Core Carbon Principles: five quick takeaways
1. A step forward for transparency & disclosure
The CCPs provide much needed guidance on what Standard Bodies should require projects to report, such as emissions impact. We continue to believe unstandardised and inaccessible information poses the biggest barrier to scaling the VCM.
2. Projects should do no harm
Ensuring consistent safeguards and a positive development impact is crucial to building and maintaining trust in the market. While the focus of this market is carbon, everyone has a duty to ensure projects are doing no harm and contributing positively to development goals.
3. Demand is all about uncertainty
The demand backdrop has slowed in 2023 amidst rising uncertainties with many looking to the CCPs to boost confidence and help the market rebound. The release of the CCPs shows the VCM is evolving into a more robust and scalable market structure. This is essential if carbon credits are to deliver climate action.
4. More information, more innovation
By promoting standardisation of transaction reporting and other activities at a registry level, the CCPS make accessing key information easier and clearer. Both are needed to better validate demand and supply side claims. For example, greater clarity around elements, such as risk buffer usage and credit cancellation, are needed to develop risk management tools, such as insurance.
5. The CCPs are complementary to carbon ratings
The CCPs were never intended to replace the role of carbon ratings and other forms of scrutiny - they will help raise the bar for integrity whereas carbon ratings assess the range of outcomes above it. Both are essential to solve the uncertainty puzzle. After all, carbon is a new ecosystem asset that cannot be delivered, cannot be observed and is based on counterfactual analysis.
We look forward to continuing our fruitful engagement with the IC-VCM on how best to build the VCM, and supporting our clients on how to assess carbon efficacy in the evolving landscape.