Full Title: Voluntary Carbon Market Landscape Guide
Author(s): Rocky Mountain Institute
Publisher(s): Rocky Mountain Institute
Publication Date: August 13, 2023
Full Text: Download Resource
Description (excerpt):
The VCM emerged as a reaction to the 1997 Kyoto Protocol’s top-down international carbon trading mechanism and became the more informal, alternative trading mechanism. Over time, it evolved as a range of actors stepped in to shape different parts of the value chain: to pilot new methodologies, build ratings agencies, deploy new technologies, or serve as verification bodies. These voluntary actions give the VCM a dynamism and complexity that reflect both its tremendous potential to finance the required climate transition and its structural and governance limitations.
As a strictly voluntary market, no single entity is responsible for instilling accountability, establishing priorities, defining standards, settling complicated debates, or mandating information disclosure. Each participant’s actions shape the market, and all challenges and responsibilities can be redirected. The result is a set of norms-enforced processes that rely on the actions of a loosely-connected set of actors who are struggling with how to define, measure, and verify carbon credits in a transparent, efficient, accurate, and reliable manner. To reach its full potential, the VCM needs to simplify its structures and strengthen two fundamental pillars: its process integrity and data integrity.
The Voluntary Carbon Market Landscape Guide unpacks the core challenges, interconnections, and innovations surrounding these two pillars. It illustrates why most data related to credit quality is currently subjective; how this has resulted in quality claims being mostly determined by process compliance and vetted in an uncertain landscape for buyers; and how innovations in digital technologies – particularly when paired with other process changes – will be instrumental in building a transformative VCM. It concludes with the levers and building blocks required to build a dynamic VCM capable of catalyzing global decarbonization.