Well this is a tough one, but I will try an answer. First, from the "Toco Owner's Manual":
Toco Owners Manual
3.1 “a safe, flexible, and stable international unit of trade that enables and supports credible atmospheric carbon reduction.”
3.2 - “The Foundation issues and regulates the supply of a global digital unit (toco) to maintain the MV (mitigation value) of each unit in supply as one tCO2e. It performs this function by holding in its custody a portfolio of high quality, verified carbon mitigation assets (CMAs) and by minting tocos that represent the mitigation value achievable”
4.1 - “The portfolio objective is to deliver stable, long term, liquid mitigation value (MV) for toco owners.”
2.4 - “Compliance value (CV) – In compliance markets, compliance value is defined as the value ascribed by the regulator to a unit of a CMA, at the time it is surrendered for compliance purposes under that regulators scheme. In the voluntary market, compliance value is defined as the value ascribed by an individual or organisation to a unit of a CMA, at the time it is retired for the purpose of claiming an emissions offset.”
5.1 - Each toco represents one tonne of mitigation value (MV) in the Foundation portfolio.
5.2 - Toco owners are individuals and organisations that:
5.2.1 - Recognise removals and compensations as important to achieve long-term sustainability goals.
5.2.22 - Accept some price volatility to own long term durable and reliable mitigation outcomes that are net zero aligned.
5.2.32 - Seek diversification, liquidity, and simplicity with low fees to achieve their mitigation goals.
5.3 - Toco owners can typically use toco as a combination of the following:
5.4.11 - Medium of exchange - Individuals and organisations taking climate action use toco as a carbon-based currency for their daily transactions to drive demand for mitigation outcomes.
5.4.22 - Store of value – Individuals and organisations use toco to invest in the mitigation value and/or financial value of CMAs to achieve their sustainability and/or financial goals.
5.4.33 -- Unit of account – Individuals and organisations use toco to track and measure the number of compensations they can realise to achieve their sustainability goals.
5.3 - Toco owners may opt to retire 1 toco to permanently claim its mitigation value as means to compensate for emissions.
5.4 - View the risk disclosure on toco ownership here. (link not available)
5.8 - In executing on its policy objectives, the portfolio composition is managed to achieve:
6.9.11 - Stable long term MV.
6.9.22 - Diversification of principal MV risks.
6.9.33 - A Portfolio composition with net zero alignment.
6.5 - The Foundation will not invest in CMAs that do not aim to ensure permanence.
7.10 - Non-permanence risk is the risk that mitigation outcomes reverse.
15.3 - Net zero aligned asset allocation. The Foundation aims to align the asset allocation of its portfolio to net zero aligned best principles.
CMA - Any instrument generated as part of a scheme, project or program, the purpose of which is mitigation of carbon emissions, usually measured in base units of tonnes of carbon dioxide equivalent greenhouse gases (tCO2e). CMAs can take the form of an ‘allowance’ or a ‘credit/offset’.
COMPENSATION - Compensation involves the calculation of one’s carbon footprint and purchasing an equivalent amount of carbon credits to “offset” those emissions.
COMPLIANCE VALUE (CV) - In compliance markets, compliance value is defined as the value ascribed by the regulator to a unit of a CMA, at the time it is surrendered for compliance purposes under that regulator's scheme. In the voluntary market, compliance value is defined as the value ascribed by an individual or organisation to a unit of a CMA, at the time it is retired for the purpose of claiming an emissions offset.
MITIGATION VALUE (MV) - The expected mitigation impact measured in tonne CO2e after discounting for all the risks associated with any unit of reduction claimed (e.g. credit issued, or allowance to emit a tonne of CO2e).
RETIRE TOCO - Retirement of toco refers to the elective action, undertaken by a toco owner, to permanently remove a toco from the monetary system. When tocos are retired, the Carbon Reserve retires an equivalent number of CMAs (at mitigation value) from its portfolio and provides evidence of such retirement to toco owners.
-------------------
The “The Carbon Reserve Mitigation Value Assessment Framework | July 2024” is an expanded version of the “Owners Manual”
Basically what you have here is a system allowing tradable credits among credits holders, who have purchased “tocos” in a quantity necessary to offset their carbon footprint, but wish to use them as tradable tokens before retiring them as their carbon offset. There is a 1% fee for each buy/sell trade and use and a 5% fee for retiring them. So you pay for an offset, but get charged another 5% for actually using it.
Nowhere in this scheme does it show any value attributable to the environment or the land associated with the supposed carbon absorption, except for the ruse of noting that a carbon-trading mechanism is in your hands with every use of the toco.
REDD-Monitor writes: "He argues that “there are many who hold opposing views to yours, and . . . still believe that the carbon markets perform a critical task of transferring capital into carbon mitigating activities.”"
And just exactly how does any “capital” transfer into mitigation activities? That is difficult to answer because in actuality for any supposed mitigation to occur, you need to be talking about CV (compliance value) when all the toco documents speak in the language of MV (mitigation value) which are not equivalent. Not once in any of these documents is it demonstrated how a particular CAM achieves its presumed goal of mitigation, especially when the CMAs are bundled into investment-grade tranches like CLOs (collateralized loan obligations).
REDD-Monitor is correct to bring up “neoliberalism” but doesn’t carry that ball - all these carbon financialization schemes are neoliberal notions of putting a price on all of Nature since, according to their doctrine, The Market is a better regulator of environmental outcomes than science-based government regulation.
Paul Rowett asks, “how do you see the world functioning under the current economic system without using fossil fuels? What is your ideal plan?” As I have said before, the present level of excess population and consumption has been allowed and supported by use of fossil fuels - all must be wound down in tandem. Lowering population is a third-rail issue without an immediate cure. We had during the pandemic a demonstration of how consumption can be wound down, mainly by reducing the various schemes employed in relieving human boredom, and the ensuing retreat into a “quieter life” was reflected in reduce seismic noise as a result of less human trampling of the planet. Instead of opting for ever-increasing economic “growth” (an exponential increase), we could choose a simpler life as illustrated by Charles Hugh Smith https://charleshughsmith.substack.com/p/what-makes-us-happier-unhappier
We could drastically reduce CO2 emissions and not really be any unhappier.
REDD-Monitor writes:
- carbon offsets do not permanently remove carbon dioxide from the atmosphere;
- carbon offsets are not gold; and
- carbon offsets are not climate action.
Then Mr. Rowett claims these are “opinions,” not facts. Well then, he can try to prove the counter to each of these facts.
It is all just another offsets system glossied up with a tokenized trading mechanism that allows polluters to “carry on” and for the most part, mitigate their shame rather than their emissions.
How is it so difficult to understand that the capitalist market economy demonstrably cannot and does not reduce emissions? It is simply not possible to profit from overshoot.
Well this is a tough one, but I will try an answer. First, from the "Toco Owner's Manual":
Toco Owners Manual
3.1 “a safe, flexible, and stable international unit of trade that enables and supports credible atmospheric carbon reduction.”
3.2 - “The Foundation issues and regulates the supply of a global digital unit (toco) to maintain the MV (mitigation value) of each unit in supply as one tCO2e. It performs this function by holding in its custody a portfolio of high quality, verified carbon mitigation assets (CMAs) and by minting tocos that represent the mitigation value achievable”
4.1 - “The portfolio objective is to deliver stable, long term, liquid mitigation value (MV) for toco owners.”
2.4 - “Compliance value (CV) – In compliance markets, compliance value is defined as the value ascribed by the regulator to a unit of a CMA, at the time it is surrendered for compliance purposes under that regulators scheme. In the voluntary market, compliance value is defined as the value ascribed by an individual or organisation to a unit of a CMA, at the time it is retired for the purpose of claiming an emissions offset.”
5.1 - Each toco represents one tonne of mitigation value (MV) in the Foundation portfolio.
5.2 - Toco owners are individuals and organisations that:
5.2.1 - Recognise removals and compensations as important to achieve long-term sustainability goals.
5.2.22 - Accept some price volatility to own long term durable and reliable mitigation outcomes that are net zero aligned.
5.2.32 - Seek diversification, liquidity, and simplicity with low fees to achieve their mitigation goals.
5.3 - Toco owners can typically use toco as a combination of the following:
5.4.11 - Medium of exchange - Individuals and organisations taking climate action use toco as a carbon-based currency for their daily transactions to drive demand for mitigation outcomes.
5.4.22 - Store of value – Individuals and organisations use toco to invest in the mitigation value and/or financial value of CMAs to achieve their sustainability and/or financial goals.
5.4.33 -- Unit of account – Individuals and organisations use toco to track and measure the number of compensations they can realise to achieve their sustainability goals.
5.3 - Toco owners may opt to retire 1 toco to permanently claim its mitigation value as means to compensate for emissions.
5.4 - View the risk disclosure on toco ownership here. (link not available)
5.8 - In executing on its policy objectives, the portfolio composition is managed to achieve:
6.9.11 - Stable long term MV.
6.9.22 - Diversification of principal MV risks.
6.9.33 - A Portfolio composition with net zero alignment.
6.5 - The Foundation will not invest in CMAs that do not aim to ensure permanence.
7.10 - Non-permanence risk is the risk that mitigation outcomes reverse.
15.3 - Net zero aligned asset allocation. The Foundation aims to align the asset allocation of its portfolio to net zero aligned best principles.
CMA - Any instrument generated as part of a scheme, project or program, the purpose of which is mitigation of carbon emissions, usually measured in base units of tonnes of carbon dioxide equivalent greenhouse gases (tCO2e). CMAs can take the form of an ‘allowance’ or a ‘credit/offset’.
COMPENSATION - Compensation involves the calculation of one’s carbon footprint and purchasing an equivalent amount of carbon credits to “offset” those emissions.
COMPLIANCE VALUE (CV) - In compliance markets, compliance value is defined as the value ascribed by the regulator to a unit of a CMA, at the time it is surrendered for compliance purposes under that regulator's scheme. In the voluntary market, compliance value is defined as the value ascribed by an individual or organisation to a unit of a CMA, at the time it is retired for the purpose of claiming an emissions offset.
MITIGATION VALUE (MV) - The expected mitigation impact measured in tonne CO2e after discounting for all the risks associated with any unit of reduction claimed (e.g. credit issued, or allowance to emit a tonne of CO2e).
RETIRE TOCO - Retirement of toco refers to the elective action, undertaken by a toco owner, to permanently remove a toco from the monetary system. When tocos are retired, the Carbon Reserve retires an equivalent number of CMAs (at mitigation value) from its portfolio and provides evidence of such retirement to toco owners.
-------------------
The “The Carbon Reserve Mitigation Value Assessment Framework | July 2024” is an expanded version of the “Owners Manual”
Basically what you have here is a system allowing tradable credits among credits holders, who have purchased “tocos” in a quantity necessary to offset their carbon footprint, but wish to use them as tradable tokens before retiring them as their carbon offset. There is a 1% fee for each buy/sell trade and use and a 5% fee for retiring them. So you pay for an offset, but get charged another 5% for actually using it.
Nowhere in this scheme does it show any value attributable to the environment or the land associated with the supposed carbon absorption, except for the ruse of noting that a carbon-trading mechanism is in your hands with every use of the toco.
REDD-Monitor writes: "He argues that “there are many who hold opposing views to yours, and . . . still believe that the carbon markets perform a critical task of transferring capital into carbon mitigating activities.”"
And just exactly how does any “capital” transfer into mitigation activities? That is difficult to answer because in actuality for any supposed mitigation to occur, you need to be talking about CV (compliance value) when all the toco documents speak in the language of MV (mitigation value) which are not equivalent. Not once in any of these documents is it demonstrated how a particular CAM achieves its presumed goal of mitigation, especially when the CMAs are bundled into investment-grade tranches like CLOs (collateralized loan obligations).
REDD-Monitor is correct to bring up “neoliberalism” but doesn’t carry that ball - all these carbon financialization schemes are neoliberal notions of putting a price on all of Nature since, according to their doctrine, The Market is a better regulator of environmental outcomes than science-based government regulation.
Paul Rowett asks, “how do you see the world functioning under the current economic system without using fossil fuels? What is your ideal plan?” As I have said before, the present level of excess population and consumption has been allowed and supported by use of fossil fuels - all must be wound down in tandem. Lowering population is a third-rail issue without an immediate cure. We had during the pandemic a demonstration of how consumption can be wound down, mainly by reducing the various schemes employed in relieving human boredom, and the ensuing retreat into a “quieter life” was reflected in reduce seismic noise as a result of less human trampling of the planet. Instead of opting for ever-increasing economic “growth” (an exponential increase), we could choose a simpler life as illustrated by Charles Hugh Smith https://charleshughsmith.substack.com/p/what-makes-us-happier-unhappier
We could drastically reduce CO2 emissions and not really be any unhappier.
REDD-Monitor writes:
- carbon offsets do not permanently remove carbon dioxide from the atmosphere;
- carbon offsets are not gold; and
- carbon offsets are not climate action.
Then Mr. Rowett claims these are “opinions,” not facts. Well then, he can try to prove the counter to each of these facts.
It is all just another offsets system glossied up with a tokenized trading mechanism that allows polluters to “carry on” and for the most part, mitigate their shame rather than their emissions.
How is it so difficult to understand that the capitalist market economy demonstrably cannot and does not reduce emissions? It is simply not possible to profit from overshoot.