Written by Dr Raúl Rosales, this policy brief provides insights on global VCMs and market infrastructure following a roundtable held in London on 19 October 2023. The roundtable, hosted at the City of London Corporation’s Guildhall, was led by Imperial College Business School’s Centre for Climate Finance & Investment and the Singapore Green Finance Centre, in association with global exchanges and platforms such as the LSEG, Climate Impact X and Carbonplace, and participation from Foresight Sustainability Forestry and UBS.
The roundtable focused on the role of market infrastructure in scaling up voluntary carbon markets (VCMs). It analysed the importance of price discovery, the impact of financial innovation, and the evolving regulatory trends for global carbon markets, VCMs and compliance. The insights gathered from this discussion can help shape policy recommendations. They aim to enhance the functionality, transparency, and effectiveness of VCMs, which are largely recognised as pivotal for decarbonization efforts and use these new emerging assets and financial instruments as a tool for financing.
In this brief, policymakers are urged to enhance the role of exchanges, marketplaces, and innovative platforms, fostering an integrated market infrastructure that links voluntary and compliance markets for efficient transactions and price discovery. Transparency in pricing mechanisms is highlighted, advocating for reliable investment returns bolstering market confidence. This brief also encourages tailoring financial innovation to the unique needs of carbon markets to increase liquidity and investment opportunities. There is a call to strengthen regulatory frameworks through international collaboration to harmonize regulations, ensuring market integrity and preventing malpractices. It also suggest exploring connections between international Emissions Trading Systems (ETS) and voluntary markets, along with the promotion of public-private partnerships to leverage collective expertise, resources, and innovation for the effective scaling up of Voluntary Carbon Markets (VCMs).