Voluntary Carbon Market (VCM)
A market where carbon credits are traded voluntarily by companies or individuals.
What is the Voluntary Carbon Market (VCM)?
The Voluntary Carbon Market (VCM) is a decentralized marketplace where individuals, companies, and organizations voluntarily purchase and sell carbon credits to offset their greenhouse gas emissions, meet sustainability goals, or demonstrate climate leadership. Unlike compliance markets, participation in the VCM is not mandated by law.
Why is the Voluntary Carbon Market (VCM) important?
The VCM plays a crucial role in channeling private finance towards climate change mitigation and adaptation projects that might not otherwise receive funding. It incentivizes the development and scaling of technologies and nature-based solutions that reduce or remove carbon, contributing to global climate goals.
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Frequently asked questions
Participants include corporations aiming for carbon neutrality or net zero, financial institutions, individuals, project developers, brokers, and standard-setting bodies.
Benefits include achieving sustainability targets, enhancing corporate reputation, demonstrating leadership, financing climate solutions, and engaging stakeholders in climate action.
Challenges include ensuring high integrity and quality of credits (e.g., additionality, permanence), managing perceptions of greenwashing, improving transparency, and standardizing methodologies across different programs.