El Niño 2026: How Big Could It Get? – State of the Planet

Nature & Climate Perspective

**Record-breaking sea-surface temperatures driven by the 2026 El Niño threaten irreversible biophysical tipping points, severely destabilizing global LULUCF and Blue Carbon sinks. **

• Thermal stress and marine heatwaves risk catastrophic dieback across coastal Blue Carbon ecosystems, particularly mangroves, kelp forests, and seagrass meadows.
• Extreme drought and shifting precipitation regimes degrade terrestrial biogenic carbon sequestration, heightening wildfire vulnerability in tropical forest biomes.
• Widespread ecological disruption risks turning key terrestrial sinks into net carbon sources, eroding baseline environmental stability required for nature-based sequestration.

Market & Policy Outlook

**Accelerated physical climate risks will stress voluntary and compliance carbon market mechanisms, challenging ICVCM Core Carbon Principles regarding permanence and buffer pool adequacy. **

• Heightened reversal events will force supervisory bodies under Article 6.4 and host nations trading ITMOs via Article 6.2 to recalibrate baseline allocations and non-permanence risk buffers.
• Financial markets will likely discount land-sector credits lacking rigorous catastrophic risk coverage, driving up cost structures for projects aligning with ICVCM CCP-level permanence guarantees.
• Corporate net-zero procurement strategies aligned with SBTi faces severe Scope 3 physical supply chain shocks, compelling firms to reassess the long-term viability of nature-based mitigation portfolios.