Walking the Talk: The Voluntary Carbon Market Disclosure Act Explained
California, known for its progressive environmental policies, is once again at the forefront of climate action with the Voluntary Carbon Market Disclosure Act. This groundbreaking legislation is designed to bring transparency and accountability to the voluntary carbon credit market and carbon-related claims. But how will this new law affect consumers, brands, and the environment? Let’s find out.
What the heck is a Voluntary Carbon Market?
These markets allow individuals, companies, and organizations to voluntarily purchase carbon offsets to compensate for their greenhouse gas emissions. Carbon offsets are essentially investments in projects that reduce or remove an equivalent amount of greenhouse gases from the atmosphere, such as reforestation initiatives or renewable energy projects.
Organizations or individuals may use multiple options to lower their carbon footprint, and the two primary approaches are through 1) reducing emissions in their operations and/or the supply chain, and 2) by utilizing carbon offsets to compensate for portions of their footprint that they haven’t yet been able to reduce.
At Neutral, our primary focus is on achieving reductions through the implementation of on-farm carbon-reduction projects, and we also utilize gold-standard carbon offsets registered with Climate Action Reserve. Climate Action Reserve is a leading carbon credit registry and requires projects to be developed through a rigorous and transparent process that ensures projects are real, additional, permanent, unique, and verifiable.
The Need for Regulation
While voluntary carbon markets offer an additional way for entities to mitigate their carbon footprint, concerns have arisen about the transparency, credibility, and effectiveness of some offset providers. There have been instances of "greenwashing" and the sale of questionable carbon offsets that do not deliver the intended emissions reductions. This is where the Voluntary Carbon Market Disclosure Act steps in.
Key Provisions of the Act
Disclosure Requirements: The Act mandates that entities selling carbon offsets in California's voluntary carbon market must provide clear and comprehensive information about the offsets they are selling. This includes details about the project type, location, and methodology used to calculate emissions reductions.
Third-Party Verification: Carbon offset projects must undergo third-party verification to ensure that the claimed emissions reductions are accurate and reliable. Verification provides credibility to the carbon credits being sold.
Marketing claims: Companies that purchase offsets and make product claims about being carbon-neutral will now have to provide detailed information to consumers to back up those claims. This includes information about third-party verification and details about the offsets they purchase.
Impact and Implications
Improved Credibility: The Act enhances the credibility of voluntary carbon markets by requiring accurate and transparent information. This, in turn, can attract more participants and investments.
Environmental Impact: With better oversight, the quality of carbon offset projects is expected to improve, resulting in more effective emissions reductions.
Consumer Confidence: Consumers seeking to make sustainable choices can have greater confidence in the legitimacy of carbon-neutral claims.
The Voluntary Carbon Market Disclosure Act underscores California's commitment to addressing climate change through responsible carbon offsetting. By increasing transparency, credibility, and accountability in voluntary carbon markets, the state is taking a significant step towards achieving its ambitious climate goals. As the world grapples with the urgent need to reduce greenhouse gas emissions, California's leadership in this area can inspire positive change beyond its borders, ultimately contributing to a more sustainable and climate-resilient future.
Find out more about Neutral’s carbon-neutral claims here.