New governing body formed to oversee voluntary carbon markets
The Taskforce on Scaling Voluntary Carbon Markets has announced the formation of an independent governance body for carbon markets and credits that will aim to set a global benchmark in proving the social value and carbon reduction potential of carbon credits and offsetting.
Launched last September, the Taskforce on Scaling Voluntary Carbon Markets works to take stock of existing voluntary offsetting schemes and identify key challenges to scaling them up while ensuring credibility and avoiding issues like double counting.
Aside from helping businesses to meet their own commitments and to align with legally binding climate targets in the markets where they operate, it is hoped that the Taskforce will play a role in boosting carbon prices. As of October 2019, the average global carbon price was just $2 per tonne.
The Taskforce has today confirmed the creation of a new governance body for voluntary carbon markets (VCMs).
Led by 22 representatives on a board, the body will be global in scope, with more than 12 countries represented, almost half of which come from the Global South. An Executive Secretariat, Expert Panel and Member Consultation Group of over 250 organisations will all feed into the body with support the creation of a global standard.
The first priority of the body is to finalise the creation of the Core Carbon Principles (CCPs). The CCPS act as a set of threshold standards to set a global benchmark for carbon credit quality.
CCPs will be launched throughout 2022 for the standard of the supply of carbon credits. CCP-compliant projects will need to demonstrate clear and measurable impacts in reducing carbon emissions and full environmental and social integrity.
The UK Voluntary Markets Forum’s chair Dame Clara Furse commented: "Carbon credits are an important step in securing a path to net-zero. The work of the Taskforce has been essential in setting out a clear pathway towards significantly scaling voluntary carbon markets, whilst ensuring they are transparent, well-governed, verifiable, and robust. The climate benefits are clear, including enabling the efficient channelling of investment from the global north to support nations in the global south who have made significant Paris-based climate commitments and offer the world an array of nature-based solutions.
“As a global financial centre at the forefront of pioneering new green financing tools and techniques, London is keen to accelerate the development of high quality, high integrity carbon credit markets. We are delighted to be involved and look forward to playing a vital role.”
In 2020, the Taskforce estimated that the current market for offsets will need to grow by at least 15-fold by 2030 if the private sector is to align with the Paris Agreement’s 1.5C trajectory. By 2050, it may need to be up to 160 times bigger than in 2020. But with concerns about greenwashing, double-counting and standards varying between nations and regions persisting, the Taskforce has proposed measures to weed out the sector’s biggest problems as it scales.
In related news, Delta Air Lines and PwC are the latest corporates that have joined a new public-private initiative committing $1bn to combat the climate crisis through the conservation and preservation of tropical forests across the globe.
The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition was set up earlier this year by governments from the UK, Norway and the US with private sector support arriving from Amazon, Airbnb, Bayer, Boston Consulting Group, GSK, McKinsey, Nestlé, Salesforce, and Unilever.
The LEAF initiative aims to mobilise at least $1bn to support emissions reductions by ensuring tropical forests that act as carbon sinks are protected from deforestation while protecting the rights of Indigenous Peoples and members of local communities.
“As a global airline committed to carbon neutrality we rely on high-quality carbon offset projects,” Delta’s chief executive Ed Bastian said. “Protecting the world’s forests is pivotal if we are to truly impact climate change. It is why we are proud to join LEAF in its efforts to protect the vital tropical forests and the billions of people who depend on them, all while supporting sustainable societies.”
Members of the Coalition must be committed to deep voluntary cuts in their own greenhouse gas emissions in line with science-based targets.
In 2020, Delta committed $1bn over a 10-year period to mitigate all emissions from its global business. As for PwC, the company publicly announced plans to develop targets verified in line with 1.5C – the Paris Agreement’s most ambitious temperature pathway – last September, announcing a vision to reach net-zero emissions from operations and supply chains by 2030.
Earlier this month, the firm has announced plans to reduce absolute Scope 1 (direct) and Scope 2 (power-related) emissions by 50% by 2030, against a 2019 baseline. Key priorities for reducing emissions will be switching to 100% renewable electricity and improving energy efficiency.
"We are excited to be joining this public-private initiative to provide incentives and results-based financing for forest protection at a scale not seen before. As part of our strategy to build trust with stakeholders and deliver sustained outcomes, we're committed to playing our part to help address the climate crisis,” PwC’s global chairman Bob Moritz said.
“Protecting tropical rainforests is essential to ensuring PwC can meet our global climate targets and address interlinked environmental and societal challenges such as biodiversity and nature loss.”