Tech-generated transparent carbon credits via nature-based solutions in South Asia and Africa

There is a growing interest in carbon markets as a tool for mitigating climate change, particularly as the Paris Agreement enables the use of such mechanisms under Article 6. The global carbon market was estimated to be valued at US$948.75 billion in 2023, marking a 2% increase from 2022. Although it has experienced rapid growth, ensuring the environmental integrity of the credits is crucial for the voluntary carbon market to be successful. The ecosystem is currently marred by many challenges, including a lack of transparency and credibility, risks of double counting, limited scientific rigor, poor quality credits, and insufficient institutional infrastructure for carbon market transactions. With increasing companies pledging to be carbon neutral by 2050, the pressure to offset emissions is also immense. Within these contexts, startups like Varaha are revolutionizing the carbon credit ecosystem by utilizing advanced technologies to develop transparent and high-quality carbon credits. 

Founded in 2022, Varaha is a pioneering full-stack climate tech startup specializing in generating fully-traceable, high-quality, carbon credits by incentivizing nature-based solutions. The startup leverages advanced technologies like remote sensing, machine learning, and scientific models to quantify the sequestration and reduction of greenhouse gas emissions from regenerative agriculture, afforestation, and biochar projects. Varaha’s projects are vetted through machine learning algorithms and carbon modeling, ensuring each investment results in carbon removal while creating income for smallholder farmers. 

Co-founder Madhur Jain explains that there is a three-step process to its SaaS-based digital measurement, verification, and reporting (MRV) platform:

• On-the-ground data is first collected through a digital app to understand farmers’ boundaries and farming practices 
• Collected data is then validated by employing remote sensing and machine learning models
• It is then quantified in terms of emission reductions and sequestration through an in-house proprietary Carbon Quantification Tool, utilizing soil samples and analysis, climate data, and more, and offering about 60-65% of the total value of carbon credits to the farmers, 10-15% to its partners, and 20-25% to Varaha

With Varaha’s holistic approach, net zero pledgers can purchase transparent carbon credits from meticulously vetted nature-based projects, enabling companies to reach their climate goals at an accelerated pace. Varaha works with NGO Verra to get its data and measurement practices audited before generating credits. Furthermore, the majority of the compensation from carbon credit sales is returned to communities, providing a major incentive for farmers to adopt sustainable agriculture practices. 

The startup has already sold more than 230,000 carbon credits and enrolled over 700,000 acres of land across India, Nepal, Bangladesh, and Kenya. By focusing on nature-based solutions such as regenerative agriculture – one of the most scalable approaches globally –  and biochar technology, a promising carbon mitigation solution derived from plant matter that sequesters carbon in the soil, Varaha is not only creating a more transparent carbon credit ecosystem but also building a sustainable future for agriculture and food systems.