Take on a podcast episode from The CDR Policy Scoop, originally published Sun, 03 Ma. Listen: https://shows.acast.com/the-cdr-policy-scoop/episodes/fixing-permanence-insurance-and-the-permanence-trust-with-na

TL;DR

  • Natalia Dorfman (Kita CEO) argues buffer pools were a useful bootstrap but not built for perpetual liability — a defensible position, gaining traction with standards themselves.
  • Frames permanence as two distinct problems: short-term liability (handle via insurance on the developer) vs long-term/perpetual (needs a fund mechanism). Useful clean split.
  • The Permanence Trust: an endowment-style, fully capitalized fund where per-credit fees are invested so the corpus always exceeds expected reversal costs. AFF-led feasibility study, report due ~June 2026, pilot to follow.
  • Expects multiple Permanence Trusts (per-jurisdiction, per-standard), not one global fund. Realistic, though fragmentation risk goes unaddressed.
  • Interim move: insurance-wrapped buffers so standards stop “holding the bag.” Practical bridge, but no costs disclosed on-air.

Eve Tamme and Sebastian Manhart host Natalia Dorfman of Kita for a 30-minute walk through where carbon insurance has landed in 2026 and, more substantively, the Permanence Trust concept being developed by the American Forest Foundation with Kita as modeling partner. If you’ve been hearing “permanence trust” in conference hallways and wondering what’s actually under the hood, this is the cleanest public explanation so far.

The load-bearing argument: buffer pools conflate two different liabilities. A 10-year reversal risk on a specific project is something an individual developer can plausibly underwrite — and Vera’s durability pilot is testing exactly this, letting developers buy insurance in lieu of buffer contributions. But perpetual liability cannot credibly sit with any single company. Dorfman: “At some point, the ability of an individual company today to promise that they will handle permanence in perpetuity loses that range of credibility.” The Permanence Trust answers the perpetual side: a regulated, endowment-style vehicle where a per-credit fee is invested, the corpus grows, and reversals are remedied from returns. The warranty travels with the credit, not the buyer. Kita’s modeling work covers reversal likelihood by project type, portfolio diversification, and forward price curves to size the required corpus — the same machinery they already run for insurance policies.

Two things the episode dodges. First, no numbers. Dorfman explicitly declines to share the per-credit cost, saying only that it should replace existing buffer-contribution costs rather than stack on top — but that’s contingent on standards actually retiring their buffers, which is the chicken-and-egg Manhart correctly flags. Second, Manhart presses on whether this is genuine asset-class maturation or just patching the existing VCM. Dorfman’s answer — that “asset class” means different things to different participants and the Trust can specify like-for-like replacement criteria — is honest but doesn’t fully engage the critique. For durable CDR buyers specifically, the question of whether a forestry-reversal warranty backed by a diversified fund counts as “replacement” is non-trivial.

For context, this sits alongside the broader insurance build-out at Kita and parallel work at players like Oka and Ceezer on portfolio-level risk. The AFF feasibility report is reportedly landing in June — worth watching, particularly for the assumed reversal rates and target funding ratios, which will tell you whether the modeling is conservative or optimistic.

Worth the 30 minutes if you’re a standard, a buyer thinking about long-tail credit risk, or a developer paying buffer contributions you’d like to claw back. Skip if you want hard numbers — those are coming in June.