The carbon crediting world is fighting.
The Integrity Council for the Voluntary Carbon Market (IC-VCM) released its Core Carbon Principles and Assessment Framework for public consultation in late July. Predictably, the other existing carbon crediting organizations responded with their feedback. The Integrity Council was created in 2021 as an offshoot of the Taskforce on Scaling Voluntary Carbon Markets to be an independent governance body for the voluntary carbon market.
The framework’s goal is to create a higher standard for quality carbon credits to combat recent increased scrutiny. The Core Carbon Principles document outlines 10 basic criteria all carbon credits should be fulfilling, including additionality and permanence, along with program governance and third-party validation. The 78-page Assessment Framework then details the requirements of a carbon crediting program and outlines how they can be fulfilled.
Verra, one of the largest carbon credit registries, has become the IC-VCM’s harshest critic since the public consultation documents were revealed calling for a course correction from IC-VCM. The Gold Standard, another carbon credits verification body, also responded to the call for feedback with its own suggested improvements and concerns, albeit with more of a balanced response.
While each reaction has multitudes of small nuanced fixes and complicated suggestions, the more structural critiques from each organization fall within two categories: the IC-VCM is trying to supplant years of crediting and standardization work with an entirely new system under itself instead of building on the previous work of other organizations; and the IC-VCM is attempting to implement its new framework too quickly.
Critique 1:The IC-VCM is trying to do too much
Reading between the lines of Verra’s response to the IC-VCM, it seems like the registry thought the IC-VCM would be acting as oversight to overall carbon crediting methodologies, not to individual projects. But the IC-VCM’s Framework seems to be aimed at assessing every project type and methodology. Verra conjectures that the IC-VCM does not have the resources to evaluate every project without significant backlogs.
William McDonnell, COO of the IC-VCM, told GreenBiz: "We are absolutely not looking to go to the project level." Instead, McDonnell explains that the framework proposes to assess methodologies, standards and credit types against factors such as additionality and permanence.
A Verra spokesperson said it appears the IC-VCM is trying to supersede the historic work of carbon crediting organizations by creating unnecessary repetitions, thus rendering the existing bodies superfluous.
"They were starting to talk about starting from scratch and reinventing the wheel," said Steve Zwick, senior manager of media relations at Verra. "And that just is going to slow everything down. Either, they'll come up with something that no one can use, because it will try to be the perfect standard. You find the sweet spot where you say 80 percent of experts agree it's good."
The Gold Standard also outlined this concern in its response, urging the organization that "rather than act[ing] as an additional regulatory hurdle for the adoption of new methodologies or approaches, and contributing to delays, we believe the IC-VCM could choose to work with standards as stakeholders within their processes."
Zwick made sure to point to Verra’s full comments on the IC-VCM, which go into more detail on each nuance Verra believes the IC-VCM should change. These including prioritizing issues that are understood to suffer from integrity issues as well as things such as minutia about additionality.
For example, a proposed change would allow regulated activities to be considered additional. IC-VCM’s current rules state that "if an activity is already regulated, it should not be credited," but Verra pushes back that some regulated activities are additional in some circumstances.
Verra called the principles 'a blunt, one-size-fits-all approach.'
According to Zwick, Verra also believes that the council that created the Core Carbon Principles and Assessment Framework lacks the technical expertise and understanding of what it means to credit a carbon project. The council includes chair Annette L. Nazareth, a former Commissioner of the U.S. Securities and Exchange Commission; Sonja Gibbs, managing director and head of sustainable finance at the Institute of International Finance; Giulia Carbone, director of the Natural Climate Solutions Alliance at the World Business Council for Sustainable Development; Mark Kenber, former CEO of the Climate Group; Kelly Kizzier; Farrukh Khan, vice president for Global Climate at Environmental Defense Fund and many others.
Not only has Verra accused the IC-VCM of trying to usurp the work of accrediting bodies, is suggests that the IC-VCM’s approach is much less robust than the ones that already exist. The response states that the principles are too simplistic and not nuanced enough to address the many types of carbon crediting projects, with Verra calling the principles "a blunt, one-size-fits-all approach."
That observation is sometimes at odds with Verra’s other critique that the requirements are "far too prescriptive." In the Gold Standard’s response, it is wary of the requirements posed by the IC-VCM that seem to go beyond the crediting aspect of the project, including requiring the publishing of minutes of governing body meetings.
Critique 2:The IC-VCM is moving too fast
The second big issue the carbon crediting bodies have with the IC-VCM’s framework is the timeline. They want the projects and standards to have time to ramp up. The Gold Standard wants to be able to "grandfather" in "good projects" to achieve the IC-VCM label without having to redo the assessment in rural and hard-to-reach areas that are expensive and difficult to reassess.
Verra responded that the principles and frameworks should be an iterative process with different stages of development. Specifically, the registry noted that listing requirements not prevalent to that stage of the project "undermines confidence in programs and the market as it implies that they are deficient until such full requirements are met." According to Verra, there needs to be a pathway for improvement.
CarbonPlan, a scientific integrity nonprofit working to increase the credibility and transparency of carbon credits, calls this approach from Verra "grading on a curve" and asserts that because current standards are so low, any attempt to raise the bar magnifies the large gap between current and actual robust achievements. While the nonprofit agrees with Verra that there is a need for some pragmatism in overcoming that chasm, it suggests the IC-VCM adopt "interim targets designed to push the industry forward one step at a time."
"Our task is to come up with a threshold quality standard," McDonnell said in response. "We see part of our role as helping to foster continuous improvement in the market. But the initial threshold is intended to be something that reflects existing good practices in the market."
What does this mean?
While each of these critiques are valid, complicated incentives are at play. Verra thinks few, if any, credits would pass the IC-VCM’s requirements — a problem for a carbon credit registration body whose job it is to track these credits. And the IC-VCM wants to be seen as the highest quality carbon credit label, thus enforcing its desire to possess the most stringent requirements.
In a published response to Verra, CarbonPlan wrote that "ultimately, Verra is worried about whether enough of its credits are robust enough to earn the Integrity Council’s [IC-VCM] gold stars. And that core insight helps explain what Verra is so upset about.”
What has become apparent to those of us who closely follow the carbon credit sector is the overwhelmingly shared sentiment for high-quality standardization; for one good standard rulebook every company and project must follow. Today, the voluntary market is flooded with different ones each measuring different metrics — making it confusing for all.
Despite that confusion, it is Verra’s view that a limited set of individuals shouldn't be creating the rules for the entire market. And Zwick expanded to say that "people who have been in [carbon markets] a while aren’t really sure it's possible to have just one thing."
On the other hand, the Gold Standard acknowledges that another governance body might add more bureaucracy and make it even harder to create a carbon credit project and sell the offsets. But the Gold Standard believes that creating a system that is robust and hard is important for a product that relies so much on trust, as carbon credits do.
But it seems we aren’t going to get there without a bit of squabbling over how to create that trust.