With the future of an international climate agreement still in flux, governments worldwide are turning to voluntary carbon offsetting markets to engage private sector climate actors – and to provide the tools that could shape tomorrow’s regulated carbon markets, according to a study by Ecosystem Marketplace, a project of nonprofit Forest Trends.
At least 21 such government programs are currently underway, and nine of these have emerged in the last four years, according to Bringing it Home: Taking Stock of Government Engagement with the Voluntary Carbon Market. The report profiled 13 such initiatives, of which five were set up by subnational regulators – three in the United States, one in Canada and one in Italy – and eight by national governments in Asia, Latin America and Europe.
The report found that national and sub-national governments’ use of private-sector tools to meet carbon-reduction aims can be partly traced back to the influence of early regional actors such as South Korea and Oregon, as well as to international development multilaterals, and to organizations such as Japan’s Institute for Global Environmental Strategies.
Fifteen countries have joined the World Bank’s Partnership for Market Readiness and another six – Brazil, Chile, Colombia, Indonesia, Mexico and South Africa – could use voluntary carbon market mechanisms to underpin or supplement future regulations. South Africa, in particular, might consider allowing offsets of voluntary origin to be used under its proposed carbon tax, the report says.
The study finds governments have moved beyond their traditional role of providing oversight for voluntary offsetting programs to now performing services ranging from the certification of projects and development of carbon-reduction methodologies to registering offsets and educating buyers.
A report released in January predicts the amount of carbon trading in North America to double this year. The volume of permits and credits traded could reach 179 million tons, valued at $782 million, according to Thomson Reuters Point Carbon.