilled to be working with Wilder Carbon on a pioneering insurance offer for their high-quality nature-based carbon credit buffer, and hope this policy helps lead the way for the wider incorporation of insurance into buffers across the Voluntary Carbon Market.”

Natalia Dorfman, CEO and co-founder, Kita

"Wilder Carbon is proud to be the first Carbon Standard to incorporate “Buffer Insurance” as a safeguard against loss for Wilder Carbon’s Buffer.  Partnering with Kita, for innovative insurance solutions will complement Wilder Carbon’s already robust risk mitigation, trusted delivery partners and commercial approach to protect carbon credit investments on our validated projects. This will reduce barriers to market entry and secure further investment into the restoration of nature.."

Sarah Brownlie , Program Director, Wilder Carbon

"Chaucer are delighted to be supporting Kita in their partnership with Wilder Carbon, backing carbon projects which seek to gain resilience and ensuring buyers of nature-based carbon credits are protected.”

Tom Graham, Head of Partnership, Chaucer

For more information on carbon buffer pools and the integration of insurance with these mechanisms, please take a look at Kita’s in-depth report, available here.