The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) today launched its Phase II Report (the Report), setting out an accelerated roadmap to a scaled, high-integrity voluntary market for the trading of carbon credits. The TSVCM is a private sector-led initiative working to scale an effective and efficient voluntary carbon market (VCM) to meet the goals of the Paris Agreement. The TSVCM was launched by Mark Carney, UN Special Envoy for Climate and Finance and former governor of the Bank of Canada and the Bank England and is chaired by Bill Winter, Group Chief Executive, Standard Chartered (read our earlier bulletins on the TSVCM here and here). Resilient LLP’s Lisa DeMarco is a member of the Legal principles and contracts Working Group of the TSVCM and Resilient LLP is a proud signatory of the TSVCM endorsement letter. This bulletin briefly summarizes the Report’s key points:
Objectives and focus of the TSVCM. The Report indicates that the TSVCM’s primary focus is to raise public awareness of the climate and co-benefits of VCMs and engage with stakeholders to drive both demand and supply in these markets.
Governance. The Report summarizes the Terms of Reference of the new umbrella governance body, which will have a mandate to (i) mitigate climate change and accelerate the transition to net zero; (ii) establish Core Carbon Principles (CCP) eligibility guidelines and additional attributes, an assessment framework for standard setters, and eligibility principles for suppliers and validation and verification bodies (VVBs); (iii) oversee standard setting organizations adherence to the CCPs; (iv) coordinate the work of, and manage interlinkages between, governance bodies; and (v) serve as a steward for the VCM. In addition, the TSVCM is seeking recommendations on the following five topics ahead of establishing the new umbrella body:
- • Modalities and procedures for the Board of Directors;
- • Transparency mechanism;
- • Grievance mechanism;
- • Transversal approach; and
- • KPIs and definition of success.
Members and the public are invited to email proposals for recommendations before August 9, 2021. The TSVCM is also seeking expressions of interest from interested parties until August 9, 2021 for the following roles in the umbrella body: member consultation and group representative, founding sponsor, independent board member, executive secretariat host, expert panel member, and funder.
- • clarity and certainty about the nature of the product;
- • complexity and legal expenses; and
- • bad actors in the market.
Credit-level integrity. The Report builds on the Phase I Report, which defined a set of high-level CCPs with both credit-level and operations principles, by suggesting implementation mechanisms for the CCPs and the role of the future governance body, standards, and VVBs in the implementation of the CCPs. The Report provides operations considerations to the credit-level CCPs identified in Phase I, including:
- • no ex ante crediting;
- • financial and jurisdictional additionality;
- • accuracy of measurement, conservative measurement, accredited VVBs, oversight of VVBs, and MRV frequency and reporting content;
- • long term permanence, buffer requirement and reversal compensation, risk assessment and mitigation measures, notification of loss event, and safeguarding after crediting period;
- • leakage assessment and mitigation measures, leakage deductions, and leakage monitoring;
- • prior and ongoing impact assessment, ongoing stakeholder consultation, safeguards, and grievance mechanisms; and
- • baseline-setting approach and revisions frequency and adjustments.