VCMI Claims Code of Practice falls short on double counting

Tuesday, June 7, 2022

The Voluntary Carbon Market Integrity Initiative (VCMI) launched today its draft Claims Code of Practice . The Code provides guidance to companies on how carbon credits can be voluntarily used and claimed by businesses.

Compensate is pleased that the new VCMI Claims Code of Practice strongly emphasizes a clear mitigation hierarchy. Science aligned measures to reduce emissions are the cornerstone of corporate climate action. 

Emission reduction needs to be locked into a pathway that is aligned with climate science and the 1.5 degree goal. Compensation is always supplementary to these measures, not a substitute for them. This is something that Compensate emphasized in its recent white paper Getting the Claims Right. All credible claims need to be founded in science aligned emission reductions measures. 

While the draft Code provides clarity on the need for emissions reductions, it falls short of taking a stance on the need for corresponding adjustment, leaving the door for double claiming open.

When a compensation claim is made, that statement should be grounded in truth. It is simply not acceptable to make a compensation claim using emission reductions or removals that have already been counted and claimed by the host country of the project. Contrary to the intention, this in fact results in a net increase of emissions in the atmosphere as only 1 tCO2 has been avoided or removed instead of 2 tCO2 - one by the company and one by the host country.

If a company claims to be carbon neutral through carbon credits that are also counted into the project’s host country goals, as far as climate ambition is concerned, the company hasn’t actually done anything extra. On the other hand, double counting can also disincentivize countries from implementing much needed climate action.

Either the so-called carbon inventories and reporting done by the host countries must be able to adjust to offsetters’ claims, or the claims made by the companies must be adjusted.

The first option means implementing national registries of all voluntary carbon offset projects and deducting them from national greenhouse gas inventories and climate targets. These are called “corresponding adjustments”. This means that these CO2 reductions or removals will not contribute to the host country’s national climate targets. In this way, emission reductions or removals will only be claimed once: for instance, in the case of corporate offsetting, only by the company making the compensation claim.

Corresponding adjustments would also mean that private climate action using carbon credits would go beyond what is already set in national policies. To be truly impactful, offsetting should always be additional to national climate targets for an increase in overall climate ambitions.

Another solution to the double counting issue would be differentiating claims into offset claims and “contribution claims”. Under the contribution model, companies would finance climate action and help countries meet their climate targets without making a compensation claim.

Compensate welcomes the contribution model. This would allow projects to be financed either by issuing carbon credits or through support for climate action and ecosystem services without the need to count towards achieving a net zero or climate neutrality target. However, this has to be very clearly understood by the companies using these credits. They would thus still need to use adjusted credits to reach a net zero or a carbon neutrality claim.

At Compensate we believe in sticking to the truth. Double counting has to be avoided either through corresponding adjustments or by using an alternative contribution claim. At this point in the ever worsening climate crisis, there is simply too much at stake to make empty promises. Read more about how to avoid greenwashing and get the claims right in Compensate's white paper on the role of compensation in corporate climate claims.

Text: Niklas Kaskeala, Chairperson of the Compensate Foundation

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