The Biden administration on Tuesday announced new guidelines for ensuring the integrity of carbon credits or offsets.
While the practice of buying carbon offsets or credits is voluntary, the administration says it hopes to help ensure that credits being sold are actually credible.
Individuals, businesses and other entities can buy these credits to try to “offset” their emissions as part of an effort to achieve net-zero. This can entail things like paying organizations to plant trees or prevent them from being cut down.
But, markets for carbon credits have been plagued by issues including double counting. Questions have also been raised in some markets that preserve trees about whether they would have been cut down otherwise or how long they will be protected.
The guidelines issued by the Biden administration say that these credits should represent actual and additional reductions in carbon dioxide emissions. They should be permanent emissions reductions and be validated by an accredited and independent third party.
The administration also said that corporate purchasers should also make efforts to cut down their own direct emissions and publicly disclose the nature of their credits.
“These principles will help us counter glossy greenwash and other real risks in a nascent and voluntary market and, instead, catalyze mountains of capital to rigorously take on emissions and create good-paying jobs,” said National Climate Adviser Ali Zaidi in a written statement.
The principles put forward by the Biden administration Tuesday are largely in line with those put forward by non-profit entities like the Integrity Council for Voluntary Carbon Markets (IC-VCM).
Nat Keohane, president of the Center for Climate and Energy Solutions, said the White House’s backing gives a boost to such efforts.
“By the White House coming out with principles that are really aligned with the principles that the IC-VCM is implementing, I think that sends a very strong signal to the market that there is really weight behind and alignment behind what the integrity council is doing,” said Keohane, whose organization is affiliated with the IC-VCM.
In remarks at Bloomberg Philanthropies, Treasury Secretary Janet Yellen said the voluntary markets “should represent real emissions reductions or removals and there should be guardrails to avoid negative environmental and social impact and to support co-benefits like local economic development and biodiversity.”
In the past, Yellen added, “we’ve seen too many examples where credits failed to meet these criteria. We know this market can do better, and we’re committed to helping strengthen it.”
Zack Budryk contributed reporting.