Developed correctly, the carbon offset market has the potential to increase capital flows towards nature-positive outcomes at large scale and should be encouraged. Currently offsets, generated through emission reductions such as planting trees, trade in a voluntary market, often on a project-by-project basis.
From $0.6bn by the most recent estimates, the voluntary carbon market could be scaled up to reach $50 billion by 2030 and $200 billion by 2050, depending on the prices achieved, by creating more transparent, liquid and standardised contracts as the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) is developing.
To ensure any scaling up of the voluntary carbon markets has a positive impact on biodiversity, it would be beneficial if biodiversity were priced as a co-benefit within a carbon offsetting project.
In January the TSVCM issued a report highlighting the core principles for a voluntary carbon market and roadmap for scaling. Within the report, recommendations for natural climate solutions were given detailing avoidance of harm to nature and the use of nature within carbon sequestration.
For co-benefits, the Taskforce encourages recognition and further development of existing programs such as: the Blue Carbon Initiative for marine-based co-benefits; and Gold Standard’s Black Carbon Quantification Methodology for co-benefits of addressing pollutants; the Verra’s Sustainable Development Verified Impact Standard (SD Vista) and Gold Standard for the Global Goals for SDG outcomes; and Verra’s Climate, Community & Biodiversity (CCB) Standards for benefits to community and biodiversity.
One way financial institutions can support the development of the voluntary carbon market is through assessing their own carbon offset programmes for impact on biodiversity.
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