The ICVCM believes that nature-based solutions play a critical role in addressing climate change, but accountability is essential.
The Integrity Council for the Voluntary Carbon Market (ICVCM) has recently unveiled its comprehensive global benchmark for high-integrity carbon credits. The primary objective behind this release is to enhance the voluntary carbon market’s capacity to support the achievement of global climate targets. The criteria and assessments introduced by the council aim to set a standard for quality and transparency in carbon-crediting programs, ensuring that projects contribute to real emissions reduction and sustainable development.
The Carbon Credit Principles (CCP) Assessment Framework
Carbon-crediting programs can now seek evaluation from the ICVCM by utilizing their Core Carbon Principles (CCP) application portal. Once they have been granted approval, these programs will have the privilege of utilizing the new CCP label on specific credit categories that fulfill the criteria.
To ensure a robust and comprehensive assessment, the ICVCM has established Multi-Stakeholder Working Groups, tasked with evaluating various credit categories and crediting methodologies against the CCP standards. The council aims to announce the first approved categories by the end of 2023, thereby enabling the availability of CCP-labeled credits for prospective buyers.
These initiatives align with the Core Carbon Principles, which define the fundamental criteria for high-integrity carbon credits, emphasizing real emissions impact and positive contributions to sustainable development.
The Core Carbon Principles set out ten fundamental principles for high-quality carbon credits, emphasizing their real and verifiable impact on emissions reduction and sustainable development. The criteria for assessing credit categories focus on emissions impact and include the following:
-Compatible with a transition to net zero, ruling out projects that lock in fossil fuel emissions or technologies.
-Permanent projects with a minimum monitoring and reporting period of 40 years to prevent reversals.
-Additional emissions reductions or removals that would not have occurred without carbon credit incentives.
-Ensuring robustly quantified impacts, clear project boundaries, and thoughtful consideration of knock-on effects, particularly the social and economic impacts of environmental projects.
Nature-Based Solutions in the Voluntary Carbon Market
The ICVCM believes Nature-based solutions play a crucial role in combating climate change and they are taking significant steps to assess REDD+ projects, focusing on reducing emissions from deforestation and forest degradation, both at the project and jurisdictional levels. The assessment process will carefully consider recent market developments and methodologies to ensure credible and effective outcomes. Specific criteria have been developed to guide jurisdictional REDD+ programs, guaranteeing high-integrity results. Additionally, the council will separately assess other nature-based solutions, such as Improved Forest Management, Afforestation and Reforestation, and Blue Carbon, reinforcing its commitment to promoting sustainable and impactful climate solutions.
Kavita Prakash-Mani, Founder of Dragonfly Advisory and Integrity Council Board member, said: “It is critical that the voluntary carbon market mobilizes funds to support nature-based solutions, because there is no path to 1.5 degrees without protecting and restoring our forests, mangroves and other natural carbon sinks. By adopting best practices, we can ensure the market continues to grow, supporting Indigenous Peoples and local communities and channeling finance to projects in the Global South.”
CCPs to Support Credible Corporate Environmental Claims
The Integrity Council is committed to escalating ambition in future versions of the CCP Assessment Framework. By doing so, they aspire to set even higher standards for carbon credits’ integrity and effectiveness. The CCP label, with its focus on trust-building, unlocking investments, and channeling them towards impactful climate solutions, serves as a significant milestone in the voluntary carbon market. It provides a recognizable benchmark for high-integrity carbon credits, offering assurance to buyers that their funding contributes to genuine emissions reductions and makes a positive environmental impact.
The Future of the Voluntary Carbon Market
The ICVCM’s release of the full criteria for high-integrity carbon credits is a significant step towards supporting the voluntary carbon market’s credibility and effectiveness in addressing climate change. By setting robust standards and continuously improving the CCP Assessment Framework, the council aims to mobilize private capital and support the transition to a 1.5-degree future. This transparent and ambitious approach is essential for unlocking additional investment and creating a highly liquid and scalable voluntary carbon market.
Annette Nazareth, Integrity Council Chair, said: “The voluntary carbon market can play a key role in mobilizing private capital to support the 1.5-degree Paris climate target. Our CCPs and assessment criteria set a global threshold for quality which aims to unlock finance at speed and scale for projects to reduce and remove billions of tonnes of emissions that would not otherwise be viable. We know there is strong demand for high-integrity credits and the CCP label will give more companies confidence to invest. We expect high-integrity credits to trade at a premium, which will incentivize the market to adopt CCP criteria. Greater confidence in the voluntary carbon market will unlock additional investment and create a market that is highly liquid and scalable.”
Trove Research recently shared the following information on carbon credit pricing, upon the release of the new ICVCM criteria: “We expect a CCP tag to drive a larger wedge in market prices between higher and lower quality credits. In our 1Q23 webinar survey over half of 350 respondents believed that CCP-tagged credits would receive a price premium of at least $2-5/tCO2e by the end of this year.”
At ClimateTrade, we believe that transparency and ambition are the cornerstones of driving meaningful change. By adhering to the CCPs and continuously improving our processes, we aim to raise the bar for climate action whilst building trust and accountability within the industry as a whole.
Contact us today to discover how ClimateTrade, in line with the CCPs, can empower your commitment to sustainability and play a key role in accelerating climate action.
