Adequate VVB capabilities
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On this page: Validation/verification bodies to maintain the integrity of ERCs generated by local projects, especially if the country is intending to roll out its own crediting system. Read more below, or download the following reports: Strategic Guidance for Country System Assessments and Guidance for Countries in Assessing ERC Projects, or the Mobilizing ERC Finance Report.
V2: Adequate VVB capabilities. To have a sufficiently scaled ERC supply landscape, it is important to have equally sufficient and qualified entities within a market’s validation and verification resources. Establishing minimum qualifications and licensing processes for these professionals is essential to maintain the integrity of ERCs generated by local projects, especially if the country is intending to roll out its own crediting system. Impact High-MRV quality is the top consideration in buyers purchase decision, ability to uphold ERC quality highly dependent on local verification capabilities Phase 2: Developing the pillars for market integrity Resources needed Medium to High-Process of developing MRV capabilities often lengthy, complicated and involves many stakeholders; with option to implement basic functionalities to meet policy objectives before full system roll-out To ensure the successful development and implementation of an effective ERC ecosystem, regulators may consider the capability development for validation and verification resources as a multi-phase exercise. Each phase, as discussed below, will differ in level of engagement with the private sector. Countries may choose to start with a leveraged approach and progress to more proactive approaches as they build capabilities. This strategy can help ensure that the development of the ERC ecosystem is sustainable and successful in the long term. Leveraged - Government leverages processes and capabilities currently available, potentially as it establishes the overall framework for ERCs. This can help governments learn about the capabilities needed while enabling existing ERC projects to proceed as planned. This is expected to be most relevant to countries at the early stages of ERC policy development, as well as those not intending to roll out a national crediting program. Patterned after global standards – leveraging infrastructure and licensing processes of the globally recognized standard-setting bodies (e.g., CDM, Verra, Gold Standard). Proof of accreditation with global standard. Registration with country system (not always required). Following new modalities, Ghana is expected to set local content requirements as well as other standards to bolster VVB integrity. Collaborative - Government aligns to the vetting and licensing process set by existing registry bodies/standard-setters to ensure that additional processes set are complementary to its own objectives, standards or policies. This is expected to be most relevant to countries intending to roll out a national crediting system. Build on top of global standards – incorporating a layer of complementary and market-aligned requirements in addition to those used by the standard-setters as informed by Phase 1 above to ensure that the country objectives are reflected while maintaining the accessibility of ERCs generated locally to potential buyers Proof of accreditation with registry body/standard-setter May include additional exam for country-specific needs. Continuous training/educational courses. Similarly, VVBs accredited with such registries also licensed by CARB to operate as CARB VVBs Proactive - Government leverages learnings from earlier implementation and develops requirements and processes while maintaining alignment with global markets for local ERCs.. This is expected to be most relevant to countries intending to roll out a national crediting system. Build own standards for verification capabilities – setting own requirements and processes based on learnings from previous implementations for the verification capabilities while maintaining the accessibility of ERCs generated locally to potential buyers from the global markets. May involve a separate examination and continuous accreditation process Continuous training/educational courses. Project verification undertaken by CER-accredited VVB; regularly reviewed by CER. As a supplement to assessing this component, the Carbon Initiative for Development’s (Ci-Dev) Standardized Crediting Framework1 is recommended as a detailed and best practice guide for countries seeking to establish their own crediting framework and by extension, the necessary verification capabilities. It is the aim of this initiative to improve transparency of national crediting decision-making, reduce transaction costs, and shorten time to generate the emissions reductions. In addition, the Digital Monitoring, Reporting, and Verification Systems and Their Application in Future Carbon Markets2 is recommended as a reference for the merits, guidelines, tools, and lessons learned for the use of digital monitoring, reporting and verification (D-MRV) systems for a country’s carbon markets. This reference will also describe the resources needed, as well as the enabling policy and regulatory environment for such systems to be implemented. Footnote 1: Standardized Crediting Framework Footnote 2: Digital Monitoring, Reporting, and Verification Systems and Their Application in Future Carbon Markets
Guideposts for best practice
Sequencing for roadmap
Model 1
Qualifications adopted
Requirements for verifier
Exemplars
Ghana. Ghana will continue to allow VVBs accredited by international crediting standards to operate in the country for ERC projects until new modalities are released.
Model 2
Qualifications adopted
Requirements for verifier
Exemplars
California. California has permitted select registry operators (American Carbon Registry, Climate Action Reserve, and Verra), to facilitate the initial crediting of projects before exchanging into CARB's.
Model 3
Qualifications adopted
Requirements for verifier
Exemplars
Australia. CER has its own staff and has established internal processes to control the verification process, including initial registration vetting, project assessment, monitoring and reporting, and issuance of ACCU.
This section is intended to be a living document and will be reviewed at regular intervals. The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions. Unless expressly stated otherwise, the findings, interpretations, and conclusions expressed in the Materials in this Site are those of the various authors of the Materials and are not necessarily those of The World Bank Group, its member institutions, or their respective Boards of Executive Directors or member countries. For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the PPPLRC at ppp@worldbank.org.
Updated: April 5, 2024
TABLE OF CONTENTS
UNLOCKING GLOBAL EMISSION REDUCTION CREDIT
Strategic Guidance for Country System Assessments
1. Introduction to Emission Reduction Credits
• The World Bank's Emission Reduction Program
• Classification of Emissions Reduction Credit
• Policy Context of Emissions Reduction Credit
2. Objective of the Strategic Guidance for Country System Assessments
• Objective of these Guidelines
• Introduction to the Country System Assessment Framework
• Process to conducting assessments
3. Framework Component Deep Dives
• I1: Appropriate Institutional Mandates
• I3: Transparency and Accountability Mechanisms in Place
• S1: Well-Defined Asset Rights
• S2: Streamlined Project Permitting
• S3: Globally Accepted Methodologies
• S4: Defined Benefit-Sharing Frameworks
• V2: Adequate VVB Capabilities
• D1: Defined Article 6 Transaction Frameworks
• D2: Develops Trading Infrastructure & Mechanisms
4. Scope for Further Refinements
• Appendix A: Approach for Cooperative Approaches