In response to serious concerns raised regarding the integrity of some international carbon credits on the ABC’s Four Corner’s program, the Carbon Market Institute (CMI) has emphasised the importance of investigating and calling out malpractice in carbon markets, as well as the urgent need to recognise and continue work to improve integrity and transparency frameworks.
Commenting on the issues raised, CMI CEO John Connor said a focus on governance, transparency and regulation was crucial. He also warned against blanket dismissal of carbon credits as a vital tool alongside at-source decarbonisation:
“Carbon markets must operate with high integrity in order to gain the social licence and scale required to make a meaningful contribution to climate goals under the Paris Agreement. As well as calling out bad behaviour, we need to focus on ongoing improvements in governance, transparency and regulation, as well as reforms to drive at-source decarbonisation.”
“The issues raised in the story should rightly be fully investigated, and any malpractice dealt with appropriately under Verra’s Verified Carbon Standard (VCS) rules and regulations, as well as under PNG law as it develops. There are clearly issues with disclosure, registry transparency and ‘fit and proper person’ tests which need to be addressed as the market evolves.”
“Domestic governance frameworks, such as those in PNG, as well as voluntary market accreditation programs, must ensure projects are generating enduring and inherent social and environmental benefits for indigenous and other local communities.”
“It is also important not to dismiss genuine measures to reverse deforestation. According to UN estimates, approximately 12 million hectares of forest are destroyed each year, and if we are to end nature loss by 2030, we will need $350 billion in finance per year by the end of the decade. With appropriate guardrails, carbon markets have a role to play here,” said Connor.
CMI notes that there are important global governance reforms underway, in addition to the substantial work under the Paris Agreement. These include new draft core carbon principles and an assessment framework for high integrity carbon credits, a new Tropical Forest Carbon Integrity Guide developed by a coalition of indigenous and environment NGOs, and updated forest protection methodologies under Verra’s VCS.
Connor noted that, in contrast, Australia’s sovereign-backed carbon crediting scheme has developed and evolved over more than a decade:
“Australia’s framework is relatively advanced, with greater regulation by international standards. It includes unique initiatives like the voluntary Carbon Industry Code of Conduct, adding to the scheme’s integrity and increasing the focus on landholder and consumer protection.”
“However, as the Chubb Review of the scheme has recommended, a series of improvements are required to ensure it remains fit for purpose, protects Indigenous interests and, alongside reforms to the Safeguard Mechanism, enhances investment in real emission reductions and removals.”
About the Carbon Market Institute
The Carbon Market Institute (CMI) is a member-based institute accelerating the transition towards a negative emissions, nature positive world. It champions best practice in carbon markets and climate policy, and its nearly 150 members include primary producers, carbon project developers, Indigenous organisations, legal, technology and advisory services, insurers, banks, investors, corporate entities and emission intensive industries. The positions put forward constitute CMI’s independent view and do not purport to represent any CMI individual, member company, or industry sector. CMI’s latest Advocacy Policy Positions Statement can be viewed here.
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