Untapped Potential: How Carbon Finance Accelerates Overlooked Climate Solutions

Carbon finance isn't just about funding the flashy, large-scale projects that dominate headlines. While those are essential, a significant portion of the emissions reduction potential lies in less "glamorous" areas, often referred to as "overlooked" or "underappreciated" climate solutions — or even "ugly ducklings." These are the unsung heroes of climate action, and carbon finance is uniquely positioned to unlock their potential.

Why these solutions are overlooked:

• Perceived Low Impact (incorrectly): Individually, some of these solutions might seem small, but collectively, their impact is immense. For example, preventing a single refrigerant leak might seem minor, but given how many thousands of times more potent HFCs are than CO2, the aggregate effect across countless refrigeration units is staggering.

• Operational Focus: Many "overlooked" solutions are deeply embedded in day-to-day operations rather than being standalone technological marvels. This includes improved waste management, energy efficiency upgrades in existing buildings, or sustainable agricultural practices.

• Lack of Traditional Funding Mechanisms: These solutions often struggle to attract conventional financing because they might involve smaller project sizes, dispersed implementation, or a lack of immediate, large-scale revenue streams beyond the avoided environmental damage.

  
  

How Carbon Finance Elevates "Overlooked" Solutions:

Carbon finance provides the vital economic incentive and measurable framework that makes these solutions viable and scalable.

1. Quantifying the Unseen: For practices like preventing refrigerant leaks or diverting food waste, the environmental benefit isn't immediately obvious in a traditional balance sheet. Carbon finance methodologies quantify these avoided emissions into tangible, tradable carbon credits. This translates the environmental good into a financial asset.

   
   

   • Example: Refrigerant Management: Hydrofluorocarbons (HFCs), commonly used in refrigeration and air conditioning, are potent greenhouse gases. A single kilogram of some HFCs can have the same warming potential as thousands of kilograms of CO2. Projects that prevent HFC leaks, recover and destroy old refrigerants, or transition to climate-friendlier alternatives generate significant, verifiable emissions reductions. Carbon finance creates a market for these reductions, enabling businesses to invest in these critical upgrades that might otherwise be deemed too costly without direct financial returns from carbon credits. Therm, for instance, is a leader in this specific area, demonstrating how carbon credits can incentivize grocers to adopt climate-friendly refrigeration systems by lowering the capital costs.

     
     

2. Unlocking New Revenue Streams: By generating carbon credits, projects in these overlooked sectors gain a new revenue stream. This additional income can bridge funding gaps, improve project economics, and attract the necessary private capital to scale up implementation. This is particularly crucial for solutions that might have high upfront costs but offer significant long-term environmental benefits.

   
   

3. Driving Adoption and Behavioral Change: When a financial incentive is tied to emissions reduction, it encourages businesses and individuals to adopt practices they might otherwise ignore. For instance, a food waste composting facility might expand its operations more rapidly if it can generate and sell carbon credits based on the methane emissions avoided from landfilled waste. This mechanism helps accelerate the diffusion of best practices across industries.

   
   

4. Supporting Localized Impact: Many overlooked solutions are highly localized, such as community grocery stores switching to climate-friendly refrigerants. Carbon finance can be structured to support these smaller, dispersed projects, aggregating their collective impact into meaningful emissions reductions that can be monetized.

   
   

At Therm, our focus on solutions like refrigerant management and food waste mitigation exemplifies this approach. We use proven, high-impact strategies for cutting emissions, especially within the food system. By rigorously developing projects that meet leading carbon crediting standards, we ensure that these efforts are not only environmentally effective but also financially viable. This allows us to channel carbon finance to where it can have a profound and often immediate climate benefit, turning overlooked opportunities into powerful climate action. It's a testament to how market-based mechanisms can identify, fund, and accelerate the adoption of all solutions necessary to address the climate crisis, not just the most visible ones.