REVERSAL RISK SUITE
Buffer Depletion Insurance
Protection for Carbon Standards against the buffer pool depleting below a defined threshold
Buffer Depletion Insurance protects against the risk of buffer credits being drawn below a defined threshold. It provides Carbon Standards with protection against unexpectedly high buffer losses and the resulting obligation to replenish the buffer, helping preserve the integrity of the Standard's buffer mechanism and the permanence protections it provides.
Why buy Buffer Depletion Insurance?
Strengthen buffer resilience
Provides a creditworthy backstop if unexpectedly high losses deplete a buffer below an agreed threshold.
Build market confidence
Reinforces trust in the integrity and solvency of the buffer pool.
Improve risk insight
Supports robust risk modelling, data analysis and monitoring of the buffer pool.
How the policy impacts the project?
Financial benefit
Greater resilience against unexpected losses and potential buffer default.
Operational benefit
Additional risk modelling, data analysis and monitoring support, to help with robust risk management of the buffer pool.
Strategic benefit
Increased buyer, seller and investor confidence in the buffer framework.
COMPETITIVE DIFFERENTIATORS
Purpose-built and first of its kind: This policy builds on Kita's existing Buffer-as-a-Service (BaaS) capability, through which Kita already manages buffer risk on behalf of Carbon Standards. This gives Kita the specialist expertise, data and risk infrastructure to underwrite buffer depletion directly - enabling the world's first dedicated buffer insurance policy.
KEY USE CASES
Standards seeking to improve the resilience of their buffer pool to outlier losses
Standards seeking to have clear & robust risk management to protect their long-term liability
Standards seeking to improve stakeholder confidence in their non-permanence risk management mechanisms
