Comment Text:
PanXchange is the leading market data and benchmark provider for the US industrial hemp industry since 2019. We have been leading the way in developing voluntary carbon sequestration projects for the US hemp industry and similar operations since Q1 of 2021. Our team at PanXchange has identified the following areas of concern for successful oversight of a voluntary carbon market.
Accredited validators and verifiers:
The carbon market needs to be built on transparency and trust, and there is currently a bottleneck at the validation and verification stages for agricultural carbon programs due to a limited number of accredited (by Verra, GS, or equivalent) entities in the marketplace. It is challenging to add more unless regulators implement a structure to address or circumvent inefficiencies at these stages. Currently, wait times and costs are too prohibitive for most farmers.
Moral Hazards:
The CFTC must be mindful of all areas of reemission or double counting of carbon credits and must develop a framework of accountability and regulatory enforcement for the efficient impact of carbon sequestration. In addition, a standard framework of force majeure must be established to decipher between moral hazard and unpreventable circumstances.
Cost to Project Developers:
Costs are a significant obstacle for many potential carbon offset projects, especially within agriculture. The primary driver of these costs is measurement, monitoring, reporting and verification fees. Regulators must establish validation and verification frameworks to expand access and bring efficiency to these services.
