WASHINGTON D.C. AND LONDON – Today, the Taskforce on Scaling Voluntary Carbon Markets published its blueprint on creating a large-scale, transparent carbon credit trading market. To limit atmospheric warming to 1.5°C, the world must halve existing greenhouse gas emissions by 2030 and achieve net-zero emissions by 2050. Every business needs to adjust its business model and develop credible transition plans.
A large-scale voluntary carbon market is critical to reaching the goals of the Paris Agreement – it will enable more companies to turn net-zero commitments into action through investments in emissions abatement projects, where they will have the most effect.
Comprising more than 50 experts from six continents, the Taskforce has released 20 comprehensive and tangible actions, as well as a roadmap for implementation, to deliver this carbon market at pace and scale. Convened in September 2020, the Taskforce was further supported by a Consultation Group of subject-matter experts from close to 120 institutions.
Mark Carney, UN Special Envoy for Climate Action and Finance, said: “Company net-zero transition plans must primarily depend on absolute emissions reductions. In parallel, a large, high-integrity market for carbon offsets is essential for three reasons. First, some companies are committed to ‘reducing' historic emissions, which can only be accomplished through offsets. Second, in hard-to-abate sectors, all the technologies do not yet exist to decarbonise completely, so companies will need to rely on offsets to limit their emissions while they transition to new, low-emission operating models. Third, carbon offsets can be used to buy down the ‘green premium’ on vital emerging technologies—such as hydrogen, direct air carbon capture and sustainable fuels—to accelerate their development and adoption. In order to conserve the world’s precious carbon budget and accelerate the transition to zero absolute emissions, we need a large, transparent, verifiable and robust voluntary carbon market. The Taskforce for Scaling Voluntary Carbon Markets blueprint sets out clearly how we can build this market. It is critical that we now move from blueprint to building as quickly as possible.”
Bill Winters, Group Chief Executive of Standard Chartered and Taskforce Chair, said: “The need for climate action, and tools to mobilize finance for a low-carbon and resilient transition, is growing more urgent by the day. While the primary focus must be on reducing direct emissions, achieving stretching net-zero targets requires the use of all the tools at our disposal. The Taskforce’s roadmap ensures that the right market infrastructure and financial instruments are in place to facilitate the movement of tens of billions of dollars from those seeking to reduce their own carbon footprint to those who can reduce and remove carbon from the atmosphere.”
Tim Adams, President and CEO of the Institute of International Finance (IIF), said: “A large, transparent, verifiable, and robust voluntary carbon market is a critical piece of the toolkit to reach net-zero. The Taskforce has worked quickly to identify key challenges and potential solutions, but this report is just the beginning. I look forward to continuing our work and moving towards implementation in the coming year.”
Renewables, nature-based solutions and energy efficiency projects are all critical tools in reducing greenhouse gases and reaching net-zero emissions. But these alone will not be enough to support the global transition away from fossil fuels. There is the need to boost emerging technologies that can transform our economy—such as low-carbon fuels for heavy transport, low-carbon steel and cement, and better carbon removal technologies.
Voluntary carbon markets can support new programmes to finance, structure, and deploy these critical solutions now, so that in the future we can continue economic development in countries across the world, including those rapidly industrializing today.
The next phase of the Taskforce will be to drive stakeholder engagement, governance, standardised documentation, legal principles and contracts, and carbon credit-level integrity, defining the Core Carbon Principles (CCPs) and additional attributes. Integrity and the appropriate use of carbon credits are paramount.
It is urgent to get this right. With increasing interest from corporates, and efforts to scale voluntary carbon markets underway, clarity over how it can contribute to the goals of the Paris Agreement is needed quickly to maintain trust and credibility in the market. COP26 in November 2021 provides a milestone for launching robust guidance on the use and claims of carbon credits to ensure that voluntary crediting contributes towards the Paris Agreement temperature goals.
Download the full report here.
Download a summary here.
Download frequently asked questions here.
The report is published ahead of a Taskforce-led panel at the World Economic Forum’s “The Davos Agenda.” More information on the discussion can be found here.
About the Taskforce:
The Taskforce on Scaling Voluntary Carbon Markets, launched by Mark Carney, UN Special Envoy for Climate Action and Finance, is chaired by Bill Winters, Group Chief Executive, Standard Chartered and sponsored by the Institute of International Finance (IIF) under the leadership of IIF President and CEO, Tim Adams. Annette Nazareth, Senior Counsel at Davis Polk and former Commissioner of the U.S. Securities and Exchange Commission, serves as Operating Lead for the Taskforce, and McKinsey & Company provides knowledge and advisory support.