Today is Wednesday, 29 May 2024.
Here is what Janet Yellen, United States Secretary of the Treasury, announced yesterday on purpose of how countries can better address global challenges including climate:
“We need to use all the tools at our disposal—creatively, thoughtfully, and at scale. I believe that harnessing the power of markets and private capital is critical. This includes efforts to grow high-integrity voluntary carbon markets … And they can channel capital towards the most effective climate solutions. Today, voluntary carbon markets are relatively small. But these markets have the potential to support significant decarbonization—if we address some key challenges”.
And she went on.
“Unlike commodities like nickel or soybeans that may be physically delivered to the buyer for inspection and use, the emissions savings associated with a carbon credit are generally “delivered” to the atmosphere. This makes it more difficult to assess the quality of carbon credits—that is, whether they really are associated with emissions savings.”
I her speech, she praised the efforts from CFTC, Commodities Futures Trading Commission, which should not be news for Carbon Credit Markets readers. Recall this post “BloombergNEF and carbon credits: 2024 is a challenging year but could reach US$238/ton in 2050.”
But the apex of her speech was the announcement of a joint statement and key principles to support high-integrity voluntary carbon markets.
“First, supply integrity … Second, demand integrity … and Third, market integrity.”
Click below to download the official 12 pages document and here for a fact sheet, both posted by the White House.
Here are the principles:
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 and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.
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.
Click here to read the exact remarks from Mrs. Yellen on high-integrity voluntary carbon markets in event by Bloomberg Philanthropies, the Center for Climate and Energy Solutions, and the Environmental Defense Fund, according to the press release of the US Department of Treasury. You can also watch her in the 7 initial minutes of this YouTube video.
As the principles are co-signed by two other U.S. Secretaries, here are their respective perspectives in specific press releases:
“With the right incentives and guardrails in place, voluntary carbon markets can be a source of critical financing to drive decarbonization and clean energy solutions", Department of Energy.
“High-integrity voluntary carbon markets offer a promising tool to create new revenue streams for producers and achieve greenhouse gas reductions from the agriculture and forest sectors”, Department of Agriculture.
“We encourage the U.S. private sector and other stakeholders in the carbon credit value chain to responsibly participate in voluntary carbon markets, consistent with the principles”.
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