Climate Rising The Potential and Challenges of the Voluntary Carbon Market
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Jan 29, 2025 Join Nat Keohane, a climate policy expert from the Center for Climate and Energy Solutions, Donna Lee, co-founder of Calix Global specializing in carbon credit ratings, David Victor, UC San Diego professor focused on innovation, and Carolyn Weinberg, formerly with BlackRock. They dive into the complexities of voluntary carbon markets, discussing the challenges of ensuring credible carbon credits, emerging standards, and how businesses can effectively utilize these markets for net-zero goals. Their insights illuminate the intersection of finance, policy, and sustainability.
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VCM Overview
- The voluntary carbon market (VCM) allows companies to buy credits representing emission reductions from projects like carbon removal or clean energy.
- The VCM reached $2 billion in 2021, a small fraction of the trillions needed for climate action, but has potential to grow significantly.
VCM vs. Regulated Markets
- Voluntary carbon markets (VCMs) rely on confidence, unlike regulated markets with governmental oversight.
- VCMs depend on the integrity of credits, as demand comes from companies seeking carbon neutrality.
Offset Challenges
- Offsets are challenging because they measure emission reductions from a counterfactual baseline.
- Low-quality credits exist for activities that would have happened anyway or offer only temporary carbon storage.