The White House, along with the Departments of Treasury, Energy and Agriculture issued a joint statement on, and associated principles about, Voluntary Carbon Markets (VCMs) in the US, that
“provides observations on the current state of VCMs and their potential. It then outlines voluntary principles that U.S. market participants should embrace as they engage in these markets. These principles will also guide how the U.S. Government engages with VCMs. While the focus of this statement is on VCMs, much of the content speaks to the development and operation of carbon credit markets generally.
… several popular crediting methodologies and activities that rely on [VCMs] have not produced the decarbonization outcomes they claim. Important questions have emerged about how to ensure that VCMs genuinely drive additional decarbonization action (rather than reward what would have happened anyway) that is sustained over time and does not simply shift emissions elsewhere. In addition, barriers to market participation have inhibited market efficiency and opportunity. Put simply, stakeholders must be certain that one credit truly represents one tonne of carbon dioxide (or its equivalent) reduced or removed from the atmosphere, beyond what would have otherwise occurred.”
Interestingly, some of the wording in the announcement seems to support accusations that the US may have had a hand in the SBTi’s recent controversial announcement (and subsequent backtracking) allowing the “use of … voluntary carbon markets for abatement purposes limited to scope 3.”
The seven VCM principles
” …recognize the need for: credit integrity, including protections regarding climate and environmental justice (i.e., ‘supply integrity’) (Principles 1 and 2); credible credit use (i.e., ‘demand integrity’) (Principles 3, 4, and 5); and market-level integrity, including facilitating efficient market participation and lowering transaction costs (Principles 6 and 7).”
This action is in addition to expected final guidance for carbon credits from the US Commodity Futures Trading Commission. Perhaps this is truly a new dawn for voluntary offsets in the US.
If you aren’t already subscribed to our complimentary ESG blog, sign up here: https://practicalesg.com/subscribe/ for daily updates delivered right to you.
