In a significant move towards combating climate change, the Biden administration has announced the publication of a Joint Statement of Policy and new Principles for Responsible Participation in Voluntary Carbon Markets (VCMs). The aim is to channel private capital towards decarbonization efforts and unlock the potential of the private market to reduce emissions.

The Joint Statement was made by prominent figures including U.S. Secretary of the Treasury Janet Yellen, Department of Agriculture Secretary Tom Vilsack, Department of Energy Secretary Jennifer Granholm, Senior Advisor for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi.

Voluntary Carbon Markets (VCMs) are markets where carbon credits, representing one tonne of carbon reduced or removed from the atmosphere, are traded by companies, NGOs, governments, and other entities. These markets hold the potential not only to drive decarbonization efforts but also to generate economic opportunities for various stakeholders, including farmers, ranchers, and small suppliers, both at home and abroad.

However, the administration recognizes that challenges exist within these markets, such as projects failing to deliver promised climate impact. This lack of transparency has undermined the credibility of VCMs. To restore confidence, it is crucial to ensure that each carbon credit accurately represents the reduction or removal of one tonne of carbon dioxide, beyond what would have occurred naturally.

The newly released Principles and the Statement reflect the Biden-Harris Administration's dedication to promoting responsible market practices that will enable VCMs to drive substantial climate ambition while fostering economic growth at a global level.

John Podesta, Senior Advisor to the President for International Climate Policy, emphasizes the potential of VCMs to mobilize private capital towards achieving net-zero emissions targets by mid-century. By adhering to high-integrity principles, VCMs can accelerate progress in climate action, protect nature, and support clean energy deployment in developing countries.

Lael Brainard, National Economic Advisor, asserts that VCMs, with the right incentives and regulations, can provide critical financing for decarbonization and clean energy solutions. The Biden administration sees the intersection of climate and job creation as an immense opportunity, positioning America to seize economic benefits while advancing its climate agenda.

The release of the Principles and the Statement underscores the administration's commitment to ensuring that VCMs play a vital role in reducing global greenhouse gas emissions and supporting the objective of achieving global net-zero emissions by 2050. By offering reliable revenue streams, VCMs can provide additional financial support for existing decarbonization practices, nature-based solutions, and innovative technologies that scale up carbon removal activities.

The Biden-Harris Administration has also taken concrete actions to strengthen these markets. This includes the Department of Agriculture's release of a Request for Information seeking public input on VCM protocols, the implementation of the Growing Climate Solutions Act, and the Department of Energy's announcement of the semifinalists for its $35 million Carbon Dioxide Removal Purchase Pilot Prize.

Tom Vilsack, Agriculture Secretary, highlights the potential of VCMs to benefit farmers, ranchers, private forest landowners, and rural communities, facilitating investment in nature-based climate solutions within the agriculture and forestry sectors.

These measures align with the United States' commitment to enhancing carbon credit market integrity internationally, including its participation in various initiatives such as the LEAF Coalition, Energy Transition Accelerator, and Article 6 of the Paris Agreement.

The Biden administration recognizes the importance of VCMs in driving the fight against climate change and fostering economic opportunities. By establishing high-integrity principles and addressing existing challenges, they aim to ensure that VCMs play a central role in achieving a clean energy future while benefiting all Americans.