Many companies that have set climate targets are struggling to meet them—particularly when it comes to their scope 3 supply chain emissions. We need to rapidly limit deforestation—but we need new forms of finance to do so. And we must significantly expand the flows of finance for climate action to the Global South. These are not easy tasks and solving these problems will require us to get practical and use every tool we have. Now is the time to step up and deliver.
The voluntary market has been held back by legitimate concerns about whether projects that generate credits really deliver emissions reductions and removals, whether businesses that buy credits can do so without delaying decarbonization, and without fear of double counting emissions reductions or removals. There have also been questions over whether it is built to scale, and what needs to be done to ensure the robust guardrails and infrastructure of other financial markets.
Meanwhile, the Global Carbon Markets Utility is building the infrastructure needed for the market to operate like a mature financial market with more transparency and accountability. The GCMU is working to increase standardization to facilitate accurate credit pricing and to introduce robust data standards, digitization, and the necessary mechanisms to enforce these standards. This new infrastructure will encourage the financial community to make a substantial commitment to expanding the market.