David Antonioli, CEO of Verra, emphasizes the critical role of the voluntary carbon market (VCM) in achieving net zero commitments and driving further climate ambitions. He highlights the VCM's ability to adapt swiftly to changing circumstances, citing its work in conserving and restoring forests as an example. The VCM swiftly implemented a pooled buffer system to assess and manage reversal risks, enabling the issuance of permanent and fungible units by land-based projects. Another significant development is the exclusion of grid-connected renewable energy projects in non-Least Developed Countries (LDCs) by both the Gold Standard and the VCS Program, acknowledging that such projects no longer require carbon finance.
While initiatives like the Science Based Targets initiative (SBTi) have been successful in encouraging companies to reduce their carbon footprint, many corporations are setting even more ambitious goals, including carbon neutrality or net zero. These targets often rely on the purchase and retirement of carbon credits. Even the SBTi is considering the integration of these instruments into its definition of "net zero," recognizing their cost-effectiveness for corporations.
Antonioli emphasizes that one key factor contributing to the success of the VCM is that carbon credits are the only asset capable of uncovering previously undisclosed climate liabilities. Once a company commits to measuring, disclosing, and reducing its carbon footprint, it becomes difficult to backtrack. By utilizing carbon credits to reduce their footprint, companies incur a liability for the purchase and retirement of those credits, which becomes publicly known. This visibility helps investors make informed decisions about which companies to support.