Voluntary carbon market support for policy-focused learning
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CRSI provides technical assistance to policymakers to help carbon removal reach climate-relevant scale. (You can read more about our approach to policy here.)
In this blog, we answer the question, “How does CRSI engage with the voluntary carbon market, through forums like New York Climate Week, given our emphasis on policy?”
In short, we believe that the voluntary buyers of carbon removal credits can help catalyze policy, like support for public monitoring infrastructure.
Crucially, the VCM is not just an onramp to compliance carbon markets. VCM activity can validate and/or demonstrate the need for a broader portfolio of policy solutions.
At CRSI, our work is based on three foundational principles.
First, carbon removal is a public good.
We all benefit from it, we all want it, but we aren’t financially incentivized as individuals to go out and suck pollutants out of the air. It’s a collective effort of society to procure and maintain public goods.
Second, carbon removal will be policy-driven. This follows naturally from the first point. Public goods (like clean air) generally require broad support through policy, regulation, and social norms.
Third, carbon removal must be integrated into all sectors of society. We need to clean up a truly mind-boggling amount of carbon pollution from the atmosphere, which will require an all-hands-on-deck effort.
Great—public goods, policy, integrated throughout society, check, check, check. But, as I get ready for the hustle of New York Climate Week, I am faced with a stark truth:
The majority of activity in the CDR industry today relies, directly or indirectly, on a small number of corporate buyers in the voluntary carbon market.
There has certainly been policy activity, and there needs to be more, but the political will for climate action is shrinking fast. What we have to work with today is the voluntary carbon market: buyers, suppliers, registries, verifiers, brokers, ratings agencies. A whole ecosystem of activity to support the process of turning a chemical process into carbon credit. And it all hinges on the sophisticated buyers that inject funding into the system.
What should we make of this, if policy is our end-goal?
It depends, I think, on our understanding of what the voluntary carbon market is, and what purpose it ultimately serves. Consider three plausible “purposes” for the voluntary carbon market —
First, marketing.
The cynical take might be that the voluntary carbon market is purely a marketing tactic. Customers want companies to care about the environment and the climate and saving ducks from oil spills. So companies use a fraction of their marketing budgets to demonstrate their environmental bona fides.
If you believe the VCM is just a marketing tactic, and you want to build a robust pipeline of policies for CDR, you probably wouldn’t bother working with or in the voluntary marketplace.
Luckily, the pure marketing approach to the VCM—buying and selling low-cost, low-quality credits to make questionable claims—is uncommon in carbon removal in my experience. (So far.)
Second, offsetting.
The voluntary carbon market enables climate-conscious consumers, through individual purchases or through the sustainability commitments of the businesses they patronize, to neutralize the radiative forcing impact of their activities (e.g., a flight to Hawaii on vacation) by preventing an emission and/or removing CO2 from the atmosphere somewhere else (e.g., planting a tree in a previously deforested eco-region).
If you believe the purpose of the VCM is offsetting emissions in response to customer, employee, or shareholder demand, you might dedicate a lot of effort to making standards, protocols, and risk management tools very, very robust. A ton is a ton is ton.
Alternatively, you might conclude that this accounting exercise is effectively impossible. Or (worse) it’s impossible and a slippery slope to mitigation deterrence and moral hazard. Accounting for counterfactuals and additionality always requires judgment calls and introduces bias. You might decide, in that case, to disengage from any VCM-related activity.
I certainly know folks who have taken either or both of these positions at times.
Third, catalyzing policy.
Voluntary carbon markets show policymakers the way towards climate policy. VCM activity demonstrates that the public (as consumers of goods and services) want climate action. Spending in the voluntary carbon market demonstrates that corporations care about their sustainability goals, and policy can make it easier to achieve those goals. VCM activity even demonstrates that carbon market solutions generate jobs and provide social and ecological co-benefits.
Lastly, and perhaps most importantly for the field of carbon removal, the VCM demonstrates what is technologically, scientifically, economically and socially feasible. Policymakers can look at what is working in the private sector, what it costs, what rules and standards were developed, and port that into policy. For example, Frontier, a $1B corporate advanced market commitment to purchase carbon removal credits, has been a model for government procurement of CDR. The EU Carbon Removal Certification Framework draws on existing registry standards in the development of new methodologies.
In short, robust activity in the voluntary carbon market makes it easier for policymakers to say yes to ambitious carbon removal policy because they know it works. At CRSI and at many of our peer NGOs, we believe that the VCM is, at its core, an onramp to policy.
But there’s a big caveat.
Folks often assume that the VCM is an onramp to one specific kind of policy: a compliance carbon market. This is a natural extension of the infrastructure of the voluntary carbon market. We’ve built the system to trade credits, so let’s keep trading credits, but with more regulatory oversight to achieve legally mandated climate targets.
Makes perfect sense… except compliance carbon markets are necessary but insufficient to scale CDR to the levels needed to stay within the targets of the Paris Agreement and correct for a temperature overshoot. We need compliance markets, and we need more. Can the VCM help us build the case for robust CDR policy beyond carbon markets?
I think the answer is yes—if we are creative about (1) what counts as CDR policy and (2) what we can learn from projects in the voluntary carbon market.
Consider, for example, MRV for regional or national agricultural liming subsidies. We’ve been working with academic partners to build the technical foundations for jurisdiction-level monitoring of enhanced weathering in soils and waterways. Corporate buyers acting in the VCM can support the collection and sharing of data from streams and rivers, which will, in turn, demonstrate the feasibility of watershed monitoring. This can support advocacy for expanded carbon measurements in public water quality monitoring systems, like the USGS Streamgaging Network.
Good carbon (and cation and alkalinity) data from waterways can, in turn, support inventory-level reporting of carbon removal from policies like targeted pH management subsidies. Taken together, watershed monitoring can support a holistic approach to tracking and eventually governing the cumulative impact of alkalinity enhancement solutions that flow into rivers and the ocean, funded through a diverse range of policy mechanisms.
Admittedly, all of this will take years. Maybe decades. But it can start now, in the voluntary carbon market, if we expand our model of CDR policy and leverage broader systems to get carbon removal to the scale we need.
It’s a wide world out there! Let’s live creatively.
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P.S. Just to be clear, this is not an excuse to mint, buy, and trade low-integrity carbon credits because we claim to have some nebulous future policy goal. Offsetting (which is the basis for essentially all corporate purchasing today) requires high-quality, high-integrity carbon credits.
