Mitigating Project Risk: Insurance and Buffer Pool
Last updated
Last updated
The Open Carbon Protocol is proud to announce our partnership with Kita, a leader in carbon market insurance and risk management. The OCP is designed to bring quality to the market through layers of trust and transparency. Kita will bring a crucial perspective to the Open Carbon Protocol (OCP).
Kita will advise on buffer pool contributions for OCP methodologies, ensuring more robust risk management. With Kita’s guidance, the OCP’s buffer pool will be regularly assessed to mitigate risk and ensure its effectiveness and quality.
Kita’s insurance services will be integrated into the OCP platform via API, providing participants with access to Kita’s services within the platform and Kita API access to the underlying data necessary to quickly understand the risk of each project.
In the case of over-issuance of credits based on an OCP methodology + OCP project, erroneous credits will be ‘on-hold’ if investigation is required (cannot be transferred or retired) and then cancelled (unchangeable state) when investigation is complete.
The OCP will either (a) provide, for free, replacement credits for all owners/buyers from relevant other projects or issuances; or (b) provide a full monetary refund (based on original price of sale, with proof of purchase). Any revenue from over-issued credits will be refunded to the relevant party.
These will not come out of the buffer pool, which is reserved for reversal events only.
With prior approval from the governing board, replacement credits may be temporarily used from the buffer pool to ensure the operation of the platform. A ‘refilling’ plan is required before this action can occur, which is tracked by the governing board until the buffer pool has been fully replaced by OCP-bought credits.
In the case of erroneous/over-issuance of credits due to error with the OCP platform, the OCP will work with the project developer to cancel or issue new credits based on correct calculation. Any sold credits will be replaced as per the mechanism above.
