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Vulnerability reduction credit
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In order to incentivize investment in climate adaptation, Karl Schultz proposed in Climate Policy journal the concept of a vulnerability reduction credit (VRC™), a credit based on the degree to which assets or productivity endangered by climate change are protected. Similar to carbon credits, which are a vehicle for climate mitigation investment, VRCs can stimulate investment in climate change adaptation. A VRC is defined here as a unit of climate vulnerability reduction crediting with a nominal value of 50 Euros. For a particular project, the number of VRCs issued would be a function of the avoided impact cost (vulnerability) of such project, i.e.: Number of VRCs = Avoided impact costs of a project / EUR50. Efficient vulnerability reduction projects would then be characterized by a market value of the VRC of below EUR50, matching the return expectations of a project developer/investor in the vulnerability reduction project and the “impact versus cost” expectations of credit buyers. The Higher Ground Foundation, a non-profit organization, is promoting the VRC™. See Also
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