An event convened by the UK Government as part of the COP26 Finance Day

3rd November | 15:00-16:30 | Nature Zone, Nature Pavilion (Blue Zone)

Global leaders from across government, the private sector, civil society and indigenous communities discuss what is needed to ensure voluntary carbon markets are high integrity and accelerate action towards the 1.5°C Paris goals, while supporting inclusive, sustainable development globally. Keynotes and panel discussions interrogate what ‘integrity’ means, on both demand and supply sides, in order to identify shared challenges and pathways for collaborative solutions. Representatives from key initiatives supporting high integrity working together on these topics also discuss their next phases of work. 

Background

We are at a turning point for our planet and our health. There is an urgent need to increase all types of finance flows, to decarbonise economies, strengthen resilience and adapt to climate change. Through the Race to Zero and Race to Resilience campaigns, Governments are calling on businesses, investors, cities and civil society to set science-based targets and take ambitious action now to reduce emissions, and to help strengthen the resilience of people in vulnerable communities to climate risks. 

Carbon markets are one tool among many for delivering global emissions reductions. To keep the 1.5°C temperature goal within reach, we need Voluntary Carbon Markets (VCMs) to play an additional and robust role in accelerating climate action and ambitious net-zero strategies – with carbon credits used in complement to, rather than as a substitute for, direct reductions in companies’ own emissions.

What are Voluntary Carbon Markets (VCMs)?  

VCMs allow organisations or individuals to support climate action by purchasing carbon credits without being legally required to do so. Projects that generate carbon credits can have wider sustainable development co-benefits such as improving energy access, biodiversity conservation, improving health outcomes, or economic development. To achieve their potential, VCMs must be used in addition, and not as an alternative, to ambitious action to reduce direct emissions in line with science-based targets.

The UN Article 6 negotiations are developing rules for the generation and international trade of carbon units. Article 6 concerns the international transfer of carbon units between countries. The relationship between VCMs and future Article 6 transactions is to be clarified once the Article 6 negotiations have been completed under the UNFCCC negotiations.

Why must we act now?

The market for carbon credits is growing (up from c.$300m in 2018 to $800m this year), in part driven by companies setting voluntary climate targets. If channelled with integrity, the financing generated through this growing market could help deliver benefits for the climate, biodiversity, Indigenous Peoples and Local Communities (IPLCs) and sustainable economic development.

Many commentators still see a number of challenges with VCMs being a credible tool to support the 1.5C transition. Key among them include situations where there is a lack of transparent and legitimate corporate claims; where the environmental and social integrity of carbon credits may be opaque and inconsistent; where there is a lack of inclusive participation and risks to safeguarding of human rights, including IPLCs land rights; and where there is inequitable distribution of benefits. 

What is the way forward? 

This event ‘Transforming High-Integrity, Inclusive Voluntary Carbon Markets Which Deliver for 1.5C’ will identify the opportunities arising from high integrity VCMs to i) increase ambition on climate, ii)

unlock finance for nature and innovation, and iii) deliver sustainable development benefits for people – particularly in emerging markets. It will provide an open space to invite in different views, and confront the challenges and risks which need to be overcome. It will seek to strengthen momentum behind key stakeholders working to develop solutions and provide the building blocks for high integrity VCMs. 

The event includes representatives from public and private sectors, Indigenous People’s groups, civil society, the United Nations Development Programme, the Science Based Targets initiative (SBTi) and two initiatives working on integrity in VCMs, theVoluntary Carbon Markets Integrity Initiative (VCMI) and the Integrity Council for Voluntary Carbon Markets (IC-VCM):

  • VCMI is a multi-stakeholder platform to drive use of VCMs which is aligned with the Paris temperature goals and inclusive, sustainable development. Though country partnerships, it also builds capacity of countries to access VCMs financing opportunities in line with Nationally Determined Contributions (NDCs). VCMI’s initial priority is to develop guidance on how carbon credits can be used and claimed by buyers such as businesses, as part of credible net-zero strategies, and develop country Access Strategies to channel VCMs finance.  
  • The IC-VCM has been established through a multistakeholder process led by the Taskforce for Scaling Voluntary Carbon Markets (TSVCM) with the aim to provide greater transparency and assurance of the environmental and social integrity of carbon credits. The IC-VCM is charged with developing a set of “Core Carbon Principles” which will set a threshold for determining high-integrity carbon credits and assess which standards and methodology meet the requirements.  

Run of Show

In addition to the below agenda, Jennifer Morgan (Greenpeace) and Teresa Anderson (Action Aid) were invited to provide remarks.

Opening RemarksManuel Pulgar Vidal – Global Leader of Climate & Energy, WWF
KeynoteHon. Samuel A. Jinapor – Minister for Lands & Natural Resources, Ghana 
Panel 1 – High Integrity DemandMarc Engel – Chief Supply Chain Officer, Unilever  Tariye Gbadegesin – VCMI co-chair  Cynthia Cummis – SBTI & WRI  Beto Borges– Director, Forest Trends  
Panel 2 – High Integrity SupplyUsha Rao-Monari – Associate Administrator for the United Nations Development Programme Hindou Ibrahim – Coordinator of the Association of Peul Women and Autochthonous Peoples of Chad Bill Winters – CEO, Standard Chartered  Solange Bandiaky-Badji – Coordinator, Rights and Resources Institute
Conversation on the Road AheadManuel Pulgar Vidal, hosting a chat with:  Rachel Kyte – co-chair, VCMI  Hugh Sealy – co-chair, IC-VCM  
Closing RemarksMark Carney – Finance Advisor to the UK Prime Minister for COP26 
Vote of ThanksManuel Pulgar Vidal – Global Leader of Climate & Energy, WWF 

With thanks to our principal partners

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