- Report from Pollination, commissioned by VCMI, recommends coordinated philanthropic funding to help countries implement high-integrity carbon markets
December 3, London – Countries require greater support to implement high-integrity carbon markets, according to new research from Pollination, commissioned by the Voluntary Carbon Market Integrity Initiative (VCMI).
A majority of countries – over two thirds – plan to use carbon markets as part of their national climate plans. Voluntary carbon markets, compliance carbon markets and international carbon markets under the Paris Agreement, can all play important and complementary roles.
However, capacity gaps hinder low- and middle-income countries’ ability to access carbon markets and maximise the positive climate and sustainable development benefits they can provide.
Pollination’s research, published today, highlights the pressing need for funders to ramp up coordinated support to address capacity gaps. The recommendations allow funders to prioritise actions that best respond to host country needs.
Priority areas for enhanced support appeared in four main categories: law, policy and regulation; institutional strengthening and governance; project implementation; and knowledge capacity building. It is crucial to build capacity across stakeholder groups to ensure benefits from high-integrity carbon market projects are shared fairly. Such groups include government staff, the private sector, carbon project practitioners, and Indigenous peoples and local communities (IPs & LCs).
While significant support is already available, more is needed, and strong coordination is essential to ensure coherence – and maximum impact – across all efforts. This new research presents an analysis of technical assistance initiatives for voluntary and compliance carbon markets and identified gaps where needs are not being fully addressed. It provides recommendations as to how VCMI and philanthropic funders can support greater low- and middle-income country involvement in high-integrity carbon markets.
Mark Kenber, Executive Director, VCMI comments, “Identifying catalytic opportunities for future support to build readiness for high integrity carbon markets that meet the needs of host countries, Indigenous peoples, and local communities is of the utmost importance. The findings in this report will be critical to inform the next phases of VCMI’s carbon market Access Strategies Programme, designed to support the equitable uptake of carbon market mechanisms globally and enable countries to achieve and enhance their climate targets under the Paris Agreement while delivering benefits for people and planet.”
Recognising the immense opportunity that remains in the carbon market space, Rick Saines, Managing Director at Pollination, notes, “Carbon markets are a vital tool for unlocking investments in high-quality mitigation at scale, but countries need assistance to fully harness this market potential. Impressive progress has been made to date by carbon market readiness initiatives, however, we heard directly from countries and market actors that gaps remain to unlock and maximise participation in carbon markets. This report will inform the strategic funding decisions of philanthropies, as well as the broader donor community, providing them with a pathway to support countries to access carbon markets.”
The Voluntary Carbon Markets Integrity Initiative (VCMI) is an international non-profit organization with a mission to enable high-integrity voluntary carbon markets (VCMs) that deliver real and additional benefits to the atmosphere, help protect nature, and accelerate the transition to ambitious, economy-wide climate policies and regulation.
The organization is fully aligned with the goals of the Paris Agreement and is committed to a world on track to 1.5 degrees and net zero emissions by mid-century, achieved through a just transition that enhances equality and sustainable development for all.
Pollination is a global investment and advisory firm focused on climate and nature. It designs, builds and invests in climate and nature solutions to accelerate the transition to a net-zero, nature-positive future. Established in 2019, Pollination has brought together a global team of over 200 leading experts from across the climate and nature ecosystem; spanning finance, investment, technology, business, law, policy and science. Leveraging unique market insights, it supports clients to navigate the transition, and designs investment platforms and funds to meet investor needs and deliver real impact. For more information, see www.pollinationgroup.com.