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COMMENT: Taskforce to Scale the Voluntary Carbon Market: How to scale without sacrificing quality

At Gold Standard, we are encouraged by the interest in a growing number of market participants to help catalyse more private sector investment in climate protection projects, as evidenced by Taskforce to Scale the Voluntary Carbon Market set up by Mark Carney. Our Chief Technical Officer, Owen Hewlett, is part of this Taskforce and offers his views below on key tenets that can help ensure future developments lead to high-quality, high-impact carbon offsetting.

Originally published on Carbon Pulse.

Owen Hewlett, Chief Technical Officer, Gold Standard

The Task Force’s objective to scale the voluntary carbon market, bringing increased investment capital to climate protection projects as well as infrastructure and processes to improve efficiencies and increase transparency is a welcome market development.

They rightly call for science-based target setting in tandem with robust carbon offsetting, clear claims guidance for credible communications and broad public support, and long-term corporate commitments and futures contracts to de-risk project development.

Yet having sat in Task Force discussions and observed several emerging instruments that seek to operationalize the forthcoming ‘blueprint,’ I spot several concerns about the quality of what is meant to scale.

Credits for voluntary offsetting must not be double counted or double claimed.

The Task Force has so far distanced itself from the challenges of double claiming with host countries, which is inevitable in the era of the Paris Agreement. Offsetting emissions with a double claimed carbon credit means that you cannot assume the other claimant does not take it as a signal to reduce their own ambition and carry on emitting.

This is not only relevant for compliance markets. It is not resolved by additionality. Without resolving double claiming, the market cannot guarantee that credits have achieved the promise of carbon offsetting – permanently avoiding or removing carbon emissions.

Robust safeguards and sustainable development must be part of minimum standards.

Safeguarding and sustainable development provisions as a minimum criteria are good progress. However, safeguards at many standards are limited, often box-ticking exercises - sometimes even retroactive after project implementation. Safeguarding should be, at minimum, aligned with UNDP/IFC principles and should include gender-sensitive requirements.

Alignment with the Sustainable Development Goals is an obvious market development. Field experience, academic research, and new tools and guidance exist to enable projects to monitor impact at the SDG target or indicator level. These should also be independently verified alongside the carbon impact.

Quality is critical, yet a single price on carbon would disincentivize high-impact activities.

Minimum taxonomy for quality is needed. However, If only a ‘floor’ is emphasized and important details about high-ambition approaches or detailed project impact are not clearly discoverable, the market will default to low-hanging fruit. This is diametrically opposed to the role a carbon market should play. A more nuanced approach, such as the carbon credit rating systems in development by WWF, EDF, and Oeko Institute or a similar initiative that incentivizes high integrity can help avoid a rush to lowest common denominator solutions.

Rule setting and oversight must be managed by appropriate actors.

The private sector should not be regulating this market, nor should market participants who financially benefit from market activity. Development and ongoing management of core taxonomy should be led by independent civil society actors.

Vulnerable projects and marginalized stakeholders should be protected.

While a 2016 ‘start date’ is logicial to align with the first commitment period of the Paris Agreement, there is substantial research on the need to protect ‘vulnerable’ projects that started prior to this date, for example, many community projects in the developing world. With a strict 2016 cut-off, these projects would need to fail and then restart in order to continue – that is, if they were able to weather the storm. This is illogical, inefficient and unethical, and contravenes the potential of carbon markets to make a material contribution to climate justice.

In summary, the Task Force has rightly identified many of the barriers to scaling the voluntary carbon. As ever, the devil is in the details. Whether a Task Force blueprint maximises the positive impact of increased market activity for those on the front lines of climate change is yet to be seen.

Media Category: News
Event Dates: Tuesday, December 8, 2020