In the past two years, we’ve seen a remarkable renaissance of the carbon markets.
Some markets are of a “compliance” type - like in Europe - heavily regulated but limited in geography and scope; but there is limited prospect for an overall Cap & Trade worldwide as carbon markets were ignored in the US IRA - the largest Climate bill ever.
So, what happens when a sector or a company is not covered by those compliance markets but still have pledged a net-zero or carbon-neutrality (whatever that means)? Well, that’s where the “voluntary market” steps in.
Re-born on the ashes of the Kyoto Protocol, projects such as forestry, carbon avoidance and removal are developed and get rewarded for their environmental benefits. That’s not THE solution to climate change, but that could be one of several.
The current voluntary market has quadrupled its size in the last 3 years to 2bnUSD and is expected to reach 50bnUSD by the end of the decade. Still small, compared to a 10bnUSD/day on the oil market… but we need all the help available on our road to a +1.5C world.
Unfortunately, we have immediately witnessed a lot of gaming and greenwashing around the issue of carbon credits. Only horror stories make it to the media, not the great projects (and there are a lot); the former must be banned, the latter promoted and rewarded.
Around Mark Carney, former governor of the central banks of Canada and England, a group of scientists, NGOs, Industries have coalesced into the Integrity Council for Voluntary Carbon Market to create a quality benchmark, and make sure that the carbon credits proposed to corporations on their way to net-zero are sound.
We bring Annette Nazareth, chair of the Integrity Council to discuss about the goal, talk about horror stories and how the ICVCM, in full openness, is establishing rules for a robust market.
(we’re sorry if sometimes the sound quality is not perfect)
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References:
https://icvcm.org/public-consultation/
https://vcmintegrity.org/
https://trove-research.com/
Alessandro Vitelli
Mark Lewis
https://www.ieta.org/
https://verra.org/
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