The IC-VCM Has a Generational Opportunity to Catalyze Carbon Markets: Will It Take It?
Dr. Spencer Meyer
Dr. Spencer Meyer
21 October, 2022 min read

NCX Public Comment to the Integrity Council on Voluntary Carbon Markets

NCX recently responded to a public consultation from the Integrity Council for the Voluntary Carbon Market (IC-VCM) on its draft Core Carbon Principles and Assessment Framework.

The IC-VCM is an international body of stakeholders that has set out on the laudable mission of promoting integrity and scalability in the voluntary carbon market. It solicited input on a several hundred page proposal for how it plans to identify ”high-quality carbon credits that create real, additional and verifiable climate impact.” We’ll refer to this proposal collectively as the draft “Core Carbon Principles,” or CCPs. 

It is encouraging to see that a body like IC-VCM has put so much effort into developing new and comprehensive standards for quality. We expect the work of the IC-VCM to be influential for the entire market, so we were very interested in reviewing and weighing in on their recommendations. Unfortunately, as currently proposed, we believe this standard of standards will fall short of its stated purpose.

We share the IC-VCM’s goal of improving credit quality and integrity. However, as written, the draft CCPs put forward an additional layer of qualitative criteria that mistakes complexity for integrity, and focuses on proof of process instead of on proof of results.

If implemented as proposed, the CCPs would likely stymie market development and thus reduce the potential scope of meaningful climate action. Importantly, the draft CCPs favor incumbent programs–many of which have created the very conditions that IC-VCM seeks to correct1,2 – ultimately failing to raise the bar on quality in the voluntary carbon market (VCM). 

In our response to IC-VCM, our team raised key concerns, and put forward recommendations that we feel are critical for addressing known problems and for encouraging growth and innovation. We offered three central critiques of the proposed standard: 

  1. It will not significantly alter the status quo for the market 
  2. It evaluates programs based on subjective criteria rather than objective outcomes 
  3. It fails to recognize the urgent need to increase the scale of climate impact in the near term 

To address these concerns, we made the following recommendations: 

First: Modify the CCPs so that they will genuinely improve credit quality 

As written, the draft guidelines could only be met by established participants, reinforcing the status quo and its current problems, while closing the door to real improvement and innovation through experimentation. For example, the CCPs do little to address the very high risk of reversal and non-delivery in the market today3,4. To address this shortcoming, IC-VCM needs to do the following: 

  • Change the requirements for long-term projects to adequately assess and mitigate the risk of non-delivery. By focusing on longer and longer promises of carbon storage, IC-VCM may be inadvertently increasing the risk that project developers cannot fully deliver the claimed climate benefits. To reduce this risk, IC-VCM could incentivize partial or temporary crediting, whereby claimed credits are issued in more conservative percentages throughout the duration of a project period, instead of all up-front before the full climate benefits have been delivered. 
  • Require true ex-post crediting for all projects. Currently IC-VCM would allow projects to issue credits up front even when they depend on 25, 50, or 100-year contracts to preserve carbon stocks and deliver their claimed climate benefit. With increasingly frequent and violent wildfires, pest infestations, and storms, this creates substantial risk for credit purchasers, who may buy credits that are ultimately rendered worthless. Instead, credits should only be issued “ex-post,” or after the underlying climate benefit has occurred and been measured.
  • Strengthen buffer pool requirements. While we appreciate IC-VCM’s phased approach which puts in place “Initial” requirements to be later replaced by more stringent “Full” requirements, weak buffer pool requirements that clearly compromise project integrity should not be a part of the Initial Threshold. As Badgley et al. (2021) showed, in less than a decade, wildfires in California have burned up 95 percent of the buffer pool meant to insure the state’s portfolio of issued credits for the next century5.

    Indeed, natural disturbances like hurricanes, drought, pests and pathogens create similar challenges for long-term carbon storage in regions across the globe6, including the American Northeast7 and Southeast8,9, Australia10, and Canada’s boreal forests11,12.

    With these risks in mind, IC-VCM should include a requirement for all buffer pools to be sufficiently capitalized in the “Initial” standard rather than just the later “Full” version. IC-VCM should also provide greater clarity on what scientific support is required to justify buffer pool contributions. IC-VCM should also require that credits placed into buffer pools are of the same quality or better than credits sold and retired.  

Second: Evaluate programs and methodologies based on objective, outcome-based criteria

The current guidance focuses on proof of process instead of results. IC-VCM should not assume that meeting subjective procedural criteria will ensure quality. The proposed approach increases complexity but does not ensure rigor. Instead, IC-VCM should: 

  • Provide a pathway for projects to demonstrate empirically their impact using methods appropriate to their duration of storage or type of credit issued.
  • Develop outcome-focused criteria for additionality and baseline scenarios. The current checks for additionality are based on subjective analyses of financial and investment information mirroring the wholly inadequate status quo. These tests are inherently biased since project developers themselves are responsible for reporting subjective metrics. IC-VCM should require projects to provide objective, data-driven ways to test baseline assumptions against reality. 
  • Create a separate pathway to evaluate innovative programs and methodologies, and a provisional approval status for approaches that show promise but are still being tested. The U.S. Food and Drug Administration, for example, uses several “Fast Track” approaches to make new drugs available more rapidly when they have important advantages over existing treatments13.

    Similarly, IC-VCM could provide a path for emerging methodologies or project types to achieve compliance. Such projects could be held to a high standard of evidence, testing, and expert input. This would allow IC-VCM to fairly evaluate new approaches that do not fit within their current process-oriented framework while incentivizing new actors to create high-quality methodologies that can scale.  

Third: Increase the near-term impact of the voluntary carbon market (VCM) by accommodating programs that store carbon storage over shorter, more immediate time horizons

Short term storage opportunities open millions of acres of additional forestland to carbon project development therefore offering immediate opportunities to increase carbon storage. The forest carbon opportunities on these lands were previously unavailable because owners were unable or unwilling to enter into risky, longer-term contracts.

As written, the CCPs will keep the VCM inaccessible to the vast majority of forest landowners. When designed correctly, short-term projects can minimize risk and drastically increase the scale of additional carbon storage helping society reach its climate goals without sacrificing integrity. The IC-VCM should not be so quick to dismiss short-term storage opportunities. Instead, it should: 

  • Allow tonne-year accounting, whereby projects earn credits depending on both the magnitude of carbon stored and how many years it was held. Using tonne-year accounting reduces risk when applied to projects of any duration, and it facilitates rigorous quantification of short term carbon storage.
  • Eliminate the arbitrary five-year minimum for short term crediting projects. IC-VCM acknowledges the drawbacks of temporary 100-year projects, but doubles down on the 50- or 100-year model as the only legitimate way to create permanent climate impact. This ignores a large body of work that demonstrates how short-term carbon storage creates real value for society by delaying negative climate effects and creating a bridge to a livable future14,15.

    Further, IC-VCM currently provides no scientific evidence for why they chose a five-year minimum for temporary crediting.
  • Eliminate the requirement for buyers to indefinitely replace short-term credits. Instead, allow project developers to “vertically stack” tonne-years. In this way, many small units of short-term storage can be stacked together, creating a large magnitude of short-term storage16,17. This provides a near-term climate benefit that has equivalent benefits to much smaller volumes of long-term storage.

    Vertical stacking drastically expands accessibility of carbon programs to landowners and increases the available volume of climate impact in the critical decade. Short term crediting also creates more rigorously demonstrable and quantifiable climate benefits with lower risk than long-term promises. 

One of the VCM’s greatest assets is its potential to rapidly scale climate solutions now, this decade, when it matters most. It has a critical role to play in driving innovation and investment in nature-based solutions which are both our most effective near-term tools to sequester carbon and provides a diverse suite of vital ecosystem and social benefits.

We believe the VCM should reward rapid iteration and innovation, fully delivered climate benefits, and the reduction of climate risk. Unfortunately, we believe that without significant modification, IC-VCM’s current draft CCPs will have the opposite effect: restricting market access to current operators, stifling innovation, and failing to capitalize on an opportunity to deliver climate benefits in this critical decade. 

We urge the IC-VCM and its expert panel to reconsider core components of the Additionality, Permanence, and Quantification elements of the CCPs in light of our feedback here.

Going forward, rather than creating another complex layer of evaluation for procedural compliance, the IC-VCM should focus on setting a high bar for a diversity of projects, new and old, to demonstrate measurable climate outcomes. If it can do so, it will help catalyze a new era of ambitious, expansive, and sorely needed climate action.

More information:

1 Pontecorvo & Osaka, Grist (2021). California is banking on forests to reduce emissions. What happens when they go up in smoke? – How faulty rules and wildfire could unravel California’s climate progress. 

2 Greenfield, The Guardian (2021), Carbon offsets used by major airlines based on flawed system, warn experts.

3 Anderegg et al. (2020), Climate-driven risks to the climate mitigation potential of forests.

4 Badgley et al. (2022), California’s forest carbon offsets buffer pool is severely undercapitalized.

5 Badgley et al. (2022), California’s forest carbon offsets buffer pool is severely undercapitalized.

6 Galik & Jackson (2009), ​​Risks to forest carbon offset projects in a changing climate.

7 Uriarte & Papaik (2007), Hurricane impacts on dynamics, structure and carbon sequestration potential of forest ecosystems in Southern New England, USA.

8 McNulty (2002), Hurricane impacts on US forest carbon sequestration.

9 Chambers et al (2007), Hurricane Katrina’s Carbon Footprint on U.S. Gulf Coast Forests.

10 Keith et al (2009), Re-evaluation of forest biomass carbon stocks and lessons from the world’s most carbon-dense forests.

11 Kurz et al (2008), Risk of natural disturbances makes future contribution of Canada’s forests to the global carbon cycle highly uncertain.

12 Metsaranta et al (2009) Implications of future disturbance regimes on the carbon balance of Canada’s managed forest (2010–2100).

13 FDA (2018), Fast Track, Breakthrough Therapy, Accelerated Approval, Priority Review.

14 United Nations Environment Programme and International Union for Conservation of Nature (2021). Nature-based solutions for climate change mitigation.

15 The Oxford Principles for Net Zero Aligned Carbon Offsetting (September 2020).

16 Parisa et al (2022), The Time Value of Carbon Storage.

17 Carbon Direct (2022), Accounting for Short-Term Durability in Carbon Offsetting.

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about the author

Dr. Spencer Meyer

Dr. Spencer Meyer

Head of Science
Dr. Spencer Meyer is the Head of Science at NCX. Spencer is responsible for ensuring NCX is deploying and advancing the most credible, innovative science on natural capital solutions. He works externally with stakeholders and thought leaders to link the science and business of natural capital markets. He also oversees internal science alignment across all teams for carbon, biodiversity, and other forms of natural capital. Spencer is an innovator and leader with 20 years of experience working collaboratively with NGO, government, private sector, and academic partners to solve natural resource challenges. He is a co-founder of Sebago Clean Waters, an advisor to conservation NGOs and private foundations, and a frequent speaker on forest management, watershed protection, natural climate solutions, conservation finance, and partnership development. Spencer previously worked at the Highstead Foundation, Harvard Forest, Yale School of the Environment, University of Maine, and The Nature Conservancy. He earned his A.B. from Dartmouth College and his M.S. and Ph.D. in forest management and sustainability science from the University of Maine.