Market Insights, January 2024
Wildlife Works
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The Health of the Voluntary Carbon Market
Despite the unprecedented amount of negative headlines in 2023, the Voluntary Carbon Market (VCM) performed on par with 2022. According to data from MSCI Carbon Markets (formerly Trove Research), credit retirements in 2023 were nearly identical with?2022. The number of companies setting climate targets is also increasing - 6,954 companies now have a Science Based Target Initiative (SBTi) commitment (up from 3,212 at the end of 2022).? A recent survey from The Climate Board and VCMI found that companies would be more likely to set and maintain science-based targets if carbon credits could be used under specific criteria. This comes as companies are finding challenges preventing them from reducing emissions, particularly Scope 3 emissions, in line with their targets.?
This reflects the need for the VCM. There is a growing realization that for companies to meet climate targets, they must invest in the projects that make up the VCM. Many companies have an interim target for 2030 or before, and some are acknowledging that they will likely miss their target. Voluntary and compliance markets are increasingly converging, with VCM credits becoming eligible for use in compliance schemes, such as Singapore's carbon tax. This is likely to increase demand for eligible credits.
The VCM’s Outlook in 2024
Experts have an optimistic outlook for the international Voluntary Carbon Market in 2024. Robust year-end credit retirements, key players uniting, and imminent developments to boost integrity all signal a positive year ahead.?
New tools, such as the “Social Return on Investment” methodology developed by Carbon Tanzania, are helping to elucidate the positive social benefits of REDD+ projects. The Equitable Earth Coalition, founded last year by Forest Trends Association , Wildlife Works, and Everland is set to revolutionize the way carbon projects are developed, radically increasing the inclusion of Indigenous Peoples and Local Communities.?
This month, Ecosystem Marketplace shared a commentary emphasizing how quality and integrity can be achieved in REDD+ carbon credit programs if updates to the system like Verra recently made are implemented. However, many developers are voicing their frustrations with Verra over delays and a lack of clear communication. Confusion remains on what will happen to legacy credits, and if they will be eligible for the CCP label. As Pachama explains, older vintages of credits are not inherently inferior to newer vintages, and can actually have a greater climate impact due to the importance of timing in fighting climate change.?
Last year, climate change raised the temperature of our shared home to new extremes, as well as the anxiety levels of those who are paying attention. In this decade of critical action, we believe in holding onto hope, our greatest superpower in the fight against climate change. At Wildlife Works, we’re dedicated to sharing our community partners’ success?stories about fighting climate change and protecting wildlife. One recent success story comes from the Amazonian region of Colombia, where the Association of Traditional Indigenous Authorities of Querarí (ASATIQ) has begun a REDD+ project with Wildlife Works to protect their forest and adapt to climate change by improving traditional food production systems and co-creating new sustainable economic opportunities.
Understanding the Mai Ndombe Project
This month, we highlighted our new video explaining the Mai Ndombe REDD+ project, the largest REDD+ project in the Democratic Republic of the Congo. In this video, hear directly from people who live in Mai Ndombe and make conservation possible. Click here for an explainer on what the threat to this critical forest is.
Did you know?
Wildlife Works co-created best practices for implementing REDD+ projects in the Democratic Republic of the Congo (DRC), in collaboration with The Nature Conservancy , DRC project practitioners and members of civil society. We recently distilled these best practices into seven key recommendations.
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Climate News Stories We're Following
"What lies ahead for the carbon markets after COP28?" - A commentary from Ecosystem Marketplace
"How REDD+ is Protecting Forests Globally" - A Space Intelligence interview with Maren Burrows (Pauly), Ph.D. from Everland
Equitable Earth sponsored the largest delegation of Brazilian Indigenous women to ever attend a United Nations Climate Change Conference
Four different ways activists went about achieving real climate progress in 2023
Embajador Ecuador de la AIV
10 个月The article provides a comprehensive overview of the UNFCCC's Reducing Emissions from Deforestation and Degradation (REDD+) framework, its evolution, and its role in creating Internationally Transferable Mitigations Outcomes (ITMOs) for the forestry sector. The REDD+ framework is a significant tool in the fight against climate change. It allows communities and governments to gain payments from voluntary carbon markets for emissions reductions achieved through forest protection projects3. This serves as a major incentive for their efforts. However, it's important to note that while REDD+ has the potential to contribute significantly to mitigating climate change, it's not without its challenges. The inclusion of REDD+ credits in the global carbon market without any adjustments in the global cap could lower carbon prices significantly and cause crowding out. Therefore, it's crucial that the cap moves towards the 2 degrees climate target if REDD+ inclusion is to maintain high carbon prices and strong incentives for emissions reductions in other sectors.