The voluntary carbon market – where institutions and individuals can buy carbon reductions, usually to offset their own carbon emissions – is experiencing rapid growth. International trades rose from $58.5 million in 2006 to $258 million in 2007. But as activity has increased, concerns have been expressed that the voluntary carbon market is a distraction and, worse, that it undermines the need for fundamental change in corporate and individual behaviour. The quality of the credits being offered on the market has also come under scrutiny. In this debate, the potential for the voluntary carbon market to deliver positive benefits, particularly for people in poorer countries, has been largely overlooked.

Our report Making the voluntary carbon markets work for the poor distils a series of interviews with a wide range of experts. It explores the opportunities, the barriers and the actions that should now be taken to make the market more effective in delivering both carbon reductions and sustainable development.

Findings:

• Small-scale grass-roots projects, particularly in energy and forestry, are benefitting from a thriving voluntary carbon market.
• Clear standards are vital in maintaining the credibility of the market.
• But the system should not be rigid and mechanical. It is critical to leave space for innovation and for meaningful connections between buyers of carbon credits and the projects they support.