In the world of climate action, the voluntary carbon market (VCM) has never operated from a comfortable seat. Scrutiny, debate, and sharp critiques have been part of the VCM since its inception, and these pressures have only intensified over the past two years.
At Verra, we welcome all this input. We take it into consideration and make deliberate decisions about each aspect.
The VCM is evolving, and so is Verra. Improvement isn’t a one-time effort, but an ongoing journey. A commitment to continuous learning and improvement is central to Verra’s strategy. As such, we welcome feedback and aim to engage in critical discourse about how our standards, methodologies, tools, and processes can be improved.
In this vein, Renoster released a report last summer titled Fixing Verra: A Critical Analysis of Verra’s Carbon Program with Proposals for Policy and Technical Reforms.
Following a flurry of activity at the end of last year—which has seen the release of our first-of-its-kind Nature Framework, a robust COP29 schedule, and recent Integrity Council for the Voluntary Carbon Market approval of our revolutionary REDD methodology, Jurisdictional and Nested REDD+ Framework, and Afforestation, Reforestation, and Revegetation methodology—we’re now taking a moment to publish our response.
We want not only to acknowledge some of that report’s valuable suggestions, but also to clarify which ideas we already have in motion and to explain where certain proposals are not feasible.
The following applies to the recommendations in the report:
- 25 are current Verra practices
- 13 are in development
- 11 are new ideas worth considering
- 13 are ones that we disagree with
Suggestions
Below, we provide brief responses to the suggestions that Renoster described as “most immediately impactful.” We welcome further discussion with Renoster and any other parties who would like to engage in constructive and critical conversations about how we can improve the VCM.
Current Status
Current Verra practice, with improvements under development.
Verra Response
Many project types, including AFOLU projects, require benefit-sharing mechanisms. Our current view is that prescribing the amount of benefit sharing does not fully solve the problem and can lead to over- or under-sharing based on project context. Instead, we are strengthening our requirements for how a benefit-sharing plan must be established and agreed upon by all relevant stakeholders. This is also aligned with the direction of the ICVCM and must be accompanied by clear requirements for what financial information must be shared to demonstrate the plan has been followed
Current Status
Current Verra practice, with improvements under development.
Verra Response
We should push for as much financial transparency as reasonably possible, keeping in mind the need for commercial sensitivity. Co-benefit claims, in the form of Sustainable Development Goal (SDG) contributions, are already required to be made public by VCS projects.
Current Status
Current Verra practice, with improvements under development.
Verra Response
Current Verra practice is to review projects based on conformance with program rules and requirements, which include core principles and methodologies. Verra plans to strengthen the VCS Program principles in VCS v5.0. Verra also plans to clarify how program principles should be applied during project assessment and review.
Current Status
Current Verra practice, with improvements under development.
Verra Response
This is the intention of IFM methodologies, although some early IFM methodologies use common performance baselines with historical averages, potentially allowing projects to maintain existing practices if they are better than the average. The dynamic performance benchmark used by VM0045 is intended to better ensure that projects represent a measurable improvement over time. Other IFM methodologies are also currently being assessed and revised to better address this and other issues.
Current Status
Current Verra practice, with improvements under development.
Verra Response
This is current practice under VM0048 for unplanned deforestation, which uses an allocation of a jurisdictional historical average and where baselines cannot exceed the jurisdictional rate of the historical reference period of 10 years prior to baseline period.
The module for Avoided Planned Deforestation (APD) is under development for VM0048, but the options being considered to develop baseline are all based on average over the historical reference period.
The existing procedure for setting baselines for APD projects is prescribed in VMD0006 and is based on the historical average. Updates are underway to address this concern in other relevant methodologies.
Current Status
Much of this is current practice, but some suggestions here have been considered and declined.
Verra Response
Much of this is current practice, but some suggestions here have been considered and declined
Forbidding monocultures and non-native species was considered carefully in the VCS Standard, v4.7 following a dedicated public consultation. The VCS Program currently allows monoculture plantations and non-native species only where activities conform with ecosystem safeguards and only in previously degraded ecosystems.
The VCS Standard requires that project areas have not been deforested in the 10 years prior to project start date, unless it can be demonstrated that deforestation was unplanned and not undertaken to generate forest carbon credits. This is also incorporated in VM0047 and will be further clarified in upcoming revisions.
To date, biological rotation age has not been a primary factor in determining project/contract length, but it is a concept that can be considered with upcoming methodology revisions.
Current Status
Related updates are under development.
Verra Response
Verra is building a remote long-term monitoring system (LTMS) for monitoring the permanence of projects. The goal is to eventually use the LTMS for loss identification and quantification. In the future, the LTMS’ application could potentially be extended to annual monitoring and validation, although it is important to determine if this additional administrative burden would result in material benefits to integrity.
Current Status
New idea to be considered.
Verra Response
This is an option that is under consideration but is likely not viable in the short term due to a lack of viable insurance products.
Current Status
While we understand the intention of this recommendation, we disagree that it is feasible as stated.
Verra Response
Verra investigates all allegations of wrongly issued credits and takes this seriously. Where an excess issuance is confirmed through a Verra review we have an established process for compensation in Section 6 of the Registration and Issuance Process. Compensation can include cancellation of the credits from the project (typically if they are with the project proponent) or, where credits have been sold, the proponent is required to cancel other credits as compensation (such as from a later crediting period). In addition to requiring compensation, Verra also considers the suspension of verification and validation bodies that were involved in the projects and failed to detect the issues. Recent examples of this include the China rice project rejections and sanctions against validatio/verifification bodies,cookstove project reviews and credit cancellations related to C-Quest Capital as well as their compensation.
Current Status
While we understand the intention of this recommendation, we disagree.
Verra Response
Verra cannot intervene or cancel bilateral agreements or reassign projects. However, we are exploring options to enable instance transfers. For nature-based projects, a platform for Indigenous Peoples and local communities to share information on good and bad actors could be a more effective approach.
Current Status
We disagree with this recommendation.
Verra Response
There are two primary challenges to this approach:
- Validation/verification bodies must, under ISO accreditation, do pre-engagement planning with the client before even accepting the proposal. Logistically, having Verra assign the audit to a VVB will be challenging because VVBs need to determine if they have the time, competent staff/contractors and capacity at that moment to undertake an engagement. All of these things make it complicated for Verra to assign audits to VVBs randomly. This can become an even bigger bottleneck in timing as Verra would have to assign the audits and wait for the VVB to confirm. If the assigned VVB declines, then Verra would need to repeat the process until finding a VVB that can accept.
- Every VVB has a different pricing structure that considers the audit team composition and travel costs. The VVB must determine what auditors/contractors are required in each case, and this frequently includes local experts. Verra may assign a VVB that has no regional/local staff or contractors, and this alone could result in the audit costing two times more than a local VVB.