US supports efforts to improve voluntary carbon markets
Hot Topic | May 2024
US government publishes Principles for Responsible Participation in the Voluntary Carbon Markets.
On May 28, 2024, the Principles for Responsible Participation in the Voluntary Carbon Markets were released to “inform and support ongoing efforts to address the challenges and opportunities associated with VCMs.” There are seven Principles in three categories – supply, demand and market functioning – each targeted at different constituents that together make up the market.
Applicability
- Voluntary Carbon Markets Joint Policy Statement and Principles
- All market participants in US voluntary carbon markets (VCMs)
Voluntary carbon markets have come under increasing scrutiny in recent years, with a number of high-profile cases related to the quality of carbon credits. While the principles themselves are not prescriptive laws or regulations, we expect them to shape the future development of regulation over the voluntary markets.
Maura Hodge
KPMG US Sustainability Reporting Leader
Relevant dates
- Effective immediately
Key impacts
Principles 1 and 2: Supply integrity
Principle 1. Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization.
Principle 2. Credit-generating activities should avoid environmental and social harm and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.
Principles 3 to 5: Demand integrity
Principle 3. Corporate buyers that use credits should prioritize measurable emissions reductions within their own value chains.
Principle 4. Credit users should publicly disclose the nature of purchased and retired credits.
Principle 5. Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards.
Principles 6 and 7: Market integrity
Principle 6. Market participants should contribute to efforts that improve market integrity.
Principle 7. Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs.
Report contents
- Source and applicability
- Fast facts, impacts, actions
- Principles for responsible participation in VCMs
- What to consider as a market participant
- Terminology and resources
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