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Policy news round up - August 1 2023

August 1, 2023

1. ICVCM unveils full guidance on Core Carbon Principles

  • Summary: After almost two years of work involving most of the top experts in the VCMs, the ICVCM (Integrity Council for the Voluntary Carbon Market) has unveiled its full Assessment Criteria for credit quality. While there was a lot of detail in Thursday's release, many big decisions were deferred to new working groups, to be set up in the coming months. Full text here. 
  • So what: This release was a major event for the VCMs, while there is a lot of detail in there (one analyst said the market was still digesting it all) the initial reactions seem broadly positive. But as with previous decisions from the ICVCM, there is still a lot to be decided on, including what the various 'credit categories' for assessment will be. Read Sylvera's write-up on the Core Carbon Principles here.

2. Greenwashing bonanza - four big stories in one week!

The four stories were:

  • (i) DWS Group (part of Deutsche Bank) is close to agreeing to pay a settlement to the US Securities and Exchange Commission (SEC, a financial regulator) essentially admitting to making false statements about the sustainability of its funds. Full text here. 
  • (ii) UK climate law charity ClientEarth’s proposed lawsuit against oil major Shell’s board of directors received another court setback Monday, but the nonprofit said it will appeal the decision. Full text here
  • (iii) A German court ruled that a retailer's climate neutrality claims lack sufficient credibility. Full text here. 
  • (iv) US auto manufacturer Rivian will begin selling a carbon neutral add-on with its luxury electric pickups and SUVs, by using renewable energy credits (RECs) after agreeing to buy power from a proposed solar plant in Kentucky. Full text here. 
  • So what: These stories together present a very mixed picture: (i) shows that the US is getting serious about prosecuting greenwashing, even if it takes years to do so (but given how much work it is, will likely only take on the biggest scalps with the fewest senior friends in Washington D.C.); (ii) shows that the climate activist lawyers still face some uphill battles, even in the UK, (iii) shows that continental Europe is by far the most dangerous place to make dodgy climate impact claims, and (iv) is just totally egregious.

3. UK government publishes price tiers for ‘net gain’ biodiversity credits (£42k - £650k!)

  • Summary: The British government has published provisional price tiers for its statutory biodiversity credits as part of upcoming net gain legislation, with the final values to be set by the Department for Environment, Food and Rural Affairs (Defra) and subject to periodic review. Statutory biodiversity credits will be available to purchase by eligible projects under mandatory biodiversity net gain (BNG) rules to come into force in November onwards, which state that any new housing developments will need to prove a 10% net gain in biodiversity to get planning permission. Full text here
  • So what: This is an interesting policy, developed by a department that does not have a track record designing new markets. It's something to keep an eye on as a fascinating experiment and the world's first compliance nature market.

4. CFTC's VCM convening hears criticism of standards

  • Summary: US federal government regulators heard pointed criticism of voluntary carbon standards, as agency officials defended their record and suggested greater participatory roles at the Commodity Futures Trading Commission's (CFTC) second voluntary carbon markets convening on Wednesday. They also heard from the Co-founder and President of Sylvera, Samuel Gill, who was one of the presenters, about the importance of independent project-level assessments. Full text here. 
  • So what? The CFTC is among the most powerful regulators in the world, so their newfound eagerness to regulate VCMs is important news. 

5. Tanzania carbon credit projects set for $20bn investment boost

  • Summary: Tanzania's burgeoning carbon credit industry is reportedly set to receive a substantial boost with investments over $20 billion expected from more than 20 companies from a series of countries. But the size of the aspiration drew derision from some quarters. Full text here. 
  • So what? Governments across the global south are latching on to the growth of VCMs and carbon trading more generally and seeking to cash in, though in some cases, as here, setting their sights unrealistically high. This speaks to the push from multilateral, donor govts and consultants to paint a picture of the market as a cash cow in the making, and suggests there will be a wave of investment in countries with limited or no experience in carbon trading - with likely a wide range of quality among the resultant wave of credits to issue in the coming years.

6. EU lawmakers call for a 2040 climate strategy as some look to international credit use

  • Summary: The EU will need a proper strategy to reach increasingly ambitious climate targets in the decade after this, according to members of the European Parliament's environment committee (ENVI) in a preliminary exchange about setting the bloc's 2040 emissions goal on the road to reaching net zero by mid-century. Full text here. 
  • So what? While only a preliminary exchange of a committee in the European Parliament, this reporting is important because the chair of the committee, Pascal Canfin, explicitly advocated that the EU should engage in international carbon trading in order to meet its climate goals - at least by 2040. This suggests the center of gravity on carbon trading is moving towards a recognition that importing emissions reductions might be essential.

7. Australia Joins Germany's G7 Climate Club

  • Summary: Australia has announced it will join Germany's G7 Climate Club, Prime Minister Anthony Albanese announced while in Europe this week. Full text here. 
  • So what? The Climate Club is a sort of meta carbon pricing scheme, where all members have roughly equivalent policies meaning that there is no need for Carbon Border Adjustment Taxes (CBATs). In practice, this means Australia will come under pressure to tighten its policies and drive up its carbon prices. Countries outside the Climate Club looking to export to it will have to submit to CBATs.

8. Next court date set for Alberta offset verifier facing criminal charges

  • Summary: An Alberta compliance offset verifier will soon have its next day in court for allegedly providing false or misleading environmental information and acting as a third-party assurance body without proper qualifications, a first for the Canadian judicial system. Full text here. 
  • So what? One of the few very concrete examples of (alleged) fraudulent MRV, something regulators worldwide are suddenly keen to understand and tackle.
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About the author
VP Policy

Ben Rattenbury is a carbon markets, green finance and climate policy expert with more than a decade of experience in the sector. A former Fulbright Scholar at Columbia University, he has also worked with and for the UK financial sector, UK Government, World Bank, and UN Climate Change Secretariat. As VP Policy at Sylvera he leads the team working on Voluntary Carbon Markets intelligence and intersections with wider climate and markets policy.