Voluntary carbon markets must scale up dramatically to meet the climate challenge. Here are 17 recommendations for achieving that and a chance for you to weigh in.
10 November 2020 | The Taskforce on Scaling Voluntary Carbon Markets today published a long-awaited Consultation Document on how to ensure voluntary carbon markets are able to generate enough emission reductions to meet the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius (3.7 degrees Fahrenheit) above preindustrial levels.
Greenhouse gas emissions must fall by 50 percent in the next 10 years and reach “net zero” by 2050. Carbon offsets can accelerate the first phase by funneling money into the most cost-effective reduction programs, and they can ensure the second phase by financing programs that actively remove gasses from the air.
Launched in September by the Institute of International Finance (IIF) and former Bank of England Governor Mark Carney, among others, the Taskforce aims to forge agreement on practices that can help the market scale without sacrificing quality. The Consultation Document contains 17 recommendations spread among six topics, and the IIF encourages all market participants to submit feedback at ScalingVCM.com
The six topics for action are as follows:
- Core carbon principles (CCPs) and attribute taxonomy. The Taskforce recommends the creation of a meta-standard that could serve as a global set of criteria for determining what constitutes a voluntary carbon credit.
- Core carbon reference contracts. To facilitate liquidity, the Taskforce recommends the creation of liquid reference contracts (spot or futures) that can generate daily price signals that serve as reference prices for over-the-counter transactions.
- Infrastructure: trade, post-trade, financing, and data. To facilitate traceability and liquidity, the Taskforce recommends the creation of global clearinghouses and meta-registries.
- Consensus on offset legitimacy. To ensure best practices, the Taskforce recommends the creation of a consensus on when offsets can and can’t be used to make claims of carbon neutrality or net-zero emissions.
- Market integrity assurance. To ensure market integrity, the Taskforce recommends certification and licensing of participants.
- Demand signals. The Taskforce also aims to encourage companies that aim for carbon neutrality to purchase offsets that meet recognized criteria.
We will provide deeper coverage at the end of the day, after participants have had a chance to digest the document.
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