Until recently, the voluntary and compliance carbon markets occupied two distinct spaces. Over the past couple of years, however, we have seen these two markets becoming increasingly integrated, especially as compliance carbon markets have begun to rely on the infrastructure developed in the voluntary markets. Examples of this include CORSIA, as well as Colombia’s and South Africa’s carbon tax systems which allow entities with tax obligations to use, for example, Verified Carbon Units (VCUs) to cover a portion of their tax liability. In addition, REDD+ projects are being “nested” into jurisdictional programs to maximize a country’s climate and sustainable development outcomes, with both jurisdictional and nested project credits potentially accepted in both voluntary and compliance market programs.
To increase the supply of high-quality projects that fit within these broader market constructs and enable countries to scale up their climate ambition, Verra has been advancing several leadership strategies.
- We just launched a public consultation on updates to the Requirements for the Jurisdictional and Nested REDD+ (JNR) Framework with a view to providing a blueprint for how carbon finance can protect forests at scale. The objective of these updated requirements is to better support jurisdictional REDD+ programs and the integration of REDD+ projects into jurisdictional accounting — and to align project-level accounting with national or subnational accounting. The deadline for this public consultation is 7 November 2020.
- We are also holding a Public Consultation on a Proposal for Scaling Voluntary Carbon Markets and Avoiding Double Counting Post-2020 to seek input on a new “Article 6” label. Such a label would allow VCUs to be used flexibly in compliance markets or in voluntary markets, depending on the buyer’s preference. VCUs with or without such labels may be issued and used as needed by buyers in different markets, according to the claim a buyer wants to make — whether it is to offset their own footprint or contribute to a country’s Nationally Determined Contributions (NDCs). As a result, VCUs generated under the VCS Program would be clearly aligned with the Paris Agreement and other emerging compliance mechanisms, while also supporting corporate climate action that is driving new and additional finance for climate mitigation activities. This public consultation ends on 17 October 2020.
- We have also started to issue quarterly data briefs on VCS activity in countries where the purchase of Verified Carbon Units (VCUs) is now an accepted mechanism for satisfying a portion of the carbon tax liability. Our Data and Insights series this month includes the second issue on Colombia (first released in July), as well as the inaugural issue on South Africa. Earlier this year, we also published an overview of how Verra plans to support the development of projects in South Africa and, more recently, guidance for listing Verified Carbon Units (VCUs) on the registry of South Africa’s Carbon Offset Administration System (COAS).
One of Verra’s key goals is to strengthen the role of offsetting in both the voluntary and compliance markets, while ensuring such action increases ambition. As part of this, Verra is working to make certain that only the highest-quality projects are credited, while advancing innovation in the market, for example in the area of Natural Climate Solutions. In upcoming newsletters, we will be unpacking each of these aspects further.
The same principles — strengthening voluntary action, ensuring high-quality projects, and advancing innovation — have also been guiding Verra’s work in scaling up plastic waste collection and recycling activities. Last week we announced public consultations on two different elements of our market-based approach to transparently and sustainably increase the value of plastic waste:
- Two methodologies of the Plastic Waste Reduction Program (Plastic Program) which will set out eligibility and accounting requirements for informal and formal plastic waste collection, and new or expanded mechanical recycling infrastructure; and
- The Guidelines for Leadership in Corporate Plastic Accounting, which describe best practices for corporate assessment of plastic footprint and waste and identification of actions within and beyond their value chain, including use of Plastic Credits, to take responsibility for their plastic use.
For more news about our work, please read on.
David Antonioli, CEO
In Other News:
- Verra Annual Report 2019 Published
- Coming Soon: Public Consultation for Version 0.2 of LandScale Assessment Framework