OPINION: Climate action hinges on money, which the VCM can provide

Mandy Rambharos is Verra's chief executive officer.

For too long, climate action has been stuck between pledges and promises. Year after year, world leaders gather at COP, striving to balance diverse national interests as they craft policies, while also raising alarms about the dire state of our planet.

On the eve of COP29 in Baku, a UN report shows record-high greenhouse gas emissions over the last year, driving climate change.

To keep warming below 2 degrees Celsius, global emissions need to drop 75% by 2040. To limit it to 1.5 degrees, a key and ambitious target of the Paris Agreement, bold action is needed to nearly eliminate emissions by 2060.

The numbers tell a clear story: minor tweaks won't cut it, and achieving climate safety means big, fast shifts, not just promises.

The UN also estimates that an additional $900 billion to $1.2 trillion per year is now needed to cut global emissions to zero. Other analysts say capital investments need to hit around $3 trillion annually until 2050 to mitigate climate change.

Make no mistake: the need for finance is also enormous.

But with global financial markets standing at a staggering $110 trillion, it's clear that we don't lack the resources, but rather a commitment to the infrastructure and pathways to channel resources to activities that truly mitigate climate change.

VCM

Well, here's the good news: the system already exists. It's called the voluntary carbon market (VCM).

In the fight against climate change, the VCM is not a theoretical or future concept: it's operational now.

In fact, the VCM has already delivered on the sidelines of stalled climate negotiations. Over the past 17 years, Verra's projects alone have mobilised billions of dollars in climate finance.

From smallholder farmers planting trees in Kenya to community-led initiatives preserving forests in Peru, these projects go beyond reducing emissions: they protect biodiversity and strengthen livelihoods by creating economic incentives for conservation in some of the world's most vulnerable regions.

The truth is, the VCM is one of the few existing systems capable of mobilising capital for climate mitigation at the scale and speed required.

I'm fully aware that this voluntary system is not without its flaws. There have been challenges, and yes, a few bad actors along the way.

Over-issued credits. Inflated baselines. Questions about transparency and accountability. These have all happened.

We can, of course, continue to cherry-pick facts about the few instances that support sensationalist headlines that serve no one, least of all the communities and ecosystems these projects are designed to protect.

Benefits

But in doing so, we ignore the overwhelming body of scientific evidence that shows, time and again, that projects developed in the Global South serve as a win-win: they have enormous environmental benefits, and even bigger benefits for the people who are often most vulnerable to climate impacts.

Luckily, we're already seeing some broader progress. Earlier this year, the US government introduced a set of comprehensive guidelines on the use of carbon offsets. It followed a letter by 10 West African countries supporting carbon credits as a tool to address the climate crisis.

Imagine if other countries followed suit. Imagine if the Global North endorsed the infrastructure the environmental and social markets have built over two decades.

Sure, we can spend another COP discussing new acronyms. Or we can get behind the solutions that already work and scale them up.

This COP must be the moment we stop waiting for the perfect solution and make the money flow into climate action today. The VCM has already worked on the sidelines to support countries better achieve their nationally determined contributions. But we need to do more.

The full operationalisation of Article 6 of the Paris Agreement would be an excellent start to clarify the role carbon markets play in it.

In a positive sign for carbon markets, the Article 6.4 Supervisory Body finalised two key standards last month: one related to carbon removal, and the other on developing and assessing projects for an UN-supervised carbon market.

Ironing out the full details of Article 6 at this COP will not only be critical in driving down emissions and enhance global cooperation but will be a sign of endorsement carbon markets need to make true impact.

Besides, we can't afford another COP where we fail to come to a consensus, while the planet and its most vulnerable communities bear the full brunt.

The VCM is ready. Now, we need the global will to match.