Benefits, Challenges and Risks of the Voluntary Carbon Market

The Voluntary Carbon Market (VCM) has the potential to mobilise considerable private capital for climate change mitigation activities. In a recently published policy paper, researchers from the Wuppertal Institute together with Florian Eickhold (Independent Senior Climate Finance and Environmental Markets Consultant) describe the benefits, challenges and risks of the voluntary carbon market – and provide recommendations for the use of this policy tool by host countries. The authors focus primarily on assisting governments, particularly those in developing countries, in decision-making regarding their involvement in the VCM.

"The VCM is not only complex and difficult to understand, the framework conditions also differ significantly from country to country, influencing the potentials and risks associated with the use of the instrument," explains Nicolas Kreibich, Senior Researcher in the Global Climate Governance Research Unit at the Wuppertal Institute and lead author of the policy paper. Accordingly, the authors emphasise in their recommendations the need to tailor legal regulations to the respective national context.

The policy paper can be downloaded free of charge via the link below.