Voluntary Carbon Markets

In contrast to the compliance market, voluntary markets are not legally mandated and consist of companies and individuals choosing to offset their emissions. This could be motivated by an organization looking to offset longer-term climate risks facing their organization for ethical or other reasons. Due to the carbon credits in voluntary markets not being administered by a specific government, they are accessible to every sector globally in contrast to compliance markets. Both compliance markets and the voluntary carbon market can play significant and complementary roles in the decarbonization of the global economy.

Voluntary carbon markets (VCM) have the potential to channel finance into carbon removal projects and address the residual emissions of firms, but they are held back by issues of market integrity. This includes a lack of consensus on how the market credits align with science-based decarbonization pathways, the overall “quality” of the credits available, as well as fragmented reporting standards. This is exactly the system ImpactScope aims to disrupt in showcasing where blockchain technology can come into its own being applied to the whole lifecycle of an offset. Blockchain provenance and immutability of a carbon offset will also go a long way towards building trust in the carbon market and avoiding greenwashing.