Delivering Confidence in Adaptation Results
What are VRCs?
A VRC™ is the monetized cost of the estimated impact of climate change, adjusted for the income level of the community, that will be avoided as a result of the project. In brief, it is a credit for work done to avoid damages or losses owing to climate change - a vulnerability reduction credit. A VRC™is €50 worth of income adjusted avoided impact costs.
VRCs are output based and issued periodically, post hoc, after validation of vulnerability reduction measures that have been and are being implemented.
Each VRC is denominated in units of €50
The number of VRCs issued to a particular project is a function of the VRC’s nominal value, the project’s Avoided Impact Cost (AIC) and an Income Equalization Factor (IEF), where:
The relationship between VRCs, AIC, and IEF stems from the three basic components of vulnerability as articulated in the literature: exposure, sensitivity, and adaptive capacity.
Projects must meet strict registration and monitoring and verification standards as outlined in Higher Ground's VRC Standard Framework.
While a quantified, fungible instrument, projects wishing to earn VRCs wishing to be registered must meet a number of clearly defined qualitative and quantitative requirements, including avoidance of harm and community consultation.
Why Vulnerability Reduction Credits?
Uses of such a certification instrument could include providing impact investors with confidence that they are getting more than purely a financial return on investment. It may as well offer national and local governments, development financing institutions, and other donors a comparable tool for project design and prioritization, monitoring and evaluation. It could serve as a tool for national and international target setting on adaptation finance, and that adaptation results are being delivered; however, knowledge of what these participants are already doing, and why, is a key foundation for understanding how our instrument can be of maximum social value.
To understand motivations for existing adaptation and adaptation funding, Higher Ground developed a report that considers:
How is adaptation done, and why?
What budgets support adaptation?
If and how is adaptation assessed?
What do supporters of adaptation think of certifying the results of adaptation?
To download the report:
Learn More About VRCs
Higher Ground Foundation hosts regular webinar tutorials on VRC basics, that are announced in the News page of our website. You also may download a webinar tutorial presentation:
For more details, explore other pages in this tab and throughout our website, review our peer-reviewed and other external documents, and contact us below if you would like to further discuss.