Digital MRV can spur growth in voluntary carbon credit market
To limit global warming to +1.5°C, the voluntary carbon credit (VCC) market has to grow. Digital measurement, reporting and verification processes can play a key role in both scaling up the market and ensuring VCC quality.
In partnership with
NRI - Nomura Research Institute
Founded in 1965, Nomura Research Institute (NRI) is a leading global provider of system solutions and consulting services with annual sales above $5.0 billion. NRI offers clients holistic support of all aspects of operations from back- to front-office, with NRI’s research expertise and innovative solutions as well as understanding of...
CO2 reduction through voluntary carbon credits
Carbon trading, whereby CO2 emission allowances are bought and sold, is garnering renewed attention as an important means of limiting global warming to a maximum of 1.5°C above the earth’s preindustrial average temperature. By creating economic incentives, carbon trading aims to fund activities that can reduce CO2 emissions more effectively, thereby accelerating decarbonization. Carbon trading schemes can be broadly classified based on whether they are (1) publicly or privately operated and (2) compulsory or voluntary.
In the lower right quadrant of the table below are privately operated voluntary carbon credit (VCC) schemes through which companies and other CO2 emitters voluntarily purchase credits to offset their own CO2 emissions. The credits they purchase are supplied by third-party projects that reduce CO2 emissions through such means as displacing fossil fuel consumption with renewable (e.g., solar, wind, hydro, biomass) energy or naturally sequestering atmospheric CO2 through, e.g., reforestation.
Because VCC schemes are not compulsory, they have yet to be widely adopted. To cap global warming at +1.5°C, the VCC market’s CO2 trading volume reportedly must grow 15-fold between 2019 and 2030. In 2021, it grew nearly 50%, from 230Mt to 350Mt.
ESG community
With Qorus memberships, you gain access to exclusive innovation best practices and tailored matchmaking opportunities with executives who share your challenges.