How to Keep Institutional Knowledge Created while Heeding the Taskforce on Scaling Voluntary Carbon Markets Recommendations
While carbon offset standards are trying to forge a way ahead in the murky unknown of a Paris-aligned world (without the benefit of policy advances at the UNFCCC’s 2020 Conference of Parties due to a COVID cancellation), a new Taskforce on Scaling Voluntary Carbon Markets led by the private sector has formed and produced a Consultation Document. The report calls for an urgent and comprehensive whole-economy transition that includes voluntary offsets as a key part of this transition, focusing on the questions of scalability, offset legitimacy, and market integrity of existing voluntary markets. Scrapping the 20+ years of experience that have led to significant protocol refinements, standards updating, and market growth to create a new system or exchange for this market could lead to offset project development stagnation, higher transaction costs if the exchange is layered on existing registries, and additional years of growing pains as a new market gets off the ground.
How voluntary markets evolve will be a dynamic and critical part of reaching global reduction goals. While the changes proposed by some registries and the Taskforce are well-intentioned, totally abandoning existing carbon markets could amount to the reinvention of the wheel. Perhaps we can build on the great work the standards/registries have done to date, while encouraging new technologies and connected solutions that could play a role in the near future.
More interconnectedness could allow for the registries to be integrated with developers and retailers’ inventories and allow for bulk transactions to occur in a more automated way. Currently, activation, transfer, and retirement of offsets is completed for each transaction, and this bespoke process can be inefficient. This system requires the same set of steps to occur for all transaction sizes and takes a few days to initiate and complete. Scaling up carbon markets as the Taskforce predicts is necessary will most likely need to involve a streamlined process for purchasing and retiring or transferring offsets that can occur more rapidly and in an automated way.