Understanding Voluntary Carbon Markets
Photo: Zafer Kizilkaya
Increasing Access to Voluntary Carbon Markets: Enabling Landscape Restoration Projects to Understand the Costs and Benefits.
Project Context and Opportunity
Insufficient funding is a barrier to effective landscape restoration in Europe. With less than a decade until the objectives of the Paris Agreement on Climate Change must be met, new sources of funding need to be unlocked. One such source of funding is the voluntary carbon market and carbon offsetting from the private sector. Fuelled by corporate carbon-neutral pledges, carbon offsetting schemes are increasing in popularity, with voluntary carbon markets for forestry and land use increasing in value by 2.5 times from 2017 to 2019. Within Europe, demand from the private sector for place-based carbon credits (those within a specific country or region) is growing and demand may soon outstrip supply. Similarly, demand for carbon offsets from Nature-based Solutions have increased in recent years. ELP projects may be well positioned to produce high-quality credits (demonstrating additionality in carbon terms as well as positive biodiversity and socioeconomic impacts) and benefit from the increasing demand for these. However, voluntary market certification is complex to navigate and has large upfront costs which may diminish potential returns.
This project aims to develop understanding of the voluntary carbon market landscape in Europe, identifying carbon standards relevant to ELP projects and the benefits and trade-offs of engaging with them. The project will bring together knowledge and lessons learnt to provide clear guidance and build capacity for identifying appropriate pathways for projects aiming to sell carbon credits. A tool will be developed to enable landscape restoration projects to assess the potential costs and returns of engaging with the voluntary carbon market. In the long term this should both increase the carbon finance directed towards landscape restoration, benefiting activities on the ground, and reduce the chance of wasted effort and resources by those restoration projects for which carbon finance would not pay.
This project has the following three aims:
- Review the existing voluntary carbon market landscape in Europe and consolidate experiences in engaging with this across the ELP and beyond, to understand the options available to restoration projects and the players involved.
- Provide guidance on engaging with voluntary carbon markets and carbon standards. The project will produce a tool to estimate the potential net benefits of selling carbon credits on the voluntary market against Measurement Reporting and Verification costs.
- Build capacity within and beyond the ELP to understand the benefits and limitations of engaging with the voluntary carbon market. This will be achieved using workshops and webinars to share knowledge and foster discussions amongst restoration practitioners.
This project hopes to achieve the following impacts:
- Improve the confidence and capacity of ELP and other restoration projects to navigate carbon standards and different voluntary carbon markets.
- Enable landscape and seascape restoration projects in Europe to unlock further funding through demonstrating their climate change mitigation potential.