World Bank Is Looking To Certify Carbon Credits For More Credibility

World Bank Announces New Outcome Bond To Fund Amazon Reforestation In Brazil - Carbon Herald

During the annual Singapore FinTech Festival, Ajay Banga, the new president of the World Bank, announced plans to start certifying carbon credits. 

Namely, in the months to come, the World Bank intends to implement a mechanism to issue certification for carbon credits generated by forestry projects, which will aim to bring more credibility to the carbon markets.

As it were, the reputation of carbon credits has taken a series of strong blows in the past year with investigations casting doubt over their quality and ability to provide meaningful climate impact. 

Nevertheless, there is a glaring, widely recognized need to channel funds to poorer regions, which Banga believes can only be achieved by boosting the transparency and credibility of the voluntary carbon markets (VCMs).

According to its new president, the World Bank plans to create trustworthy credits with better pricing, which will allow for resources to “move the right way.”

Relevant: World Bank To Launch New Fund To Reduce Carbon Emissions

The announced move will not only help bring more structure to the VCMs, but is part of Banga’s strategy to reform the nearly 80-year-old financial institution, for which purpose he was elected by the bank’s board of governors earlier this year. 

The World Bank wouldn’t be the only financial institution to look deeper into carbon credits and the carbon markets at large, as other banks and similar organizations are beginning to recognize the opportunities presented by the space. 

For instance, earlier this month, Barclays announced its return to carbon trading in a move that experts describe as a ‘sea change’ and a sign of the changing financial landscape at large.

Read more: Barclays Re-Enters Carbon Trading After A Decade

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