Background
As part of its recommendations needed to scale an effective and efficient voluntary carbon market to help meet the goals of the Paris Agreement, the Taskforce on Scaling Voluntary Carbon Markets has highlights the importance of Market Integrity Assurance as part of Recommendation 12 in its final report. In the report, the TSVCM states: "The integrity for voluntary carbon markets should be further improved. Today the market lacks a strong governance body to decide on participant eligibility, strengthen validation and verification processes, and combat fraud and money laundering. As an example, the highly fragmented nature of supply creates potential errors as well as for fraud (eg potential conflicts of interest between the auditor and the project developer, issues in baseline modeling, double counting under multiple standards). There is also potential for money laundering, in particular due to lack of price transparency and regulatory oversight. And finally, there may be duplication in AML/KYC efforts, as various market participants independently screen complex counterparties.
To promote market integrity, the Taskforce encourages continued development toward a digitized project cycle with shared digital data protocol across standards. The TSVCM recognizes that the shared digital data protocol should explore the use of satellite imaging, digital sensors, and distributed-ledger technologies (DLT) to improve speed accuracy and integrity. FInally, the Taskforce acknowledges that monitoring, reporting and verification (MRV) involves a global community of assurance providers with overlaps between the compliance and voluntary markets and that the verification process should be consistent across both markets.
The Voluntary Carbon Offsets Directory Research Project seeks to support recommendation 12 by creating a trusted and open directory blockchain directory to provide transparency around the voluntary carbon market data. Transparency is however just the first step. The Governance Research Project for Carbon Offsets Directory will see to explore a governance structure that can be used to help stakeholders self-regulate the marketplace.
To accomplish this, this project will seek the advice of experts and examples of governance structures, including DAO governance, that may be used to develop this new governance structure.
Ecosystem
Taskforce on Scaling Voluntary Carbon Markets Publishes Roadmap for Strengthening Market Integrity
Challenges
Proposed Solution
Resources
- Guides
- "Producing Open Source Software": For resources about governance in open source communities, see sections about social and political infrastructure that could be worth checking out.
- "Understanding Open Governance Networks": Linux Foundation
- Real World Models
- ICANN (The Internet Corporation for Assigned Names and Numbers)
StackOverflow
- Wikipedia
- Governance Experts To Engage
Other
This project is part of the Documentation and Use Cases for Climate Action mentorship. For updates on this project, see the Project Plan - Documentation and Use Cases for Climate Action.