Voluntary carbon market will not work because it’s voluntary

Avinash Persaud, speaking with Bloomberg climate reporter Akshat Rathi on the Zero podcast:

So people think the line works that it’s a lack of integrity. These knaves are out there, these bad people doing bad things, and as a result, there’s no integrity. And because there’s no integrity, the price is low. No. It’s because it’s voluntary, and no one’s required to do it. So what is this marketplace? It’s someone who’s saying, ‘Oh, I wouldn’t mind buying some credits to offset my activity, and it’s voluntary, I’m looking around. I don’t have to do it and not be required to do it, and so I will buy the cheapest credit I can find.’

So the price of this voluntary market is very, very low. It’s about 2% of the price of the compliance markets. When the price is so low, there’s no money in there to do integrity properly. Because to do integrity properly, you need monitoring, evaluation. You also need to consider also what happens when the thing which was reducing emissions, stops reducing emissions. So you need a bunch of stuff that costs some money. And if there’s no money in this credit, because it’s so it’s voluntary and low priced, you’re not investing in integrity.