A Union Funded by the UK Strives to Expand Spontaneous Carbon Trading Platforms
The Coalition to Grow Carbon Markets, a new initiative comprising countries like the UK, Kenya, Singapore, France, Panama, and Peru, along with institutions such as the International Chamber of Commerce and the Integrity Council for the Voluntary Carbon Market, has established shared principles to promote the use of high-quality carbon credits by businesses.
The coalition's primary objective is to boost demand for carbon credits in both compliance and voluntary markets, with a focus on projects that can reduce emissions quickly and affordably while promoting growth. The shared principles aim to address concerns about credit quality, transparency, and integrity that have hindered participation in voluntary carbon markets.
The principles encompass several key areas. High environmental integrity is ensured by verifying that carbon credits represent real, additional, and verifiable emissions reductions or removals, delivering credible climate impact. Clear, consistent guidance for businesses is provided to help them incorporate carbon credits reliably into their broader net-zero strategies, prioritising actual emissions cuts over mere offsetting.
The coalition's efforts are also geared towards restoring market confidence by addressing past issues of fraudulent or low-quality projects. The aim is to rebuild trust in voluntary carbon markets and increase private sector demand. Support for emerging markets and developing economies is directed towards climate-positive projects such as clean energy, nature restoration, and sustainable agriculture, without increasing debt burdens in these regions.
Transparency and interoperability are key aspects of the coalition's principles, ensuring that markets across jurisdictions align to promote seamless and trustworthy carbon credit trading globally. The coalition aims to unlock up to $250 billion in climate finance by 2050 to support sustainable development and emissions reductions, particularly in the Global South.
The Voluntary Carbon Market Integrity Initiative (VCMI) will serve as the secretariat for the new initiative. The coalition's efforts build on the recent adoption of global standards for carbon reduction project verification by the Paris Agreement Crediting Mechanism (PACM). The standards initially cover afforestation and cook stove projects.
The coalition does not aim to replace compliance carbon markets but rather to enhance the functioning of voluntary carbon markets. The new coalition aims to develop emissions trading markets for corporations and other entities. The coalition's shared principles are expected to cover a broader range of carbon reduction projects than the initial PACM standards.
The new UNFCCC standards, welcomed by international market players, are seen as an important step towards making carbon credits more credible. The coalition's efforts are expected to accelerate global decarbonization, advance corporate ESG efforts, and provide regulatory clarity for high-integrity carbon credit use.
- The Coalition to Grow Carbon Markets is concentrating on projects that not only reduce emissions promptly and economically, but also encourage growth, focusing on high-quality carbon credits.
- The coalition's principles aim to strengthen the trust in voluntary carbon markets by eliminating fraudulent or low-quality projects, and promoting transparency and integrity.
- To incentivize businesses, the coalition offers clear guidance on how to incorporate carbon credits into their net-zero strategies, prioritizing actual emissions reductions over mere offsetting.
- The coalition supports emerging markets and developing economies by focusing on climate-positive projects such as clean energy, nature restoration, and sustainable agriculture, without adding to their debt burdens.
- The coalition's efforts in promoting the use of high-quality carbon credits are aligned with the recent adoption of global standards for carbon reduction project verification by the Paris Agreement Crediting Mechanism, seeking to advance corporate Environmental, Social, and Governance (ESG) efforts and global decarbonization.
