Social responsibility is one of the key motivators of voluntary corporate action. It is therefore valuable to harness carbon markets to promote multiple co-benefits in addition to mitigation, including adaptation co-benefits, particularly if they promote global equity by generating resources to support those who suffer most from adverse impacts of climate change while having contributed least to causing it - for example through a Share of Proceeds for Adaptation (SOPA).
A new OCP/ecbi Discussion Note argues that the Voluntary Carbon Market (VCM) has the unique opportunity to explore the value proposition that a SOPA can provide stakeholders. Given the political buy-in that SOPA can bring about, as observed during the CDM development, and the policy need to align with the provisions of the Paris Agreement, the authors recommend that ongoing efforts to improve the governance of the VCM should strive to:
- encourage standard setters to promote a SOPA;
- incorporate regulatory provisions for a SOPA into VCM as a key component of good governance and a high-level principle for the market, to ensure environmental and social non-carbon positive impacts; and
- enhance coordination of supply and demand oversight efforts, to foster synergies towards effective SOPA implementation and delivery.