Voluntary carbon market

The voluntary carbon market (VCM) is so-called because companies or organisations operate in it of their own free accord. Suppliers on this unregulated market are under no legal or regulatory obligation to generate carbon credits and companies, organisations or individuals are similarly not obliged to purchase them. They usually do so as part of a corporate social responsibility and/or public relations plan, or sometimes in anticipation of future obligations.

Despite what its name suggests, the voluntary carbon market is not a single, integrated global marketplace but a hodgepodge of different standards, platforms and jurisdictions that share certain common features.

Although market players and advocates perceive the voluntary carbon market as a vital climate action tool that can help slash emissions cost-effectively, the current reality is very different. Most carbon credits available on the market are of low quality, have negligible to little positive climate impact and are too often used to greenwash corporate images rather than spearhead decarbonisation efforts.

With proper, principled reform, Carbon Market Watch is convinced, the VCM can complement and supplement decarbonisation efforts but the primary overwhelming focus must be on deep, rapid and sustained emissions reductions.

What is CMW doing about it?

When it comes to the VCM, Carbon Market Watch focuses on:

The real impact of carbon market projects and the role of project developers
The human rights of local communities and indigenous peoples
The functioning and impact of voluntary carbon markets, including the role of intermediaries and other “hidden” actors
The buyers of carbon credits and how they use them

“The voluntary carbon market cannot be used as a tool for offsetting ambition. The primary focus must lie on rapid emissions reductions. Carbon credits should only be used to support climate action.”

Inigo Wyburd

Expert on global carbon markets

Inigo Wyburd

Expert on global carbon markets

What changes is CMW demanding?

Ending the practice of offsetting emissions and replacing it with more sustainable options, such as the so-called ‘contribution model’

Prioritising deep and rapid emissions reductions

Enhancing the quality and climate impact of carbon credits by improving the methodologies used by standards and project developers and the quality of carbon projects

Putting in place effective mechanisms to ensure that local communities and indigenous peoples are consulted about climate projects, benefit from them and have adequate recourse to grievance mechanisms