The ICVCM’s recently released Core Carbon Principles provide a strong foundation

If anything is clear from the last 12 months in the voluntary carbon market, it’s that increasing the quality and integrity of credits available, and communicating transparently about those improvements, are key to restoring trust among credit buyers. If you agree, then last month’s release of the Core Carbon Principles (CCPs) was surely welcome news. Crafted by the Integrity Council for the Voluntary Carbon Market (ICVCM) following an extensive stakeholder consultation, this first release of the CCPs represents the leading attempt to define “high integrity” carbon credits. 

We think the CCPs are a great first step toward a common set of standards, creating clarity in what can be a confusing marketplace. We’re glad the ICVCM has put a lot of thought into how the CCPs relate to other efforts, including existing standards such as CORSIA and new developments under Article 6 of the Paris agreement. But this is just the first part of their work, and it’s clear that there’s a long way to go before we have a detailed, fully realized path to a better, higher integrity carbon market. This post summarizes our takeaways, as well as what we see as some key next steps in the process.

What the CCPs get right

The initial release focuses on program level principles related to governance and methodology design. Here are a few things we’re excited about from the final draft:

• A comprehensive framework: The CCPs encompass the most critical variables affecting the quality and integrity of carbon credits. They place equal emphasis on fundamental features of carbon project design, such as additionality and permanence, and factors related to program governance and certification. While there is certainly plenty to discuss in the details, we believe that the scope of the principles is the right framework from which to evaluate credit quality project to project. 

• Codifying social impacts: One of the most significant developments is the inclusion of sustainable development goals (SDGs) and safeguards as one of the core principles. Although SDGs have long been supported by carbon projects, certification of social impact claims has typically been achieved through secondary standards, such as Verra's Sustainable Development Verified Impact Standard. Elevating SDGs to a core principle of credit integrity is vital for incentivizing better tracking and monitoring of social impact claims. That said, we hope future versions will require clear demonstration of progress towards meeting SDGs as a baseline requirement, rather than simply providing safeguards against damages.

• Accounting for uncertainty: The CCPs set a high bar on the quantification of uncertainty, stating that all sources should be considered, including errors related to prediction models and underlying data. Assessing the risk associated with carbon credits is critical to understanding their quality, and fully quantifying uncertainty is necessary to understand risk. We support the ICVCM in taking a strong stance on the need for addressing uncertainty, but it's also important to recognize that many existing methodologies will need to be updated to meet these requirements. 

What can be improved upon

While the CCPs are directionally correct, there is of course still room for improvement. Here are a few things we’d like to see addressed, either in future versions of the principles or in the broader market:

• Communicating to stakeholders: During the public consultation process, one common point of feedback was that the ICVCM risked creating another complex set of standards, layered on top of other complex sets of standards. To avoid undercutting the CCPs value and creating more confusion, the industry needs to double down on clear communication to the buyer audience. This isn’t just a task for the ICVCM, however: all of us in the industry must make it easier to understand what defines a high quality credit, and to differentiate these from lower quality – often legacy – credits whose impact may not hold up under scrutiny. 
• Supporting emerging approaches: One point of concern is that ex-ante credits, those whose impacts have not yet been verified, are not CCP eligible. Many promising carbon removal technologies are just now coming online, and forward contracts are an important mechanism for delivering capital that can help them scale. While we agree that assessing ex-ante credits introduces additional challenges, leaving these aside completely risks depressing the pace of innovation in new carbon solutions. 

Next steps for the voluntary carbon market

While there will always be room for improvement, we believe that the release of the CCPs is a significant step forward in integrity for the voluntary carbon market. We need buyers to pay attention, and to consider how these principles can guide near term credit purchases. If we are to stay close to IPCC targets and avoid the worst impacts of climate change, this urgent action will be absolutely necessary. 

We look forward to the clarifications and implementation details which ICVCM have promised to include in their second release later this year. Those details are missing from this draft, making it difficult to truly evaluate the impact of the CCPs on the market. For example, key details related to how projects will demonstrate additionality and permanence have not yet been addressed. The next release will also be an opportunity to take a bolder stance on how quality is measured and assessed, such as by requiring greater transparency regarding methods and performance benchmarks to assess actual performance. These developments could be the difference between this effort representing a bold vision for the future of the carbon market, or an important but ultimately incremental step in the right direction. 

The VCM has been evolving and improving since the very first carbon projects were introduced in the 1980s. We must scale this critical market quickly to help reach our global decarbonization goals, and the market is up to the challenge as long as market participants continue to invest in improving it. The ICVCM’s CCPs released to date are an important step in the right direction, and we at Rubicon Carbon are looking forward to helping create a larger, more robust, and higher integrity carbon market for all.