- Case on the World Bank model for Africa: Ms. Yeshika Malik from the World Bank discussed the role of world bank on providing capacity building support to various countries on accessing carbon markets. The ACCENT program of the World Bank is focused on southern and eastern African nations. Enabling digital platforms for carbon markets is one of the key pillars of this program. She mentioned that there are five activities the World Bank is supporting. Digital MRV platform, Project preparing facility, Policy and regulations support, building skills, project management and capacity building. Cross border transactions are one of the key features of this program. There are many take aways for India from this platform.
- Lessons on integrity and transparency from the past: Mr. Axel Michaelowa congratulated India on the eligibility list for article 6.2 and 6.4 where India has focused on activities that have high mitigation costs and where he believes the carbon markets will play. He highlighted that the learnings from the CDM mechanism around quality of credits is one of the reasons why EU has been hostile to international carbon markets. Therefore, additionality must be the cornerstone of any carbon market and that also relates to green hydrogen technology. On baseline issue, he highlighted that baseline should be below than Business as Usual. He expressed happiness that India has taken up the additionality requirement very seriously.
- Need for standardization and liquidity: Mr. Bjorn Fonden reiterated Mr. Axel’s view on the need to focus on integrity for any carbon market to evolve. He said Bilateral agreements under 6.2 are moving forward. He articulated that as of now carbon markets are not standardised. The buyers and sellers are looking for specific type of projects. The challenge lies ahead of us to standardise and make these markets more liquid and scale up. He also the clarified that project authorisation doesn’t necessarily mean higher quality credit. He highlighted that the distinction between accounting adjustments and quality need to be clearly understood by market participants.
- Initiatives to improve integrity issues: Mr. Anton Tsvetov described that ICVCM has setup an assessment framework that revolves around the Core Carbon Principles (CCPs). ICVCM evaluates carbon crediting programs and methodologies. The framework has about 200 criteria – 70 around program and 130 around methodologies. The labelling provides credibility to buyers and sellers and creates trust in the ecosystem. Mr. Axel expressed his comfort on reporting standards and can be followed in future. However, he said independent third-party audit remains a concern and auditors are being paid by the developers. A model of allocating auditors by draw of lots to avoid collusion may be deliberated.
- Initiatives by Registries on integrity and transparency: Mr. Ashok Kumar added the issues of double counting, permanence, and public perception in addition to the issues mentioned earlier. He said substantial changes have been made and submitted to ICVCM. He informed that 10 million credits have now been labelled after approval from ICVCM. He added that they have now introduced a mandatory requirement of a non-permanence risk assessment of projects so that credits can’t be reversed. On double counting, he said that deactivation from previous registry is mandatory and initiated a performance assessment and grading of validation body/ auditors. Dr. Lokesh Dubey from Gold Standard said there are 3 layers of transparency and integrity – standards related documents/ methodologies layer; registries layer and overall carbon markets layer. On methodologies, he said we are making all methodologies public for each stage. The comments received and how are they addressed are also being made public. The registry related transparency has also been enhanced. The standards relating to the information being provided by the registry have been enhanced. Regarding transparency across the market segments, he said that under Article 6 authorisation, each credit/ project that is intended for article 6 needs to get letter of authorisation from the host country. This enhances the confidence of the buyers and brings a lot of trust in the market.
- Technology initiatives to address integrity and transparency: Mr. Yuvraj Dinesh Babu mentioned that climate data trust is focusing on providing seamless access to information through a service layer for facilitating information access using blockchain technology. They have onboarded 6 registries including the CDM registry. They represent close to 18,000 projects with 3.6 billion carbon credits. Approx 200 parameters are available on each project. They have established a double counting task force of 20 members who will help solve the double counting issue. He said that challenges around monitoring Letter of Authorisation on real time basis are being discussed.
- Integrity challenges for community-based projects: Mr. Jimmy Sah said that for community projects identifying beneficiaries and geo-tagging of users is critical to address the transparency and integrity issues. He also said interoperability remains a challenge particularly moving from one standard to the other. ICVCM’s common standard will certainly help to avoid re-assessment of the project on each standard.
- Capacity building on transparency and integrity: Mr.Abhishek Kaushik from UNEP said that they are providing technical and capacity building support to many countries. He explained the UNEP’s initiative on article 6 pipeline which includes tracking progress of different countries on article 6. He added they are developing tools, frameworks to help countries on article 6 initiatives.
The discussions lauded India’s efforts to address the transparency and integrity around carbon markets. The experts underscored the need to focus on transparency and integrity for a sustainable carbon market. Let's leverage these insights to drive impactful projects and foster sustainable development!
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