Community guidelines for accessing forestry voluntary carbon ... - FAO

Chapter 2: VCM project types and standards
2.4 What can the forestry VCM deliver?
Table 1: Strengths and drawbacks of the voluntary carbon market
VCM strengths
Flexibility: A variety of approved
standards exist, and project
developers can choose the
standards and methods most
appropriate for their situation.
Less rules to comply with: Easier
and faster to register a project
and sell carbon credits compared
to the compliance carbon
market.
Cheaper: Lower transaction
costs.
VCM drawbacks
Lack of credibility: Some
standards lack credibility,
meaning credits may be more
difficult to sell.
Greater risk: Higher potential to
fall victim to unreliable buyers or
sellers. Enforcement of rules is
often weak.
Low price: Unless associated
with a credible standard, VCM
carbon credits are worth less
than those on the compliance
market.
The voluntary carbon market is ‘voluntary’ because the investors in this
market have decided, of their own accord, to pay for carbon credits. They
are not legally required by any government or international institution
to reduce their carbon emissions. Instead they are motivated by a sense
of Corporate Social Responsibility (CSR). This means, in theory, that
the voluntary carbon market should have fewer barriers to setting up
projects than the compliance market. Table 1 above presents some of
the strengths and drawbacks of the Forestry VCM.
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