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The International Organization of Securities Commissions (IOSCO), a global securities watchdog, has put forth a set of 21 safety measures to enhance the integrity, transparency, and enforcement within voluntary carbon markets (VCMs), as reported by Reuters on December 3. These markets have gained substantial importance in recent years as a key component of global efforts to combat climate change. IOSCO, which comprises market watchdogs from various regions, has initiated a 90-day public consultation on these measures, signaling a commitment to establishing good practices for national regulators.
VCMs encompass projects aimed at reducing pollution, such as reforestation, renewable energy, biogas, and solar power. Companies purchase carbon credits from these projects to offset their emissions and achieve net-zero targets. The proposed measures by IOSCO include standardizing terminology in VCMs, preventing double counting of credits, and introducing safeguards against fraud and market manipulation. With the voluntary carbon market expected to grow significantly, from USD2bn in 2020 to an estimated USD250bn by 2050, these measures aim to establish a framework that ensures the credibility and effectiveness of VCMs in contributing to global climate goals.
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