Frontier Technologies for the Voluntary Carbon Market
The goals of this report
This report explores the ways in which frontier technologies can help to unlock the potential of the Voluntary Carbon Market (VCM) as a mechanism for supporting the transition to Net Zero. It is intended that its findings are useful for a wide range of market actors, including project developers, interested in applying technologies for impact, and technologists already involved in developing and scaling solutions for the VCM. We hope that its findings are also relevant to wider system level actors (governments, multilaterals) who are seeking to support the development and growth of a higher quality, higher integrity VCM.
What’s included in this report
The first section of this report examines and diagnoses the issues that are currently facing the VCM, and holding back the growth of the VCM as a marketplace for high quality, high integrity carbon credits.
The second section explores in detail the different types of frontier technologies that are already in use across different functions of the VCM, from monitoring and verification, through to trading and benefit distribution. It shares lessons and considerations on how and where best to apply different technologies for impact, and identifies the ways in which different technologies can tackle critical issues affecting the market.
The third, and final section of the report identifies the limitations of technical solutions as mechanisms for supporting a higher quality and integrity in carbon markets. A number of wider system-level changes and interventions are identified, which are necessary in order for the potential of technology, and the VCM more broadly to be realised.
Three insights from the report
1. Three critical and interrelated issues of data and process integrity, markey opacity and fragmentation and lack of inclusion, collectively inhibit the development and growth of a high quality VCM.
2. Frontier technologies hold considerable potential to tackle common issues across the VCM. For example, the use of satellite and AI enabled Digital Monitoring Reporting and Verification (DMRV) technologies can greatly support more accurate and efficient project monitoring. If applied in the right way these technologies can support improved data integrity, increased project transparency and can lower barriers to participating in markets.
3. A range of wider, and coordinated system level interventions are required for the potential of technology within the VCM to be realised. We believe these include interventions that support the localisation of technologies (and methodologies used for monitoring carbon market projects more generally), the development and adoption of data stewardship and sharing standards, and the development of more robust cross-market quality standards on equity and inclusion.
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