Towards Greater Integrity of Carbon Markets

The carbon credit value chain is made up of communities, associations, entrepreneurs, developers, certifiers, distributors, technology service providers, attorneys, auditors and others players involved in supply origination, commercialization and impact assessment. Only with a good articulation between all these stakeholders will it be possible to achieve the integrity or quality of a carbon credit. 

We can understand the integrity of a carbon credit as the combination of different good practices applied in its value chain, including notably:

• the ability to reduce risks such as the impermanence of the environmental asset;
• assertiveness and transparency in the measurement of avoided and captured emissions;
• social additionality, which is verified with indicators of equitable distribution of benefits for local communities and entrepreneurs; among other best practices.  

In addition, value chains that do not follow basic principles of transparency, traceability, additionality and fair distribution of benefits, among others, will hardly have a consistent impact on the carbon mitigation they offer, especially in the medium and long term.

This allows us to conclude that, behind a high-quality carbon credit, there is a system of shared values, sustaining it or—on the contrary—weakening it.

At the Latin American and Caribbean Carbon Market Initiative (ILACC), we work to boost the competitiveness of the voluntary market credit supply. Our goals include helping the region be recognized as a reliable generator and—more than that—as the first choice as a provider of carbon credits, mainly in the sector of natural climate solutions, where LAC concentrates about 30% of the total global supply.

To achieve this goal, the different players in the voluntary carbon market value chain in LAC must share integrity principles and criteria with each other. These principles have the role of aligning standards, procedures and good practices that improve operational practice, and offer consistency to the supply of carbon credits generated.

In order to help strengthen the value chain of LAC carbon credits and consequently the integrity of the supply, ILACC has been implementing the 2022–2023 Work Program, which include notably the following core activities:

The current context of climate emergency declared by the United Nations in 2020 is a call to all sectors of society to strengthen multi-sectoral and inter-sectoral collaboration.

Therefore, accountability for climate action cannot be understood as the result of a certain area, but as an object of shared action, within any organizational structure, and this—naturally—includes the stakeholders in value chain of carbon credits in the voluntary market.

This is the time to combine capabilities with the aim of expanding the effect of our individual efforts, in an attempt to advance a true social transformation that leads us towards an economy where climate efficiency and positive impact on nature is the rule rather than the exception.