Earlier today, the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) released its final report on a blueprint for the infrastructure needed for a scalable, liquid, transparent, and reliable voluntary carbon market. Verra commends the Taskforce for producing a report that recognizes the impact private sector finance channeled through the voluntary carbon market has on climate action. We believe that this report will increase confidence in the market, which, in turn, will lay the foundation for scaling it up, getting us closer to the goal of keeping global warming below 1.5 degrees Celsius.
For the past two decades, the voluntary carbon market has evolved and matured into a robust and effective means to tackle climate change by driving resources to projects that deliver independently verified and additional emissions reductions on a global scale. The standards that establish the rules and requirements that projects have to follow to generate emission reductions and removals for this market have evolved and today provide a strong foundation for this market. The blueprint laid out in this report will not fundamentally change the way we and other high-quality standard-setters operate, but it will formalize existing rules and procedures, provide a basic level of consistency, and ensure accountability. As a result, the recommendations would instill in stakeholders trust that the carbon credits traded in this market represent real and permanent emission reductions and removals.
At the heart of the effort to ensure consistency across all credits certified under any standards program are the Core Carbon Principles, minimum threshold quality criteria that standards have to meet. These criteria would assure buyers and other market players that carbon offsets represent genuine emission reductions, have high environmental integrity, and do not have any negative social or environmental side-effects. Any possible co-benefits (educational, economic, social, environmental impacts other than direct GHG emissions mitigation) will be addressed separately, as an additional attribute.
The report takes a broad and comprehensive outlook and, with regards to forest-based carbon credits, recognizes the need for offsets originating from both removal and reduction activities.
Along with the recognition that we need to reduce emissions, for example by avoiding deforestation, also comes the welcome decision of the Taskforce to embrace REDD+ projects at all scales (i.e., both at the project- and jurisdictional scale). This is an acknowledgment of the different but complementary roles project-level and jurisdictional REDD+ play and will result in the maximum flow of finance to all avoided deforestation efforts, which will help scale climate mitigation.
The infrastructure for scaling up the voluntary carbon markets as outlined in the report includes plans for 1) a governance body to oversee the implementation of the Taskforce’s decisions; 2) a meta-registry that provide standardized issuance numbers for projects across the existing GHG programs; and 3) standardized contracts that ensure adherence to the Core Carbon Principles and which can be easily customized to reflect individual buyers’ preferences. Together with the other recommendations, these various infrastructure components will put into practice the vision of a market with a high degree of accountability and scalability.
Exactly how the infrastructure for the voluntary carbon market as outlined in this blueprint will be operationalized is still to be determined. It will be important to ensure that the governance body overseeing the implementation of this infrastructure has the necessary skill and knowledge and that its scope is clearly defined. While there are important decisions yet to be made, we want to make sure that the final governance structure adds value and helps to drive further finance towards climate mitigation.
The Taskforce is a private sector iniative, launched by Mark Camey, UN Special Envoy for Climate Action and Finance Advisor to UK Prime Minister Boris Johnson for COP26; chaired by Bill Winters, Group Chief Executive, Standard Chartered; and sponsored by the Institute for International Finance (IIF).
Verra’s CEO, David Antonioli, has been involved in the work of this Taskforce — among many other stakeholders.
We want to express our gratitude to IIF and a team from McKinsey for running an open and transparent process that took into account a number of different viewpoints and managed to balance a broad variety of input, creating a solid structure for this market that will allow for some necessary flexibility.
We plan to remain a part of the continuing work of this Taskforce and participate in some of the individual Working Group that will carry this work forward.