Unraveling the Voluntary Carbon Market (VCM): Challenges, Improvements and the Way Forward

Unraveling the Voluntary Carbon Market (VCM): Challenges, Improvements and the Way Forward

The voluntary carbon market (VCM), currently estimated to turn around $2 billion a year, has experienced an impressive upsurge in recent years. This rapid growth, however, has not been without some challenges.  What does "good" look like in the Voluntary Carbon Market (VCM)? And, most importantly, how can we ensure that we are practicing it? The industry’s focus should be on upholding the quality of credits that successfully divert capital into decarbonization efforts and holding accountable those who remain inactive, set no concrete targets, and continue to pollute.

At a recent seminar hosted by the Centre for Climate Finance & Investment and the Centre for Environmental Policy at Imperial College London. Pernille Holtedahl, a Research Fellow at CCFI, steered a robust discussion between Patrick Greenfield, a journalist at The Guardian, Guy Turner - CEO and founder of Trove Research, and Tommy Ricketts -CEO and co-founder of BeZero Carbon.

The discussion focused on concerns regarding the integrity and value of carbon credits which have been reignited following investigations by The Guardian, the German weekly, Die Zeit, and SourceMaterial, a non-profit investigative journalism organization. The nine-month investigation is based on new analysis of scientific studies of leading carbon credit verifier Verra's rainforest schemes.

Carbon offsetting is not equivalent to purchasing the right to pollute. It should not replace mitigation efforts. Yet, according to research by Trove, companies that use carbon credits to a material extent decarbonize at twice the rate of those that do not use them. To ensure the value of carbon credits, there is a need for a scalable system supported by rigorous standards and regulations. Third-party institutes currently play a vital role in ensuring the credibility and integrity of carbon credits.

How it started? A Journey Through the Voluntary Carbon Market

The VCM has come a long way since its conception in the late 1980s. It was initially established as a mechanism to control costs within the broader strategies for addressing GHG emissions. The first and most prominent carbon offset program was the Clean Development Mechanism (CDM), instituted under the Kyoto Protocol to enable developed nations to cost-effectively fulfill their emission reduction obligations by investing in mitigation projects in developing countries.[1]

The Guardian’s Analysis on Rainforest Credits

The investigation by  The Guardian and others has triggered a wave of public discourse and a consequent dip in interest in carbon offsetting[2]. An intrinsic question hanging is what is going on behind the project creating carbon credits. Patrick presented his on-site visit to the Peruvian Amazon as part of a continuing investigation into forest-based carbon offsetting. The credits are used by companies such as Disney to offset their emissions.[3]

The investigation underscored several problems within the offsetting industry, particularly regarding the integrity of the VCM, the close association with the oil and gas industry, and unclear benefits to local people. The investigation also questioned the quality of the credits being investigated.  How credits are used, especially when corporations claim net-zero through the acquisition of low-quality credits, is a particularly thorny issue. It should be pointed out that the investigation primarily focused on ‘rainforest projects’, i.e.the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) sector of voluntary carbon credit, which is only one part of the broader carbon credit category.

Forest-based Credits: Where Did We Stumble?

Forests are an important category, as emissions from land use and agriculture account for 23% of global greenhouse gas emissions, and emissions from forest degradation and deforestation are responsible for 10% to 15%.

Understanding the complexity of verifying forest-based credits, such as those from REDD+ projects, is paramount. As Guy, CEO of the Trove, mentioned, "Over 100 REDD+ projects protect 250,000 square kilometres of land, which is about the size of the UK. However, these projects are difficult to validate, and the problem of over-crediting due to fluctuating baselines has turned out to be significant." Despite these challenges, the credits from these projects have been appealing to corporates due to the co-benefits they offer and their alignment with nature-based solutions.

The Stewardship of “Good Carbon Credits”

Assessing the quality of carbon credits independently is a complex task. According to Guy, this can be done through registry-led, governance body-led, or buyer-led methodologies. For example, the Integrity Council on the Voluntary Carbon Market (ICVCM) has developed the Core Carbon Principles (CCPs) as a global benchmark for high-integrity carbon credits[4]. However, it is the ultimate responsibility of buyers to ensure that their purchases meet their sustainability goals and contribute to climate change mitigation.

Since voluntary carbon credits are voluntary, it is essential to ensure their quality. Companies like Trove and BeZero have been created as independent third parties to assess carbon credits using varied methodologies and technologies such as digital Measurement, Reporting, and Verification (MRV).

Is The VCM System Broken?

The main concern of VCM is not that carbon credits do not work, but rather the trustworthiness of the system. The quality of credits drives most of VCM's concerns, as there are examples in history of carbon projects overpromising and underdelivering, which threatens the development of VCM. As Guy pointed out, "While some credits have quality issues, the system is not broken. We need a VCM that ensures 'good credits,' as some credits are less valuable than others."

Consumers of credits need to know what they are buying, as said by Tommy, CEO of BeZero, “Quality is not binary in the carbon market. Accreditation is not the end of the process and it's really about educating the market and getting this debate on that people can have an idea of what the risk associated with all these schemes”.


[1] https://www.spglobal.com/commodityinsights/en/market-insights/blogs/energy-transition/061021-voluntary-carbon-markets-pricing-participants-trading-corsia-credits

[2] https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe

[3] https://www.theguardian.com/environment/2023/jan/18/forest-communities-alto-mayo-peru-carbon-offsetting-aoe

[4] https://icvcm.org/the-core-carbon-principles/

Guy Turner_Imperial College 20 06 23.pptx

Patrick Greenfield, The Guardian -Carbon pirates.pdf

Imperial Panel - BeZero Carbon - June 20th.pdf


Patrick Greenfield

Reporter for the Guardian and the Observer

He writes about biodiversity loss and the climate crisis.Patrick Greenfield is a biodiversity and environment reporter with the Guardian newspaper covering the loss of nature and the climate crisis. Alongside his work investigating carbon markets and nature based solutions, he was part of the Guardian's climate COP26 and COP27 reporting teams, and helped lead their biodiversity COP15 coverage in Montreal last year.

He was previously a TV producer with CNN and holds a masters in international and development economics from Yale University.

Recent work (published by The Guardian):

Guy Turner

Founder and CEO of Trove Research Limited

He has 30 years’ experience in research and strategy in sustainability and the energy transition. He spent his first 15 years in consulting advising companies and governments on a wide range of sustainability issues. In 2006 he joined New Energy Finance (NEF) to create the carbon market research business (New Carbon Finance) which was integrated into NEF. After the sale to Bloomberg, Guy continued as Head of Commodities and Chief Economist of BNEF, building out power and gas market analysis and renewables economics.

In 2017 Guy joined BP Economics where he was responsible for global oil supply analysis and worked on BP's Energy Outlook. From 2018 to 2020 Guy was the Strategy and Analysis Manager at EDF Renewables, overseeing market and financial analysis to support investments in offshore and onshore wind, solar, battery storage and hydrogen. Guy has undergraduate degrees in Mechanical Engineering and Economics, a Masters in Environmental Technology and is a graduate of London Business School Corporate Finance Evening Programme.

Tommy RickettsCEO and Co-Founder, BeZero CarbonTommy Ricketts is the CEO and co-founder of BeZero Carbon, a global ratings agency for the voluntary carbon market. BeZero was founded in 2020, its global team combines expertise within climate and earth science, financial research, data science, and public policy. Prior to founding BeZero Carbon, Tommy was a VP in Global Research at Bank of America and worked as a political strategist in London and Brussels.


Pernille Holtedahl is a Research Fellow at the Centre for Climate Finance and Investment, part of Imperial College Business School. Pernille’s primary research interests are models and incentive systems for increasing private investments in nature. Her expertise lies in nature investing, green finance and green bonds – with particular exposure to the forestry, land-use and agriculture sectors. She has worked to promote jurisdictional approaches to forest protection and restoration through ART (Architecture for REDD+ Transactions) and advised philanthropic foundations on impact investment strategies in the forest sector in developing countries.

In addition to her research activities at CCFI, she is a senior consultant to CICERO Shades of Green (now a part of S&P Global), founder of Blue Maia Ltd. (an advisory firm), and on the European advisory board of the Hawthorn Club. She has worked on issues related to climate change, green finance and sustainable development for over 20 years and holds a PhD in environmental economics from George Washington University.

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