A private sector task force on Wednesday unveiled plans to turn the small voluntary carbon offset market into a global standard that could direct billions of dollars from companies aiming to meet net zero targets into projects to cut emissions.
Multinational companies, such as e-commerce giant Amazon and oil majors Royal Dutch Shell and BP have set net zero emission goals but will need to buy or generate carbon credits to offset the emissions they cannot cut from their operations.
"The question for us is how do we get the cash out of the hands of those companies that are making net zero commitments... into the hands of people that can actually reduce or remove carbon from the environment," Bill Winters CEO of Standard Chartered and chair of the Taskforce on Scaling Voluntary Carbon Markets told Reuters.
He was speaking as the body on Wednesday launched its blueprint for scaling up the market at a virtual meeting of the World Economic Forum.
Currently offsets, generated through emission reductions such as planting trees or switching to less polluting fuels, trade in a voluntary market, often on a project-by-project basis.
This could be scaled up to a market worth $5-$50 billion by 2030, depending on the prices achieved, by creating more transparent, liquid and standardised contracts, the report said.
"To have a pricing benchmark will add real legitimacy to the market," Winters said.
The task force plans to launch a governance body to set the contract standards that Winters said could comprise representatives from non-governmental organisations, large emitters and investors.
Standardised spot and futures contracts, meeting the core carbon standards set, should be traded on exchanges with the market hopefully launched within a year, Winters said.
Greenpeace earlier on Wednesday said the plans could hand oil majors and airlines an excuse to pollute for longer and jeopardise international climate goals.
The task force has more than 50 members including buyers and sellers of carbon credits, standard setters and financial institutions.