The Untapped Potential of Great Green Wall Voluntary Carbon Market Projects 2024

Example of the voluntary carbon market potential in GGW countries BOX 5 Tree Aid carbon projects in GGW countries, registered under Verra, have the potential to achieve competitive internal rates of return (IRR) for high-quality removals credits, especially when programmes are run at scale. Figure 5 provides a detailed breakdown of an illustrative project based on one of Tree Aid’s VCM projects under development. The project is for potential afforestation, reforestation and revegetation in a semi-arid zone of the GGW, focused on the restoration of 14,000 hectares of degraded wooded savannah and the planting of 1,500 hectares of farmland using agroforestry systems.Developed through extensive on-the-ground feasibility assessments, community discussions and comprehensive tree-growth and financial modelling, the project identifies an anticipated carbon sequestration of 4.5 million tCO2e and a 19.1% return for investors over a 40-year period. At the same time, 45% of credits go to the community to extend the benefits they receive throughout the lifetime of the project by selling on the spot market. Based on an investment over seven years of $26.1 million for development and operations, this project could yield a 19.1% internal rate of return (IRR) for investors, with a 55% credit share to investors at an investor indicative price of $10.50 per credit, while providing communities with a 45% credit share that yields $90-120 million in direct benefits. FIGURE 5 Illustrative carbon removal project for semi-arid region with high potential IRR Total hectares planted (ha) – Reforestration – AgroforestryMethodology Estimated number of credits issuedTotal trees planted Verra VM0047 (TBC) 4,5M tCO2e8M diverse native trees 14,000 1,500 012345MillionsInvestment needed and tranches ($) 2025 2026 2027 2028 2029 2030 2031 20324.133.923.674.42 3.91 2.29 1.732.01 Reforestration Agroforestry01000200030004000MillionsHectares planted 2025 2026 2027 2028 2029Total available credits to issue Cumulative available credits0 6050100150200250Cumulative investor profit ($)Millions205.12 1 11 16 21 26 31 360100200300400500600Credits issued (tCO2e)Thousands 12345 MIllions538.17 4.51 2025 2030 2035 2040 2045 2050 2055 20607.87x multiple on investmentInvestor profit and investment need Carbon credit generation and pricing curves Source: Tree Aid. The Untapped Potential of Great Green Wall Voluntary Carbon Market Projects 18