Clifford Chance, in co-operation with UK Voluntary Carbon Market Forum and the City of London Corporation, has launched a new report: 'Enabling the Voluntary Carbon Market in the Context of the Paris Agreement'.
The Sharm el-Sheikh Implementation Plan agreed at COP27 concluded that a global transformation to a low-carbon economy is expected to require investment of at least USD 4-6 trillion a year. A high integrity scaled Voluntary Carbon Market (VCM) will be essential if we are to mobilise the capital required to achieve the Paris objectives. Investment in the Global South, in nature-based solutions, and in climate technology innovation is vital, and the VCM will facilitate and drive these capital flows.
Earlier this year the Forum undertook a market mapping exercise which sought to identify market gaps and potential actions. A clear conclusion of this work was that uncertainty around Article 6 of the Paris Agreement and what it means for the VCM is holding back urgent investment.
This paper considers the state of the Paris mechanisms and the VCM, examines actual and perceived barriers to its scaling and identifies recommendations for the way forward.
“We’ve outlined eleven specific issues and uncertainties that exist between the Paris mechanisms and the VCM which, if not resolved, may hinder the opportunity presented by the VCM to deliver immediate climate action.”