Key Updates in Verra’s VCS Standard Version 4.5
by: Andrew Primo | October 11, 2023
On August 29, 2023, Verra, a Voluntary Carbon Market (VCM) registry, released a major update to its Verified Carbon Standard (VCS) program, changing and expanding a host of program aspects, including project risk assessment, credit labeling, stakeholder engagement requirements, social and environmental safeguards, and methodology development. The update represents the most considerable change to the VCS program in several years. As the largest VCM registry, developments at Verra can significantly impact the broader market, particularly for nature-based climate projects like reforestation and avoided deforestation.
Much of the update was driven by Verra’s efforts to align its VCS program with the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principle (CCP) Assessment Framework, published earlier this year to set standards for credit quality and reinforce trust in the market.
Verra has published a list of 54 updates in v4.5 of the VCS Program. We have summarized three of the most significant updates below:
- Agriculture, forestry, and other land-use (AFOLU) projects will have a higher average risk profile: Verra has updated its AFOLU Non-Permanence Risk Tool for the first time since 2019, including new project risk analyses based on projected future impacts from climate change, including sea level rise, fire, extreme weather, and pest and disease outbreaks. AFOLU projects will also need to assess risks related to host nations’ climate policy and history of political intervention in land or resource use, and all AFOLU projects will be required to have an adaptive management plan. Because the outcome of the tool’s risk analyses determines the number of credits that a project must contribute to the AFOLU buffer pool—a kind of insurance policy for projects that suffer loss of carbon stocks or access to project lands—many projects are likely to see a rise of buffer pool contributions. The permanence of carbon stocks in AFOLU projects must now be monitored for at least 40 years rather than the 30 years required previously.
- All projects will require more analysis of project-related environmental, social, and economic risks, with a greater emphasis on stakeholder engagement for all projects: The “No Net Harm” clause in the VCS Standard has been significantly clarified and expanded. Beginning in March 2024, project proponents must formally analyze potential risks to multiple groups, including women and girls, children, minorities, and marginalized groups. Projects must also ensure compliance with a list of other specific social and environmental safeguards based on CCP requirements, including respecting human rights, providing equal pay for equal work, prohibiting forced and child labor, preventing relocation and economic displacement, and having no negative impacts on ecosystems.
Verra has also expanded stakeholder engagement requirements to include stakeholder identification, risk analysis, and grievance redress procedure implementation for all projects. The new stakeholder engagement rules also require project proponents to obtain free, prior, and informed consent from all stakeholders to participate in the stakeholder engagement process.
- Verified Carbon Units (VCUs) will be labeled based on whether they are greenhouse gas (GHG) reductions (avoided emissions) or carbon dioxide removals, as well as if they are compliant with Paris Agreement Article 6 accounting requirements: The VCS Program will require new projects and methodologies to quantify GHG reductions and carbon dioxide removals separately. VCUs issued by these projects will be labeled as either “reductions”—where GHG emissions are reduced or avoided—or “removals”—where carbon dioxide is removed from the atmosphere and stored in long-term carbon stocks (e.g., stable forests or geologic sequestration).
Verra also published its first Paris Agreement Article 6 Label Guidance as part of the update, detailing which credits are eligible for use against a country’s Nationally Determined Contribution (NDC) to Paris Agreement goals. While the reduction and removal labeling system will only go into effect for projects listed after March 1, 2024, the Article 6 labeling conventions are active immediately.
Verra hosted a series of webinars from September 12-28, reviewing different aspects of the VCS Program update. These webinars will be made available to the public on Verra’s Events site.
About Verra’s Verified Carbon Standard
Verra is a nonprofit organization that operates standards in environmental and social markets, including a leading carbon crediting program, the Verified Carbon Standard (VCS) Program. The VCS Program drives finance toward activities that reduce and remove emissions, improve livelihoods, and protect nature. VCS projects have reduced or removed more than one billion tons of carbon and other GHG emissions from the atmosphere. The VCS Program is a critical and evolving component in the ongoing effort to protect our shared environment. Learn more by visiting here.
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