EMERGING VOLUNTARY MARKET STANDARDS
The Voluntary Gold Standard (VGS)
15. Launched by WWF-UK in May 2006, the Voluntary
Gold Standard is a simplified version of the CDM Gold Standard.
The methodology is only available for voluntary emissions reductions
and creates Voluntary Emissions Reduction Units (VERs).
The VGS is only available for projects in developing countries
and whilst it uses the basic methodologies of the CDM Gold Standard,
its hope is that it will make them easier to apply to the smaller
project types more generally found in the voluntary market.
The Voluntary Carbon Standard (VCS)
16. The Voluntary Carbon Standard has been developed
by The Climate Group and the International Emissions Trading Association
(IETA). Version 1 of the VCS was released for consultation on
2 March 2006. The comments from this consultation were incorporated
into version 2 of the VCS which is still in its consultation stage.
The VCS has created a unit called the Voluntary Carbon Unit (VCU).
VCUs issued under version 1 will be grandfathered (allowed to
continue to operate as per version 1); the final version of the
VCS has yet to be finalised. The Voluntary Carbon Standard aims
to ensure that all voluntary emission reductions projects that
want to trade in VCUs are independently verified to meet specific
criteria and that these will represent "real, quantifiable,
additional and permanent project-based emission reductions".
The VCS will provide protocols and criteria to certification entities
and project developers on the specifications for creating, verifying,
and registering VCUs. The VCS has created a registry managed by
the Bank of New York which is used to register, transfer and retire
VCUs from the market.
Other developed standards
17. The Climate, Community and Biodiversity Standards
(CBB) developed by the Climate, Community and Biodiversity Alliance,
are for "land-based projects that can simultaneously deliver
compelling climate, biodiversity and community benefits."
There are three levels of CBB validation: approved; silver; and
gold. There are 23 possible standards to meet of which 15 are
compulsory for "approved" validation with the remaining
eight being optional. Depending on the number of optional standards
met, the project may get either silver or gold validation. An
independent third party evaluates whether the project merits approval,
and if so, at what level. The standard uses the methodologies
of the Intergovernmental Panel on Climate Change Good Practice
Guidance (IPCC GPG) but can also used approved CDM methodologies
for calculating carbon reductions/ savings.
18. Similarly the Plan Vivo System provides a standard
for "managing the supply of verifiable emission reductions
from rural communities in a way that promotes sustainable livelihoods."
The Plan Vivo System is managed by BioClimate Research and Development
which is a not-for-profit organization and is responsible for
development and maintenance of the Plan Vivo system. It contracts
the Edinburgh Centre for Carbon Management (ECCM) to provide the
systems maintenance resources needed for the development of Plan
Vivo. ECCM provides a technical team to assist with the development
of technical specifications for the project alongside the project
developer and the host organisation. Projects are usually monitored
using local experts and credits are registered on a database.
19. Voluntary offset retailers have developed their
own standards which create credits which use the generic term
of Verified Emission Reductions (VERs). They share their acronym
with Voluntary Emission Reductions and the two are often using
interchangeably which can cause confusion as in one, the emissions
reduction or saving has been verified, whereas in the other, this
is not necessarily the case. Here, the standards for these verified
emissions reductions vary widely in many respects including how
the project baselines are calculated, how additionality is tested
and how verification is carried out. For some projects, this is
not done at all, which reflects the cheaper cost of some of these
credits in the voluntary market. It is up to the buyer of credits
to determine what standards they want their credits to meet. Consequently
these sorts of credits are neither comparable nor tradeable.
Proposed Government Code
20. In January 2007 the Department for Environment,
Food and Rural Affairs (DEFRA), launched its consultation on establishing
a voluntary code of best practice for the provision of carbon
offsetting the UK customers. Its purpose in establishing the code
is to "ensure consumer confidence in an emerging market and
continued growth of that market through that confidence."
The code would not create a new tradable unit in the voluntary
offset market but would be applicable only to compliance market
credits being traded in the voluntary market, principally, CERs.
The code would define standards for offset providers trading in
these credits, who in return for meeting these standards would
be awarded a quality mark. The code proposes standards for: ensuring
accurate calculations of emissions to be offset; providing clear
information for consumers about the mechanisms and projects supported;
transparent pricing; and a timetable for cancelling or retiring