The Voluntary Carbon Market cannot grow unless it makes project quality more clearly discernable to buyers. Project proponents can do their part to usher in a healthier, faster-growing VCM by taking steps to ensure their own projects are exemplary in this way.

To demonstrate quality, project proponents and their stakeholders need to create well-designed projects and tell the full story of these projects with objective, transparent data.

For carbon buyers on the path to net zero, the first step is reducing their own emissions across all scopes. Nobody disagrees on that. In fact, more than a third of the world’s largest publicly traded companies have publicly committed to net-zero targets. And while these targets can be partially realized through corporate reduction and insetting efforts, there will always still be residual corporate emissions that must be offset through the purchase of carbon offset credits. Offsets are thus an essential component of a decarbonized economy — but only if the offsets companies purchase are derived from high-quality projects. 

Today, many credit buyers perceive multiple risks in publicly claiming carbon offsets. One risk is finding that planned-for “co-benefit” impacts (i.e., project benefits beyond carbon) did not materialize, which can generate negative publicity. Buyers are sensitive to this risk and want deeper assurances – not only of realized co-benefits, but also of credible levels of additionality  and durability. And what credit buyers want, project investors want as well, because such projects can command premium credit prices.  

Investing in the Voluntary Carbon Market is made more challenging in that commitments to creating these positive impacts is occurring today under a watchful public eye that is losing patience. And yet, market demand continues to outpace supply, with some projections indicating a need for 50-fold market growth within the next 10 years, from $2 billion just two years ago to $100 billion by 2030. And so there exists a terrifying parallel between the societal need for a rapid scale-up of capital commitments to a market that continues to lack accountability for quality, credibility, and transparency.

Many players in the market are jockeying for position as arbiters of quality, but none are doing the hard work of forging the path to quality improvement. The Integrity Council for the Voluntary Carbon Markets initiative (ICVCM), and registries and standards bodies like VERRA, Gold Standard, Climate Action Reserve, Puro.Earth are all seeking to define the contours of project quality. There are evolving principles being developed and deployed like the ICVCM Core Carbon Principles and the Oxford Net Zero-Aligned Offsetting Principles. There are verifiers like SCS Global Services and DNV who claim to issue quality stamps. There are marketplaces like MSCI, 3Degrees, Flow Carbon, and Salesforce which apply disunified lenses for testing quality. And there are ratings agencies trying to compete with each other for the best rubrics, such as BeZero, Calyx, and Sylvera.

All of these players exist to promote quality, but they all point to different sets of rules, differing and subjective assessment methodologies, “save-the-day” satellite-based monitoring solutions and opaque black-boxes. The fundamental problem is that they don’t really do the hard work of guiding the fundamental behavior of how to get to good in nature-based carbon to ensure market confidence. It’s easy to position oneself as an arbiter of quality by one’s own measures, but it’s an entirely different exercise to show someone the path to delivering quality that credit buyers and investors trust.