IOSCO Proposes Safety Measures for Voluntary Carbon Markets

4 Dec 2023

Context: The International Organization of Securities Commissions (IOSCO) proposed 21 safety measures to enhance integrity, transparency, and enforcement in voluntary carbon markets (VCMs).

IOSCO Launches Public Consultation on Carbon Market 

  • IOSCO, which groups market watchdogs from Asia, Europe, Latin America, and the United States, launched a 90-day public consultation on a set of good practices for national regulators to apply.
  • The announcement was made at the COP28 climate summit in Dubai during a dedicated event.
  • IOSCO’s Concerns and Focus: IOSCO expressed concerns about credit quality, double counting, and fraud in the carbon market, prompting the need for closer scrutiny.
  • Regulatory Measures: IOSCO suggests regulatory measures such as requiring companies to disclose their use of carbon credits.
  • Good Practices: IOSCO advocates good practices including comprehensive disclosures on project development, verification and auditing methodologies, and entities responsible for measurement, reporting, and verification.

What is IOSCO?

  • The International Organization of Securities Commissions is the international body that brings together the world’s securities regulators. It is recognized as the global standard setter for the securities sector
  • IOSCO develops, implements, and promotes adherence to internationally recognized standards for securities regulation. 
  • It works intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda. 
  • IOSCO was established in 1983. Its membership regulates more than 95% of the world’s securities markets.

What are the Voluntary Carbon Markets?

  • Voluntary markets are those in which emitters— corporations, private individuals, and others— buy carbon credits to offset the emission of one tonne of CO2 or equivalent greenhouse gases.
  • Such carbon credits are created by activities that reduce CO2 from the air, such as afforestation.
  • Nature of VCMs: VCMs encompass projects like reforestation, renewable energy, biogas, and solar power, generating carbon credits for companies to offset emissions and achieve net-zero targets.

What is the Difference Between the Voluntary Carbon Market and the Compliance Market?

  • Compliance Carbon Market:
    • Regulated by national, regional, or international carbon reduction regimes.
    • Operates under a cap-and-trade system with a limited supply of allowances.
    • Examples include the Kyoto Protocol and the European Union’s emissions trading system.
  • Voluntary Carbon Market:
    • Operates independently from compliance markets; entirely voluntary participation.
    • Participants are not mandated to reduce emissions; engagement is driven by social responsibility, shareholder pressure, or PR considerations.

News Source: Business Standard

 

Archive Calendar

Mon Tue Wed Thu Fri Sat Sun
 123456
78910111213
14151617181920
21222324252627
28293031  

by month

SRIJAN MAINS

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Aiming for UPSC?

Download Our App

      
Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">






    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.