PCS TA 005 Non Permanence Risk Tool_v1.0
Document Control
Document identification
Document code: PCS-TA-005
Title: Non-Permanence Risk Assessment Tool
Scope: Tool to assess non-permanence (reversal) risk for PCS projects with biological/ecosystem carbon storage and to determine a buffer contribution/withholding percentage based on structured risk scoring and mitigation adjustments.
Application: Mandatory where applicable PCS methodologies require permanence risk assessment and buffer withholding; applied at project design and updated during monitoring periods as required.
Version history and change log
Table DC-1. Revision history
v1.0
TBD
Draft
Release for public consultation
PCS
TBD
Superseded versions
No superseded versions for v1.0.
Governance note on versioning and archiving
Only the latest approved version of this tool shall be used for new project registrations and for quantification/verification of monitoring periods unless PCS specifies otherwise. Superseded versions shall be archived and retained for traceability and audit purposes, including for projects assessed under earlier versions where applicable, consistent with PCS governance rules.
Chapter 1 - Introduction and Purpose
Purpose and scope of the tool
The Non-Permanence Risk Assessment Tool establishes the procedures for evaluating and quantifying the risk that stored carbon within a PCS project may be reversed during the crediting period. The purpose of this tool is to ensure that all PCS Nature-Based Solutions (NBS) projects maintain high environmental integrity by identifying potential threats to carbon permanence and determining an appropriate buffer withholding percentage to mitigate the impact of such risks.
Types of reversals considered
Carbon reversals may occur as a result of natural disturbances, anthropogenic pressures, institutional or governance weaknesses, financial instability, or project management limitations. This tool provides a structured and transparent framework for assessing these risks consistently across all PCS projects. It enables project developers to identify the factors that influence the likelihood and magnitude of reversals and to assign risk scores that reflect the project’s overall risk profile.
Applicability across project types and timing
The tool applies to all projects generating long-term or durable carbon sequestration benefits, including forestry, mangroves, agroforestry, restoration, and peatland rewetting projects. It must be used during project design to establish the initial risk rating and buffer contribution. During each monitoring period, the risk assessment must be updated to reflect changes in project conditions, mitigation measures, and external threats. The buffer withholding percentage may be revised accordingly.
Objective for environmental integrity and mitigation
By implementing a standardized risk assessment approach, this tool ensures that carbon credits issued under PCS represent durable, credible climate benefits. Risk scoring and buffer deductions derived from this tool form part of the PCS governance framework, helping safeguard against unintentional reversals and providing long-term stability for the PCS carbon pool. The tool also promotes proactive risk mitigation by encouraging project developers to adopt management practices and institutional arrangements that reduce risk exposure over time.
Chapter 2 - Scope and Applicability
Project types and applicability
This tool applies to all PCS projects that generate carbon credits based on the storage or long-term retention of carbon in biomass, soils, or ecosystems. Because such projects face varying degrees of risk that stored carbon may be lost or reversed over time, this tool provides a standardized framework for quantifying non-permanence risk and determining the required buffer contribution.
Examples of NBS project types covered
The tool is applicable to Nature-Based Solutions (NBS) project types including, but not limited to:
Afforestation and reforestation
Forest restoration and conservation
Avoided forest degradation
Mangrove restoration and conservation
Agroforestry and silvopastoral systems
Peatland rewetting and conservation
Wetland and blue carbon ecosystems
Degraded land rehabilitation initiatives
When the tool must be used and exemptions
Any project that maintains or increases carbon stocks and relies on biological or ecological processes to store carbon must apply this tool. Projects based purely on avoided emissions without a carbon storage component may be exempt if the applicable methodology specifies that no permanence risk assessment is required.
Application timing and grouped projects
The tool must be used during initial project design to establish the baseline risk rating and corresponding buffer percentage. It must also be applied during each monitoring period to reassess risks and update buffer requirements based on new information, changes in project conditions, improvements in management, or changes in external risk factors. All updates must follow the procedures described in this tool to ensure consistency across reporting cycles.
The tool may be applied at the project level or, when applicable, at the programmatic or grouped project level. For grouped projects, risk assessments must consider both common risks and site-specific factors. In all cases, the tool requires transparent documentation of the assumptions, scoring decisions, and mitigation measures used to evaluate risk.
Relationship to external requirements
This tool does not replace external regulatory or jurisdictional requirements regarding permanence, nor does it supersede national policies or host-country safeguards. It functions exclusively as a component of PCS’s internal quality assurance system, ensuring that carbon credits issued under PCS maintain durable climate benefits.
Chapter 3 - Key Concepts and Definitions
Understanding non-permanence risk requires consistent terminology. This chapter defines the key concepts used throughout the tool and establishes a common language for evaluating and scoring risks that influence carbon storage durability within PCS projects.
3.1 Non-Permanence Risk
Non-permanence risk refers to the likelihood that carbon stored within a project may be released back into the atmosphere during the crediting period due to natural, anthropogenic, or institutional factors. The magnitude of this risk determines the buffer contribution required from the project.
3.2 Carbon Reversal
A carbon reversal is an unintentional loss of previously credited carbon, resulting from disturbances such as fire, storms, pest outbreaks, drainage failure, illegal harvesting, or management lapses. Reversals may be partial or complete and may occur suddenly or gradually.
3.3 Buffer Contribution
The buffer contribution is a percentage of verified carbon credits that a project must deposit into the PCS Buffer Pool. These credits serve as insurance against carbon reversals. The required percentage is based on the project’s risk score calculated through this tool.
3.4 PCS Buffer Pool
The PCS Buffer Pool is a shared, centrally managed reserve of carbon units held to compensate for verified reversals across PCS projects. It supports system-wide permanence and distributes risk across many projects.
3.5 Risk Categories
Risk factors are grouped into categories that reflect key drivers of reversals. PCS uses four overarching categories:
Natural Risk
Anthropogenic Risk
Management and Operational Risk
Institutional and Governance Risk
Each category contains multiple sub-factors evaluated through the scoring system described in later chapters.
3.6 Risk Score
A risk score is the numerical value assigned to each risk factor. Scores reflect the likelihood and potential magnitude of negative impacts on carbon permanence. Summed and adjusted scores produce the final buffer withholding percentage.
3.7 Risk Mitigation Measure
Risk mitigation measures are actions taken by the project to reduce specific risk factors. Examples include firebreak maintenance, hydrology restoration, community enforcement partnerships, or financial reserves. Effective mitigation may reduce risk scores.
3.8 Gross Risk vs. Residual Risk
Gross risk represents the initial risk score before mitigation measures are applied. Residual risk represents the adjusted risk after accounting for mitigation.
Residual risk determines the buffer contribution.
3.9 Monitoring Period Risk Update
Risk scoring is not static. During each monitoring period, the project must reassess:
Changes in natural risk conditions
New management practices
Improved or weakened governance
Implemented mitigation measures
New threats or disturbances
Revised risk scores may increase or decrease buffer requirements.
3.10 Catastrophic Risk
Catastrophic risk represents the potential for large-scale, abrupt carbon loss—such as a major wildfire, cyclone, large-scale dieback, drainage collapse, or widespread pest outbreak. Catastrophic risk has greater weighting due to its system-wide effects.
3.11 Reversal Responsibility
Reversal responsibility defines who must compensate for a carbon reversal. Under PCS, the Buffer Pool compensates for verified unintentional reversals, while intentional or negligent reversals remain the responsibility of the project.
3.12 Reviewable Risk Factors
Certain risk factors may improve over time as the project becomes more stable—such as enhanced community engagement, improved governance, or financial strengthening. These factors may be updated each monitoring period.
3.13 Non-Reviewable (Static) Risk Factors
Some risks, such as location-specific natural hazards or inherent ecosystem vulnerability, remain largely constant. These factors must be reassessed periodically but may not change unless ecological conditions significantly shift.
Chapter 4 - Parameters and Symbols
This chapter defines the parameters, symbols, and scoring elements used to assess non-permanence risk within PCS projects. These values provide a standardized structure for scoring natural, anthropogenic, management, and governance risks. Consistent use of the parameters ensures that risk assessments are transparent, replicable, and comparable across projects.
4.1 Risk Factor Symbol Framework
The risk assessment system uses a consistent symbol format:
Rₙ = Natural Risk Score
Rₐ = Anthropogenic Risk Score
Rₘ = Management & Operational Risk Score
Rᵢ = Institutional & Governance Risk Score
Rₜ = Total Gross Risk Score
M = Mitigation Adjustment Factor
RR = Residual Risk Score
B% = Buffer Contribution Percentage
These values appear in subsequent equations and tables.
4.2 Risk Scoring Scale
All risk factors are scored on a standardized 0–5 scale:
0
No meaningful risk present
1
Very low risk
2
Low to moderate risk
3
Moderate risk
4
High risk
5
Very high or near-certain risk
Scores must be justified with evidence and documented clearly.
4.3 Weighting Factors
Different risk categories contribute differently to total risk. PCS applies category weightings to reflect their relative influence on carbon reversals.
Natural Risk
0.35
Highest weighting due to uncontrollable hazard exposure
Anthropogenic Risk
0.25
Human-driven threats such as illegal logging or encroachment
Management Risk
0.25
Project-level operational and financial stability
Governance Risk
0.15
Institutional reliability and policy environment
These weights must be applied uniformly across all PCS projects.
4.4 Formula for Total Gross Risk Score
Gross risk score before mitigation is calculated by combining weighted category scores. Risk scores must be rounded to two decimal places.
4.5 Mitigation Adjustment Factor
Mitigation actions may reduce risk. The adjustment factor applies a proportional reduction. M ranges from 0 to 0.50, depending on strength of mitigation. M must be evidence-based, not speculative.
Examples of mitigation include:
Firebreak implementation and maintenance
Community enforcement agreements
Hydrological restoration (mangroves, peatlands)
Insurance mechanisms or financial reserves
Governance stability agreements with host authorities
The Monitoring Report must document mitigation effectiveness.
4.6 Conversion of Residual Risk Score to Buffer Percentage
Residual risk is converted to a buffer withholding percentage using a standardized PCS function. This ensures:
Minimum buffer = 5%
Maximum buffer = 30%
Risk scaling remains consistent across project types
PCS may revise this function periodically based on portfolio-wide reversal experience.
4.7 Risk Factor Tables and Coding
Each risk factor is assigned a code for transparency:
N1
Natural
Wildfire exposure
N2
Natural
Storms, cyclones, extreme weather
N3
Natural
Pests, invasive species, disease
N4
Natural
Hydrological instability
A1
Anthropogenic
Encroachment pressure
A2
Anthropogenic
Illegal extraction risk
A3
Anthropogenic
Conflict or land-use competition
M1
Management
Financial stability
M2
Management
Operational capacity
M3
Management
Long-term maintenance commitments
I1
Governance
Land tenure security
I2
Governance
Policy and regulatory stability
I3
Governance
Institutional oversight capacity
These codes appear throughout the risk assessment sheets and annexes.
4.8 Reporting Requirements for Parameters
The Monitoring Report must include:
Values of all risk factor scores (Rₙ, Rₐ, Rₘ, Rᵢ)
Category weightings
Mitigation adjustment factor (M) with justification
Final residual risk (RR)
Calculated buffer percentage (B%)
All supporting evidence and references
PCS requires complete transparency for verification.
Chapter 5 - Natural Risk Assessment Procedures
Natural risks refer to ecological and environmental disturbances that may cause unintentional carbon reversals. These risks are partially or entirely outside the control of the project developer and therefore carry the highest weighting in the PCS risk assessment framework. This chapter outlines the procedures for identifying, evaluating, and scoring natural risks across all PCS NBS projects.
5.1 Overview of Natural Risk Factors
Natural risk factors include disturbances inherent to the project’s ecosystem, climate, and geography. Under PCS, natural risk is evaluated using the following four sub-factors:
N1: Wildfire Exposure
N2: Extreme Weather Events (storms, floods, cyclones)
N3: Biological Risks (pests, diseases, invasive species)
N4: Hydrological Instability (soil moisture, drainage, salinity, tidal dynamics)
Each sub-factor is assigned a score from 0 to 5 based on likelihood and potential impact.
5.2 N1 - Wildfire Exposure
Wildfire represents one of the most significant threats to biomass permanence. The risk assessment must consider:
Historical fire frequency within the project area or region
Satellite-based fire detection data
Proximity to human ignition sources
Ecosystem fire dynamics (e.g., savannas vs. moist forests)
Availability and continuity of fuels
Climatic conditions that exacerbate fire risk
Score determination must reflect both the probability and severity of potential wildfires.
Mitigation measures (e.g., firebreaks, early detection systems, community patrols) are accounted for later and must not reduce the gross natural risk score.
5.3 N2 - Extreme Weather Events
Extreme weather events may cause sudden large-scale biomass loss. Evaluation must assess exposure to:
Tropical cyclones, hurricanes, and typhoons
Severe storms and windthrow events
Flooding or storm surges (especially in mangroves)
Droughts leading to heightened mortality
Risk scoring must use historical patterns and projections from recognized climate sources. If events are increasing in frequency or intensity due to climate change, the score must reflect upward risk trends.
5.4 N3 - Pests, Diseases, and Invasive Species
Biological threats can reduce biomass and cause localized or widespread mortality. Risk evaluation must consider:
Prevalence of native pest outbreaks
Known invasive species pressures
Presence of pathogenic fungi or bacteria
Susceptibility of dominant species
Spread dynamics of invasive flora or fauna
Projects in monoculture or low-diversity systems typically face higher biological risk.
5.5 N4 - Hydrological Instability
Hydrological conditions are critical for forests, mangroves, peatlands, and restoration systems. Risk assessment must consider:
Drainage collapse (for peatlands)
Salinity spikes (for mangroves)
River regime changes
Drought conditions affecting soil moisture
Groundwater depletion from external activities
Seasonal flooding impacts on root stability
Hydrological instability may cause partial or widespread biomass loss and may also exacerbate other natural risks.
5.6 Scoring Natural Risks
Each natural risk factor (N1–N4) must be assigned a score between 0 and 5. Scores must be supported by:
Geospatial analysis
Historical datasets
Ecological assessments
Climate risk maps
Published literature
Government hazard classifications
The Natural Risk Score is the unweighted sum of all natural risk sub-scores. Apply the natural risk weighting factor (0.35) to obtain the weighted natural risk score.
5.7 Documentation Requirements
The Monitoring Report must provide:
Spatial and historical fire data used
Climate records supporting weather-related scoring
Biological risk assessments, pest monitoring results, or ecological studies
Hydrological studies or monitoring data
Justification for assigned scores
Maps and tables illustrating hazard zones
All evidence must be traceable and suitable for independent verification.
Chapter 6 - Anthropogenic Risk Assessment Procedures
Anthropogenic risks refer to the threats of carbon reversal arising from human activities occurring within or around the project area. These risks depend on social, economic, and land-use pressures that may lead to intentional or unintentional disturbance of biomass. Unlike natural risks, anthropogenic risks are often influenced by community dynamics, enforcement capacity, land tenure clarity, economic incentives, and accessibility of project lands. Although mitigation can substantially reduce these risks, the gross risk assessment must reflect the conditions that exist before mitigation is applied.
6.1 Overview of Anthropogenic Risk Factors
Anthropogenic risks in PCS are evaluated through three core sub-factors: encroachment pressure, illegal extraction risk, and land-use conflict or competition. Together, these factors capture the extent to which human-driven pressures could cause degradation, deforestation, disturbance, or biomass loss. Each sub-factor receives a score between zero and five based on evidence about local land-use dynamics and human behaviors that influence the stability of carbon stocks.
6.2 Encroachment Pressure (A1)
Encroachment risk refers to the likelihood that individuals or groups may enter the project area for agriculture, settlement expansion, grazing, charcoal burning, or other uses that reduce biomass. Assessment must consider the surrounding population density, proximity of settlements, existing patterns of land conversion, trends in migration or land scarcity, and the economic value of project land for alternative uses. Areas experiencing agricultural expansion, land speculation, or competing claims typically present higher encroachment risk. Remote project areas with low human presence may receive lower scores, but only when documented evidence supports such a conclusion.
6.3 Illegal Extraction and Resource Harvesting (A2)
Illegal extraction risk reflects the potential for unauthorized removal of trees, fuelwood, mangrove poles, or other biomass within the project area. This risk must be assessed by examining historical patterns of illegal harvesting, the commercial value of resources found in the project area, accessibility by road or waterways, and the presence of organized extraction activities. Additional considerations include the strength of enforcement by local authorities, the availability of alternative livelihoods, and market demand for timber, charcoal, or biomass-derived products. Higher scores are appropriate when past extraction has occurred or when project lands contain highly valuable species.
6.4 Land-Use Competition and Conflict (A3)
This factor evaluates whether competing claims or unresolved land-use disputes may lead to carbon reversals. Risk assessment must consider the clarity of land tenure documentation, recognition of community or customary rights, the presence of overlapping concessions, and ongoing disputes regarding land boundaries. Projects situated in jurisdictions with fluid or poorly enforced property rights may face elevated risks. Economic drivers such as agricultural expansion, real estate development, infrastructure projects, or large-scale concessions in surrounding areas also increase the likelihood of conflict-driven biomass loss.
6.5 Scoring Anthropogenic Risks
Each of the three anthropogenic sub-factors is assigned a score from zero to five. The gross anthropogenic risk score is the sum of these sub-scores. The weighted anthropogenic risk value is obtained by multiplying the gross score by the assigned category weighting (0.25). Scores must be accompanied by detailed justification and verifiable evidence. Unsupported or speculative scoring is not permitted.
6.6 Documentation Requirements
Anthropogenic risk scoring must be grounded in transparent and verifiable evidence. The Monitoring Report must describe the socioeconomic context around the project area, including population trends, local land-use pressures, historical disturbance patterns, enforcement capacity, and land tenure conditions. Supporting documents may include spatial analyses, demographic data, community consultations, market assessments, government reports, or previous monitoring records. The justification for each assigned score must be explicit and sufficiently detailed to allow independent verification by a VVB.
Chapter 7 - Management and Operational Risk Assessment Procedures
Management and operational risks arise from factors internal to the project’s design, financial structure, governance, staffing, and implementation capacity. These risks reflect the project’s ability to maintain carbon stocks over time, execute planned interventions, and respond effectively to unexpected threats. Unlike natural or anthropogenic risks, management risks are largely within the control of the project developer, making them central to the assessment of long-term project stability.
This chapter outlines the procedures for evaluating three sub-factors that determine management and operational risk: financial viability, operational capacity, and long-term management commitments. Each sub-factor must be analyzed using verifiable evidence, and the resulting scores contribute directly to the non-permanence buffer requirement.
7.1 Financial Viability and Stability (M1)
Financial viability evaluates whether the project has secure, predictable, and adequate funding to sustain implementation over the crediting period. Risk assessment must consider the reliability of revenue streams, diversification of funding sources, contractual commitments from buyers or investors, and the presence of financial contingencies or reserves.
Projects that rely on a single uncertain revenue source or short-term financing agreements typically have higher risk scores. In contrast, projects supported by long-term financing arrangements, diversified revenue structures, or government-backed programs may justify lower scores. Evidence must include financial plans, funding agreements, audited statements when available, and descriptions of cash flow stability.
7.2 Operational and Technical Capacity (M2)
Operational capacity measures the project entity’s ability to implement required activities, manage field teams, monitor biomass, enforce safeguards, conduct community engagement, and maintain infrastructure essential for carbon permanence. Assessment must address staffing levels, staff qualifications, turnover rates, experience with similar projects, and the presence of clear management systems.
A project with inadequate staffing, limited technical expertise, or unstable management structures faces higher operational risk. Conversely, a project that employs experienced personnel, utilizes standard operating procedures, and implements robust monitoring frameworks may receive lower scores. Documentation must include organizational charts, staff CVs, training records, and descriptions of management systems.
7.3 Long-Term Management Commitments (M3)
Long-term management commitments evaluate whether the project is structurally and institutionally prepared to maintain carbon stocks beyond initial implementation. This includes legal commitments to maintain land-use restrictions, community agreements that support long-term stewardship, and institutional arrangements that ensure continuity of operations over decades.
Projects operating on secure long-term leases, community-owned land with established governance structures, or government-designated conservation areas with strong management frameworks generally present lower risk. Projects lacking permanent control over land or facing competing land-use claims may present elevated risk. Supporting evidence should include legal agreements, tenure documentation, partnership contracts, and governance frameworks.
7.4 Scoring Management and Operational Risks
Each of the three management risk sub-factors is scored from zero to five based on documented evidence. The gross management risk score is the sum of these sub-scores. Application of the category weighting (0.25) yields the weighted management risk score.
Scores must be proportional to demonstrated capacity and must not be assigned based on future expectations or unverified commitments.
7.5 Documentation Requirements
The Monitoring Report must include descriptions of the project’s financial planning, funding sources, operational structures, staffing, and long-term stewardship arrangements. All supporting documents must be referenced clearly and made available to the VVB. When risk scores decrease due to improved management capacity, the report must provide evidence of actual enhancements rather than intended improvements.
Chapter 8 - Institutional and Governance Risk Assessment Procedures
Institutional and governance risks arise from the broader political, administrative, and regulatory conditions that influence the stability of carbon projects. These risks are external to the project developer yet deeply affect the likelihood that carbon stocks will remain secure over long time horizons. Stable governance systems, clear land tenure, and consistent regulatory environments reduce the risk of unintentional reversals, whereas volatile or weak institutions increase it. This chapter outlines the procedures for evaluating governance-related risks through three core sub-factors: land tenure security, regulatory and policy stability, and institutional oversight capacity.
8.1 Land Tenure Security (I1)
Land tenure security is one of the most influential determinants of permanence. Assessment must consider whether the project area is governed by clearly defined and legally recognized land rights. Evidence may include ownership titles, customary rights agreements, government concessions, long-term leases, or documented community tenure arrangements.
Projects operating in areas with unresolved land claims, overlapping concessions, or historically contested boundaries may face elevated risks of encroachment, displacement, forced land-use change, or cancellation of agreements. Higher scores are assigned when documentation is incomplete or disputed. Lower scores are appropriate when land tenure is formally recognized and enforced by authorities or customary governance bodies.
8.2 Policy and Regulatory Stability (I2)
This factor evaluates the stability and reliability of laws, regulations, and governmental policies relating to land use, conservation, carbon markets, and environmental protection. Risk scoring must consider the potential for abrupt regulatory changes, lack of enforcement capacity, inconsistent policy application, or political instability that could threaten project permanence.
If the jurisdiction has a track record of unpredictable policy shifts, weak institutional coherence, or inconsistent enforcement, the project may face heightened risk. Conversely, stable regulatory frameworks, robust environmental laws, and long-standing government support for conservation allow for lower scores. Assessment must reference credible policy analyses, government reports, or internationally recognized governance indices.
8.3 Institutional Oversight and Administrative Capacity (I3)
Institutional oversight examines the strength and reliability of the governmental or administrative entities responsible for regulating land use, enforcing environmental laws, and overseeing project activities. Weak institutions increase the likelihood of unaddressed violations, illegal extraction, or administrative failure that could cause carbon reversals.
Evaluation should consider the capacity of government agencies, transparency in administrative processes, presence of corruption risks, responsiveness to reported violations, and the history of institutional performance in the region. Projects in areas with strong oversight, efficient reporting mechanisms, and low corruption typically score lower.
8.4 Scoring Institutional and Governance Risks
Each governance-related sub-factor is assigned a score from zero to five. These scores must reflect evidence from official land records, policy analysis, governance assessments, and field observations. The raw governance risk score is the sum of these three sub-scores. The weighted score applies the designated category weighting (0.15).
Even though governance risks have the lowest weighting among the four categories, they significantly influence long-term permanence and buffer requirements.
8.5 Documentation Requirements
Institutional and governance scoring must be supported by publicly available laws, government records, tenure documentation, governance indicators, and recognized assessments of institutional quality. Any assumptions must be justified, and all sources must be cited clearly in the Monitoring Report. Projects must also describe any changes in governance or tenure conditions since the previous monitoring period and explain how these changes influence updated risk scores.
Chapter 9 - Determining the Total Gross Risk Score
The total gross risk score represents the combined effect of natural, anthropogenic, management, and governance risks before accounting for mitigation measures. It is the foundational value from which residual risk and the final buffer contribution are derived. This chapter outlines the procedure for integrating category scores, applying category weightings, and calculating the total gross risk value in a transparent and verifiable manner.
9.1 Structure of the Gross Risk Calculation
Gross risk is calculated by combining weighted risk scores from all four risk categories. Each category contributes differently to the overall risk based on its relative influence on carbon permanence. Natural risks receive the highest weighting due to their uncontrollable nature, while governance risks carry the lowest weighting but remain essential to permanence integrity.
The weighted category scores are obtained through procedures described in previous chapters. The calculation assembles these values into a single composite score.
9.2 Formula for Total Gross Risk Score
The total gross risk score is calculated by summing the weighted scores from each category:
Rₜ = (Rₙ × 0.35) + (Rₐ × 0.25) + (Rₘ × 0.25) + (Rᵢ × 0.15)
Where Rₙ, Rₐ, Rₘ, and Rᵢ are the raw scores from each risk category. All values must be recorded to at least two decimal places.
9.3 Interpretation of Gross Risk Score
The gross risk score provides insight into the project’s overall non-permanence vulnerability. Higher scores indicate increased likelihood of carbon reversals in the absence of mitigation. The gross score does not determine buffer requirements directly, but it defines the starting point from which mitigation measures are assessed.
A high gross risk score may be characteristic of projects exposed to natural hazards such as wildfires or storms, or those with significant governance challenges. A lower score indicates environments where carbon stocks face fewer inherent threats.
9.4 Consistency and Documentation Requirements
All inputs used to calculate the gross risk score must be traceable. The Monitoring Report must document each category score and justify the assigned values using the evidence described in Chapters 5 through 8. The calculation must be presented in a manner that allows a verifier to replicate the total without ambiguity.
Evidence supporting each sub-score must be included or referenced in an annex. The risk assessment must be internally consistent, meaning that scores for different categories must reflect a coherent understanding of project context. For example, low encroachment risk must not be presented alongside high land tenure risk without explanation.
9.5 Updating the Gross Risk Score During Monitoring
Gross risk must be recalculated at each monitoring period. Changes may occur due to shifts in natural conditions, socioeconomic developments, improved management, or governance changes. The Monitoring Report must explain any increase or decrease in category scores and demonstrate how updated information affects the composite gross risk value.
Consistency across reporting periods is essential. Category scores must not be lowered without demonstrable evidence of reduced risk. Conversely, if environmental or social conditions deteriorate, the gross score must reflect increased risk accordingly.
Chapter 10 - Applying Mitigation Adjustments
Mitigation adjustments allow a project to reduce its gross non-permanence risk score by demonstrating the existence of effective, credible, and verifiable measures that lower the likelihood of carbon reversals. These adjustments do not eliminate risk; rather, they reflect how proactive management and protective actions improve project resilience. This chapter defines how mitigation measures are evaluated, how the mitigation adjustment factor is determined, and how the final residual risk score is calculated.
10.1 Purpose of Mitigation Adjustment
Mitigation adjustments ensure that projects are not penalized for risks they actively manage. Although natural, anthropogenic, management, and governance risks contribute to the gross risk score, many of these threats can be reduced through sustained interventions. This adjustment therefore creates a more accurate representation of permanence risk by acknowledging the effectiveness of credible mitigation strategies implemented at the project level.
10.2 Evaluating Mitigation Measures
Mitigation measures must be assessed based on their reliability, implementation status, scope, and demonstrated effect on permanence. Projects may present mitigation strategies across several domains such as ecosystem protection, community engagement, fire management, hydrology restoration, monitoring systems, enforcement partnerships, or financial safeguards.
To qualify for adjustment, mitigation must be currently implemented, adequately resourced, technically appropriate for the identified risk, and verifiable by a VVB. Mitigation measures that are planned but not yet operational cannot reduce the risk score.
Evidence of mitigation must be documented clearly. For example, if firebreaks are claimed as mitigation, the project must show maps, maintenance records, or operational protocols rather than conceptual plans.
10.3 Determining the Mitigation Adjustment Factor
Mitigation is represented through a factor denoted as M, which reduces the composite gross risk score. This factor ranges from zero to a maximum of 0.50, reflecting up to a fifty-percent reduction in risk when strong mitigation measures are demonstrably effective.
The value of M is determined holistically by evaluating the strength, scope, and evidence supporting the project’s mitigation portfolio. Weak or partial mitigation justifies only a small adjustment, whereas mature, well-funded, and comprehensive mitigation frameworks justify a larger reduction.
While the tool allows flexibility, mitigation scoring must remain conservative and must not exceed 0.50 under any circumstances.
10.4 Formula for Calculating Residual Risk
The residual risk score is calculated by applying the mitigation adjustment factor to the total gross risk score:
RR = Rₜ × (1 − M)
Where RR is the residual risk after mitigation, Rₜ is the total gross risk score from Chapter 9, and M is the mitigation adjustment factor.
Residual risk represents the final risk exposure that will be converted into a buffer withholding percentage.
10.5 Interpretation of Residual Risk
Residual risk reflects permanence risk after accounting for both inherent vulnerabilities and mitigation efforts. A project with high gross risk may achieve a moderate residual risk if it employs effective mitigation strategies. Conversely, a project with a relatively low gross risk may still maintain a high residual risk if mitigation is weak or unverified.
Residual risk should not fall below what is realistically achievable for the ecosystem type and management context. An extremely low residual risk implies that risk has been underestimated or mitigation overstated.
10.6 Documentation Required for Mitigation Adjustments
The Monitoring Report must present detailed documentation supporting any mitigation adjustment. It must describe the mitigation measure, its operational status, the resources dedicated to it, and evidence demonstrating its effect. Implementation must be verifiable and ongoing. Mitigation strategies that were active in previous monitoring periods must show continuity or improvement.
If mitigation measures have weakened or lapsed, the adjustment factor must be reduced accordingly.
10.7 Updating Mitigation Adjustments During Monitoring
Mitigation is dynamic and may strengthen or weaken across time as project conditions evolve. Each monitoring period must include a reassessment of mitigation. If the project expands fire management, strengthens community agreements, or improves hydrological control, the mitigation adjustment factor may increase. Conversely, mitigation effectiveness may decline due to funding changes, institutional instability, or unanticipated challenges.
The Monitoring Report must describe these changes clearly, justify adjustments, and ensure that mitigation values remain evidence-based.
Chapter 11 - Converting Residual Risk to Buffer Contribution Percentage
Once the residual risk score is calculated, it must be converted into a buffer contribution percentage that determines the share of verified emission reductions that the project must deposit into the PCS Buffer Pool. This chapter explains the conversion method, minimum and maximum thresholds, interpretation requirements, and reporting obligations associated with determining the final buffer withholding percentage.
11.1 Purpose of the Buffer Contribution Percentage
The buffer contribution ensures that PCS maintains system-wide permanence despite the inherent risk of carbon reversals at the project level. By withholding a percentage of verified emission reductions, PCS creates a shared insurance mechanism. Projects with higher risk must contribute more to the buffer pool, while those with strong mitigation and lower residual risk contribute less. This system balances fairness, environmental integrity, and portfolio-wide resilience.
11.2 Conversion Formula
PCS uses a standardized formula to convert residual risk into a buffer withholding percentage. The formula ensures that risk-adjusted contributions remain consistent across project types and ecosystems.
This formula performs three functions:
It multiplies residual risk by a factor of six to scale risk into a suitable buffer range.
It applies a minimum buffer contribution of 5 percent to all projects.
It applies a maximum buffer cap of 30 percent when residual risk is very high.
Projects cannot receive a buffer percentage lower than 5 percent or higher than 30 percent, regardless of risk level.
11.3 Interpretation of the Buffer Percentage
The buffer percentage reflects the project's overall permanence risk and must be interpreted in context.
A residual risk value that produces a buffer near the lower limit suggests stable ecological conditions, low anthropogenic pressure, robust mitigation, and strong governance. A project assigned the minimum buffer does not have zero risk; rather, its risk is sufficiently low that the minimum contribution is adequate to safeguard the buffer pool.
A buffer percentage near the upper limit indicates high natural or anthropogenic vulnerability, limited mitigation capacity, weak governance, or a combination of these factors. These projects may require closer monitoring and more frequent reassessment of risk conditions.
Intermediate values reflect proportional risk and are the most common across diverse NBS projects.
11.4 Consistency and Verification Requirements
The procedure for buffer determination must be documented clearly in the Monitoring Report. Documentation must include the value of the residual risk score, the application of the conversion formula, and the final buffer percentage. All values must be presented with supporting calculations to allow independent verification by a VVB.
If the buffer percentage changes from previous monitoring periods, the project must explain the cause of the change, whether it results from improved mitigation, increased natural hazards, or changes in the risk environment. Documentation must be transparent and must align logically with the evidence presented in earlier chapters of the risk assessment.
11.5 Buffer Stability Across Monitoring Periods
The buffer percentage may remain stable or vary over time depending on changes in risk conditions. Projects should not assume that buffer contributions will automatically decrease as the project matures. Reductions are permitted only when evidence shows genuine improvement in mitigation effectiveness or reduced exposure to risk. Conversely, increases in risk factors must result in higher buffer contributions when justified.
PCS may periodically revise its risk framework or buffer policy. When such changes occur, projects must follow updated guidance while ensuring continuity with previously reported assessments.
11.6 Integration With PCS Buffer Pool Operations
The buffer percentage translates into the number of carbon units withheld from issuance during each monitoring period. These units are transferred to the PCS Buffer Pool and maintained for the duration of the project's crediting period. In the event of a verified reversal, credits from the buffer pool compensate for the loss. If no reversals occur and the project fulfills its obligations through the end of its crediting period, buffer credits may be retired or reallocated according to PCS governance policies.
Chapter 12 - Reporting Requirements
Accurate, transparent, and comprehensive reporting is essential to ensure that a project’s non-permanence risk assessment can be fully replicated and independently verified. Because the buffer contribution directly affects the number of credits issued, all assumptions, datasets, scoring decisions, calculations, and mitigation measures must be documented with sufficient clarity and detail. This chapter describes the reporting requirements that must be met in each Monitoring Report submitted under the Planetary Carbon Standard (PCS).
12.1 Presentation of Risk Scores by Category
The Monitoring Report must present the risk assessment results for each of the four risk categories—natural, anthropogenic, management, and governance—in a clear and structured manner. For each category, the report must include the raw score, the weighting factor applied, and the resulting weighted contribution to the total gross risk score. The narrative explanation accompanying each score must describe why the assigned value is appropriate, referencing field data, historical information, geospatial analyses, and supporting documents.
12.2 Evidence Supporting Each Assigned Score
All risk scores must be grounded in verifiable evidence. The Monitoring Report must identify the sources used to justify each score, including ecological assessments, hazard maps, demographic information, forest inventories, financial records, governance evaluations, hydrological studies, and any other relevant documents. When the project uses external datasets or scientific publications, citations and data access links must be included. If site-specific field observations contribute to the assessment, the report must describe the methods used to collect those observations.
12.3 Documentation of Mitigation Measures
Mitigation measures are central to determining the mitigation adjustment factor. Therefore, the Monitoring Report must provide a detailed account of all mitigation actions implemented during the reporting period. The report must describe the operational status of each measure, its scope, the resources allocated, and how it reduces risk in a measurable way. Evidence may include operational plans, monitoring reports, maintenance logs, training records, firebreak maps, community agreements, or hydrology restoration documentation. Mitigation that is planned but not yet implemented cannot be reflected in the adjustment factor.
12.4 Presentation of Gross and Residual Risk Calculations
The Monitoring Report must include a clear presentation of the calculation steps used to determine the total gross risk score and the residual risk score. This includes the values assigned to each risk category, the application of weighting factors, the mitigation adjustment factor, and the final computed values. Calculations must be presented in a manner that allows independent replication by a Validation and Verification Body. All intermediate steps must be included and numerical values must be internally consistent.
12.5 Determination of Buffer Contribution Percentage
The report must show how the residual risk value was converted into the buffer withholding percentage using the standard PCS formula. The Monitoring Report must also explain any changes from previous monitoring periods, such as improved mitigation, increased natural hazard exposure, or governance changes. If the buffer percentage increases due to worsening risk conditions, the project must document the causes. If it decreases, the project must demonstrate measurable improvements in conditions or mitigation.
12.6 Reporting Changes in Risk Conditions Over Time
Non-permanence risk is dynamic. The Monitoring Report must describe any changes in ecological, social, economic, or governance conditions since the previous monitoring period. Examples include increased fire frequency, new infrastructure developments, changes in community relationships, shifts in land tenure, or improvements in management capacity. The report must clearly show how these changes influenced updated risk scores and the resulting buffer contribution.
12.7 Transparency and Replicability Requirements
The entire risk assessment must be presented so that a VVB can fully replicate each score and calculation without requiring supplemental clarification. All datasets, references, maps, and supporting documents referenced in the assessment must be provided or made accessible. Any assumptions must be clearly stated, justified, and applied consistently.
12.8 Summary of Final Results
The Monitoring Report must include a summary that consolidates the residual risk score, the buffer contribution percentage, and the final number of units transferred to the PCS Buffer Pool for the monitoring period. This summary must align with the crediting calculations and issuance tables elsewhere in the report.
Annex A - Risk Scoring Tables
Annex A provides standardized tables for assigning and documenting risk scores for each sub-factor within the four risk categories. These tables ensure transparency, consistency, and verifiability across all PCS NBS projects.
A.1 Natural Risk Scoring Table
N1
Wildfire Exposure
N2
Extreme Weather Events
N3
Pests, Diseases, Invasive Species
N4
Hydrological Instability
The Monitoring Report must summarize the evidence used (historical data, hazard maps, field observations, scientific literature) and justify the score.
A.2 Anthropogenic Risk Scoring Table
A1
Encroachment Pressure
A2
Illegal Extraction Risk
A3
Land-Use Competition / Conflict
Documentation must reference socioeconomic data, land use analyses, enforcement records, and stakeholder assessments.
A.3 Management & Operational Risk Scoring Table
M1
Financial Stability
M2
Operational Capacity
M3
Long-Term Management Commitment
Evidence must include management plans, organizational structures, financing arrangements, and proof of operational systems.
A.4 Institutional & Governance Risk Scoring Table
I1
Land Tenure Security
I2
Policy and Regulatory Stability
I3
Oversight and Administrative Capacity
Evidence includes tenure documents, legal frameworks, governance assessments, and institutional performance records.
Annex B - Mitigation Evidence Templates
Annex B provides structured templates that must be used to document mitigation measures and justify the mitigation adjustment factor (M).
B.1 Mitigation Measure Documentation Template
Fire Management
Hydrology Management
Community Agreements
Enforcement & Patrols
Financial Contingency Mechanisms
Monitoring Systems
The project must clearly describe how each measure reduces risk and provide verifiable evidence (maps, logs, agreements, financial commitments, operational protocols, etc.).
B.2 Mitigation Adjustment Factor (M) Determination Table
Natural Risk
Anthropogenic Risk
Management Risk
Governance Risk
Although mitigation is assessed holistically, this table supports transparent review.
B.3 Residual Risk Calculation Table
Total Gross Risk (Rₜ)
Mitigation Adjustment Factor (M)
Final Residual Risk (RR)
Annex C - Calculation and Summary Sheets
Annex C provides standardized formats for presenting the full risk assessment process and the final buffer percentage.
C.1 Composite Risk Summary Table
Natural Risk
0.35
Anthropogenic Risk
0.25
Management Risk
0.25
Governance Risk
0.15
Total Gross Risk (Rₜ)
—
—
C.2 Buffer Percentage Calculation Sheet
Residual Risk (RR)
Buffer Formula Applied
Final Buffer Percentage (B%)
Credits Withheld for Buffer
Based on verified units
C.3 Monitoring Period Update Sheet
This ensures consistent and transparent tracking over time.