Scientific principles and transparency must lead the conversation about what counts as carbon credits in order to build confidence in the voluntary carbon market (VCM), finds a new report led by UCL researchers.
Voluntary carbon markets allow private entities in industry and other sectors to buy carbon credits representing carbon dioxide either removed from the atmosphere or kept locked away so it's never emitted in the first place.
These carbon markets are meant to encourage entities to reduce their carbon footprint by offsetting unavoidable emissions, but in practice too often the markets are poorly regulated, opaque or otherwise ineffective.
Now a report by the Climate Crisis Advisory Group (CCAG) has set out seven key recommendations that go beyond the Oxford Offsetting principles, an established guide on the design and delivery of net zero commitments for governments, cities and companies.
The report emphasises the need for embedding scientific principles, such as the standardisation of monitoring, reporting and verification practices, within the VCM in order to ensure emissions reductions delivered by each credit are real and verifiable.
It also recommends the setting up of independent oversight bodies at a national, regional and global level to regulate and standardise carbon credits based on quality and performance rather than quantity of offsets.
Lead author Professor Mark Maslin (UCL Geography) said: "There must be a stringent approach and management to VCM practices in order for the market to play a meaningful role in mitigating the climate crisis. However, this will not be achieved without a strong and standardised commitment from all actors within the system.
"Carbon credits can be viable as part of a set of tools to fund emissions mitigation projects around the world. But their value must be based on clear scientific principles, and deliver real, tangible value to the health of the planet."
CCAG Chair Sir David King from Cambridge University added: "The science is clear, we need to be pulling every lever available to us to help tackle the climate crisis, this is one such lever and we should be doing everything possible to ensure that it is fit for purpose."
The report outlines a blueprint for the VCM to overcome recent criticisms about their effectiveness, fairness and credibility in order to rebuild trust in it by supporting projects that deliver real, science-based emissions reductions, as well as redistribute finance and meaningful co-benefits to local communities where projects are based, ranging from improved environmental conditions to a more active economy with new opportunities for health services, education and livelihoods. It further stresses the need for international and state regulation to guarantee the quality of carbon credits and ensure organisations take all feasible steps to reduce emissions before engaging with the VCM.
Acknowledging the current limits of the VCM, the report provides guidance on the application of rigorous scientific principles across measurement, monitoring and reporting in order to create a reformed market that has potential to make a much-needed contribution to climate efforts. It also sets boundaries for the legitimate use of carbon credits, stressing that they cannot be used to leave carbon removal and carbon sink preservation to market forces, nor can vulnerable 'green' carbon sinks meaningfully offset 'black' carbon emissions like greenhouse gasses.
Acknowledging the historical shortcomings of the VCM, the report emphasises financial transparency as a critical step towards building trust and confidence in the current absence of international and state regulation.
A transparent system would mean measurement and methodology are open for discussion, and as industry norms are strengthened, opportunities for shopping around by buyers and sellers into VCMs are reduced. Transparency about financial allocations along the VCM pipeline will also help to expose unethical practices and secure a fairer deal for communities and project implementers.
Professor Mercedes Bustamante, member of the CCAG and Professor at the University of Brasilia, said: "We cannot afford to throw money at initiatives that don't work. It is a noble aim to provide countries with more funds to protect nature, but they cannot be used as a way to concentrate wealth in the hands of the few again.
"The VCM has the potential to deliver co-benefits for local communities in the Global South, creating wealth for areas most in need of resources in the transition to net zero. But it's up to us to ensure the system is more rigorous and able to deliver the results promised, and fund the clean energy transition in an equitable manner."
CCAG is an independent group of experts which reflects a wide range of academic disciplines and indigenous knowledge, comprising 16 experts from 10 nations. It includes leading authorities in climate science, carbon emissions, energy, environment, and natural resources. The group looks at in-depth policy and financial issues, including ones not currently on governmental agendas.
