(Bloomberg) -- After several bruising years of fighting fires and trying to fix glaring shortcomings, the voluntary carbon market is now ready for prime time.

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That’s the resounding message from investors, corporate executives and government ministers who gathered in New York on Wednesday for what’s been dubbed “VCM Day.” In a series of talks and seminars, speakers are making the case for why carbon credits must be considered a key pillar of climate action. It’s an argument that’s garnering support from the likes of Treasury Secretary Janet Yellen and former Bank of England Governor Mark Carney.

“VCMs have the potential to create both economic and climate opportunities by channeling private capital to high-impact and cost-effective climate projects across technologies, ecosystems and geographies,” US Deputy Treasury Secretary Wally Adeyemo said in prepared remarks at the event, which was part of New York Climate Week. He stood in for Yellen, who had been scheduled to speak. “But today’s markets face significant challenges that are holding back their growth.”

In May, the Biden administration unveiled a framework for using high-quality carbon offsets that Yellen has said would help rehabilitate a climate solution that’s been dogged by a string of greenwashing controversies. The move was seen as tantamount to a US government blessing for an instrument that’s deeply divided experts, in part because many projects have been shown to fall short of their emissions-cutting promises.

The initiative emphasizes “the importance of supply integrity — the idea that credits should represent real emissions reductions or removals and avoid harm,” Adeyemo said. “In recent months, we’ve seen steps taken to improve supply integrity.”

The goal also is “to improve a currently fragmented market with more transparency,” he said. “Increasing transparency around pricing and transaction data would help buyers reduce their risk, developers better predict their revenues and financiers develop new products.”

His comments dovetail with other advocates who have been making the case for offsets.

With strained government budgets and limited philanthropic money, “the only way to allocate massive resources is through market mechanisms” such as carbon credits, said Ivan Duque Marquez, Colombia’s former president. Without this market, “it’s going to be impossible” for many developing countries to meet their climate commitments, he said.

The conveners share one goal and that’s to transform the VCM, said Chris Canavan, chief executive officer of the Global Carbon Market Utility.

Doing so “requires integrity, but it also requires scale,” said Canavan, who called on attendees to envisage a $50 billion a year market. “It can’t merely be four or five times larger than it is today. It needs to be orders of magnitude larger. Only then will it deliver the climate impact that we need.”

Standard Chartered Plc CEO Bill Winters agreed. “If you don’t get the billions and billions and billions put to work, we’re simply not going to make the impact that we know we have to have to make,” he said. “Let’s see this as a market that’s enabling.”

There have been numerous efforts in recent years to clean up the $1 billion voluntary carbon market. VCM Day was hosted by two entities that have been critical to that campaign: the Integrity Council for the Voluntary Carbon Market and the Voluntary Carbon Markets Integrity Initiative.

ICVCM has established a standard for carbon credits it calls the “core carbon principles,” which excludes large swathes of the market it says fall short. Meanwhile, VCMI has created a “claims code of practice” that provides companies with guidance on how to use offsets and talk about them in their sustainability claims.

On Wednesday, speakers also are expected to discuss the thorny issue of how offsets should be used to address Scope 3 emissions. Those greenhouse gases, produced by customers and supply chains, typically account for more than 70% of a company’s carbon footprint and are difficult to cut because businesses often don’t have direct control over them.

The Global Carbon Market Utility, which will provide infrastructure to enable trading and risk management of carbon credits, is also co-hosting the event. GCMU was launched at the COP27 climate summit with backing from Three Cairns Group and Bloomberg Philanthropies, which is also a supporter of VCM day. Bloomberg Philanthropies is the philanthropic organization of Michael Bloomberg, the founder and majority owner of Bloomberg LP, which is the parent company of Bloomberg News.

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