ecbi has published a Policy Paper that analyses how the social integrity of the Voluntary Carbon Market (VCM) could be boosted through a “Share of Proceeds for Adaptation (SOPA)” to support the poorest and, particularly, the most vulnerable developing countries in adapting to the adverse impacts of climate impacts. The paper begins by discussing why shoring up VCM’s (social) integrity is important; focuses on the work of the Integrity Council of the VCM (IC-VCM); and identifies options on SOPA operationalisation, both in terms of collection and transfer to entities receiving and disbursing SOPA proceeds to adaptation projects.
The authors conclude that any SOPA must be mandatory and applied to all credits in the market to ensure the VCM’s social integrity. In addition, a SOPA should be applied to all project types, and exemptions should only considered based on geographical (host country) location of the project, for example in a least developed country (LDC). The authors discuss charging a SOPA when credits are issued, retired, or traded, and the pros and cons of each option, and explain that the simplest way to charge a SOPA would be in the form of a fixed fee per credit. They also argue that involvement of VCM standards in SOPA collection or monitoring is essential and success will depend on strong partnerships with VCM standards. In addition, they agree that while the Adaptation Fund offers a ready and tested Adaptation Delivery Vehicle (ADV), other ADVs could be accredited and used by collaborating VCM standards.