Global commodity price reporting agency Argus today launched prices for three key voluntary carbon markets (VCM) and five well-known projects, bringing transparency to trade in this emerging sector and supporting its development.
The fragmented nature of VCM means that liquidity is split across multiple types of project, and there is a lack of standardisation and fungibility. After extensive engagement with participants from across the VCM sector, including project developers, corporate buyers, brokers and traders, Argus has launched prices broken down by region and vintage for specific markets, covering:
- REDD+ (reduced emissions from deforestation and forest degradation);
- Renewable energy
- Clean cookstoves
- Project-specific – Envira (Brazil); Kariba (Zimbabwe), Katingan (Indonesia), Rimba Raya (Indonesia) and Southern Cardamom (Cambodia)
Argus has chosen to focus initial coverage on these specific types of credit because they account for the majority of traded volumes in the market today and provide market participants with the granularity needed to have confidence in a representative assessed price, avoiding the problems associated with covering too broad a range of uses or too many project types.
The VCM assessments are underpinned by Argus’ proven expertise and long experience in assessing illiquid markets by applying rigorous editorial standards to create reliable and trusted price assessments that represent true market value. The methodology is transparent and public.
Argus Media chairman and chief executive Adrian Binks said: “The voluntary carbon markets have the potential to play an important role closing the gap between what governments can deliver through mandated carbon markets and Paris Agreement climate ambitions. There is a real need for independent, precise and accurate prices. We have seen in other sectors that reliable benchmarks can really improve transparency and help markets evolve to allocate resources in the most efficient ways possible.”
The Integrity Council, an independent governance body for VCM, estimates that the sector could be worth $50bn by 2030.