The Taskforce on Scaling Voluntary Carbon Markets (the TSVCM) today released its Phase 2 Public Consultation Report (the Report). The Report provides background on TSVCM activities and current thinking in support of consultations launched today to help inform and provide stakeholder feedback for the Phase 2 Final Report, to be published in July (read our previous bulletin on the TSVCM’s Phase 1 Final Report on creating large-scale carbon credit trading markets here).

The TSVCM is conducting public consultation between May 21 and June 21, 2021 on the proposed governance design and preliminary recommendation guidelines from interested parties, particularly those interested in being a Founding Sponsor, Independent Board Member, Expert Panel Member or Executive Secretariat Host for the new governance body. Interested parties are encouraged to contact Lisa DeMarco at to discuss opportunities for engagement with the TSVCM.

Background. The TSVCM was launched in 2020 by Mark Carney, UN Special Envoy for Climate Action and Finance and former governor of both the Bank of Canada and the Bank of England, and is chaired by Bill Winters, Group Chief Executive, Standard Chartered, and sponsored by the Institute of International Finance (IIF) through the leadership of Tim Adams, President and CEO, with Annette Nazareth, former Commissioner of the US Securities and Exchange Commission, serving as TSVCM’s Operating Lead.

Objectives and focus of the TSVCM. The Report provides the objectives and focus of the TSVCM, which include increasing public awareness of the climate and co-benefits associated with voluntary carbon markets (VCM). In addition, the TSVCM focuses on:

  • High-integrity carbon credits and robust, transparent, and liquid markets;
  • Addressing the oversight needs for an at-scale market;
  • Legal principles and contracts through harmonization and liquidity by streamlining standard Terms of Use and developing general trading terms;
  • Credit level integrity with respect to Core Carbon Principles (CCPs) and additional attributes; and
  • TSVCM’s position on Article 6 of the Paris Agreement.

Governance. The TSVCM is proposing the design of a new umbrella governance body (the Body) that is to be an independent, voluntary, stakeholder-led, and self-regulating body that promotes the integrity, liquidity, and growth of global VCM. The TSCVM believes that the rapid growth of VCM requires:

  • CCPs and standards for high integrity carbon credits that are broadly accepted and applied;
  • Infrastructure, technology, and solutions that foster market data and price transparency; and
  • Sufficient debt and equity capital formation to support a liquid market for VCM credits.

The proposed mandate for the Body is to:

  • Establish, host, and curate CCP eligibility guidelines and additional attributes, a CCP assessment framework for standard setters, and eligibility principles for suppliers and Validation and Verification Bodies (VVBs);
  • Provide oversight of standard-setting organizations on adherence to CCPs and participant eligibility;
  • Coordinate work of, and manage interlinkages between, individual bodies; and
  • Serve as the steward for the VCM and foster its responsible growth by defining a roadmap for success.

The design of the Body is to include a board of directors, expert panel, executive secretariat, and member consultation group.

Legal principles and contracts. The Report outlines the recommendations of the Legal Principles and Contract Working Group, which include:

  • Use cases. Buyers intent to use CCP credits to fulfill corporate claims (e.g., net zero, carbon neutral, and carbon neutral on the path to net zero), which all benefit from standardized contracts. Examples include: over-the-counter (OTC) for complex needs, exchange trade, immediate delivery, future delivery, and specific buyer and seller needs.
  • Operational requirements for standards’ terms of use. Operational requirements for standards’ terms of use to issue CCP credits is meant to enhance fungibility and ensure adherence to CCPs. Key recommendations include thresholds for and uniform onboarding procedures, prohibited practices and cybersecurity systems, limitation of liability, provisions on force majeure, auditable logs, tax compliance, termination, and the use of arbitration for dispute resolution.
  • General trading terms. The Report underscores the necessity of developing key general trade terms such as definition of products, avoidance of double counting/claiming/use, settlement and delivery, failure to deliver, force majeure, limitation of liability, compensation, change in law, dispute resolution, benchmark price and/or source, and tax compliance.

Credit-level Integrity. The Report provides the key objectives of the Credit-level Integrity Working group, which include:

  • Operational considerations to the credit-level CCPs. Operational considerations include: no ex ante crediting; financial and jurisdictional additionality; accuracy of measurement; conservative measurements; accredited VVBs and oversight of VVBs; monitoring, reporting and verification frequency and reporting content; long term permanence; buffer requirement and reversal compensation; risk assessment and mitigation measures; notification of loss event; safeguards after crediting period; leakage assessment and mitigation measures, deduction, and monitoring; prior and ongoing impact assessment; ongoing stakeholder consultation; grievance mechanisms; baseline-setting approach; and revision frequency and adjustments.
  • Further operational considerations for standards. Operational considerations for standards include the following criteria: program governance; program transparency and public participation provisions; clear and transparent requirements for independent third-party verification; legal underpinning; public accessible registry; registry operation; liability for credit permanency; and registry terms and conditions.
  • Standard taxonomy of additional attributes. There are two objectives for the standard taxonomy of additional attributes: (i) to drive scale and liquidity through standardization and (ii) to enable a price differential for CCP credits with specific benefits. The working group proposes a first standard taxonomy of additional attribute types, with the following attribute options: removal; avoidance/reduction or mixed; nature-based; tech-based; biological; geological; products (e.g., building materials); co-benefits associated, such as tech catalyst benefits and SDGs; and associated corresponding adjustments.

Position on Article 6. The Taskforce acknowledges that cannot deliver policy guidance on issues currently subject to international negotiations and notes that, once rules are negotiated, the VCM should comply with the rules.

Please contact Lisa DeMarco at should you wish to discuss the contents of this bulletin.


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