Lesson 1, Topic 1
In Progress

What is the Voluntary Carbon Market (VCM)

The VCM has exponentially grown, reaching a market size of $2B in 2021, which was 4 times its 2020 value.

The Voluntary Carbon Market (VCM) is by definition driven by voluntary private initiatives and not established by government regulations or laws. Therefore, it is not mandatory like the Compliance Carbon Market. Thus, there are no constraining rules regarding the type of eligible carbon credits.

As a result, organizations that are active in the Voluntary Carbon Market have been increasingly using carbon credits issued by independent certification standards that started emerging around 2006, since the establishment of the VCM.

In this market, companies, governments, NGOs or single individuals voluntarily purchase carbon credits to offset their carbon footprint. Buyers might purchase carbon credits for a variety of reasons, such as to offset the carbon emissions associated with their operations, products, or services, to meet sustainability goals or environmental certifications, to demonstrate corporate social responsibility or seeking for accountability and to help drive the transition to a low-carbon future.

The VCM can provide funding for climate projects. Also, it can help create a price signal for carbon emissions to drive innovation and investment in low-carbon technologies.

(Data extracted from SustainCERT Market Share Yearly Analysis 2022. Data including REDD+ projects)

The VCM has significantly grown in the last decade due to the increasing ambition of companies to reach their CO2 emissions reduction commitments and reach net-zero. Despite of this growth, the VCM represents less than 1% of the global carbon markets.