White House outlines carbon market and credit policy pointers

Sources: U.S. Department of the Treasury; CP staff

Three Cabinet and three senior White House officials have issued a joint policy statement on voluntary carbon markets (VCMs), where public and private entities buy or sell credits representing one metric ton of carbon dioxide removed from, or captured or eliminated prior to release to, the atmosphere. VCMs have the potential to channel private capital to drive decarbonization efforts in concrete, as startup companies have demonstrated from cement plant calciners and kilns to construction jobsites, plus other industrial or consumer sectors where carbon dioxide emissions reduction measures are afoot. To formalize the federal government’s view of funding mechanisms behind such efforts and measures, the White House presents Voluntary Carbon Markets Joint Policy Statement and Principles, anchored by these pointers: 

  • Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization.
  • Credit-generating activities should avoid environmental and social harm.
  • Corporate buyers that use credits should prioritize measurable emissions reductions within their own value chains. 
  • Credit users should publicly disclose the nature of purchased and retired credits. 
  • Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards. 
  • Market participants should contribute to efforts that improve market integrity. 
  • Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs.
The joint statement document is posted here.

“The principles are an important step toward building high-integrity voluntary carbon markets, [which] can help unlock the power of private markets to reduce emissions,” says Treasury Secretary Janet Yellen. Joining her in the formal statement release were Agriculture and Energy Department counterparts Tom Vilsack and Jennifer Granholm, along with the White House’s Senior Advisor for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi.

The Statement and Principles affirm that high-integrity VCMs can and should play a meaningful role in reducing and removing global greenhouse gas emissions and support an objective of global net-zero emissions by 2050, signatories contend. By providing steady, reliable revenue streams, VCMs can deliver additional capital and market support for both existing, credible decarbonization practices plus innovative climate technologies, including those that scale up carbon removal activities. 

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