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The Biden-Harris Administration has taken a significant step to bolster climate action in the world’s largest economy with the announcement of new principles for high-integrity voluntary carbon markets (VCMs). This move is designed to ensure that these markets operate with transparency and deliver real, measurable climate benefits.
For businesses, particularly those committed to sustainability and supporting climate solutions, these new principles offer a framework for participation in VCMs that promise both environmental and economic benefits:
Ensuring Credible Atmospheric Integrity
One of the core principles outlined by the administration is the need for carbon credits to meet credible atmospheric integrity standards. This means that credits must represent genuine decarbonisation efforts. This principle is crucial for maintaining the credibility and effectiveness of VCMs, as it ensures that each credit genuinely corresponds to one tonne of carbon dioxide (or its equivalent) being removed from or avoided in the atmosphere.
Promoting Environmental and Social Co-Benefits
The new principles also emphasise the importance of avoiding environmental and social harm while supporting co-benefits and transparent benefits-sharing. For businesses, this means engaging in activities that not only reduce carbon emissions but also promote broader environmental and social benefits. This approach aligns with the administration’s goals of creating economic opportunities across diverse businesses and communities.
Prioritising Measurable Emissions Reductions
Another key aspect of the new principles is that corporate buyers should prioritise measurable emissions reductions within their own value chains before turning to carbon credits. This principle encourages businesses to focus on reducing their own carbon footprints as a first step. For companies committed to net-zero targets, integrating high-quality carbon removal solutions can complement these internal reduction efforts, ensuring that climate strategies are robust and effective.
Building Market Confidence
To build confidence in the carbon markets, the administration calls for public disclosure of the nature of purchased and retired credits. This transparency is vital for maintaining trust and ensuring that market participants can verify the impact of their investments. This commitment to transparency and rigorous measurement, reporting and verification (MRV) ensures that carbon removal efforts are backed by solid science and verifiable data, giving businesses confidence in their climate investments.
What Are Voluntary Carbon Markets?
Voluntary carbon markets (VCMs) facilitate carbon credits being bought and sold on a voluntary basis, outside of mandatory regulatory schemes. These markets enable businesses and individuals to offset their carbon emissions by purchasing credits generated by projects that reduce the level of greenhouse gas emissions or remove carbon from the atmosphere.
High-integrity VCMs ensure that these credits represent real, additional and permanent emissions reductions or removals. They are an essential tool for financing the transition to a net-zero economy, providing critical support for innovative climate solutions and promoting sustainable development.
The Role of High-Quality Voluntary Carbon Markets
While companies must focus on decarbonising their value chains first, the VCM provides a way for them to take responsibility for emissions they can’t yet cut. They provide a source of finance for projects that reduce or remove carbon from the atmosphere. This includes both nature-based solutions and technological innovations, which can deliver significant co-benefits, from improved soil health to enhanced biodiversity.
The Biden-Harris Administration’s principles are a positive and pragmatic step towards strengthening these markets. They complement existing initiatives aimed at improving market integrity and driving meaningful climate action. As businesses look to leverage these markets, it’s essential to choose partners and projects that adhere to these high standards.
Embracing High-Integrity Voluntary Carbon Markets for a Sustainable Future
The Biden-Harris Administration’s announcement marks a pivotal moment for voluntary carbon markets. By setting clear standards and expectations, the administration is paving the way for a more robust and credible market that can drive substantial climate action. This new framework ensures that carbon credits are reliable and verifiable, which is crucial for maintaining trust and efficacy in climate mitigation efforts. High-integrity voluntary carbon markets offer a transparent and accountable avenue for businesses to offset their emissions, thereby supporting global net zero goals.
UNDO’s Chief Commercial Officer, Ryan King, says: “This announcement signals to U.S. businesses that this administration is serious about its commitment to Net Zero by 2050. This statement is a strong continuation to the largest piece of climate legislation in history, the Inflation Reduction Act, and will instil needed confidence in the Voluntary Carbon Market.”
For businesses, this development represents a significant opportunity to invest in high-quality carbon removal projects that deliver real, measurable benefits. By adhering to these new principles, companies can enhance their sustainability strategies and contribute to meaningful climate action. This not only supports the transition to a net-zero economy but also fosters innovation in climate solutions such as enhanced rock weathering and other carbon removal technologies. Aligning with these standards allows businesses to play a vital role in the fight against climate change while ensuring economic and environmental co-benefits, driving substantial strides toward a sustainable future.
Engage with High-Integrity Voluntary Carbon Markets
At UNDO, we use enhanced rock weathering (ERW) to permanently remove CO2 from the atmosphere and combat climate change. Join us in scaling this vital technology and making a difference on the path to a sustainable future.
