The Integrity Council for the Voluntary Carbon Market has launched a disclosure framework for carbon credits as well as core principles for what counts as being high quality.
The assessment framework requires “comprehensive and accessible disclosure” by programs on how each project calculates and quantifies its emissions impact, and how it assesses additionality, and social and environmental impacts. This should include the spreadsheets each project uses to calculate its impact and set a baseline.
Crucially, carbon credits must show their positive sustainable development impacts, including on Indigenous Peoples and Local Communities, biodiversity, pollution, human rights, labor rights and gender equality.
The Core Carbon Principles (CCPs) state carbon credits must fund emissions reductions and removals that are:
- additional (generated by projects that would not have gone ahead without carbon credit funding);
- permanent;
- measured robustly and conservatively;
- and counted only once.
They must support the transition to net zero and not lock in net-zero incompatible activities.
Programs that issue them must meet high standards of governance to ensure the overall quality of carbon credits; use a registry to uniquely identify and track each credit from issuance to retirement or cancellation; and have emissions reductions and removals verified by independent third-party experts.
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The CCPs have been developed with input from organizations across the voluntary carbon market and are “based on the latest science and best practice”, the Integrity Council said.
The Integrity Council will continue to collaborate with stakeholders to strengthen the CCPs over time, it added. A series of work programs will feed into the next version of the CCPs, due to be launched in 2025 and implemented in 2026. These will consider issues such as the implications of Corresponding Adjustments under Article 6 of the Paris Agreement, whether all carbon credit projects should make a contribution towards the UNFCCC Adaptation Fund, and how to further strengthen the sustainable development requirements.
Annette Nazareth, Integrity Council chair, said: “It’s clear we are not acting fast enough to address the climate crisis. We need every tool available working at full speed to secure a livable future and a high-integrity voluntary carbon market is one of those tools.
“Building a widely shared understanding of what high integrity means for carbon crediting programs and categories of carbon credits is a pre-condition for the development and growth of a viable and vibrant voluntary carbon market.”
The news has been welcomed by industry commentators. Amy Bann, SVP Supply & Ecosystem at Xpansiv, told ESG Clarity: “The publishing of the Integrity Council’s latest Core Carbon Principles is a positive step for the market. It has worked diligently to strike a balance between ambition and practical application to support carbon market quality and growth. These global frameworks are crucial to delivering market confidence.”
Market must evolve
The Integrity Council’s CCPs and assessment framework come as increased scrutiny is placed on the voluntary carbon market, which grew at its fastest ever pace in 2022.
“The voluntary carbon market must evolve at a quicker pace than ever before to maintain public confidence in its ability to meaningfully contribute to the global goal of net zero by 2050,” a recent paper, The Evolving Voluntary Carbon Market, from the International Emissions Trading Association, said.
Carbon credit markets are challenged by the lack of a single overarching governance system and a common set of standards and definitions, the paper found, but it said stakeholders such as the Integrity Council, the Voluntary Carbon Market Integrity initiative and the International Carbon Reduction and Offset Accreditation are taking action to create commonly accepted benchmarks that should boost confidence.