MARKET MADNESS — Voluntary carbon markets are unregulated, rife with reputational risk — and booming. That combination of attributes is creating a volatile set of perspectives. To some, carbon offsets are a scam — a way for industry to say it’s reducing climate pollution without any official way to check it. To others, these markets are one of the best ways to get the business world on board with climate action. Avery Ellfeldt of POLITICO's E&E News has a look at the international groups that are trying to bring order to the $2 billion market that Shell and Boston Consulting Group said Thursday is going to expand fivefold by 2030. Not everyone’s on board with the effort. Critics say third-party attempts to corral the markets are unlikely to move the needle — and could provide more cover for bad corporate behavior. French nonprofit Reclaim Finance, for instance, has argued that any effort to expand carbon markets is "at best hazardous from a climate perspective." But proponents say it's vital because the credibility problem will only get worse if the market remains unchecked. Another possible outcome: companies get cold feet amid an unreliable market and heightened scrutiny — surrendering billions of dollars for climate action. “I don't think anybody thinks voluntary markets are going to solve climate change,” said Derik Broekhoff, a senior scientist at the Stockholm Environment Institute and former vice president of Climate Action Reserve, a leading international carbon credit registry. If used responsibly, voluntary carbon markets could channel “billions of dollars into climate change mitigation around the world that otherwise would not be forthcoming,” Broekhoff said. “That’s what’s at stake.” The tensions are on display at the Integrity Council for the Voluntary Carbon Market, which is getting ready to release a final version of its requirements for "high-integrity carbon credits" in March, followed by specific approved credit types in the third quarter, our Allison Prang writes. “Our goal is to establish a consistent definitive quality standard for carbon credits,” William McDonnell, the ICVCM's chief operating officer, said in an interview. "Lack of consistency and doubts about integrity” is turning off some buyers, he said. The push for higher standards (and commensurately higher credit prices) is creating pushback. Verra, which manages one of the four major offset accrediting registries, took issue with the ICVCM’s draft core carbon principles, saying in September they would lead to “unnecessary replication” and would be “administratively difficult and slow.” (Verra's response to a Guardian investigation this week finding that 90 percent of its rainforest offsets may not represent real emissions reductions: "[T]his claim is untrue, as it is based on studies that use a “synthetic control” approach or similar methods.")
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