The Biden administration released policies to strengthen voluntary carbon markets. These guidelines highlight that high-integrity markets can help achieve global net-zero emissions.
“These markets have the potential to support significant decarbonization—if we address some key challenges,” Treasury Secretary Janet Yellen said. She urged companies to prioritize reducing their own emissions, using carbon credits to complement these efforts.
Carbon offsets, which support projects like reforestation, have faced credibility issues due to scandals and studies showing limited impact, reported WSJ. The $2 billion market saw slowed growth as major companies like Nestlé reduced purchases.
Officials hope the guidelines will restore trust and boost private investment in carbon-mitigation projects globally. Energy Secretary Jennifer Granholm stated, “Credibility is literally the commodity.”
The new guidelines recommend companies disclose details about carbon offset purchases annually in a standardized, comparable manner. Input came from the Voluntary Carbon Markets Integrity Initiative and the Integrity Council for the Voluntary Carbon Market.
Lucy Hargreaves, from Patch, said, “The U.S. is sending a strong message to corporate buyers to participate with integrity following these guidelines.” She noted direct government regulation is unrealistic now.
Morgan Stanley projects the voluntary market could grow 50-fold to $100 billion by 2030.
The Biden-Harris Administration aims to cut greenhouse gas emissions in half by 2030 and reach net zero by 2050. The new principles for voluntary carbon markets, co-signed by key officials, represent a commitment to advancing responsible carbon markets with clear incentives and guardrails for credible climate action.
