The Integrity Council for the Voluntary Carbon Market (ICVCM) has published its first Continuous Improvement Work Program (CIWP) report, focusing on one of the carbon market’s most persistent challenges: permanence. The report provides targeted recommendations for how the voluntary carbon market can better manage the risk that sequestered carbon will be released back into the atmosphere after credits have been sold or retired – an issue that ICVCM calls “a fundamental and controversial part of carbon markets since their inception.”
Defining the Permanence Challenge
In the carbon market, permanence refers to how long a carbon credit – representing one tonne of carbon dioxide reduced or removed – stays out of the atmosphere. While some project types guarantee permanent storage, others carry higher risks of “reversals,” situations where previously sequestered carbon is released back into the atmosphere.
The ICVCM’s Core Carbon Principle on Permanence requires that carbon credits come from projects where emissions reductions or removals are either scientifically proven to be permanent, or have mechanisms in place to adequately manage and compensate for reversals.
The report acknowledges that while carbon crediting programs have developed various approaches to address permanence risks, these approaches “are not standardised or harmonised” across the market. All CCP-eligible crediting programs have aligned their permanence monitoring requirements to 40 years, following ICVCM Assessment Framework requirements, but significant variations remain in implementation approaches.
Six Key Recommendations
The working group reached consensus on six recommendations designed to strengthen permanence frameworks across the voluntary carbon market:
1. Standardizing Reversal Definitions
The report’s first recommendation calls for the ICVCM to establish standard definitions for “avoidable” and “unavoidable” reversals in future Assessment Framework updates. Currently, each carbon crediting program defines these terms differently, creating inconsistencies in how reversal scenarios are categorized and managed.
For example, Verra defines unavoidable reversals as events “over which the Project Proponent has no control such as natural disasters,” while Climate Action Reserve’s U.S. Forest Protocol defines them as “any reversal not due to the Project Operator’s negligence, gross negligence or willful intent.” The working group noted that while similar, these definitional differences allow for varying interpretations of minimum standards.
2. Clarifying Monitoring Cessation Liability
When project proponents stop monitoring and verification activities, the Assessment Framework currently treats this as an avoidable reversal but provides limited guidance on quantifying the compensation required. The report recommends clarifying that cessation of monitoring should result in compensation liability equivalent to the amount of credits the project previously contributed to pooled buffer reserves.
3. Implementing Buffer Reserve Stress Testing
Perhaps the most significant operational recommendation involves mandatory stress testing of pooled buffer reserves – the mechanisms carbon crediting programs use to compensate for reversals. While several programs already conduct informal stress testing, the working group recommends the ICVCM pilot formal stress testing protocols in collaboration with interested programs.
The proposed stress tests would occur at minimum every five years, aligned with project validation and verification cycles, and would be conducted by independent parties using transparent, objective criteria. The working group emphasized drawing lessons from stress testing practices in financial markets.
4. Standardizing Risk Assessment Guidance
The report identifies significant variations in how carbon crediting programs conduct project-level risk assessments to determine buffer contribution requirements. The working group recommends the ICVCM provide guidance on risk categories that must be evaluated and acceptable data sources for those evaluations.
5. Exploring Extended Monitoring Periods
Looking beyond the current 40-year monitoring standard, the report outlines several innovative mechanisms for extending permanence guarantees while distributing liability among market participants. These include:
- Permanence funds: Trust mechanisms that would assume liability after the initial 40-year period, funded by fees embedded in credit prices and managed by independent third parties
- Industry-wide pooled buffer reserves: Market-wide mechanisms that could reduce geographic concentration risks inherent in program-level buffers
- Insurance products: Advanced insurance mechanisms designed for multi-decade carbon storage liability
6. Creating Innovation Sandboxes
The final recommendation suggests establishing regulatory sandboxes that would allow carbon crediting programs to pilot innovative approaches to CCP-approved methodologies while maintaining their approval status. These pilots could include special attribute tags (such as “CCP-I” for innovation) to provide transparency about experimental approaches.
Permanence in Progress
The report comes as the voluntary carbon market faces increasing scrutiny over credit quality and permanence risks. High-profile reversals in forest projects and questions about long-term storage in direct air capture and geological sequestration projects have intensified focus on permanence frameworks.
The working group emphasized that its recommendations should be considered holistically rather than as discrete options, noting that several recommendations are “mutually reinforcing or interlinked.” The systems approach reflects growing recognition that permanence challenges require coordinated solutions across multiple market functions.
The ICVCM indicated that the report’s recommendations will inform future Assessment Framework refinements, though no timeline was provided for specific implementation. The organization noted that some recommendations may be implemented by entities other than the ICVCM, reflecting the collaborative nature of voluntary carbon market governance.
ICVCM’s Next Steps
The report participants included representatives from major market players including Verra, American Carbon Registry, Puro.earth, and academic institutions like the University of Cambridge and Stockholm Environment Institute. The diverse stakeholder engagement process aimed to build consensus around approaches that balance “scientific rigour in delivering climate impact while balancing complex policy, legal, financial, equity, and implementation trade-offs.”
The ICVCM has already approved continuation of this work through a second phase focusing specifically on monitoring and compensation mechanisms, set to commence in 2025. Additional CIWP reports addressing sustainable development safeguards and Paris Agreement alignment are expected in the coming months.
The permanence report represents the first concrete output from the ICVCM’s continuous improvement process, established following the July 2023 release of the organization’s Core Carbon Principles and Assessment Framework. The process aims to incorporate “the latest science, emerging technologies, and innovative approaches from across the market” into evolving carbon market integrity standards.
Looking Forward
The report acknowledges that implementing its recommendations will require significant coordination across the carbon market ecosystem. Several proposals, particularly around extended monitoring periods and innovative compensation mechanisms, would require substantial legal framework development and potentially new institutional arrangements.
The stress testing recommendation may see the earliest implementation, given that several carbon crediting programs already conduct informal assessments of their buffer reserve adequacy. The standardization recommendations around reversal definitions and risk assessment guidance could also be incorporated into near-term Assessment Framework updates.
The broader question remains how quickly the voluntary carbon market can evolve to address permanence challenges while maintaining the flexibility that has enabled innovation in carbon project types and methodologies. The ICVCM’s approach of using expert working groups to develop consensus recommendations represents one model for navigating these tensions as the market continues to mature.
The full CIWP Permanence Report is available on the ICVCM website at icvcm.org/continuous-improvement-work-programs.
