Voluntary Carbon Accreditation
The credibility of carbon credit schemes is vital to a successful market. Buyers must be able to have confidence that their money has been well spent to avoid the risk of reputational damage associated with “greenwashing”, while sellers need to carefully define what it is that they are selling if the market for stacked benefits is to develop.
Current voluntary carbon credit schemes have emerged from the private and third sector over the past 20 years without much in the way of global oversight, but the Taskforce on Scaling Voluntary Carbon Markets(https://www.iif.com/tsvcm) is now seeking to address the issue.
The TSVCM is a private sector-led initiative with Mark Carney at the helm which aims to scale an effective and efficient voluntary carbon market to help meet the goals of the Paris Agreement. Recognising that the voluntary market is not currently working effectively due to lack of recognised standards, it proposes a governance body to set Core Carbon Principles, against which carbon credits offered by the market can be benchmarked. If carbon credits meet those Principles, they can be labelled as such by standard setting bodies, improving credibility and standardisation. The Task Force’s Phase 2 Report is useful reading: https://www.iif.com/Portals/1/Files/TSVCM_Phase_2_Report.pdf
The two standards most often used in the UK are Gold Standard and Verra:
Gold Standard (www.goldstandard.org) was developed in 2003 by WWF and other NGOs “to ensure projects that reduced carbon emissions featured the highest levels of environmental integrity and also contributed to sustainable development”. It claims to have issued 159 million carbon credits from projects in more than 60 countries. Its Gold Standard for the Global Goals (GS4GG) links its verification process to the UN’s 17 Goals for Sustainable Development and includes emissions reduction schemes such as cookstove projects in developing countries. Its landscape projects include the Yarra Yarra Biodiversity Project in Western Australia which involved re-vegetating 10,000ha of degraded farmland with native tree and shrub species to restore bush habitat. The carbon credits (1.257 million tonnes) are protected by 100 year carbon covenants. The carbon credits for this project were advertised at $30/t and it has sold out.
Verra (www.verra.org) is a non-profit corporation based in the USA. Established in 2005 by the private sector, it develops its own global standards for environmental programmes, including the Verified Carbon Standard (VCS). Projects certified under the VCS can issue tradable credits called Verified Carbon Units (VCUs), which can be sold on the open market and retired to offset emissions. Each VCU is equivalent to a metric tonne of greenhouse gas emissions reduced or removed from the atmosphere. It claims that around 1,700 projects have been registered, of which 1,300 have issued a total of more than 700 million VCUs, about half of which have been retired.
If the TSVCM is successful in establishing global standards, Gold Standard and Verra will be among those bodies seeking to ensure that their standards align with the Core Carbon Principles in order to promote more confidence among investors in the principle of carbon credits. Without such rigour, the very concept risks falling into disrepute.