The US Government Accountability Office (GAO) says federal agencies could take steps to strengthen the credibility of voluntary carbon markets (VCM), but there’s no clear consensus on whether such intervention is necessary.
In a report released Wednesday, GAO examined how these markets operate, the limited role federal agencies currently play, and possible actions to ensure higher-quality carbon credits.
While US agencies such as the Commodity Futures Trading Commission (CFTC) and the Treasury Department have taken small steps in the past two years to provide oversight or guidance, federal involvement remains minimal.
Some agencies have supported credit generation or even purchased credits, but there is no comprehensive regulatory framework.
GAO’s interviews with eight experts revealed divided opinions. Some argued that a federal certification program for carbon credits could improve trust and integrity, while others warned of high costs and bureaucratic burdens.
The report notes that earlier studies by the National Academies and GAO have highlighted tradeoffs between stronger oversight and the potential impact on credit affordability.
Questions over credibility and transparency
Supporters of voluntary carbon markets say they offer a cost-effective way to offset emissions compared with direct reductions.
Critics counter that limited transparency and inconsistent quality controls leave room for inflated or misleading climate benefits.
A 2024 review by the International Organization of Securities Commissions echoed those concerns, warning that weak safeguards may be undermining both market growth and public confidence.
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GAO’s study drew on past federal reports dating back to 2008, recent international regulatory assessments, and interviews with agency officials and industry experts.
While the watchdog stops short of recommending specific regulatory action, it lays out potential paths, including federal quality standards and certification programs — should policymakers decide a more active role is warranted.
