Biden-Harris Administration Announces New Principles for High-Integrity Voluntary Carbon Markets
The President’s Investing in America agenda has crowded in a historic surge of private capital to take advantage of the generational investments in the Inflation Reduction Act and Bipartisan Infrastructure Law. High-integrity VCMs have the power to further crowd in private capital and reliably fund diverse organizations at home and abroad –whether climate technology companies, small businesses, farmers, or entrepreneurs –that are developing and deploying projects to reduce carbon emissions and remove carbon from the atmosphere.
However, further steps are needed to strengthen this market and enable VCMs to deliver on their potential. Observers have found evidence that several popular crediting methodologies do not reliably produce the decarbonization outcomes they claim. In too many instances, credits do not live up to the high standards necessary for market participants to transact transparently and with certainty that credit purchases will deliver verifiable decarbonization. As a result, additional action is needed to rectify challenges that have emerged, restore confidence to the market, and ensure that VCMs live up to their potential to drive climate ambition and deliver on their decarbonization promise. This includes: establishing robust standards for carbon credit supply and demand; improving market functioning; ensuring fair and equitable treatment of all participants and advancing environmental justice, including fair distribution of revenue; and instilling market confidence.
The Administration’s Principles for Responsible Participation announced today deliver on this need for action to help VCMs achieve their potential. These principles include: