Biden Admin Rolls Out Nonbinding Rules To Boost ‘Integrity’ Of Popular Green Financial Product

The Biden administration released new rules Tuesday designed to improve the “integrity” of a popular type of green financial product.

The nonbinding guidance is meant to introduce or enhance standards for carbon credits, which are popular products because they give corporations a way to offset the emissions footprint of their operations without making sweeping and costly changes to the way they operate. Proponents of carbon offset credits tout them as a market-based climate solution, but critics say that they are too inconsistent to be trusted or are not effective enough to actually address climate change.

The guidance urges prospective credit buyers to make their own efforts to cut emissions in their own supply chains and operations, but it also lays out steps for certifiers and purchasers to increase transparency and the accuracy of their reporting.

“Voluntary carbon markets can help unlock the power of private markets to reduce emissions, but that can only happen if we address significant existing challenges,” Treasury Secretary Janet Yellen said in a statement. “The principles released today are an important step toward building high-integrity voluntary carbon markets. This is part of the Biden administration’s ambitious efforts to tackle the climate crisis and accelerate a clean energy transition that benefits all Americans.”