The consultation document from The Taskforce on Scaling Voluntary Carbon Markets sets out a roadmap to build an effective voluntary carbon market to help meet the goals of the Paris Agreement.
The consultation document acknowledges that achieving 'net zero' by 2050 necessary for the 1.5°C goal requires deep, rapid and broad-ranging action to reduce greenhouse gas emissions across all sectors of the economy. As an increasing number of companies are committing to 'net zero' to support this goal, they will be expected to show how they plan to meet it through an appropriate mix of direct emissions reductions and use of carbon credits. Carbon credits, purchased voluntarily, enable organizations to compensate for residual emissions by financing the reduction of emissions from other sources or the removal of greenhouse gases from the atmosphere. For companies operating in hard-to-abate sectors carbon credits will play a particularly important role in achieving their 'net zero'.
As the decarbonisation of the global economy accelerates in the coming years, the Taskforce predicts that demand for voluntary offsetting is likely to increase. To facilitate this demand there is a need for a large, transparent, verifiable and robust voluntary carbon market.
To support the scale-up of the voluntary carbon markets, the Taskforce highlighted six key areas for action:
- Core Carbon Principles;
- Core Carbon Reference Contracts;
- Infrastructure for Trade, Financing and Data;
- Consensus on the Offset Legitimacy;
- Market Integrity Assurance; and
- Demand Signals.
The goal of the Taskforce is to deliver a ‘blueprint’ for the future of the voluntary carbon market, which is expected to be published in January 2021. This is a positive development for the market users in assisting their commitments to net zero and net-negative goals.
The scale up will need to be significant – our estimate is that voluntary carbon markets need to grow by more than 15-fold by 2030 in order to support the investment required to deliver the 1.5°C pathway