What is a voluntary carbon market?

According to the IPCC’s Sixth Assessment Report, the Earth is facing a climate emergency that requires urgent and unprecedented action. The document confirms that human activities are the main cause of the rapid and widespread warming of the planet, which poses severe risks for natural and human systems. Preventing the Earth from getting too hot is the key to mitigating the climate crisis. The United Nation’s Paris Agreement targets aim to limit global warming to no more than 2°C above what it was before the Industrial Revolution, an ambitious goal that requires a rapid and deep reduction of greenhouse gas emissions across all sectors of the economy and society.

However, cutting down on emissions may not be enough. Other actions are necessary, as some emissions are hard to eliminate or reduce, such as those from aviation, agriculture or heavy industry. Some sectors must do more than just stop emitting greenhouse gases —they must also explore solutions to take these gases, also called negative emissions, out of the air faster than they are put in. This is where voluntary carbon markets can play a vital role: by purchasing carbon offsets from verified projects that adhere to carbon credit standards, voluntary buyers can support the low-carbon transition.

As a company dedicated to engineering, architecture, environmental and construction services, we are committed to acting on climate change and supporting our clients in their decarbonisation journey. That’s why we are working with the Science Based Targets Initiative (SBTi) to set a net-zero science-based target, and near-term science-based targets, to reduce value chain emissions in line with 1.5°C pathways. This is one way that we are contributing to the voluntary carbon market growth and helping the world move towards achieving carbon credit compliance.

We also take part in raising awareness among communities. Along with Australia’s Department of Sustainability, Environment, Water, Population and Communities, GHD helped raise awareness about carbon trading among Indigenous people, through a series of workshops around the country that shared valuable information on the technical, legal and financial issues involved.

Subsequently, we then conducted studies to assess the feasibility of establishing a Carbon Farming Initiative (CFI) reforestation project for four Indigenous communities. The team spent time in each of the communities to better understand their broad objectives for their country and to investigate the practicalities of planting trees, as well as developed planting plans for each community and calculated potential costs and revenues related to carbon trading. The results of these studies have been presented at various conferences, including one on Climate Change Mitigation with Local Communities and Indigenous Peoples run by the United Nations University and the Intergovernmental Panel on Climate Change.

Learn more about GHD and Future Energy at Future Energy Insights and know our services that can help create a greener future at Energy and Resources - GHD.

Articles referenced

^{Corporate Finance Institute n.d. ‘Voluntary Carbon Market – Overview, Participants, and Advantages’, retrieved May 9, 2023, from https://corporatefinanceinstitute.com/resources/esg/voluntary-carbon-market}

^{Hewitt 2023, ‘How the voluntary carbon market could help us get to net zero’, retrieved May 9, 2023, from https://www.weforum.org/agenda/2022/03/voluntary-carbon-market-net-zero}

^{Intergovernmental Panel on Climate Change 2021, ‘Climate change widespread, rapid, and intensifying’, retrieved May 9, 2023 from https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/}

^{Intergovernmental Panel on Climate Change 2023, 'Climate Change 2022: Mitigation of Climate Change’, retrieved May 9, 2023, from https://www.ipcc.ch/report/sixth-assessment-report-working-group-3/}

^{Intergovernmental Panel on Climate Change 2023, Sixth Assessment Report, retrieved May 9, 2023 from https://www.ipcc.ch/assessment-report/ar6/}

^{United Nations Paris Agreement The Paris Agreement | United Nations}