Main Carbon Standards
The Voluntary Carbon Market consists of several standards, which are the centre of operations in the market. They act as the market regulators, providing the certification and issuance of the carbon credits, but also safeguarding the quality and credibility of the credits.
These standards include a complete set of rules, requirements and methodologies, and they lead regulatory procedures and a validation and verification system which is usually outsourced by third parties.
Voluntary carbon credits experience generally lower transaction costs that those generated in the compliance market. Besides, the VCM created a niche for micro-scale projects that are too small to justify the administrative effort of compliance schemes or for initiatives that are not covered yet.
Some of the most known VCM standards are:
- Verra or Verified Carbon Standard (VCS)
- Gold Standard (GS)
- American Carbon Registry (ACR)
- Climate Action Reserve (CAR)
Total retired credits (tCO2) per standard 2018-2022 (including REDD+ projects).
Data extracted from SustainCERT Market Share Yearly Analysis 2022
ICROA Endorsed Standards
As explained in Lesson 2, the International Carbon Reduction and Offset Alliance (ICROA) is a non-profit membership organization that represents leading carbon offset providers and advocates for high-quality carbon reduction and offset projects. ICROA accredits best practices in carbon offsetting and endorses specific standards to ensure the credibility and integrity of carbon projects.
ICROA has endorsed the UN and the following government standards:
ICROA endorsement for the Voluntary Carbon Markets requires a third-party assessment in which the following criteria are tested: independence, governance, registry, validation/verification, carbon crediting pricing, environmental/social impacts, stakeholder considerations and scale. Endorsed independent standards by ICROA:
The Gold Standard for the Global Goals
The Gold Standard Foundation (GSF), a non-profit organization, was established in 2003 by WWF and other international NGOs. The GSF operates a voluntary standard focused on environmental and social benefits. It ensures that carbon emission reduction projects feature the highest levels of environmental integrity while contributing to sustainable development. Under this standard, more than 550 registered projects have achieved emission reductions of about 78 million tCO2eq in the period between 2008 to 2017.
The Gold Standard Foundation developed in July 2017 the Gold Standard for the Global Goals (GS4GG) in line with ISEAL requirements, the global association for credible sustainability standards.
Sustainable Development (source: GSF website)
GS4GG is one of the most credible and robust standards in the voluntary carbon markets. It sets the standard for climate and sustainable development actions to quantify, certify and maximize their outcomes and impacts in the most efficient way, while creating value for the people around the world and the planet we share. For that, the Gold Standard requires that projects contribute to at least two Sustainable Development Goals (SDGs) in addition to Climate Action (SDG 13). The Gold Standard Foundation issues GS Certified Impact Statements or products, including Verified Emissions Reduction or VERs carbon credits.
GS4GG can also be applied as an add-on quality label to CDM activities. Eligible project types are renewable energy, energy efficiency, waste management, land use and forestry (afforestation, reforestation and agriculture) and water (supply, purification and conservation). However, forest conservation projects or REDD+ are not eligible under Gold Standard.
Geographical distribution of GS4GG projects (source: GS Impact Registry)
GS4GG credit issuing trend by 2022 (source: SustainCERT Market Intelligence)
Verra, formerly known as Verified Carbon Standard (VCS) Program, is a non-profit organization that develops and manages standards and programs for the Voluntary Carbon Market. It is the world’s most widely used GHGs crediting program and it sets rigorous criteria and guidelines for projects seeking to generate carbon credits in the voluntary market.
VCS projects have reduced or removed nearly one billion tons of carbon and other GHG emissions or Verified Carbon Units (VCUs) from the atmosphere, since the standard started operations in 2005.
Verra’s standards cover a range of project types, including renewable energy, energy efficiency, forestry, agriculture, and waste management. These standards ensure that projects meet robust environmental and social criteria and undergo rigorous third-party verification. Projects seeking certification under Verra must demonstrate additionality.
Verra also supports the development of innovative methodologies and market mechanisms that promote sustainable development and help drive investment in climate solutions. They collaborate with stakeholders from governments, NGOs, businesses, and communities to continually enhance the standards and ensure their relevance and effectiveness in addressing climate change.
|Project and credit summary|
|VCUs Issued||1,132,219,925||VCUs retired||600,379,044|
|VCS projects registered||2,037||VCS projects with VCUs issued||1,629|
VCS credit issuing trend by 2022 (source: SustainCERT Market Intelligence)