Unedited from here:
Integrity Council launches global benchmark for high-integrity carbon credits
Core Carbon Principles, Program-level Assessment Framework and Assessment Procedure set rigorous thresholds on disclosure and sustainable development.
The Integrity Council for the Voluntary Carbon Market (ICVCM or Integrity Council) today (March 29, 2023) launches its Core Carbon Principles and Program-level Assessment Framework, setting rigorous thresholds on disclosure and sustainable development for high-integrity carbon credits and establishing a pathway towards even higher ambition.
The Core Carbon Principles (CCPs), developed with input from hundreds of organizations throughout the voluntary carbon market, set out fundamental principles for high-quality credits that create real, verifiable climate impact, based on the latest science and best practice. The ICVCM is also publishing the first part of its Assessment Framework, which provides detailed criteria for assessing whether carbon-crediting programs (programs) are CCP-Eligible
The criteria published today take a significant step forward for consistent transparency by requiring programs to publish comprehensive information in an accessible manner so all stakeholders can understand how projects issuing CCP-labelled carbon credits impact emissions, society and the environment.
The CCPs and Program-level Assessment Framework require comprehensive and accessible disclosure by programs on how each project calculates and quantifies its emissions impact, and how it assesses additionality and social and environmental impacts. This should include the spreadsheets each project uses to calculate its impact and set a baseline.
The criteria break new ground by requiring programs to ensure high-integrity credits come from projects with robust social and environmental safeguards that deliver positive sustainable development impacts.
CCP-Eligible programs must ensure project developers assess the risks of any negative environmental and social impacts, articulate measures to mitigate those impacts, and report on progress. These include impacts on Indigenous Peoples and Local Communities (IPs & LCs), biodiversity, pollution, human rights, labor rights, and gender equality. These details must be captured in validated design documents, which programs will be required to publish along with associated monitoring reports provided by projects.
Programs are required to ensure free, prior informed consent (FPIC) from IPs & LCs and be transparent about the sharing of benefits from the mitigation activity with IPs & LCs. REDD+ forestry projects must also conform to the Cancun Safeguards.
The program-level requirements for Governance have been streamlined to build on the existing CORSIA requirements following extensive consultation with all our stakeholders. However, CORSIA-eligible programs, which issue more than 95% of credits in the market, will have to provide evidence that they meet additional high-integrity criteria around effective governance, credit tracking, transparency and robust, independent third-party validation and verification. Other programs will also need to demonstrate they satisfy the CORSIA requirements in these areas, and all programs will have to provide evidence they meet the Program-level criteria for other CCPs including sustainable development benefits and safeguards, no double-counting and robust quantification.
The initial assessment phase for programs will launch around mid-year 2023 following the publication of the ICVCM’s criteria for assessing different categories of carbon credits. Carbon-crediting programs are expected to be able to label the first credits as CCP-Approved later this year.
ICVCM is also establishing a clear pathway to higher ambition which will be developed through multi-stakeholder Work Programs. The Integrity Council will continue to collaborate with stakeholders to strengthen the CCPs over time. A series of work programs will feed into the next version of the CCPs, due to be launched in 2025 and implemented in 2026. These will consider complex issues such as the implications of Corresponding Adjustments under Article 6 of the Paris Agreement, whether all carbon credit projects should make a contribution towards the UNFCCC Adaptation Fund, and how to further strengthen the sustainable development requirements.
Core Carbon Principles will build trust and unlock finance for climate solutions
The CCPs are designed to build trust, unlock investment and channel it at speed and scale to effective climate solutions by providing a readily identifiable benchmark for high-integrity carbon credits, no matter which carbon-crediting program issued them, what kind of credits they are, or where they are generated. This will reduce confusion, overcome market fragmentation, and give buyers confidence they are funding projects making a genuine impact on emissions.
Annette Nazareth, ICVCM Chair, said: “It’s clear we are not acting fast enough to address the climate crisis. We need every tool available working at full speed to secure a livable future and a high-integrity voluntary carbon market is one of those tools. Well-functioning markets and integrity are inextricably linked. Building a widely shared understanding of what high integrity means for carbon crediting programs and categories of carbon credits is a pre-condition for the development and growth of a viable and vibrant VCM. The CCPs and Program-level criteria we are issuing today are an important step towards a transparent, regulated-like market where buyers can easily identify and price carbon credits that meet consistently high-integrity standards that will also increase ambition over time.”
Angela Churie Kalhauge, Executive Vice President for Impact at the Environmental Defense Fund and an ICVCM Board member, said: “I applaud the ICVCM’s efforts to provide clarity around what a “good” carbon credit looks like. The CCPs aim to help programs strive for high integrity and give investors and the public confidence that high-integrity credits are making genuine climate impact.”
The Integrity Council is publishing a document today containing:
- The CCPs, fundamental principles for high-quality credits that create real, verifiable climate impact, based on the latest science and best practice;
- The Program-Level Assessment Framework, setting out the detailed criteria it will use to assess whether carbon-crediting programs meet the CCPs;
- The Assessment Procedure, explaining its process for implementing the CCP label in the market; and
- CCP Attributes, tags programs can apply to highlight additional quality features of CCP-labelled carbon credits.
Programs are expected to apply for assessment following the release of the Category-level Assessment Framework, which ICVCM expects to publish toward mid-year 2023. This will set out its criteria for assessing categories of carbon credits, such as cookstoves or forestry projects, for different programs.
The framework has been substantially updated following extensive consultation
The Integrity Council has revised the CCPs and substantially updated the Assessment Framework and Assessment Procedure on the basis of feedback from hundreds of organizations which took part in a public consultation last year, including carbon-crediting programs and project developers, academics, eNGOs, Indigenous Peoples and Local Communities, policy makers, buyers and investors
It has taken particular care to ensure that Indigenous Peoples and Local Communities have a powerful voice in shaping the CCPs. This included organizing workshops specifically for input from IPs & LCs and reserving three of 22 seats on its Board for IPs & LC members.
In addition to the requirements on transparency and sustainable development, the CCPs state that to be considered high-integrity, carbon credits must fund emissions reductions and removals that are: additional (generated by projects which would not have gone ahead without carbon credit funding); permanent; measured robustly and conservatively; and counted only once. They must support the transition to net zero and not lock in net-zero incompatible activities.
Programs that issue them must: meet high standards of governance to ensure the overall quality of carbon credits; use a registry to uniquely identify and track each credit from issuance to retirement or cancellation; and have emissions reductions and removals verified by independent third-party experts.
High-integrity carbon credits are designed to unlock finance for urgently needed projects to reduce and remove billions of tonnes of emissions that would not go ahead without it. They can play a key role in channeling finance to developing countries and make a range of essential climate projects viable, from action to protect and restore forests through to developing and scaling emerging technologies that are difficult to commercialize today.
Dr Francisco Souza, Managing Director of the FSC Indigenous Foundation and an ICVCM Board member, said: “Indigenous Peoples and Local Communities have a vital role to play in achieving net zero because they manage and protect around 40% of the planet’s ecologically intact landscapes. The CCPs respect their importance and will ensure that high-integrity carbon credits recognize and safeguard their rights, livelihoods and values. They can also catalyze robust mechanisms to share the benefits of climate mitigation projects with the communities managing and safeguarding the natural ecosystems connected to those projects.”
Ousmane Fall Sarr, West Africa Climate Alliance Coordinator and a member of the ICVCM Expert Panel, said: “Ensuring high integrity in the voluntary carbon market can help mobilize the substantial financial flows African countries need to support implementation of their NDC climate commitments. The launch of the CCPs is an important milestone.”
Integrity Council will take a regulatory-like approach to assuring credit integrity
Carbon credits will receive the CCP label provided both the carbon-crediting program that issued them, and the credit category are assessed by the Integrity Council as meeting the criteria for high climate, environmental and social integrity set out in the CCPs and Assessment Framework.
The Integrity Council has designed an efficient assessment process to introduce high-integrity credits to the market as soon as possible. It expects to begin announcing CCP-Eligible programs and CCP-Approved categories later this year, enabling CCP-labelled, approved credits to appear in market soon after. Programs will be able to tag both existing and new carbon credits with the CCP label, provided the category has also been approved by the Integrity Council.
The Integrity Council will conduct a review of how different carbon credit categories can be assessed against the CCP criteria. Categories considered to be highly likely to meet the CCP requirements will be fast-tracked for approval. Categories raising more complex issues will require a deeper assessment and the Integrity Council will prioritize those with the largest current or expected market share. It will announce the results of this review in Q3.
The Integrity Council’s approach to assuring the integrity of CCP-labelled credits is similar to one a government regulator would take. Programs that have been assessed as CCP-Eligible will be responsible for ensuring that carbon credits meet the high-integrity criteria before tagging them with the CCP label. The Integrity Council will audit programs, make spot checks and respond to complaints. It will have the power to review a program or category if there are concerns about its adherence to the CCPs. If it finds material failings it will be able to suspend or terminate the eligibility of the program or category.
The Integrity Council plans to improve and strengthen the CCPs over time, updating them every two to three years, based on experience, the latest science and technology and new developments in the market. Once the Assessment Framework has been released, the Integrity Council will start work to develop the next version. This will include multi-stakeholder work programs, public consultations, and workshops with key stakeholder including programs, project developers, and Indigenous Peoples and Local Communities. It expects to launch the first process to revise the CCPs and Assessment Framework in 2025, in time for implementation in 2026.