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Market News

 November 19, 2007
New Guarantee for Global Offset Market

 London, UK (WBCSD) - A new global carbon offset standard has been established at the London Stock Exchange in order to build business, consumer and government confidence in the voluntary carbon market.

The Voluntary Carbon Standard (VCS) provides a much needed quality assurance for certification of credible voluntary offsets.The rigour and transparency of the new VCS is expected to boost market confidence for many companies and individuals wishing to deal with climate change by going carbon-neutral.

The standard also will help shift more investment dollars into credible offset projects that result in real and additional emissions reductions around the world.
As noted in a recent news article, the flourishing greenhouse gas (GHG) offset market remains largely unregulated and is open to abuse with respect to the legitimacy of carbon offsets being offered. The largely voluntary nature of the unregulated market has led some companies to buy credits that are valued more for their public relations appeal than their actual greenhouse gas reduction potential.

Market analysts estimate that annual transactions in the voluntary carbon market could reach US$4billion in the next five years and that the VCS - already popular with buyers - will be instrumental to this future growth.

The new VCS marks the end of a two year consultation with the industry, NGOs and market specialists, led by The Climate Group, the International Emissions Trading Association (IETA) and the World Business Council for Sustainable Development (WBCSD).

Andrei Marcu, President of The International Emissions Trading Association (IETA) and co-chair of the VCS Steering Committee, says: "While the main action must be in regulatory approaches, voluntary actions and offsets have an important role to play, and the VCS will provide them with necessary credibility."

Mark Kenber, Policy Director of The Climate Group and co-chair of the VCS Steering Committee, says: "The Voluntary Carbon Standard means business and consumer buyers can now trust the offsets they buy. Its robust quality assurance will trigger a new global confidence in the voluntary market from corporate buyers, consumers, and policy-makers.

The VCS is vital for the environment and for growth of an important global market."Adam Kirkman, Program Manager, World Business Council for Sustainable Development, says: "Many WBCSD member companies already participate in emerging carbon markets or implement emission reduction projects on a voluntary basis.

The Voluntary Carbon Standard provides additional incentive to business to invest internationally in low carbon technologies, allowing companies to monetize the gains from their early voluntary actions via a robust standard supported by third-party verification that delivers environmental integrity, consumer confidence, and market credibility."

About The Voluntary Offset Market - Although direct cuts in emissions should be the first step for any individual or business looking at minimizing its impact on climate change, the voluntary carbon market has an important role to play. Government regulation and appeals for people to change their behaviour will not be sufficient alone to achieve the carbon reductions needed at the speed required.

Carbon offsetting is a valuable transition solution because it allows additional investment in carbon reductions over and above that which Government regulations have achieved, and makes those reductions wherever they can be made fastest and at the lowest cost.

Explaining the valuable role of the voluntary carbon market, Mark Kenber says: "Urgent and drastic action is required to stabilise climate change. The voluntary carbon market has an important role to play in bringing down emissions quickly and priming the pump of clean green innovation while the politics catches up."


About the Voluntary Carbon Standard (VCS)

  • The VCS is a global benchmark standard for project-based voluntary greenhouse gas emission reductions and removals. It offers confidence to buyers, sellers and other stakeholders in the growing voluntary carbon market.

  • The VCS has been developed by The Climate Group, the International Emissions Trading Association (IETA), the World Business Council for Sustainable Development (WBCSD) and a range of business, government and non-government organisations.

  • Rules for certification under the VCS will be as robust as those of the Kyoto Protocol’s Clean Development Mechanism (CDM), while attempting reduce the costs for participants.

  • Based on early consultations, the VCS is already the most popular single standard for voluntary offset projects according to businesses working in the voluntary carbon market. The VCS was also deemed to be the most appropriate for the future needs of businesses in the market. (Source: "State of the Voluntary Carbon Markets 2007", Ecosystem Marketplace and New Carbon Finance)

  • Full technical details of the standard will be published and available at http://www.v-c-s.org/ on 19 November 2007.

Key Guarantees under the VCS:

ENVIRONMENTAL QUALITY: Offsets certified under the VCS have guaranteed environmental benefits.

MARKET CREDIBILTY: The VCS is the first carbon standard specifically designed to exacting ISO principles.

TECHNOLOGY INNOVATION: The VCS will stimulate greater innovation and investment in a wider range of low carbon technologies without compromising environmental integrity.

CONSUMER AFFORDABILITY: The VCS drives down transaction costs, and maintains the value-formoney carbon price that makes the voluntary market so attractive to buyers.

POLICY LEADERSHIP: The VCS will guide future policymaking on climate change. It is already shaping the pre-compliance market in the US which contributes around 60 per cent of current market demand.

BUYER TRUST: Independent research suggests the VCS will become the carbon market’s single most popular voluntary offset standard.

PUBLIC TRANSPARENCY: The public will be able to access information on every offset project approved under the VCS.

For More Information: World Business Council - WBCSD