White House announces principles for ‘high quality voluntary carbon markets’

The White House today announced a Joint Statement of Policy and new Principles for Responsible Participation in Voluntary Carbon Markets (VCMs) that the administration said “codify the U.S. government’s approach to advance high-integrity VCMs.”

Agriculture Secretary Tom Vilsack signed the principles and statement, along with Treasury Secretary Janet Yellen, Energy Secretary Jennifer Granholm, Senior Adviser for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi.The White House said the signed principles and statement “represent the U.S. government’s commitment to advancing the responsible development of VCMs, with clear incentives and guardrails in place to ensure that this market drives ambitious and credible climate action and generates economic opportunity.”

“As leaders of U.S. federal departments and offices, we have issued this statement and associated principles on VCMs because we believe they can and should play a meaningful role in facilitating global greenhouse gas emissions (’emissions’) reductions and removals and helping to reach global net-zero emissions by 2050 and limit warming to 1.5 degrees C,” the officials, including Vilsack, wrote.

“While VCMs remain relatively small today, they have the potential to grow in the coming years and channel a significant amount of private capital to support the energy transition and combat climate change, with the right incentives and guardrails in place.”

At the same time, we believe fully achieving the potential of these markets requires further action to address challenges that have emerged, promote robust standards for carbon credit (‘credit’) supply and demand, improve market functioning, ensure fair and equitable treatment of all participants, and instill needed market confidence.”

In a fact sheet, the White House noted several Agriculture Department actions that that create “new climate opportunities for America’s farmers and ranch landowners.”

The fact sheet said that USDA’s Agricultural Marketing Service (AMS) today published a Request for Information (RFI) in the Federal Register asking for public input relating to the protocols used in VCMs.”

This RFI is USDA’s next step in implementing the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program as part of the Growing Climate Solutions Act,” the White House said.

“In February 2024, USDA announced its intent to establish the program, which will help lower barriers to market participation and enable farmers, ranchers, and private forest landowners to participate in voluntary carbon markets by helping to identify high-integrity protocols for carbon credit generation that are designed to ensure consistency, effectiveness, efficiency, and transparency.”

The program will connect farmers, ranchers and private landowners with resources on trusted third-party verifiers and technical assistance providers. This announcement followed a previous report by the USDA, The General Assessment of the Role of Agriculture and Forestry in the U.S. Carbon Markets, which described how voluntary carbon markets can serve as an opportunity for farmers and forest landowners to reduce emissions.

“In addition to USDA AMS’s work to implement the Growing Climate Solutions Act, USDA’s Forest Service recently announced $145 million in awards under President Biden’s Inflation Reduction Act to underserved and small-acreage forest landowners to address climate change, while also supporting rural economies and maintaining land ownership for future generations through participation in VCMs.”

The White House also pointed out that the Commodity Futures Trading Commission “proposed new guidance at COP28 [the 28th United Nations Climate Change Conference] to outline factors that derivatives exchanges may consider when listing voluntary carbon credit derivative contracts to promote the integrity, transparency, and liquidity of these developing markets.”

In addition, the fact sheet noted administration involvement in several international actions. It said that the State Department “helped found and continues to coordinate the U.S. government’s participation in the LEAF Coalition, the largest public-private VCM effort, which uses jurisdictional-scale approaches to help end tropical deforestation.”

It said “the U.S. Agency for International Development also has a number of programs that offer financial aid and technical assistance to projects and programs seeking to generate carbon credits in developing markets, ensuring projects are held to the highest standards of transparency, integrity, reliability, safety, and results and that they fairly benefit Indigenous Peoples and local communities. “This work includes the Acorn Carbon Fund, which mobilizes $100 million to unlock access to carbon markets and build the climate resilience of smallholder farmers, and supporting high-integrity carbon market development in a number of developing countries.”

As The New York Times noted today, many questions have been raised about whether voluntary carbon markets work.

–The Hagstrom Report