Paving the Road for Good Governance in the Voluntary Carbon Market

• Florence School of Transnational Governance
• STG Climate

The rising interest in the Voluntary Carbon Markets (VCM) has many stakeholders asking questions on which path will it end up evolving along.

The integrity of VCM has been scrutinized since their inception. Some independent standards are reviewing requirements for aligning with Article 6 of the Paris Agreement. In the ongoing debate around VCM there will inevitably be a need to zoom in on the role of avoiding double claiming and double counting in promoting quality in VCM.

Discussion on the integrity of VCM is multifaceted. Currently, financial regulators watch over institutions to keep markets efficient and transparent. Although these regulators are actively watching the carbon market, voluntary carbon credits have yet to benefit from some risk-reducing practices well established in financial markets. How could financial market instruments contribute to the integrity of the VCM is a question emerging in the debate surrounding VCM.

The EU has thus far been largely absent from VCM developments. Latest regulatory proposals however, including those related to corporate disclosure seem to recognize the useful role of VCM. The incoming EU’s certification framework for carbon removals may also put more emphasis on discussing the role of removals in VCM. Also, ambitious net targets set in the EU for 2030 and 2050 will intensify questions about high quality removal credits and their possible role in the EU ETS and Effort Sharing regulation.

The three topics described above will be the focus of the High Level Policy Dialogue, where the STG Climate hopes to facilitate a meaningful discussion on role and future of the VCM.

Attendance at this event is by invitation only and all deliberations will take place under the Chatham House rule (no views or positions may be attributed publicly to any participant). Following the recommendations that come out of the discussion, the organisers will publish a policy brief as part of their public mission.