In an Already Broiling Summer, El Niño Is About to Turn Up the Heat - Yale E360

Nature & Climate Perspective

**El Niño-fueled extreme heatwaves pose acute risks to global ecosystem stability, directly threatening LULUCF carbon sinks through accelerated permanence reversal risks. **

• Escalating global temperatures severely disrupt terrestrial and marine biodiversity, accelerating habitat degradation across vulnerable European and Asian biomes.
• Widespread heat and drought significantly impair biomass accumulation, weakening critical forest carbon sequestration capacity and triggering increased wildfire risk.
• Prolonged extreme weather events disrupt historical baselines, threatening long-term ecological resilience and the physical stability of Nature-Based projects.

Market & Policy Outlook

**Intensifying climate extremes expose critical permanence vulnerabilities in land-use offset projects, pressuring ICVCM alignment and risk buffer pool mechanisms. **

• Standard setters and regulators face increasing pressure to adjust buffer pool calculations under the ICVCM Core Carbon Principles (CCPs) to account for heightened climate physical risks.
• Market pricing may bifurcate as physical climate impacts threaten the credit delivery of LULUCF and Blue Carbon projects relative to technological removals.
• Corporates aligning with SBTi targets face increased supply chain volatility, necessitating re-evaluated Scope 3 physical risk assessments and resilient procurement strategies.