Supporting high-integrity voluntary nature and carbon markets in New Zealand

The Government is supporting the growth of high-integrity voluntary markets so landowners, communities, buyers and investors can take part with greater confidence.  This is about encouraging better nature, climate and environmental outcomes through more nature and carbon projects and more investment from here and overseas.  

Participation is voluntary. These markets sit alongside government funding, regulation and other environmental programmes. They don’t replace them. 

A high-integrity voluntary nature and carbon markets explained in 3 steps

1. A group or individual works with a project developer to initiate, plan and deliver a project 

A landowner, iwi or other Māori organisation, community group, conservation organisation, council or business decides they want to do work benefitting nature or climate.  This might include restoring a wetland, pest control, or planting out an erosion prone slope with native trees.  They work with a project developer to plan the work using a particular voluntary markets scheme and methodology that suits their goals and circumstances.  

2. Activity work is carried out and results are measured, checked & verified by independent experts  

The project deliverer follows the rules of the voluntary markets scheme it has chosen to work with. 

A scientific method is used to work out what and how outcomes should be measured, and how the results will be checked. Independent experts assess whether the project has followed the scheme’s rules and methodologies. The independent experts examine evidence collected over time to show whether expected environmental outcomes have been achieved. 

3. Credits are issued then sold or held as an asset 

If the project delivers verified and promised activities, the scheme issues credits which can then be sold by the project owner eg a landowner.   Government recognition or endorsement of the scheme and project provides confidence in project implementation, its independent verification and the scheme’s issuing of credits.   

A project doesn’t automatically receive credits simply because it’s carrying out environmental work. It must meet scheme and measurement requirements. 

The credit recipient eg the landowner with the project can sell the credit via a trading platform to an organisation that wants to support credible nature or climate action. Money from the sale can help fund the project’s delivery of environmental outcomes or invested for other projects.  

The credit buyer such as a business or philanthropist can make an environmental claim about the outcome they have specifically funded.  Alternatively, the credits can be held as an asset or sold.  

Organisations wanting to demonstrate their commitment to improving climate and nature are increasingly looking beyond carbon markets alone and towards projects that combine carbon and nature/biodiversity.   Just like other markets such as the real estate market, New Zealand voluntary nature and carbon markets are made up of different ‘products’ people and organisations want to buy and sell. The products are positive environmental outcomes which receive a credit. It’s buyers who decide the products they want and sellers who decide what product they want to sell.   

Credit buyer and investor trust in projects and schemes is critical.  Credit buyers need confidence the credits honestly and fairly represent the environmental outcomes they are linked to. Credit sellers and project owners need to be confident the scheme that generated the credits is well governed and is business that will last.

Nature activities  

Nature activities protect or improve nature and in New Zealand they could include restoring wetlands, protecting native forests, improving habitat for native plants and animals, controlling pests or restoring waterways and coastal ecosystems. 

Carbon activities

Carbon activities reduce greenhouse gas emissions or remove carbon from the atmosphere. One carbon credit usually represents one tonne of carbon dioxide, or an equivalent amount of another greenhouse gas, that has been reduced or removed. 

Note:  voluntary carbon markets are separate from the New Zealand Emissions Trading Scheme which requires compliance from our biggest emitters and is solely government-run.  Voluntary markets provide an additional, voluntary way to support climate action and are privately-run with government providing a light-touch role.  

Voluntary markets are privately-run and provide another source of finance and incentive for nature and climate projects. They don’t replace government funding which, on its own, can’t support the level of nature and climate outcomes required.  

Many New Zealand landowners, iwi, hapū, community groups and conservation organisations are already caring for wetlands, waterways, indigenous forests and native species.  The markets can support them to do more.  

Businesses and investors here and overseas want to back credible environmental outcomes in New Zealand. Voluntary markets can be hard to understand and it’s time consuming and costly to work out which schemes and projects have achieved what they say they have. In addition, smaller farm-scale and community projects have struggled to get going, and without clear signals from government about quality and integrity, even good schemes have struggled to attract investment. That’s why government integrity and quality signals have been put in place.  

Well-functioning market schemes issuing high-integrity credits could: 

• attract private investment into credible New Zealand projects 
• support practical environmental work on farms, whenua Māori and other land 
• create opportunities for community and water catchment-scale projects 
• increase the supply of credible New Zealand nature and carbon credits 
• make it easier for buyers and investors to identify projects they can trust and support. 

These are potential opportunities, not guaranteed outcomes. Whether a project is suitable will depend on the land, the proposed activity, its environmental benefits, costs, long-term obligations and market demand. 

New Zealand’s voluntary nature and carbon markets are still developing. The Government’s approach is intended to clearly signal which schemes are credible, high-integrity and which ones buyers and landowners can be confident in. Government’s approach also allows for schemes to be designed specifically for New Zealand conditions such as our unique context with the Treaty of Waitangi and Māori land. 

Voluntary markets only work if people trust the environmental outcomes and the claims made about them. 

There are two government pathways to help people identify quality voluntary market schemes: 

1. Recognised international schemes and methodologies 

Some schemes are already recognised because they’ve been accredited by reputable international bodies such as the Integrity Council for the Voluntary Carbon Market, Carbon Offsetting and Reduction Scheme for International Aviation and Paris Agreement Crediting Mechanism. Several project developers and other providers are already offering these schemes in New Zealand, but they are not suited to every project.

See assessment status (Integrity Council for the Voluntary Carbon Market website)

See CORSIA eligible emissions units (Carbon Offsetting and Reduction Scheme for International Aviation website)

See Paris agreement crediting mechanism (United Nations Climate Change website)

2. New Zealand-endorsed high-integrity schemes 

Other schemes will soon be able to apply for government endorsement. This is an opt-in opportunity.  Schemes will need to meet government endorsement criteria. This means having governance rules and systems needed to run with integrity and reliability over time.

See Domestic Scheme Endorsement Criteria

Methodologies for implementing projects and measuring environmental outcomes will also need to be scientifically robust by a process run by the Ministry for Cities, Environment, Regions and Transport (MCERT) or via approval from one of the recognised international bodies mentioned above.

See Criteria to Assess Voluntary Market Biodiversity and Marine Methodologies

This domestic pathway is intended to support credible schemes that fit New Zealand’s circumstances. This includes nature/biodiversity and smaller farm-scale restoration projects currently not well catered for currently by internationally approved schemes.  

Note: Government recognition or endorsement is a signal of quality. It’s not a government guarantee of a project, credit, financial return or private agreement. Participants must carry out their own checks and seek independent advice where appropriate.  

Government endorsement and recognition is there to support landowners, communities, buyers and investors to have greater confidence a project or credit represents ‘what it says on the box’ ie the environmental outcome is credible.  

Endorsement and recognition are also there to support confidence in nature and carbon projects and the credits issued by schemes.   A scheme will be able to seek government endorsement via meeting government criteria.  A scheme does this by demonstrating it has the governance, rules and systems needed to operate with integrity and in a way that meets government’s six internationally aligned principles: 

In clear terms, the work needs to be: 

• Additional: it would not have happened anyway without the project or the finance associated with the credit. 
• Durable: the environmental benefit needs to last, with a plan for dealing with possible loss or reversal. 
• Real and measurable: the outcome is supported by evidence, monitored and independently checked. 
• Transparent: people can understand how the outcome was measured and how the credit is created and used, while sensitive information is appropriately protected. 
• Respectful of rights: the rights and interests of people affected by a project are respected, including Māori and local communities. 
• Not double-counted: the same environmental outcome is not issued, used or claimed more than once. 

These criteria and principles are there to protect trust in New Zealand’s voluntary markets which in turn encourages more investment into climate and nature positive activities.