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.
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VRCs are output based and issued periodically, post hoc, after validation of vulnerability reduction measures that have been and are being implemented.
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Each VRC is denominated in units of €50
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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:
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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.
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Projects must meet strict registration and monitoring and verification standards as outlined in Higher Ground's VRC Standard Framework.
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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.
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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.
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To understand motivations for existing adaptation and adaptation funding, Higher Ground developed a report that considers:
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How is adaptation done, and why?
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What budgets support adaptation?
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If and how is adaptation assessed?
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Why assess?
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What do supporters of adaptation think of certifying the results of adaptation?
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To download the report:
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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:
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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.
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