Carbon markets have been mired in controversy, now the Biden Administration has drawn up 7 new principles to restore trust

The US has drawn up 7 new principles to act as “incentives and guardrails” as it seeks to restore confidence in Voluntary Carbon Markets (VCMs) following widespread uncertainty on the integrity of such mechanisms
June 11, 2024

US looks to address concerns around carbon offsetting, arguing these investments can drive significant progress towards climate goals

To address concerns around Voluntary Carbon markets (VCMs), the Biden Administration has revealed seven new principles to help restore trust. These have been issued in collaboration with top federal climate advisers alongside the cabinet secretaries for the Department of Agriculture, Department of Energy, and the U.S. Treasury.

Published at the end of May, the guidelines recognise the potential for VCMs to support decarbonisation efforts within the United States as well as globally. They argue that the carbon credit markets more generally have the added potential to “unlock capital and demand for real, additional, lasting, and independently verified emissions reductions and removals”[i].

The recently released guidance outlines voluntary principles that U.S. market participants should embrace as they engage in these markets. These principles will also guide how the U.S. Government engages with VCMs. The seven principles - which aren’t legally binding but instead an attempt to encourage the development of “incentives and guardrails” for buyers, project developers, and crediting agencies - are:

1.       Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonisation.

2.       Credit-generating activities should avoid environmental and social harm and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.

3.       Corporate buyers that use credits should prioritise measurable emissions reductions within their own value chains.

4.       Credit users should publicly disclose the nature of purchased and retired credits.

5.       Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards.

6.       Market participants should contribute to efforts that improve market integrity.

7.       Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs[ii]

In a press release U.S. Secretary of the Treasury, Janet Yellen, said:

“Voluntary carbon markets can help unlock the power of private markets to reduce emissions, but that can only happen if we address significant existing challenges. The principles released today are an important step toward building high-integrity voluntary carbon markets. This is part of the Biden administration’s ambitious efforts to tackle the climate crisis and accelerate a clean energy transition that benefits all Americans.”[iii] 

Jennifer M. Granholm, U.S. Secretary of Energy added:

“The Department of Energy is proud to work alongside our interagency partners to catalyse the market for high-integrity, high-impact carbon dioxide removal credits. The Biden-Harris Administration is giving the private sector the tools they need to make real contributions to our fight against the climate crisis and deliver real benefits to communities across the nation.”[iv]

What are Voluntary Carbon Markets?

As we  previously discussed, Voluntary Carbon Markets (VCM’s) facilitate the buying and selling of carbon credits. One entity seeking credit for a decrease in emissions can trade with another company who is offering to fulfil this emissions reduction. Sellers use carbon credits to pay for emission-reduction activities, and buyers utilise them to boost their environmental credentials. Fundamentally, credits are a means of transferring a net climate benefit from one party to another.

Recent controversies drive demand for “high integrity” VCMs

The latest US guidance follows widespread uncertainty around the legitimacy of carbon credits, with the White House stating: "In too many instances, credits do not live up to the high standards necessary for market participants to transact transparently and with certainty that credit purchases will deliver verifiable decarbonization.”[v]

According to data published by BloombergNEF in February 2024, the carbon market is presently worth $2 billion, with this expected to reach $34 billion in 2050 in a voluntary market scenario (where integrity issues are not resolved, and company demand is elastic)[vi]. However, in the researcher’s ‘High-quality scenario’, carbon credits could reach $238/ton in 2050, meaning the market would hit a value of $1.1 trillion annually by mid-century[vii].

Last year ZCA discussed findings from peer-reviewed research which suggested that carbon offsets aren’t what they claim. It followed an earlier expose by Guardian newspaper which claimed that over 90% of rainforest carbon offsets by the leading certifier, Verra, “are worthless” because they do not represent genuine carbon reductions[viii]. You can read more on this here:  New peer-reviewed research finds that carbon offsets aren’t what they claim


[i] Voluntary Carbon Markets Joint Policy Statement and Principles (

[ii] Ibid

[iii] Biden-Harris Administration Releases Joint Policy Statement and Principles on Voluntary Carbon Markets | Department of Energy

[iv] Ibid

[v] FACT SHEET: Biden-Harris Administration Announces New Principles for High-Integrity Voluntary Carbon Markets | The White House

[vi] Carbon Credits Face Biggest Test Yet, Could Reach $238/Ton in 2050, According to BloombergNEF Report | BloombergNEF (

[vii] Ibid

[viii] Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows | Carbon offsetting | The Guardian

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Lauren Foye
Head of Reports

Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”

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