[This review updates the original version published on this page in Feb 2009]The VCS is emerging as the most popular standard across the breadth of the international voluntary market, offering project developers carbon credibility, ease of use and medium-range credit prices. It enjoys a high degree of acceptance in the carbon market place, enjoying the official backing of The Climate Group, the International Emissions Trading Association and the World Business Council for Sustainable Development, as well as other NGOs. It appears to have the support of brokers too, who would prefer to deal with a smaller number of widely-accepted standards.
The VCS meets a high standard in carbon verification and successfully addresses the issues of real and permanent carbon sequestration. Because the wider environmental and social impacts are not directly covered by the standard, however, it won’t serve every project developer’s needs in demonstrating full credibility of activities. As such, credits verified to this standard do not attract as high a price as standards covering all impacts.
An increasing number of forestry projects being developed under the VCS are also seeking verification under the robust environmental marque, the CCB Standard. VCS offers these developers the option of having their carbon credits (VCUs) ‘tagged’ with such standards, raising their price.
The AFOLU sectoral scopes cover afforestation, reforestation & regeneration; agro-forestry; forest management; agricultural cropland management; and forest preservation. The VCS is a pioneer in the coverage of the emerging field of forest preservation, known as ‘avoided deforestation’ or ‘
REDD’. The VCS also offers flexibility to project developers in accommodating multiple land-use activities across different AFOLU scopes in the one carbon verification.
The final rules for the Agriculture, Forestry and Other Land Use (AFOLU) component of the VCS were released on 18/11/08, although project developers were proceeding on the draft guidance. Most of the AFOLU projects going through this standard up to now have been A/R using CDM methodologies, but increasingly REDD projects are coming through the pipeline based on new methodologies emerging for this space.
VCS credits carbon reductions on an ex-post basis while some other standards offer ex-ante. The ex-post approach only grants credits on actual carbon storage achieved, offering greater integrity in the eyes of many. But it may not suit developers having to rely on upfront carbon revenues to finance projects, the advantage of ex ante crediting.
The VCS’s methodological requirements are similar to the UN CDM as regards issues like project leakage and carbon accounting, and it accepts approved CDM methodologies in project design. Like other voluntary standards, the big difference is in the approach to ensuring permanence. The VCS employs a buffer reserve requirement, holding some credits generated in an “insurance pool” to cover unplanned losses of trees. This buffer reserve requirement is set between 10 and 60 per cent, according to the VCS’s well-regarded risk assessment criteria.
There are potentially higher costs to be incurred by project developers under a double approval process that VCS requires in some circumstances. Two independent audits are required for the leakage assessment and the permanence risk assessment. Two independent validations are required to approve a new methodology. Carbon credit registration fees, however, are low compared to other standards. These are charged at 4 euro cents per credit.
Importantly, the VCS Association has ruled that a general deadline applying to pre-existing projects (to achieve validation within two years of their start date or by 19/11/09, whichever is later), DOES NOT apply to AFOLU projects. This is in recognition of the extra complications faced by land-based projects to get up and running.
DocumentationThe latest version of the standard is 2007.1 released in November
2008. The Guidance for agriculture, forestry and other
land-use projects (AFOLU) supplements the standard for projects in
those sectors and was also released in November 2008.
Voluntary Carbon Standard 2007.1Voluntary Carbon Standard AFOLU GuidanceRelated news:
VCS releases forestry carbon rulesFurther information:
www.v-c-s.orgCarbon Positive News
Acknowledgements: Forestry Carbon Standards 2008, Nov 2008, Eduard
Merger; Forging A Frontier: State Of The Voluntary Carbon Markets, May
2008, Ecosystem Marketplace and New Carbon Finance; A comparison of
carbon market offset standards, Mar 2008, WWF Germany and Stockholm
Environment Institute.