A large-scale voluntary carbon market is critical towards enabling more businesses to turn their net zero commitments into action through investments in emissions avoidance, reductions and removals.
That’s according to The Taskforce on Scaling Voluntary Carbon Markets, consisting of experts from six continents who have released comprehensive and tangible actions as well as a roadmap for implementation to deliver the carbon market at pace and scale.
Voluntary carbon markets, a vital part of emissions reduction efforts worldwide, enable buyers to purchase credits that support projects that reduce emissions and contribute to a smaller global emissions footprint overall.
The Taskforce believes the private sector has a major role to play in fighting climate change by scaling up the voluntary trading of carbon credits and investment in natural climate solutions.
Its report outlines clear guidance on the role business can play in curbing climate change, through making commitments to align with the Paris Agreement, reporting annually on their emissions and those produced in their value chains and compensating a share of unabated emissions through the purchase and retirement of carbon credit.
Solutions in the report include measures to protect and enhance forests, peatlands and mangroves as well as soil sequestration through, for example, cover cropping.
It adds nature-based solutions are more economically attractive than other forms of carbon removal and can be deployed immediately without waiting for technological breakthroughs.
With close to 7Gt CO2 in annual potential by 2030, assuming an illustrative price per ton of $20 (£14.6), it estimates potential capital flows greater than $100 billion (£73bn).
Mark Carney, UN Special Envoy for Climate Action and Finance and one of the Taskforce initiators said: “Company net zero transition plans must primarily depend on absolute emissions reduction. In parallel, a large, high intensity market for carbon offsets is essential for three reasons.
“First, some companies are committed to ‘reducing’ historic emissions, which can only be accomplished through offsets. Second, in hard-to-abate sectors, all the technologies do not yet exist to decarbonise completely, so companies will need to rely on offsets to limit their emissions while they transition to new, low emission operating models. Third, carbon offsets can be used to buy down the ‘green premium’ on vital emerging technologies – such as hydrogen, direct air carbon capture and sustainable fuels – to accelerate their development and adoption.
“To converse the world’s precious carbon budget and accelerate the transition to zero absolute emissions, we need a large, transparent, verifiable and robust voluntary carbon market. The Taskforce for Scaling Voluntary Carbon Markets blueprint sets out clearly how we can build this market. It is critical that we now move from blueprint to building as quickly as possible.”