This could be the strongest El Niño on record » Yale Climate Connections

Nature & Climate Perspective

**An unprecedentedly strong El Niño threatens global ecological stability, directly undermining the permanence of nature-based carbon sinks. **

• Extreme weather anomalies and altered tropical cyclone paths threaten fragile coastal ecosystems, severely impacting Blue Carbon sequestration habitats.
• Widespread drought and temperature anomalies risk triggering catastrophic forest diebacks, elevating the reversal risk for LULUCF projects worldwide.
• Accelerated coral bleaching and terrestrial habitat degradation threaten long-term ecological baselines, complicating biodiversity credit underwriting.

Market & Policy Outlook

**Extreme climate volatility will force a drastic recalibration of carbon market buffer pools and corporate Scope 3 risk disclosures. **

• Regulatory bodies governing Article 6.2 and 6.4 mechanisms must adjust baseline assumptions as extreme weather alters national carbon accounting.
• The ICVCM's Core Carbon Principles (CCPs) regarding permanence will require stricter risk premium adjustments, driving up the cost of nature-based credits.
• Corporations aligning with SBTi targets face heightened supply chain disruptions, forcing a shift in corporate risk assessment from offset procurement to physical asset resilience.