VERRA: “We need to scale carbon projects to make them work faster and involve the communities”

Exclusive interview with Heather McEwan, Regional Representative: Africa and the Middle East, Verra. Heather is a speaker at the upcoming Carbon Markets Africa Summit in Johannesburg, taking place 21–23 October.

Q: Thank you for joining us today. Let’s start with some background on you and your role at Verra.

Good morning, thanks very much for allowing me to participate. My name is Heather from Verra. Sounds like a joke, but it’s true. So I’ve been at Verra for 4.5 going on 5 years now, and what I really like is the impact that we have. I’ve changed roles through Verra over the last 5 years. I started off as the manager for South Africa, that was just after the 2019 carbon tax, then moved into Africa, and then eventually the Middle East. I’m happy in that role because I was born in Zimbabwe, so they call me the Gwelo girl. Gwelo was the little town that I was born in. And the Middle East, I lived in Kuwait for 10 years, so I have some understanding of the Middle East. My current role is assisting project developers and, most recently, governments to understand and utilise the Verra programmes and standards.

The Voluntary Carbon Standard is our flagship standard, and we also have a plastics and an SD VISta standard. On the back of the carbon standard where you get a credit for removing a ton of carbon out of the environment, you can also get a plastic credit, because it’s a very similar process. We have a methodology, and you can get plastics credits. Interestingly enough, we were in Senegal 3 weeks ago with Mandy Rambharos, our CEO who you might know, she’s South African. She actually purchased one of those little cell phone desk stands that you can put your phone on. The gentleman that made that particular recycled phone stand actually appeared in the impact video that Verra made on that particular project. So we kind of call that “total recycling” and we did have a smile about it.

The SD VISta programme allows us to measure projects against the 17 United Nations Sustainability Goals. And the United Nations Sustainability Goals were made for countries. Why is it important for projects? It’s important because someone from the Global North who sits in the ESG department and he’s (or she) is having to buy carbon credits, but he also is tasked with, for example, water, so you can go and have a look at our carbon credits and see, for example, which credits contribute to water or as another example for women’s health. Therefore, the SD VISta programme is also key for us.

So, yes, I’m very happy at Verra and in my role as it’s changed and evolved over time.

Q: Verra is a widely used voluntary carbon market standard. There have been challenges in this sector regarding transparency and fairness. Would you say we have turned a corner?

Yes, there have been challenges. And based on these challenges of transparency and fairness, I would say absolutely we’ve turned the corner. And I think we’ve turned the corner forever. So before I explain this, and my reasoning for saying that with such strength and belief behind it, we need to note there are always good actors and bad actors in a market. Unfortunately, the carbon market is exactly the same- with good and bad actors. What we need to do is manage the negative perceptions that are out there. And unfortunately, that’s like trying to nail jelly to a ceiling. So we need to start talking about positive narratives and the positive impact that we do have.

Going back to the question, I think that there are a couple of things that have been done regarding transparency and fairness, both internally within Verra and externally in the industry and market itself. So internally within Verra, we have done a number of things. We have digitised the process. So if you submit a document, for example, initially, we’d have to get all the documents and we do an accuracy and a review check and that would take 10 days.

Now we have a project hub. You submit your documents automatically. It does the calculations for you because it has a carbon calculator inside of it. So therefore, we can assess and process those projects very quickly so that 10 days is lost in terms of the cycle because it’s now an automatic process. So in terms of digitisation, we are processing documents much quicker through the project hub. And Justin Wheler, who’s our director of the programme management team, tells me that 95% of our SLAs are being met.

SLAs are the service level agreements. The service level agreement says for example that we will take 10 days to do an accuracy review, 20 days to do a registration review, a validation or looking at a monitoring report. The 5% that we’re not achieving are the more complicated kind of projects that we have. So that’s very positive, and there’s a risk-based approach that they are using in that project cycle.

I think the most exciting thing for me is that Verra has teamed up with the Hedera Foundation. This was announced in Senegal where they had digitised not only the submission of projects and the methodologies, but also the collection of data. In the field, what we will do is we will accelerate the transparency, auditability and integrity of the methodologies. So in Senegal, we literally went into a mangrove where there was a signpost that had a QR code on it, and the community could scan the QR code on their phone.

What would happen is that they would then submit the data; and the data could be that they’ve done for example a salinity test in their 25 by 25 meter quadrant. They could then submit the height of those plants, the little mangrove plants that have grown there, and how many had survived for mortality rates. And that information can come live back into our project hub, which means that in theory, issuances could happen quicker. So a lot of work has been done on our side to improve transparency, to approve accountability, fairness and to involve communities.

That said, I also said that the industry is changing, and the industry itself has, for example, bodies like the ICVCM. They have developed core carbon principles and all the standards have to apply to them to be able to apply their core carbon principles to add integrity to our credits. We also have the VCMI, which is looking at the buyer side and assisting buyers in looking at projects and what they can do and announce with their credits. Then we have the ratings agencies as well. So the ratings agencies, for example, rate a project A, AA, B, BB, C, which is something the financial world understands. This allows buyers to be able to know what the integrity is and to kind of look at the transparency and fairness involved in that project. So, I think a lot of work has been done. In summary, we’ve turned the corner, and we’re looking for positive buy signals now on the demand side.

Q: Please tell us more about the Verra verifications and the different methodologies used?

Talking about various verifications and the different methodologies, very simply, I think if people are familiar with ISO standards, so in ISO standards you had ISO 9000, which was a quality standard, you had ISO 14000, which is the environmental standards, and then more recently the 18000 and 50000, which are the energy standards. Verra is no different in that we have created a standard document, it’s short, like the ISO standards are that you have to pay thousands of rands for. And it basically is a guidance document.

So it says in there, for example, thou shalt have a management system in place. Thou shalt allocate a management representative. You shall do regular audits. The Verra standard is no different to that. It is based on ISO principles. And the standard document will explain to you and set out the principles that you should follow for your particular carbon project that you are setting up.

How does it link to methodologies? Underneath the standards document are methodologies, and the methodologies are the recipe almost for how you do those greenhouse gas calculations. And I’ll give you a very simple example. We all as housewives and people in our homes send rubbish out on a Monday morning, whatever day your rubbish is collected, and it goes to a municipal tip. The municipal tip basically generates methane and methane goes into the atmosphere. Methane is not a great greenhouse gas for us to be accounting for. So how do you deal with that? Municipalities would, for example, put a lid over that tip or that waste site. But remember, that’s like a pressure cooker; so if you’ve got the methane developing underneath and that exploded, there would obviously be a problem.

So you may have to have a pipe which allows some of the methane to flow to a collection point and you maybe would flare some of that methane. Then you would have a burning or flare rate. At the same time, you might have pipes underneath that particular cap and they would be sucking the methane to the side of the plant. So there’s a flow rate through those pipes. At the plant, you might be using Eskom power, which is not great in terms of its greenhouse gas emissions, so there are kilowatt hours used where you are converting that methane into another form of energy.

Assume that energy was then distributed via trucks from that site to another source, you’ve got kilometers driven. So the methodology is basically the recipe that we use to calculate the greenhouse gas emissions. And in this case, it consists of a flare rate, a flow rate, kilometers driven and kilowatt hours. And that recipe is no secret, anybody could do that. But the inputs and the numbers that you use vary from Durban to Cape Town to Johannesburg or even to Gqeberha where I live. So that’s what we mean by the methodologies. Verra has a number of methodologies. We have maybe 50 methodologies and a higher number of methodologies that are coming into Verra to be assessed and approved, which I think is a healthy sign for the market.

So that’s really how the verification programme works in terms of the standard and the methodologies. A project would be based on the methodology, submit their documentation, and then we would assess that using a third party auditor so that we know that actually what they’re proposing on the ground actually happens on the ground and it is validated. In other words, we check the predictions going forward into the future, and then we would go to site to go and check that that actually happened called verification and then issue the credits accordingly on our registry. So it’s a complex process. It can take 2–3 years. It can take six months, depending on what the project is. But I’m happy to help anyone if they have any questions on that.

Q: You are working in a system that is constantly evolving and changing. There must be pros and cons to that.

Yes, working in a constantly evolving and changing system. All I say is, thank goodness we’re constantly evolving, and we’re still not selling horse whips. Remember that old business school model teachings where Henry Ford was selling the horseless carriage and people selling horse whips were kind of going to go out of business? So I think it’s a good thing that there’s change. That said, I do remember at school reading a book, I can even remember it was orange, by Alvin Toffler called Change. In that book, what he said was that change is normal. It’s the rate of change that we need to deal with. So even in the last 2 weeks, I think we have seen that. A friend of mine was in London, and he was thinking about whether he could fly back to the Middle East. But overnight, there could be a ceasefire or not. Flights were cancelled. Flights were open again. So our world changes really, really rapidly these days.

In terms of a constantly evolving and changing system, I use the analogy of a system of cogs. I am a mom, but when my twin girls were younger, we had an early learning toy that consisted of eight cogs, and each is fridge magnet and was stuck on the fridge that the kids could play with it. But the main cog had a battery in it and it drove the system. So it would go around in an anti-clockwise direction. The cog you connected to that would then go in a clockwise direction. And it made a whole lot of different patterns for want of a better word.

So in a changing carbon world, using that analogy, we have all the cogs that we need this time around. We have the Paris Agreement. We have 196 countries that have agreed. We have the Article 6 playbook, which was issued in Baku. We have African countries issuing policies. We have affluent governments who understand the previous mechanism, which was the Clean Development Mechanism, the CDM, and how that worked and how you could get carbon credits. We have international standards, ratings agencies and insurance companies involved. So what I’m saying is, this time around, yes, there’s change. Change is normal. The rate of change is quick. But this time around, I do think we have all the cogs and we just need to put those cogs together so that we can connect them and make this market work.

Q: What are your favourite success stories that you can share of carbon credit swapping and selling?

My favourite stories; I love this. I think in terms of swapping and selling, I don’t have any stories. But I think in terms of impact, I’ve got a couple of stories. There was a project developer once who told me that she asked a lady who was involved in a project similar to cook stoves, it was an energy efficiency cooking device, what made her happy about that particular project? On a cook stove project, it’s not unusual to hear that the lady is happy with the cook stove, because she’s got a job, she can afford school fees, because she’s not out collecting wood so frequently, because she has money coming in, she can buy school shoes for her children who walk barefoot to school in the winter. But this particular story, my heart still kind of softens when I hear it, is that this lady liked this particular project, because she said I can now cook with dignity. In other words, she could cook standing up and not bending over a fire.

So there are some examples where the benefits of these projects are hard to measure, but we know that the benefits that accrue to the ground. I told this story to our staff in 2021 in Washington, and I had all the ladies on the team in tears. And that particular project also has an app so they can geolocate every single device that’s distributed into the field. And this is actually a South African project, which is awesome. The nice thing about using that app is that they use it to share recipes and they’ll also use it for general health safety advice and tips. I think there are a lot of additional benefits to these projects that accrue to the ground. And that’s what kind of keeps me working in this field, seeing what people can actually achieve.

The second story I have is about solar water pumps. There’s a project in Kenya that I visited a couple of weeks ago. Basically, there are a couple of pumps that people can buy. You could put the pump down into the river or into a borehole and draw water out of it. You get a certain pump, depending on how much money you’re prepared to spend, certain lengths of pipe, depending on the head that you need to draw against.

And this particular gentleman got involved in the project and he’s a very clever MBA guy. So he’s involved in finding the funding and doing the carbon side of it. He said to me, what hooked him on the project was that he went to go and see a gentleman on site. And this gentleman said that as a result of having the pump, he now has six growing seasons in a year as opposed to one, which is guaranteed vs waiting for rain, allowing perhaps one and a half a growing season’s because the rain wasn’t so great. And as a result of having six growing seasons, he now has enough income to put his son through university. He said to the gentleman: “My son will become an educated man and I wasn’t.” So those are the kind of impact stories from these carbon credit projects that need to be told, that are told through our impact stories and that’s what makes me go to my desk every day.

Q: How is Africa doing in terms of making the most of its natural resources and obtaining VCM finance for development?

As soon as I see natural resources, I convert that to carbon projects. I see lots of opportunities being taken up in the last few years and in my travels. Obviously, I alluded to the solar water project. There are a lot of cook stove projects. I think in Kenya, what I’ve seen is a direct air capture project, which you might think is unusual because it’s these large containers that they put down that literally suck carbon out of the atmosphere. And you sort of assume that that’s for the Global North. But it requires a lot of energy to be able to suck that atmosphere in. And in Kenya, we’re sitting on the Rift Valley where we have geothermal energy, which is cheap. So I’ve seen certain companies start to put down their containers and negotiate with communities to start to do this. And this is just making use of natural resources in Africa, which I think is fantastic.

Here in South Africa, we’ve got agricultural projects. At a dairy just outside Gqeberha, the dairy farmers had data which they were using in their track and trace system, and they were able to use that to claim carbon credits, and they’re now expanding that into different sectors like the wheat and the maize sectors. There’s also grassland management, and then of course in South Africa we have a few spekboom projects coming along and then biochar has just popped its head up in the last couple of months.

I think the other opportunities in Africa are that they are all distributed, so it’s not going to be one large industrial project where we’re saving a gazillion, or million tons of carbon. It might be that it’s a whole lot of little projects. So for example, what I see in my travels in East Africa and West Africa is e-bikes, and these have started to penetrate in Rwanda, Uganda and Kenya. In Kenya, they call them boda-bodas. And so what happens is a person drives a little e-bike. They are expensive initially, but the carbon finance assists. Instead of putting fuel in it, which is obviously not good for the environment, they can then go and swap a battery. In South Africa, we swap a gas bottle, but maybe you could swap a solar charged battery. And as long as that battery is charged through renewable energy, then one could claim the carbon credits for that. And instead of using, I’ve read numbers of $11 a day being spent on fuel, it would maybe only charge them $3 or $4 a day to swap the battery. So there’s a saving there for those particular communities. But this is, again, using solar resources in Africa. So I think Africa is using its natural resources, and we just need to continue to scale to drive that carbon finance to those particular projects.

Q: Which countries on the continent are doing the right things to prepare for carbon markets?

I think it would be remiss of me to mention or point out one or two countries. I travel a lot. I’ve recently been to the East African Carbon Alliance meeting, the West African Carbon Alliance meeting. And I see a lot of policies and frameworks that are being developed presently. However, they are all at different levels: One country could be really well advanced in its policy, and another is still trying to kind of figure out the nuts and bolts of it. There’s nothing wrong with that, but I think that makes an unfair comparison for countries.

I think what’s more important is that we look at what countries are doing to encourage project developers to come into their country to build those carbon projects, either in the voluntary space or the compliance space. I think what’s important is that countries, in terms of doing the right things, don’t need to charge exorbitant prices just to list the project with the government. That information is available on the registries. Don’t withhold letters of approval, because you need a letter of approval in order to make your credits fungible to be used in the Paris Agreement. Don’t charge super high fees for corresponding adjustments, because they need to submit that to account for the impact that the project had on the ground. If they’ve sold those credits, Governments need to add it on to the carbon footprint as a country.

I think the countries need to start to make a legally sound environment. They need to be very clear in terms of their policy, what projects are acceptable in their country and what projects are not acceptable. And I think that, as I said once again, to name one or two countries at this stage would not be fair, but there is definitely movement in the right direction.

Q: What is your vision for what carbon markets can mean for the continent?

So my vision for carbon markets this time around is that African leaders and African countries don’t miss the boat, literally. So in the Clean Development Mechanism, which was under the Kyoto Protocol before, only a couple of projects were registered, and African countries were a little left behind. I think I saw something like 3,500 wind projects in China. So they capitalised on that particular opportunity. This time around, Africa, I think, needs to catch up a little bit. That said, I’m seeing a lot of movement in governments and discussions.

So as I said, I was recently at the West African Carbon Alliance and the East African Carbon Alliance, and countries will literally send delegations from one country to another to learn from each other, to learn how they are creating their policies, how they are addressing Article 6, how they are addressing their nationally determined indicators and contributions and how they can best capitalise on this market going forward. I think that that’s really exciting to see this genuine interest, this genuine attempt to scale up these markets and a lot more policies coming out. My vision would be that we have lots of projects on the continent because also there’s a lot of those social benefits that get attached to that. So the SD VIsta project, as I said, you can label your project with that. There’s a lot of benefits that accrue to the ground and to communities, which people are looking for when they buy a credit these days.

Q: Anything you would like to add.

The last thing I’d like to add is that carbon markets are not perfect. Obviously, there’s always a criticism of them. It’s the best tool we have right now. I do see a lot of impact as a result of the work that we do at a community level. And communities are definitely involved, collecting data and want to be a part of these projects and processes. Therefore, they take time because you’re trying to involve communities as well as take into account legislation and get the project process approved. So I think it’s really important that we don’t diss the market so much it fails and there is a bad actor somewhere. The most important thing now is that we need scale. We need scale to make these projects work faster and involve the communities so that we can reduce carbon dioxide. For me, I’m a mother, and I want to make sure that I leave the world in a better place for my twins.