‘Welcome’ or ‘unworkable’? Carbon offset registries submit contrasting views to market integrity scheme

Major player Verra said a plan to introduce global principles for the carbon market is far too prescriptive, and that its support for the initiative has been shaken. Rival Gold Standard appears more supportive but asked for moderation.

Trees line a dirt track in Thailand.
Trees line a dirt track in Thailand. Tree-planting schemes are an increasingly popular way for companies to offset their carbon emissions. Image: Kostas GR/Flickr.com

Two major standard-setters for voluntary carbon offsetting projects have issued feedback, in sharply contrasting language, in response to a plan to create new certifications for the industry.

Both US-based Verra and Switzerland-based Gold Standard said the scheme risked being a regulatory barrier that hinders the growth of the carbon offsetting market.

Gold Standard said the problem can be addressed by avoiding unduly stringent assessments and dropping some requirements, in a communique released on Tuesday (27 September). Verra, meanwhile, has indicated that the “blunt” plan requires an overhaul, in its statement released a week ago.

The two non-profits are responding to a draft released in July by the Integrity Council for the Voluntary Carbon Market (ICVCM), a coalition of climate and finance experts set up earlier this year. The council is tasked to discipline the booming private carbon offsetting market, where heavily polluting firms pay for activities like replanting forests and installing solar panels to strike off carbon emissions from their own records.

As it stands, the space is riddled with allegations of redundant or counterproductive projects, as well as those that have done harm to local communities.

ICVCM wants to establish a set of 10 “Core Carbon Principles”, which includes ensuring carbon offsetting projects deliver actual emissions cuts, stay for the long run, and care for local communities. The council wants to vet and certify the work of carbon registries like Verra and Gold Standard based on the principles.

Verra issued 83 per cent of the registered carbon credits last year; Gold Standard issued 12 per cent of them, according to advisory firm Climate Focus.

Verra said the ICVCM should focus on checking the rubrics and auditing process of existing carbon offsetting programmes, instead of defining global standards. It said the planned assessment framework repeats what standard-setters already do and is too time-consuming. IVCVM had said that it expects to take up to half a year to assess each program.

Verra added that ICVCM had set the bar too high, but it did not specify which aspects it was referring to specifically. It said it will provide detailed feedback to ICVCM this week.

“Initial analyses of the draft CCPs and AF suggest that few, if any, credits would pass the test, which will satisfy purists but do nothing to drive investment at the scale needed around the world to combat the climate crisis,” Verra’s statement said, referring to the Core Carbon Principles and Assessment Framework by acronym.

Some of the criteria ICVCM proposed go beyond the norms in the voluntary carbon market today, an expert had told Eco-Business. For example, the council suggests that projects should be asked to deliver emissions reductions that go beyond what their host countries pledged under the global climate treaty Paris Agreement. Project registries may also need to disclose the identity of entities buying carbon credits.

Some of these rules are part of a more stringent basket that ICVCM intends to put in place after an unspecified initial period. Verra said that ICVCM shouldn’t be specifying future rules without studying how the initial set goes down with industry players.

“The proposed approach will not only fail to create a workable pathway to achieve the ICVCM’s goals, but significantly harm the voluntary carbon market by enshrining a process that sets impossible requirements, is impervious to input from a range of stakeholders, and is unworkable from an administrative standpoint,” Verra said.

“Our support for the ICVCM has been shaken,” it added.

Gold Standard, meanwhile, said it welcomes ICVCM’s plans, but added that putting too much effort on verifying each project takes away resources from launching more projects and increasing emission cuts. Requirements should be eased for projects in least developed countries, where additional costs could be particularly painful, it said.

It added that requirements such as publishing minutes of governing body meetings could stifle the open discussion needed for good decision-making.

“It is hoped that the ICVCM will consider it a priority to embrace and encourage efforts to simplify and streamline approaches, rather than introducing criteria that would require standards to do the opposite,” Gold Standard’s statement said.

It also suggested further safeguards, such as for ICVCM to be able to withdraw approvals where necessary. 

Leah Glass, a technical advisor at UK-based ocean conservation firm Blue Ventures, said that she “can empathise” with Verra’s point that another level of governance over the standard-setters of carbon projects could add additional barriers. Glass said the use of technology, such as satellite imagery data, could help speed things up.

“If governance is what is required to improve integrity, how can we speed things up and ensure that other parts of the project development process can be done quicker?” she said.

Paris alignment

Gold Standard said that ICVCM should respect decisions made at the upcoming COP27 global climate summit later this year, including on how much money should be diverted away from certain private deals into a global climate adaptation fund.

There is also talk of disregarding a small portion – drafted as 2 per cent – of emissions savings from these projects such that they theoretically overachieve their targets, to help accelerate decarbonisation.

These are some of the last outstanding details from the Paris Agreement treaty in 2015.

Gold Standard said ICVCM should have a clearer stance on the double counting of carbon credits, where two parties claim emissions cuts from one project, even if it does not have a way to regulate the issue.

ICVCM had deferred judgement on whether countries and firms can use the same offsetting project in tabulating emissions cuts – a grey area in the fight against double-counting carbon credentials.

Verra did not raise any issues regarding ICVCM’s treatment of Paris Agreement matters in its latest statement, though it earlier told Eco-Business that it had some reservations.

The public consultation of ICVCM’s plans, which closed on Tuesday (27 September), had attracted over 2,200 comments. The council has said it would take a “balanced approach” to the feedback, and publish its first formal rulebook by the end of the year.

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