---
title: alternatives to carbon credits
canonical_url: https://ensurance.app/guide/alternatives-to-carbon-credits
markdown_url: https://ensurance.app/guide/alternatives-to-carbon-credits.md
subtitle: "nine ways to pay for a living system, and the one that funds a named place"
category: nature-finance
---

# alternatives to carbon credits

*nine ways to pay for a living system, and the one that funds a named place*

Ask what you can buy instead of a carbon credit and most answers name another credit. The better answer is a field. There are at least nine other ways to pay for a living system, each built for a different job, and one more that funds a named place.

Start with what does not change. A forest, a peatland, or a tidal marsh stores carbon and keeps doing the rest of its work (water, soil, habitat, flood buffer) whether or not anyone buys a certificate. Every row below is a way to pay for some part of that work. None of them is the living system.

:::johnson
**a carbon credit is one way to pay. it is not the only way, and it is not a hold on the living system.**

Pick the alternative that matches the job. If the job is funding a named place, that is the row we build. It is not the only row, and it is not a title.

[what a carbon fund buys, and what a hold buys →](/guide/what-a-carbon-fund-actually-buys)
:::

## what a carbon credit does, and where it stops

A **carbon credit** represents one tonne of carbon dioxide avoided or removed by a project, retired by a buyer against its own emissions. Compliance and voluntary markets both trade it; see [what a carbon market actually is](/guide/what-a-carbon-market-actually-is).

A credit does one thing well: it prices a tonne. Where it strains is the claim attached, that a tonne bought here cancels a tonne emitted there. [The carbon template biodiversity is copying](/guide/the-carbon-template-biodiversity-is-copying) walks through the evidence on additionality, permanence, and leakage. And the forest was doing more than carbon all along ([a carbon credit is not a forest](/guide/a-carbon-credit-is-not-a-forest)).

Scale matters too. Financing Nature 2026 (Paulson Institute, The Nature Conservancy, and WWF) puts the global nature finance gap at $1.317 trillion a year. No single instrument closes that.

## the survey: alternatives to carbon credits, side by side

| alternative | what it actually does | what it does not do |
|---|---|---|
| Regulation, carbon price, subsidy redirect | Stops the harm, or makes it cost, through law and the public budget | A hold on one named parcel |
| Direct public finance and grants that back Indigenous tenure | Moves money and secures title without creating a transferable unit | A corporate procurement line item |
| Contribution claim | Funds climate or nature action without claiming neutrality | A 1:1 instrument on a place you can keep |
| Insetting | Funds the landscape inside your own supply chain | Permission to emit somewhere else |
| Beyond value chain mitigation | Finance outside your value chain, on top of your own cuts, with no offset claim | A standing place-level hold |
| Beneficiary-pays bond | A utility or agency repays work that cuts its own costs | Permanence; most are one-off deals |
| Debt-for-nature and outcome bonds | Ties sovereign debt relief or bond returns to conservation results | Scale against the finance gap, or a tonne of absolution |
| Nature shares | A longer claim on ecological output than a one-off credit | Proof that every share design is sound |
| Money based on living systems | A unit meant to circulate because life is its ground | A claim on the forest. "Backed by" puts the forest on the table |
| **Ensurance** | Funds the present condition of a named place through a certificate issued 1:1 with that place's account (its agent). Not sold as neutrality. A certificate is not land title | A replacement for regulation, public finance, or a tonne you are legally required to retire |

## what each row is for

### stop the harm, fund the public side

**Regulation and carbon pricing** are the base layer. A cap, a tax, a mitigation rule, or a subsidy moved from clearing land to keeping it changes behavior across a whole economy. A January 2026 Climate Recovery Institute paper on carbon removal reviewed how 19 public goods are funded across 47 jurisdictions and found layered, multi-mechanism funding is the norm, not a single market.

**Direct public finance and Indigenous tenure** move money and rights without minting a unit. Trust funds, grants to Indigenous-led funds, and recognized land title protect large areas at the source. They are not built for a procurement list, and they do not need to be.

### corporate claims without neutrality

A **contribution claim** says "we funded this" instead of "we cancelled our emissions." Barbara Haya at UC Berkeley and the Compensate Foundation argue for it because it keeps money moving without a counterfactual.

**Insetting** funds farms, forests, and watersheds inside your own supply chain, the landscape your product already depends on. More in [insetting is not an offset](/guide/insetting-is-not-an-offset).

**Beyond value chain mitigation**, the SBTi term, is finance a company puts outside its value chain on top of its own reductions, and it is explicitly not counted as an offset. More in [what beyond value chain mitigation actually is](/guide/what-beyond-value-chain-mitigation-actually-is).

### finance repaid by whoever benefits

A **beneficiary-pays bond**, such as Blue Forest's Forest Resilience Bond, raises upfront capital for forest restoration, repaid by the utilities and agencies whose wildfire and water costs fall. Each deal is built around its own watershed, which makes it precise and slow to repeat.

**Debt-for-nature swaps** restructure a country's debt in exchange for conservation commitments, as Belize and Ecuador have done. **Outcome bonds** tie returns to a result: the World Bank's rhino bond pays more if black rhino numbers grow. Both are serious sovereign-scale tools. Neither sells a tonne, and neither is sized to the whole gap.

### nature shares

**Nature shares** swap a one-off credit for a long-lived stake. In CEPR Policy Insight 145, from the 2025 Paris Report (a CEPR and Bruegel initiative), Estelle Cantillon, Eric Lambin, and Beatrice Weder di Mauro propose that jurisdictions offer shares in large nature projects. Shares do not change who owns the land. They pay dividends in carbon and biodiversity benefits over time, with a secondary market for liquidity. The point is duration: a shareholder has a reason to care whether the forest stands in year thirty.

The Kwiakah First Nation in British Columbia is building its own version. The Nation worked with the provincial Ministry of Forests to convert a logging obligation on its territory into rights to protect and regenerate the forest. Kwaxala, an Indigenous-majority-owned company the Nation helped found, securitizes the annual revenue from that living forest into perpetual Living Forest Shares. Today that revenue comes from carbon offset sales, so the rows can stack: a share carries a credit's income longer than one credit does. What makes any share credible is the governance behind the dividend.

### money based on living systems

This row asks what money itself should rest on. The lineage runs from Silvio Gesell's demurrage (money that slowly loses value, so it circulates instead of being hoarded), through the WIR Bank's mutual credit among Swiss businesses since 1934, to commons reserve currency proposals issued from measured regeneration and onchain coins such as Single.Earth's MERIT.

The design question for every coin here is two words. A unit **backed by** a forest is a claim someone can call on the forest in a crisis. A unit **based on** living systems keeps the forest off the table. If it redeems, it redeems against flow, never the land. More in [a carbon currency is not a forest](/guide/a-carbon-currency-is-not-a-forest).

### ensurance: the standing hold on a named place

**Ensurance** is the row we emphasize, because it is built for one job: funding a named place. A forest, a peatland, a marsh, or a river gets an **agent**, an account that represents that place. A **certificate** is issued 1:1 with that agent and funds the place's present condition. A certificate is not land title. Tenure and public ownership stay where they are. It is a standing payment for the condition of a place someone else already holds. It is not a tonne the place might sequester, and not a claim that anyone's emissions are cancelled. Certificates are not fungible and are not sold as neutrality. Our natural capital accounting prices condition so capital can see it. The price is a bridge, not the worth.

A hold does not replace regulation, public finance, or a tonne a buyer must retire. It stacks beside them. Our stage is small: live agents and [certificates](https://ensurance.app/specific?from=guide) exist today at modest volumes. On the Thames, [the river's agent](https://ensurance.app/thames-river.basin?from=guide) is live, and a [thames source hold](/specific/create?mode=suggest&agent=thames-river.basin&name=thames%20source%20hold&from=guide) is a suggested line, not yet a certificate, open to co-create. More in [what you hold if you want the place to stay](/guide/what-you-hold-if-you-want-the-place-to-stay).

## pick the row by the job

- **Setting policy?** Price the harm and redirect the subsidies.
- **Funding at the source?** Grant directly and secure tenure.
- **Legally required to retire a tonne?** Retire it. That is what compliance markets are for.
- **Funding climate or nature without claiming neutrality?** Make a contribution claim.
- **The harm sits in your own sourcing landscape?** Inset.
- **Already cutting, and financing more outside your chain?** Beyond value chain mitigation.
- **A utility or agency saves money if the forest is healthy?** Beneficiary-pays.
- **Working at sovereign scale?** Debt-for-nature or an outcome bond.
- **Want a long-dated stake in ecological output?** Nature shares.
- **Redesigning the unit of account?** Money based on living systems.
- **The job is the place itself?** Fund it.

Most organizations will use more than one. Corporate teams can [see how the rows map to corporate work](/solutions/corporations?from=guide&topic=carbon-market-alternatives); investors can start at [solutions for investors](/solutions/investors?from=guide&topic=carbon-market-alternatives); public agencies can start at [solutions for governments](/solutions/governments?from=guide&topic=carbon-market-alternatives).

## faq

### what are alternatives to carbon credits?

The main alternatives to carbon credits are regulation and carbon pricing, direct public finance and grants that back Indigenous tenure, contribution claims, insetting, beyond value chain mitigation, beneficiary-pays bonds, debt-for-nature and outcome bonds, nature shares, money based on living systems, and ensurance. Each does a different job, and most do not sell a neutrality claim.

### is insetting an alternative to carbon credits?

Yes, for impacts inside your own supply chain. Insetting funds the landscapes your business already depends on. It does not give you permission to emit elsewhere, which is why it is not an offset.

### what is the alternative if you want the place itself?

Fund it. Ensurance funds the present condition of a named place through a certificate issued 1:1 with that place's agent, and it is not sold as neutrality. It sits beside regulation, public finance, and any tonne you are required to retire. [Talk to someone about a hold](/contact?from=guide&topic=carbon-market-alternatives).

## sources

Paulson Institute, The Nature Conservancy, and WWF, *Financing Nature 2026* — the $1.317 trillion annual nature finance gap

Cantillon, Lambin, and Weder di Mauro, CEPR Policy Insight 145, *Designing and scaling up nature-based markets* (2025) — nature shares

Ecosystem Marketplace and The Nature Conservancy, *State of Private Investment in Nature 2026*, Kwaxala case study — Living Forest Shares

Climate Recovery Institute, *Expanding revenue models for CDR* (January 2026) — public-goods funding models

Barbara Haya, UC Berkeley, contributions paper for the World Bank (2025); Compensate Foundation, *From Carbon to Nature* — contribution claims

Science Based Targets initiative — beyond value chain mitigation

## the series

1. [what a carbon market actually is](/guide/what-a-carbon-market-actually-is)
2. [alternatives to carbon credits](/guide/alternatives-to-carbon-credits)
3. [insetting is not an offset](/guide/insetting-is-not-an-offset)
4. [what beyond value chain mitigation actually is](/guide/what-beyond-value-chain-mitigation-actually-is)
5. [a carbon currency is not a forest](/guide/a-carbon-currency-is-not-a-forest)
6. [what a carbon fund actually buys](/guide/what-a-carbon-fund-actually-buys)