The Integrity Council for the Voluntary Carbon Market expected to complete its new assessment framework by early July, raising the threshold for carbon credits of high quality, Pedro Barata, Co-Chair of its Expert Panel, told S&P Global Commodity Insights in a recent interview.
Core Carbon Principles
In March, ICVCM issued a program-level guideline called Core Carbon Principles (CCPs) for carbon crediting standards. The upcoming assessment framework is at category level, focusing on the type of carbon credits and methodologies that would be CCP-compliant. While program-level principles were not problematic to major carbon crediting standards, Barata said the upcoming category-level principles would have more significant impacts. “If successful, it can be a turning point in the evolution of the carbon market,” Barata said. “The voluntary carbon market has an image problem. Right now, much of the voluntary carbon market is just frozen. It is like a deer caught in the headlights.”
Initially at least there must be a bias towards being “too strict, as opposed to being too lenient” to restore confidence, he said. “This is a market that builds on reputation. It would be bad if we issue labels, and then six months down the line, there was a media report saying, look, this CCP project has human rights violations. We must minimize the chance of that.” The more stringent the rules the more credits would not make the grade, with much of the focus likely to be on the impacts for renewables, cookstoves and deforestation/forest degradation projects. “My sincere hope is that this trade off will actually be reversed over time, because if we do get a set of signals to the market that points to exactly what quality is, then investment will flow towards those types of projects and activities,” Barata said.
ICVCM’s new assessment system would be reviewed and updated every two years, with the next version due in 2025. The vast majority of requirements would not change, Barata said, with a first update focusing on what had not been included in the initial framework. One area for potential improvement involved risks around permanence, namely the reversal of carbon savings brought about by events like forest fires, or unexpected conversion of forested land to agricultural use. “We can start a conversation about why we still have not seen financial and insurance services coming into this market to address reversal risk,” Barata said. “This is not the end of the road, it is actually the beginning.”
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