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The heads of the Treasury, Energy and Agriculture Departments as
well as President Joe Biden's top climate and economic advisers
announced a joint statement of policy and principles to guide
participation in voluntary carbon markets as part of its broader
efforts to encourage their development.
“Voluntary carbon markets can help unlock the power of private
markets to reduce emissions, but that can only happen if we
address significant existing challenges,” said Treasury
Secretary Janet Yellen.
“The principles released today are an important step toward
building high-integrity voluntary carbon markets."
Many companies "offset" their own greenhouse gas emissions by
buying voluntary carbon credits, which represent the avoidance
or removal of emissions via projects largely located in
developing countries.
But a series of high-profile controversies has shaken confidence
in the market for carbon offsets, with several large companies
that buy carbon credits retreating from the market as recent
studies found that several large forest protection projects
failed to deliver their promised emission reductions.
Voluntary carbon markets shrunk for the first time last year in
at least seven years.
The principles for "responsible participation" in offset markets
outlined by U.S. officials on Tuesday include strict standards
to ensure that projects deliver real and quantifiable emissions
reductions, monitoring to ensure projects do not harm local
communities and that corporate buyers prioritize decarbonizing
their own supply chains before opting for credits.
The move by the U.S. to ensure "integrity" in voluntary carbon
markets comes as several organizations, such as the Integrity
Council for Voluntary Carbon Markets, have started to publish
principles to define high-quality offsets.
The Energy Department announced last year that it would purchase
credits from projects that will remove carbon dioxide from the
air in a bid to bolster that technology.
The Agriculture Department has also created a program to help
farmers, ranchers and forest owners to participate in carbon
markets by helping them to identify high-integrity carbon offset
programs for generating carbon credits.
Meanwhile, the State Department set up the Energy Transition
Accelerator, a carbon offset program that aims to help
developing countries transition away from coal, as well as the
LEAF coalition, which aims to stem tropical deforestation.
(Reporting by Valerie Volcovici; Editing by Muralikumar
Anantharaman)
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