New Study Explores the Potential of the Voluntary Carbon Market to Improve Water Resilience in the Colorado and Mississippi River Basins

Boulder, CO – A new study published in MDPI Water proposes that the Voluntary Carbon Market (VCM) could play a significant role in addressing water management challenges in the Colorado and Mississippi River basins. Authored by CU Boulder researchers and Virridy employees John Ecklu, Alex Johnson, Tessa Landon, and Evan Thomas, the paper explores how carbon credits can generate revenue to support sustainable water practices in these regions.

The Colorado and Mississippi River basins are critical for water supply, agriculture, and ecological stability in the United States, but they face increasing pressure from climate change, water management practices, and energy sector demands. The research indicates that water projects in these basins could generate over 45 million carbon credits annually, potentially attracting around USD 4.5 billion in investments over the next decade. 

“Water projects have the potential to generate significant carbon credits, offering a path to fund sustainable water management while contributing to global climate goals,” said lead author John Ecklu. “However, realizing this potential will require addressing challenges like high costs, complex regulations, and the need for effective stakeholder coordination.”

The paper outlines key recommendations for advancing water resiliency projects through the VCM, including:

• Promoting the VCM–Water Relationship: Raising public awareness and engaging corporations to highlight the mutual benefits of integrating water projects into carbon markets.
• Encouraging Methodology Innovation: Developing and refining methodologies to accurately quantify the carbon reduction benefits of water management projects.
• Developing Pilot Programs: Implementing pilot programs to demonstrate the viability and impact of water-related carbon credits.
• Investing in Digital Monitoring Technologies: Utilizing digital tools to monitor and verify project performance, ensuring the integrity of carbon credits.
• Conducting Localized Analyses: Carrying out region-specific analyses to identify optimal strategies for integrating water projects into the VCM.

The authors argue that water projects such as wetland restoration, water conservation efforts, and improvements to water treatment facilities can contribute significantly to carbon sequestration and emissions reduction. By integrating water projects with carbon markets, stakeholders can create sustainable, performance-based funding streams that support safe water services and align with global net zero goals.

“The VCM offers a promising avenue for water utilities, policymakers, and corporations to support water resilience projects while advancing their climate objectives,” said co-author Alex Johnson. “As a longtime US water professional, I’ve been frustrated at the limited scale and slow speed of investment in climate-friendly water resiliency solutions – so I’m excited to put this research into action. Our findings provide a roadmap for leveraging carbon finance to support water sustainability initiatives in these critical river basins.”

The Colorado River serves as a vital resource for seven states in the Western U.S., supporting millions of people and diverse ecosystems. Similarly, the Mississippi River is essential for agricultural output, navigation, and water supply across 31 states. This research highlights the need for innovative financing mechanisms like the VCM to ensure the long-term sustainability of these water resources.

This study addresses a gap in current research by offering a detailed analysis of how the VCM can be specifically applied to the U.S. water sector. It is the first to quantify the potential carbon credit generation and financial impact of water-related projects in the Colorado and Mississippi River basins, presenting a new perspective on integrating carbon markets with water management strategies. Research was conducted with support from the Walton Family Foundation.

The full paper, “Leveraging the Voluntary Carbon Market to Improve Water Resilience in the Colorado and Mississippi River Basins,” was published on September 12, 2024, in MDPI Water.

About Virridy

Virridy develops and deploys technologies to monitor water quality and generate carbon credits. Globally, their technology and expertise support the generation of carbon credit revenue for water security. The company’s low-cost satellite-connected sensors are compatible with a wide range of fixed infrastructure and support carbon credits, energy incentives, water permitting, and other environmental market commodities.

Contact:

Alex Johnson
Chief Strategy Officer, Virridy
[email protected]