The cost of "transparency"

Have you ever considered supporting climate action projects in least developed countries? Yes? Well you probably wondered where the money actually goes? It's a great question, but the answer is complicated.

Over the past 10 years concerns about transparency have risen up the agenda of the voluntary carbon market. Doubts arose when huge amounts of money entered the market exponentially increasing the risk of speculation. There have been examples of supposed carbon offsetting projects that ended up being proven as ineffective. Even worse, sometimes they didn't even exist.

To rectify this situation two huge accreditations bodies were created: VCS and Golden Standard. They now dominate the voluntary carbon market. Today carbon credits issued by climate projects and verified by those two bodies must be based on a triple verification, all of it independent. Their process is now at least as robust as that of the UN verified credits under the compliance mechanism (so-called "clean development mechanism", CDM).

So, problem solved, eh?

Well, not really. In fact this doesn't provide a clear answer to your question: where does my money actually go?

The reality is that the most of your money is used to finance the multiple links in the chain of certification and selling procedures. In fact, strengthening the procedure for verification has obviously ended up in increasing the costs of certification and complicating the rules for projects validation. Today this highly bureaucratic procedure actually prevents small and medium size projects from entering the voluntary carbon market. Only big scale projects counting on the involvement of highly qualified experts are able to go through all the necessary processes.

While the Kyoto Protocol was meant to support local communities in disadvantaged areas affected by the consequences of climate change, it seems that now those very populations are excluded from the benefits due to the complexity of the procedures.

This brings us to the real challenge of today's voluntary carbon market: develop new simplified economic certification processes that offer easier access to small and medium size project developers while assuring an essential guarantee to those who invest their money. We need to revert to the Kyoto protocol's original intentions. They were built on principles of solidarity and fairness which in our opinion should be the key principles of real offsetting initiatives.