Inspired by Value at Risk in financial markets, Carbon at Risk (CaR) quantifies the full distribution of likely carbon storage outcomes — from best to worst case — across the time horizons over which permanence claims actually operate.

Rather than a single deduction based on average expected loss, CaR models the risk factors affecting carbon storage across multiple time horizons — producing a trajectory that reveals not just how much carbon is likely to remain stored, but when large losses become more probable. Two projects can have identical average outcomes but very different probabilities of rare, sudden, severe losses — and when the credits underpinning a net-zero commitment share the same risk factors, those losses can arrive simultaneously. Understanding both the probability and the correlation structure is what enables more accurate risk pricing and better-sized reserves.

This applies across pathways — from reforestation to direct air capture — enabling like-for-like comparison, better risk management, and the forward planning needed to ensure that credits and capital are in place before losses arrive, not after. It is the foundation for understanding and protecting the carbon we remove and the systems that hold it.