The first three months of 2026 have been the fourth warmest on record, with each...
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Carbon Brief
State of the climate: Strong El Niño puts 2026 on track for second-warmest year
Abatify Summary
Nature & Climate Perspective
**Accelerated warming driven by El Niño events directly threatens the permanence of nature-based sequestration, potentially triggering reversal events in LULUCF-based carbon projects. **
- Heightened thermal stress exacerbates biodiversity loss in sensitive biomes, undermining the 'co-benefits' required for high-integrity carbon credit labeling.
- Drought cycles associated with strong El Niño phases significantly reduce the net primary productivity of forest ecosystems, slowing the accrual of carbon removals.
- Increased wildfire frequency in tropical and temperate zones places immense pressure on carbon registry 'buffer pools,' necessitating more stringent risk-sharing models for long-term environmental stability.
Market & Policy Outlook
**Systemic climate volatility is likely to drive a flight to quality as market participants prioritize ICVCM-aligned credits that demonstrate robust climate resilience and risk mitigation. **
- The increased frequency of 'second-warmest' years may trigger Article 6.2 bilateral adjustments as nations find it harder to meet NDCs through domestic LULUCF measures alone.
- Market pricing for nature-based solutions may see increased volatility, leading financial institutions to demand higher discounts for projects lacking rigorous CCP (Core Carbon Principle) alignment.
- Corporate compliance strategies, particularly under SBTi and Scope 3 reporting, will likely pivot toward technical removals and I-RECs to hedge against the physical climate risks inherent in natural sequestration.
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