The conclusion of this year’s Climate Week NYC marks a particularly significant event for the voluntary carbon market (VCM), as the inaugural “VCM Day” was held on 25 September 2024. Leading into COP29, the events at Climate Week may have lasting impacts as the push to improve market integrity continues.
The Climate Group, a nonprofit headquartered in England, began organizing Climate Week NYC in 2009 to promote climate action by leveraging the UN General Assembly’s (UNGA) annual session held nearby. With leaders worldwide flocking to New York City to meet every September, Climate Week has grown to be what the organizers call “the largest annual climate event of its kind.”
VCM Day was held by the Integrity Council for the Voluntary Carbon Market (ICVCM), the Global Carbon Market Utility (GCMU), and the Voluntary Carbon Markets Integrity Initiative (VCMI), who hosted an event alongside other VCM-related events throughout Climate Week. Most of the discussion revolved around the challenges faced by participants, the progress made so far, and the emerging opportunities in the VCM. These discussions were framed around the need for increased action to scale a high-integrity VCM to help achieve critical environmental, social, and economic goals.
Buyer challenges and participation in the VCM were major topics in Climate Week, which included discussions around the need for evolving standards and more action in addressing value chain emissions. Corporations continue to face scrutiny in their decarbonization and offsetting strategies, leading to downward pressure on demand from elevated levels of risk and uncertainty. Participation has also been impacted by corporations facing an evolving policy landscape, highlighted by SBTi’s Scope 3 Offsetting standard and disclosure regulations such as the Corporate Sustainability Reporting Directive (CSRD). While these short-term challenges are expected to persist, Climate Week may contribute to settling some of that uncertainty by providing a forum to facilitate discussion and improve transparency.
Additionally, a growing focus on the social impact and benefits of carbon projects was highlighted at Climate Week, reflecting the need to integrate biodiversity and community benefits. Discussions highlighted how nature-based projects can benefit local communities, especially in developing nations, by providing jobs and supporting sustainable development. This shift may signal a broadening of market appeal beyond traditional corporate buyers to impact-driven investors, which could reflect in integrity groups and registries making changes to better accommodate this preference shift.
Carbon dioxide removal (CDR), while a nascent technology, was a key topic at VCM Day since it is considered essential in reaching ambitious net-zero goals. In addition to the empathized need for tech-based removals and discussions around aligning standards, Climate Week saw the emergence of multiple carbon removal deals, including Climework’s deal with British Airways, making them the largest purchaser of carbon removals in the United Kingdom.
Highlighted by ClearBlue's market access agreement with Elimini, the role of intermediaries in the VCM was showcased across Climate Week as well. Measurement, Reporting, and Verification (MRV) technologies continue to be seen as central in identifying areas for corporations to act on, as well as ensuring credits are of high quality. Since insurers are expected to play an important role in scaling a high-integrity mark as well, discussions included a push for buyers to bear the insurance costs.
With COP29 approaching, Article 6 was unsurprisingly a major topic during Climate Week. A notable development from Climate Week was the launch of the Miombo Restoration Alliance, an agreement between 11 African countries developing a framework to drive a USD 500M investment in the region while generating Internationally transferred mitigation outcome (ITMO) credits under Article 6. Participants at Climate Week stressed that much of the focus at COP29 would be on finalizing guidelines for Article 6.4, particularly regarding ensuring environmental integrity and preventing double counting of emissions reductions. Leading into COP29, the increasing push seen at Climate Week for private sector engagement in Article 6 is expected to remain a central theme in enabling the expansion of a well-functioning international carbon market.
New York Climate Week 2024 showcased the voluntary carbon market as a crucial tool for financing climate action, particularly through its inaugural VCM Day. Reforms led by ICVCM and VCMI are expected to bolster market integrity, potentially driving increased demand for high-quality carbon credits. However, the market still faces challenges in overcoming the negative sentiment driven by past scandals. As regulations tighten and investor confidence builds, the VCM could see accelerated growth, especially as it becomes more integrated into broader climate finance frameworks.
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