The Integrity Council for the Voluntary Carbon Market (IC-VCM) has made a significant stride towards increasing the quality assurance of the voluntary carbon market (VCM) with the publication of its Core Carbon Principles (CCP). Buoyed by the Article 6 agreement at COP26, the VCM has been marked by rapid growth, quadrupling in value since 2020 to reach $2 billion in traded credits. However, as the market expands, so too does the risk of greenwashing and the number of low-quality credits masquerading as high-quality ones.
While leading standards such as Verra and the Gold Standard have traditionally provided project and credit verification, recent investigations have shown that these verifications may not be sufficient. A nine-month investigation headed by the Guardian, Die Zeit and SourceMaterial found that 90% of Verra’s most common rainforest offset credits were “phantom”, representing no actual carbon reductions. In response, voluntary ratings agencies have stepped in to provide bespoke rating methodologies to help buyers understand actual carbon offset performance – but these ratings can vary hugely, leaving firms without a clear idea of where they stand.
In an attempt to boost transparency and standardize ratings, IC-VCM has launched a Program-level Assessment Framework and CCPs. Acting as a kind of regulator, the council will grant CCP-approved status to projects that meet quality controls around issues such as governance and additionality. Critics have raised concerns that the council is attempting to supersede current market participants and that it is doing so too quickly.
In 2023, the VCM faces a major inflection point, and leaders will need to ensure that the market is transparent and trustworthy to realize its full potential in supporting net-zero strategies. As credit ratings agencies and trading platforms work to improve carbon credit data accessibility, the market still lacks the ability to identify and assure the quality of a credit. While the effectiveness of IC-VCM as a governing body remains to be seen, it represents a significant step towards addressing this challenge – and offers hope for the future of the VCM as it continues to develop.
