Verified Carbon Standard
The Verified Carbon Standard (VCS - formerly the Voluntary Carbon Standard) is the most popular standard across the breadth of the international voluntary offsets market, offering project developers carbon credibility, ease of use and medium-range credit prices. It enjoys a high degree of acceptance in the carbon market place with the official backing of The Climate Group, the International Emissions Trading Association and the World Business Council for Sustainable Development, as well as other NGOs. It appears to have the support of brokers too, who would prefer to deal with a smaller number of widely-accepted standards.
The VCS meets a high standard in carbon verification and successfully addresses the issues of real and permanent carbon sequestration. Because the wider environmental and social impacts are not directly covered by the standard, however, it won’t serve every project developer’s needs in demonstrating full credibility of activities. As such, credits verified to this standard do not attract as high a price as standards covering all impacts.
An increasing number of forestry projects being developed under the VCS are also seeking verification under the robust environmental marque, the CCB Standard. VCS offers these developers the option of having their carbon credits (VCUs) ‘tagged’ with such standards, raising their price.
Forestry and agriculture
There are specific requirements for land-use project developers outlined in the Agriculture, Forestry and Other Land Use (AFOLU) guidance. This covers afforestation, reforestation & regeneration; agro-forestry; forest management; agricultural cropland management; and forest preservation. The VCS is a pioneer in the coverage of the emerging field of forest preservation, known as ‘avoided deforestation’ or ‘REDD’. The VCS also offers flexibility to project developers in accommodating multiple land-use activities across different AFOLU activities in the one carbon verification.
VCS credits carbon reductions on an ex-post basis while some other standards offer ex-ante. The ex-post approach only grants credits on actual carbon storage achieved, offering greater integrity in the eyes of many. But it may not suit developers having to rely on upfront carbon revenues to finance projects, the advantage of ex ante crediting.
The VCS’s methodological requirements are similar to the UN CDM as regards issues like project leakage and carbon accounting, and it accepts approved CDM methodologies in project design. Like other voluntary standards, the big difference on forestry is in the approach to ensuring permanence. The VCS employs a buffer reserve requirement, holding some credits generated in an “insurance pool” to cover unplanned losses of trees. This buffer reserve requirement is set between 10 and 60 per cent, according to the VCS’s well-regarded risk assessment criteria.
There are potentially higher costs to be incurred by project developers under a double approval process that VCS requires in some circumstances. Two independent audits are required for the leakage assessment and the permanence risk assessment. Two independent validations are required to approve a new methodology.
The latest version of the standard is VCS Version 3 released in March 2011. The Guidance for agriculture, forestry and other land-use projects (AFOLU) supplements the standard for projects in those sectors and was updated in March 2011.
Note: Previous version VCS 2007.1 may be used up to 8 September 2011 - all project documents reliant on this version must be issued by that date.