ICVCM’s assessment framework fails to put robust checks on the voluntary carbon market
Photo: iStock An independent governance body for the voluntary carbon market recently released its global benchmark for high-integrity carbon credits. However, the guidelines fall short in several areas — the assessment framework fails to meet robust requirements for a more meaningful and watertight carbon market.
The Integrity Council for the Voluntary Carbon Market (ICVCM) July 27, 2023 brought out its core carbon principles (CCP), assessment framework and assessment procedure, replacing the draft published in March 2023.
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With this release, the Integrity Council has also started accepting applications from carbon-crediting programmes for the assessment of projects against the CCP.
Over the years, fraud and greenwashing allegations have significantly damaged the credibility and integrity of large-scale carbon offset projects that comprise the voluntary carbon market, affecting stakeholders who depend on these offsets and alarming observers of the ecosystem.
Consequently, a growing need has been felt to evaluate and regulate the voluntary offset markets.
ICVCM was set up in 2021 to enforce standards that would benchmark ‘credible’ and ‘high-integrity’ carbon credits. It was a successor to the Taskforce on Scaling Voluntary Carbon Markets, a body formed in 2020 by the United Nations Special Envoy for Climate Action, Mark Carney.
The CCP released by ICVCM has been designed to review carbon credit projects against principles that are often violated in the existing, structureless and unregulated voluntary carbon markets.
A checklist of measures — broadly categorised under governance, emissions impact and sustainable development — is provided by the framework. It assigned responsibilities to carbon-crediting programmes and mitigation activity proponents.
But a good part of the checklist hardly goes beyond what is already accepted as principles and requisites by the existing carbon-crediting programmes, such as Verra and Gold Standard, at least in theory.
For instance, a technical requirement in the framework mandates the inclusion of information such as the location of the project, proponents, applied technologies/practices, environmental and social impacts, methodology for baseline determination and quantification of greenhouse gas emissions reductions or removals in the mitigation activity design document.
However, this information is already required by several crediting programmes to be given by the mitigation activity proponents. But programmes often outmanoeuvre the rules and the ICVCM framework does little to help counter it. Take, for instance, a project providing an outline map of India to specify that the project is in the country.
Similarly, the framework did not state requirements for establishing additionality any differently than what has been considered by crediting programmes. Proponents have been able to game the additionality requirement by following the letter of the law. ICVCM’s proposition on additionality would only further the malpractice.
The framework also did not address conflicts of interest existing in the system. For instance, with respect to third-party independent validation and verification (VVB), the terms of engagement and transparency in relations with activity proponents remain unaddressed.
The responsibility to assess environmental and social risks has largely been placed on the project proponents such as by mentioning negative impacts of mitigation activity on terrestrial and marine biodiversity, etc. in the design document.
However, this holds little value unless a third party performs an independent check for environmental and social risks. VVBs have proved insufficient to assess and flag such risks.
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There are some welcome specifications in the framework, including the requirement for registries to compulsorily include information such as on whose behalf the credits are being retired and by whom and the consideration of government policies and legal requirements when specifying baseline emissions.
The framework also excludes ex-ante credits that are issued before the emission is actually reduced from receiving CCP labels.
One of the key components is the benefit-sharing aspect of carbon credits, where communities and indigenous groups are involved and there is almost always very little information available in the public domain.
The ICVCM framework requires activity proponents to include information on benefit sharing in the design document.
However, it does not specifically ask the proponent to clarify ownership of carbon rights and the sharing of monetary benefits from the sale of credit. In several cases, benefit sharing is described subjectively by proponents who avoid objectively describing exactly what has been the benefit to the community.
One of the leading carbon credit programmes, Verra, was quick to issue a public statement welcoming the new assessment criteria and reworking its existing programme for carbon credits by August 2023.
When the draft of the core carbon principles was released last year, Verra raised concerns about the extensive assessment procedures outlined in the framework.
In March 2023, Verra welcomed the framework but also declared its intentions to conduct a thorough review of both the principles and the framework. Meanwhile, the Gold Standard expressed its belief that the principles fail to elevate the level of ambition or quality.
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The Gold Standard has yet to issue a statement on the latest iteration of the framework.
The framework has been much anticipated by buyers eager to avoid the pitfalls of greenwashing as well as by sellers who wish to restore public trust in the voluntary carbon market. However, it seems to water down the checks that enforce core carbon principles, likely to increase acceptability among carbon credit programmes.
Instead of having a plethora of integrity principles, frameworks and labels, what is necessary to restore public trust in the market is the efficient implementation of rules, possibly with government support.
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