The World Wildlife Fund and Stockholm Environment Institute have just released an in-depth report on the state of standards in the voluntary carbon market. There really is no headline takeaway from the study. Rather, it provides a dense and chewy look at the state of play in the industry, the technical features of the various standards, and the primary issues confronting standards bodies as they attempt to design rules that will help to build a high-quality and environmentally effective voluntary carbon market:
Each standard has a slightly different focus and none has so far managed to establish itself as the industry standard. Some closely mirror compliance market standards, while others take a more lenient approach in order to lessen the administrative burden and enable as many credits as possible to enter the market. Certain standards are limited to particular project types (e.g. forestry) while others exclude some project types in order to focus on the social benefits of carbon projects. It is important to note that the vast majority of voluntary offsets are currently not certified by any third-party standard. This is likely to change over the coming years.
Of course, 100% of TerraPass’ projects are certified to a third-party standard, and that will remain the case as the standards evolve and improve. In the near term, we expect the Voluntary Carbon Standard (VCS) will be the primary standard we use, because it brings Kyoto’s Clean Development Mechanism (the reference against which other standards are compared) to a wide variety of project types appropriate to the U.S. We will also be actively investigating any U.S.-based Gold Standard projects as they become available. Expect to hear a lot more on this topic in the coming months.