Janet Yellen Secretary of the Treasury | Twitter Website
On May 16, 2024, U.S. Secretary of the Treasury Janet Yellen, alongside Department of Agriculture Secretary Tom Vilsack, Department of Energy Secretary Jennifer Granholm, Senior Advisor for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi announced the release of a Joint Statement of Policy and new Principles for Responsible Participation in Voluntary Carbon Markets (VCMs). These markets have the potential to channel private capital towards decarbonization efforts.
“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,” said Yellen. “The principles released today are an important step toward building high-integrity voluntary carbon markets.”
VCMs involve buying and selling carbon credits—each representing one tonne of carbon reduced or removed from the atmosphere—on a voluntary basis by various entities including companies and governments. They hold potential not only for driving decarbonization but also for generating economic opportunities domestically and internationally.
However, challenges such as projects failing to deliver promised climate impacts have undermined confidence in VCMs. Ensuring that one credit truly represents one tonne of carbon dioxide reduced or removed is crucial. The newly released Statement and Principles aim to advance responsible market practices.
“To reach net-zero emissions by mid-century and achieve our climate goals, we need to mobilize enormous amounts of private capital,” said Podesta. “Voluntary carbon markets that adhere to principles of high integrity can play a critical role in getting private capital off the sidelines.”
“With the right incentives and guardrails in place, VCMs can be a source of critical financing to drive decarbonization and clean energy solutions,” added Brainard.
Assistant to the President and National Climate Advisor Ali Zaidi emphasized President Biden’s focus on jobs related to climate action: “President Biden recognizes that the right rules are key to advancing both our climate ambitions and economic opportunity.”
The announcement highlights initiatives across various departments encouraging responsible development of VCMs. This includes direct carbon removal purchases by the Department of Energy and support from the Department of Agriculture for market infrastructure development.
“If done right, Voluntary Carbon Markets can provide new revenue opportunities for farmers, ranchers, private forest landowners, all while driving needed investment in nature-based climate solutions across agriculture and forestry sectors,” stated Agriculture Secretary Vilsack.
The Statement and Principles were developed with coordination from the Office of the Special Presidential Envoy for Climate. Sue Biniaz noted their alignment with international efforts under initiatives like ETA and LEAF.
For further details:
- View the Joint Policy Statement.
- View the White House Factsheet.
