Need for legal clarity to scale the voluntary carbon market

THE voluntary carbon market holds immense potential to attract sustainable finance to deliver climate impact at scale. There are, however, several pain points impeding the scale-up of the voluntary carbon market. One fundamental issue is the lack of clarity on the treatment of voluntary carbon credits (VCCs), and how the law recognises their ownership and transfer.

Legal clarity is one of the keys to scaling the voluntary carbon market. To understand the importance of the legal character of an object, consider the example of a property we are familiar with – an apartment.

Will you buy an apartment if it is uncertain that you will be the legal owner? What if this uncertainty results in a bank refusing to provide a loan because it is not confident that the apartment can be mortgaged as a security for the loan?