Scaling the voluntary carbon market? Let's think bigger.
The 25th August 2021, Gold Standard announced a partnership with the Swedish Government, through which the government will use Gold Standard’s infrastructure to ensure the quality of carbon credits they buy and use under Article 6 of the Paris Agreement.
This partnership is the first of its kind globally. It is also a sign of things to come.
At Gold Standard, we are taking steps to respond to new drivers shaping the voluntary carbon market in the new context of the Paris Agreement, the need for science-based mitigation hierarchy as well as the work of the Task Force for Scaling the Voluntary Carbon Market (TSVCM). We are also looking to the longer-term, and the role of markets in helping to achieve the global balance of emissions sinks and sources needed to achieve the goals adopted in Paris.
Over the next few months, you will see more signs of how we are building for a future market, not defined by distinct voluntary and compliance systems, but by one market used for different purposes that will evolve over time.
To prepare for this, we are starting to take steps that will enable all Gold Standard credits – whether issued or labelled by us – to be able to meet the requirements of Article 6 in the near future, as well as the core carbon principles established by the TSVCM.
In this ‘meta-market,’ some credits will have corresponding adjustments, enabling their use by airlines in CORSIA, by companies or other entities to voluntarily offset emissions, and by governments for use towards NDCs – either buying credits themselves or requiring their companies to do so. We expect this will become more common over time: look, for instance, at the carbon pricing proposals under discussion in Japan.
Some credits will represent emissions removals, enabling their use to neutralise residual emissions to achieve their science-based net zero target.
With or without these specific attributes, all Gold Standard credits will empower companies to take responsibility for their unabated emissions – supporting the global climate transition – and contribute directly to the Sustainable Development Goals.
It’s no coincidence that this aligns with the framework recommended in the July Taskforce on Scaling Voluntary Carbon Markets (TSVCM) report. While we have been – and remain – a critical ‘friend’, we think that the TSVCM has got a lot right. But as we see it, we have an opportunity now to think bigger than scaling the voluntary carbon market in isolation. We can start to apply the same models, innovation and infrastructure to build a global meta-market for both voluntary and compliance purposes.
In the coming months, we will introduce a new process for project developers looking to attach host country corresponding adjustments to their projects, in line with CORSIA and any outcome from upcoming Article 6 negotiations at COP26. Our team will provide the support we can to both project developers and host governments as this new model is rolled out.
We will update our registry to enable buyers to identify and retire credits which have the additional attributes they are looking for, whether that is a corresponding adjustment or a removals-based credit.
We’ll also work with partners to fill some of the gaps needed to fulfil the full potential of this vision. This includes the development of corporate practices and a claims framework to ensure carbon credits are used within a proper mitigation hierarchy and that new impact claims are both desirable and credible. It also will feature digitisation and interconnectedness of various market operations to reduce barriers to entry, lower transaction costs and ensure transparency and traceability of impact.
At the same time, we will continue to take steps to streamline our processes, enable earlier access to carbon revenue, expand our methodologies with new nature-based methodologies underway for mangrove planting, biochar, avoided emissions from efficient fertilizer management, and modern cookstoves.
Gold Standard continues to believe in the power of markets and of responsible voluntary climate action, to close the emissions gap, drive innovation, and promote sustainable development. We want to think bigger, and think ahead to maximise its potential to deliver climate security and sustainable development for all.