The Integrity Council for the Voluntary Carbon Market (ICVCM), a governance group searching for to instil high quality and belief within the beleaguered company offsetting house, is able to reject candidates searching for endorsement ought to they fall wanting expectations.
However ICVCM board member Kavita Prakash Mani advised Eco-Enterprise that the council will first search to get carbon credit score certifiers to enhance their governance and methodologies, given the group’s intention to create as massive a high-quality market section as attainable.
The ICVCM had earlier this month authorized the primary three certifiers, which may quickly affix “Core Carbon Rules” labels – a high quality stamp – to the carbon credit they difficulty. The clearances didn’t embody Verra, which covers almost 70 per cent of the market, nor methodologies on contentious forest safety tasks, of which a number of have come underneath fireplace in recent times.
A ruling by the council on Verra is predicted by Might, whereas the assessments on methodologies – rulebooks on how carbon credit may be generated – will take at the least months extra.
The evaluation of methodologies for “decreasing emissions from deforestation and forest degradation”, or REDD+ tasks, is the “most difficult” a part of ICVCM’s work, Mani stated.
Companies purchase carbon credit that every characterize a tonne of carbon dioxide saved to advance their very own decarbonisation objectives. A media investigation early final yr alleged that the majority REDD+ tasks don’t reside as much as their local weather credentials, which led to a dramatic drop within the worth of carbon credit.
Kavita Prakash Mani presently sits on the requirements oversight committee and board of the Integrity Council for the Voluntary Carbon Market. Picture: Kavita Prakash Mani.
The ICVCM scrutinises the work of carbon credit score certifiers, which confirm particular person tasks earlier than they will commerce in the marketplace. The council will not be failsafe, so the main focus needs to be on figuring out and plugging gaps when problematic carbon tasks are referred to as out sooner or later, Mani stated.
On the again of ICVCM’s first approvals, and because the council heads into extra heated territory, Eco-Enterprise spoke with Mani, a veteran conservationist, about its future work plan, engagements with Asian policymakers, and views on reputational dangers in a polarised market.
How a lot traction is there amongst Asian international locations and financiers in getting corporations to purchase carbon credit cleared by the ICVCM?
Our predominant intention is to make sure the integrity of the availability aspect of the market. However alongside that, we’re clearly eager to make it possible for demand for high-quality carbon credit exists.
Right here in Southeast Asia, we’re working with Singapore, which permits a part of its carbon tax to be fulfilled with carbon credit. We try to see if corporations can use ICVCM’s Core Carbon Rules (CCPs) as a part of their commonplace setting. The CIX carbon alternate is utilizing the ICVCM framework as the premise for his or her analyses and due diligence.
In different Asian markets, reminiscent of Japan, South Korea, India and China, there are not any particular commitments to the ICVCM, however we now have a variety of engagements in these markets. Corporations try to make it possible for they aren’t caught out with shopping for credit from programmes that lack integrity.
What we are actually pushing for is extra authorities engagements, for them to set requirements aligned to the ICVCM. Companies in China may use some carbon credit to offset taxes. We have now board members and teams in senior positions within the Chinese language system – they create each the Chinese language perspective into ICVCM and assist take the ICVCM into the federal government system.
What we might love can also be for organisations growing carbon tasks to make use of the ICVCM requirements to craft high-quality tasks.
There may be concern that ICVCM’s work may result in a two-tiered market the place the high-quality tier is inaccessible or unpalatable for emerging-market patrons. How do you stop that?
We hope there is no such thing as a two-tier market, that’s undoubtedly not the intention. The purpose is that all the market ought to be lifted to 1 commonplace that’s actually excessive in high quality and integrity.
We are going to work with all carbon credit score programmes to make sure that we now have the very best protection of the market. Then everybody will have comparable pricing. In a market with credit of various high quality, any mission that goes fallacious will begin influencing the whole lot else and drag the market down. We are able to’t make programmes apply for CCP eligibility, however we might actually encourage all of them to take action.
We are going to most likely find yourself overlaying 98 per cent of the market, with Verra underneath evaluation, and the opposite main programmes – Gold Commonplace, ACR, Local weather Motion Reserve – having already been authorized.
Carbon offsetting platform Abatable stated final month that solely about 6 per cent of historic provide can confidently cross ICVCM’s evaluation. What’s your response to this?
I believe the operative phrase there may be “historic”. Markets evolve and get stronger, so it is rather attainable that the earliest carbon credit score requirements don’t meet the standard thresholds tody. Even now, as we’re assessing programmes, we’re seeing some which might be beginning to shut loopholes.
This journey will take time. Take for instance Verra, which has now modified their methodology on REDD+ in response to all of the suggestions and studying. Essentially the most used methodology in carbon offsetting has now been improved.
Clearly all of the tasks underneath the earlier methodology now want to ensure they meet the brand new requirements, and that will entail large enhancements. We have to assist tasks transition as methodologies enhance, and never simply depart them behind as a result of they’re now not adequate.
One signal of a high-quality commonplace could possibly be that not all candidates cross the check. Is the ICVCM ready to fail programmes or methodologies?
We might be completely prepared to fail candidates. I believe that’s the complete level. However we additionally need to assist them meet our requirements.
What we now have seen, at the least within the three programmes which were validated, is that they’re utilizing the ICVCM framework to enhance their very own processes first even earlier than making use of to us.
We might not hesitate to say one thing doesn’t meet the usual, however there may be additionally a variety of engagement with candidates as a part of the evaluation to allow them to enhance, earlier than we now have to decide that the hole on high quality is simply too huge.
In the long run, we are able to difficulty three outcomes for programmes and methodologies: authorized, authorized with provisions, and never authorized. The place modifications are wanted, the board has discretion to set a timeline and make clear what must be addressed.
Lately the majority of criticism has been on REDD+ tasks. How is the ICVCM approaching its evaluation of such methodologies?
We’re trying into Verra, the biggest programme round REDD+, together with ART’s TREES commonplace that appears into jurisdiction-scale tasks.
REDD+ has clearly been within the limelight due to points reminiscent of additionality and leakage. These are difficult points. For example, do you have got a requirement for 20 years of permanence in carbon storage, or 40 years? Do you have got a ample buffer pool of credit for situations the place there’s a forest fireplace? A few of these points have been troublesome, even inside the ICVCM.
I believe we now have landed on one thing we really feel is powerful. There may be additionally a steady enchancment programme particularly for REDD+ [the current rule is to monitor for at least 40 years’ of carbon storage, with future iterations of the rulebook possibly extending to 100 years].
The primary criticism on REDD+ has been round additionality and creating baseline deforestation charges. I believe we now have a variety of good know-how for trying into these points. New jurisdictional approaches additionally assist with making correct baselines in comparison with creating them for particular person forest tasks.
However REDD+ is certainly essentially the most difficult a part of ICVCM’s work. For technology-based tasks, the additionality difficulty may be addressed by searching for whether or not tasks in developed markets have already got sufficient financing. That’s simpler than carbon calculations in REDD+, the place there are many uncertainties and parts not utterly in builders’ management – reminiscent of how deforestation charges are affected by forest fires or local weather change.
Additionally, the environmental and social safeguards for REDD+ generally should be far more strong than technology-based tasks. You don’t need giant monoculture plantations which destroy biodiversity, and there are a variety of communities residing in forest environments. You might want to be very clear concerning the FPIC [free, prior and informed consent] and profit sharing processes.
How are you working with the United Nations to harmonise guidelines with the “Article 6.4” worldwide carbon market for international locations?
There’s a working group trying into that, it’s one in every of our excessive precedence duties. We don’t have a solution but, however that’s ongoing.
We do need to harmonise the requirements, and for the Paris Settlement’s Nationally Decided Contributions [climate targets set by countries] course of to match what the ICVCM is doing. We can’t have two totally different processes, there may be sufficient complexity available in the market already.
In immediately’s carbon market, a single errant carbon mission can destroy belief throughout the ecosystem. Can the ICVCM’s status stand up to a state of affairs the place a mission promoting CCP-labelled credit is accused of wrongdoing?
It’s undoubtedly a danger, particularly given the extent of scrutiny in the marketplace. Among the carbon mission issues could possibly be avoidable, others is probably not.
CCP-labelled credit come from assembly the necessities of methodologies and programmes that the ICVCM has authorized. So if one thing goes fallacious with a mission, we have to discover out why. Was it the validation and verification our bodies who didn’t do job checking the mission towards the methodology? Was there one thing fallacious with the methodology? Or was there a governance difficulty for the programme?
I wouldn’t say issues would by no means come up; extra doubtless than not one thing will nonetheless go fallacious. We have now to be taught from it and take it ahead. We’re hoping the requirements are robust sufficient, after which stakeholders can give attention to plugging gaps in implementing them.
We have now additionally arrange an appeals course of to the ICVCM for claims that sure packages or tasks don’t meet our requirements.
What are your ideas on the SBTi (Science-based Targets initiative) approving carbon offsetting for an organization’s Scope 3 oblique worth chain emissions?
From ICVCM’s perspective, we need to channel finance into carbon avoidance and removing by guaranteeing the availability aspect of the market is basically robust.
However the market doesn’t work except there may be demand. To create such demand, it’s good to have alignment between all of the stakeholders – ICVCM, SBTi, sustainability reporting group CDP and others. If the SBTi doesn’t recognise offsets as a part of company decarbonisation methods, corporations are unlikely to spend money on carbon credit.
From a realistic perspective, it’s useful to recognise the position of offsets within the hard-to-abate areas. The primary precept remains to be that corporations need to give attention to inside decarbonisation, and can’t be allowed to purchase their method out. However we do see a job for offsets, given additionally that we’d like the investments into nature and carbon tasks to cease local weather change in time.
This interview has been edited for readability and brevity.
