Governments Embrace Voluntary Carbon Offset Market

A new Ecosystem
Marketplace report takes stock of the 13 most advanced efforts, and
offers a glimpse of the carbon markets of tomorrow.

The United States has famously failed to develop a
strategy for slowing and adapting to climate change, but that
hasn’t stopped the US states of Oklahoma, California, and Oregon
from creating frameworks to support greenhouse gas (GHG) emissions

All three are among more than 20 national and sub-national
governmental agencies around the world that have incorporated
voluntary climate-change solutions into their formal strategies -
creating in the process a means of developing the tools and
procedures that will be needed in a low-carbon

Ecosystem Marketplace has profiled the 13 most advanced
initiatives in a new report entitled “
target=”_blank”>Bringing it Home: Taking Stock of Government
Engagement with the Voluntary Carbon Market”, which grew
out of a meeting of national governments and carbon market
participants that was convened by the International Emissions
Trading Association’s (IETA) International Carbon Reduction and
Offset Alliance (ICROA) and the Carbon Markets & Investors
Association (CMIA) at year-end climate talks in Durban, South

Different States; Different Approaches

In an approach that many believe is more realistic and
sustainable than the top-down methods pursued by the United Nations
Framework Convention on Climate Change (UNFCCC), the regional
efforts are evolving with regional realities in mind.

In Oklahoma, for example, participation is voluntary, and the
government limits its role to certifying the companies that verify
emission reductions and nurturing agreement on how to measure the
types of GHG reduction projects likely to be pursued in the state -
such as grassland management and climate-safe farming.

“Agriculture is the heart of Oklahoma, and…this program benefits
both ag producers and natural resources,” says Stacy Hansen,
director of the Oklahoma Conservation Commission’s Oklahoma Carbon
Program, which oversees the project. “People appreciate our
non-regulatory approach.” 

California and Oregon, on the other hand, have implemented
mandatory emission caps, but in a way that incorporates elements
from long-standing voluntary programs.  California is even in
the process of selecting a voluntary-market registry to keep track
of credits once they are issued.

Nine of the 21 programs identified in the report emerged just in
the last four years, and three of the 13 programs profiled in the
report - California, British Columbia and Oregon - use offsetting
tools that were developed for voluntary actors to underpin regional
GHG regulations. Several other nations are not be far behind,
including Costa Rica, the Republic of Korea and most recently South
Africa - which could consider allowing offsets of voluntary origin
for use under its proposed carbon tax. 

Dramatic Shift

“In a few short years, governments have shifted from skepticism
to acceptance of the voluntary carbon offset market as a valid
complement to regulation,” says Ecosystem Marketplace’s Carbon
Program Manager Molly Peters-Stanley. “Some voluntary programs are
even writing the rules for regulated carbon markets as governments
outsource a growing list of market functions to independent bodies
- leaning on their accumulated experience with carbon offset

The study finds governments have moved beyond their traditional
role of providing oversight for voluntary offsetting programs to
now performing services ranging from the certification of projects
and development of methodologies that reduce greenhouse emissions -
to registering offsets and educating buyers.

“Many of these programs are both unique and innovative, but have
gained very little attention globally. We analyzed these various
government programs with the goal of highlighting and clarifying
their domestic efforts to reduce greenhouse gas emissions,”
explains Ecosystem Marketplace Director Katherine Hamilton. “In
many cases, governments are setting up trading programs not only to
support corporations and citizens seeking to offset emissions, but
also as a means of testing carbon trading as a regional compliance

So far, the efforts seem to be winning the confidence of buyers:
prices for offsets generated under such programs averaged $11 per
ton of carbon dioxide equivalent (tCO2e), compared to a
global average of $6 per ton, according to Ecosystem Marketplace’s
2011 href=””
target=”_blank”>State of the Voluntary Carbon
Markets report.

Of the 13 initiatives profiled in
the new report, five have been set up by sub-national regulators
(three in the United States, one in Canada and one in Italy) and
eight have been set up by national governments in Asia, Latin
America and Europe.

Several of the national governments profiled are also party to
the World Bank’s new Partnership for Market Readiness, a
capacity-building trust fund to assist developing countries that
wish to take on GHG reduction targets.

Beyond implementing national pilots to engage the private sector
in carbon offsetting, some of these governments also view their
“voluntary” programs as the first step toward developing national
climate action plans and regulated carbon marketplaces.

target=”_blank”>The full report may be downloaded from

Steve Zwick is Managing Editor of Ecosystem
This article from href=””
target=”_blank”>EcoSystem Marketplace is republished here with


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