What was your motivation for analysing the participation in voluntary carbon offset (VCO) programmes across developing countries?

Liliana Andonova. Carbon markets are an important instrument for addressing the complex problem of climate change. They engage actors in implementing carbon offsets and open possibilities to trade these offsets in the voluntary or mandatory carbon-trading platforms. In theory, market forces can be a powerful vehicle to scale up and optimise carbon reduction initiative. In practice, we have relatively limited knowledge on the extent to which carbon offset programmes have been implemented in emerging and developing markets. Yet, if this instrument is to have a truly global impact, we need a better theoretical and empirical understanding of the diffusion of carbon markets in the Global South. We found this research gap a compelling motivation.

What are the central contributions of your article?

Liliana Andonova. The key question that our article addresses is, What are the political and institutional factors that shape the variable uptake of carbon offset programmes in developing countries? These contexts are arguably characterised by more limited capacity, harder trade-off between economic and environmental imperatives, and less normative pressure on private actors to engage in emission reductions for climate change due to consideration of historical justice. Our main contribution, which is based on an analysis of project-level data from VCO programmes registered in developing countries as of 2016, is to highlight the linkage between private incentives for the uptake of voluntary carbon offsets and public institutions such as the Clean Development Mechanism (CDM), foreign aid and domestic policy priorities. Such public institutional interventions play an important role in strengthening capacity and signalling regulatory commitment, which increase the likelihood of engagement by private actors in VCOs. Our study also finds that the institutional design of carbon offset programmes matters for the spread of their uptake, especially in less developed countries.

Based on the evidence presented in your article, what could policymakers do to increase the participation in VCO programmes?

Yixian Sun. Our results show that VCO projects have been unevenly distributed across developing countries and their uptake has been largely driven by the CDM, targeted foreign aid and proactive domestic policies promoting clean energy. In other words, far from a purely market-based instrument to help developing countries address climate change, VCO programmes are likely to follow existing public policies – instead of bridging gaps left by formal institutions at both the international and domestic levels – and ultimately reinforce, in an unfortunate way, inequalities within the Global South. We believe that this unintended uptake pattern of VCO programmes is an important lesson for government officials and climate advocates who want to solve global climate crisis. Hence, better public institutions are needed to orchestrate market-based, transnational climate governance in order for the latter to deliver benefits to vulnerable actors who suffer the most from climate change. This requires that the international community, and developed countries in particular, provide more aid, capacity-building and information-sharing in smaller, poorer developing countries. Additionally, our comparison between the two leading VCO programmes also suggests that programmes highlighting synergies between sustainable development at the local level and climate mitigation are more accessible for smaller, less rich countries. This implies that those who develop VCO standards need to carefully design their programmes to take into consideration the concerns of people and communities in developing countries. 

Lastly, how do you see the future of the participation in VCO projects in the Global South?

Yixian Sun. With the Paris Agreement that acknowledges the role of non-state and sub-state climate action, we see a greater potential of transnational private initiatives, such as VCO programmes, in the future of global climate governance. More specifically, climate scientists have found that the pledges that countries made in 2015 are far from achieving the goal of keeping global warming bellow 2 degrees Celsius by the end of this century. Accordingly, VCO programme constitute an important tool in addition to formal policies to develop the capacity of climate mitigation or energy transition in the Global South. While we have not found significant effects of transnational markets in our analysis, given the prospects of carbon pricing in many places, one can expect that transnational business networks would play a more prominent role in the future to drive the creation of VCO projects. Another optimistic view lies in greater willingness of developing countries to pursue sustainability transition. If countries ratchet up their climate targets, they are likely to increase their capacity and provide more support, either directly or indirectly, for the development of VCO projects in various sectors, including energy and forest. From the perspective of VCO programmes, such new opportunities mean that they must ensure that their standards are credible and stringent enough to deliver expected benefits. 

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Full citation of Prof. Andonova’s and Dr Sun’s article:
Andonova, Liliana B., and Yixian Sun. “Private Governance in Developing Countries: Drivers of Voluntary Carbon Offset Programs.” Global Environmental Politics 19, no. 1 (2019): 99–122. doi:10.1162/glep_a_00496.

• The article was also covered in Nature Climate Change 9, no. 4 (2019): 257. doi:10.1038/s41558-019-0452-6.

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Interview by Buğra Güngör, PhD candidate in International Relations and Political Science. Edited by Nathalie Tanner, Research Office.
Illustration by DarwelShots / Shutterstock.com.