The Biden-Harris Administration has announced new principles for responsible participation in Voluntary Carbon Markets (VCMs). These principles aim to ensure high-integrity carbon markets that drive real decarbonization efforts and generate economic opportunities for diverse American businesses.
Historic Climate Investments and Economic Opportunities
Since President Biden took office, his administration has prioritized a robust climate agenda. Key legislative achievements include the Inflation Reduction Act and the Bipartisan Infrastructure Law, representing the largest-ever climate investments in U.S. history. These initiatives have already catalyzed over $860 billion in business investments, particularly in sectors such as electric vehicles (EVs), clean energy, and semiconductors. These investments are not only helping to cut greenhouse gas emissions but also creating new American jobs and revitalizing communities that have historically been left behind.
Commitment to Climate Goals
The Biden-Harris Administration is committed to ambitious climate goals, including cutting greenhouse gas emissions by half by 2030 and reaching net zero by 2050. The newly introduced principles for VCMs are part of this broader strategy to mobilize the necessary investments to meet these targets.
Ensuring High-Integrity Voluntary Carbon Markets
The new principles, co-signed by key officials such as Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm, address existing challenges in the VCMs. Observations have shown that many popular crediting methodologies often fail to deliver the promised decarbonization outcomes. To rectify this, the administration’s principles emphasize:
- Credible Atmospheric Integrity Standards: Carbon credits must represent genuine decarbonization.
- Avoiding Environmental and Social Harm: Activities generating credits should support co-benefits and transparent benefits-sharing.
- Corporate Accountability: Buyers should prioritize emissions reductions within their value chains.
- Transparency: Credit users must disclose the nature of purchased and retired credits.
- Accuracy in Public Claims: Climate impacts of credits should be accurately represented.
- Market Integrity Efforts: Participants should work towards improving market integrity.
- Efficiency and Lowered Transaction Costs: Policymakers should facilitate efficient market participation.
Supporting Diverse Climate Projects
High-quality VCMs can accelerate decarbonization by providing reliable revenue streams for various projects, including nature-based solutions and innovative climate technologies. These markets can support economic development, sustain livelihoods, and conserve natural resources while advancing environmental justice.
Federal Actions to Support VCMs
The administration is taking several steps to support the development of high-integrity VCMs. This includes initiatives like the USDA’s Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program, DOE’s Carbon Dioxide Removal Purchase Pilot Prize, and international efforts such as the LEAF Coalition to combat tropical deforestation.
Enhancing Monitoring and Market Integrity
Efforts to enhance measuring, monitoring, reporting, and verification (MMRV) are critical to maintaining the scientific integrity of carbon credits. The administration’s comprehensive approach includes initiatives from various federal agencies and the establishment of a new Environmental Fraud Task Force by the Commodity Futures Trading Commission (CFTC) to address fraudulent activities in carbon markets.
Conclusion
The Biden-Harris Administration’s new principles for voluntary carbon markets underscore a commitment to ensuring these markets effectively contribute to the nation’s ambitious climate goals. By setting high standards for both carbon credit supply and demand, the administration aims to restore confidence in VCMs, driving substantial private capital towards innovative decarbonization projects and preserving natural ecosystems.