Voluntary carbon markets: a public-private cooperation in progress.

🤝 Significant climate threats today endanger several billion people worldwide. And the frequency of such threats is only predicted to increase, especially illustrated by the COP26 summit at Glasgow this week.

This has become important, given also what is happening at the EU level - the so-called European Green Deal. Also, consumers nowadays take note of the carbon-neutrality of the goods and services they use, as well as investors, concerned about the greenness of their portfolios, demand hard action to be done.

Therefore, a crucial part of an effective global climate policy has been the emergence of Voluntary carbon markets (VCMs) – a mechanism through which private entities – for instance, corporations, organisations, and individuals alike – can contribute to the offsetting of GHG such as carbon dioxide by taking part in projects that reduce and capture such gasses.

Plantations are one of the most popular offsetting initiatives. Through photosynthesis, trees use the carbon in the atmosphere to produce oxygen - a by-product of their metabolism. Also, trees are the habitat for millions of species, having an overwhelmingly positive effect on biodiversity.

However, in order to really make a difference, companies that aim to reduce their carbon footprint need to initiate projects on a grand scale - something that the current pace and governmental cooperation cannot provide. There needs to be a more integrated kind of approach when states and multi-national corporations pursue climate policies. Many projects may span several jurisdictions (think, a reservoir-scale plantation) and require reporting to governments. A handful of states already are legislating or drafting such climate laws to enforce voluntary carbon markets but still lack the necessary knowledge and practice of how to coordinate both tracks with the nationally determined contributions (NDCs) of the Paris Agreement.

To make these international climate targets met, NDCs will indeed need to be synchronised with private efforts. Do follow the latest developments in the field of VCMs because such projects may be of great significance to your organisation in the upcoming two decades. How far are your company and your state in terms of voluntary carbon market cooperation?