# Governance (Archived)

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A brief overview of carbon class governance is as follows:

* Carbon classes do not define the price of a given credit within the protocol; they define the basket of credits that can be influenced by Protocol mechanics.
* kVCM and K2 holders vote across classes to signal:
  * carbon acquisition preferences (portfolio weight)
  * the rate of carbon acquisition and disposal (portfolio capacity)
* These governance signals affect:
  * protocol purchasing behaviour
  * supply diversity
  * long-term portfolio exposure
  * which classes grow or shrink over time
* Overall carbon pricing is influenced by:
  * kVCM and K2 governance allocations
  * kVCM token price
  * supply and demand for each class
  * the protocol’s acquisition and retirement traffic
* Classes **should** reflect long-term potential for:
  * transaction volume
  * growing liquidity
  * price appreciation
  * relevance to major buyers (e.g. due to compliance market applicability)
* Misallocating purchase power may result in the protocol holding assets with insufficient demand or stagnant pricing.

For more detail on the role of carbon classes within the Protocol, visit [Overview of Carbon Classes](/carbon-class-handbook/overview-of-carbon-classes.md).

### Whitelisting

Whitelisting carbon means defining which carbon credits may enter the ecosystem via a carbon class, as follows:&#x20;

* Whitelisting or expanding a class allows new carbon types to enter the system.
* Creating a new class may allow a number of new or existing carbon credits to be integrated into Klima.&#x20;
* Whitelisting of classes is the primary non-economic governance input within Klima.&#x20;
* Over time, the whitelisting process may evolve to allow token-voting delegations; or a formal advisory council with voting power.&#x20;
* Initially it is a centralised process undertaken by the Klima Protocol team, through engagement with market stakeholders.&#x20;

### Initial governance approach

* The main engagement route around carbon class curation will be taken bilaterally between the Klima Protocol team and members of its Partnership Programme. This includes:
  * Anaxee
  * Regen
  * ICR
  * Super Biochar
  * UCR
* A quarterly RFP is issued to partners for their feedback on new and existing classes.&#x20;
* Whitelisting will be “demand led”: new whitelisted classes (or credits) must have justification that there is legitimate demand.&#x20;
* Partners and the Protocol team will also consider attributes such as:
  * Certification standard, ICROA status, CCP labels.&#x20;
  * Methodology relevance to compliance schemes (e.g., CORSIA).
  * Vintage criteria.
  * Geography and project type.
  * Publicly available data on liquidity and volume.
* **All credits must have permission from the host registry to technically integrate with their system.**&#x20;

### Transparency

* Open-source governance principles emphasise inclusivity, clarity, and auditability – whilst the initial process will be centralised, it will be conducted with maximum transparency, ensuring all market stakeholders understand the process, and can react to decisions fairly.&#x20;
* All RFPs, feedback and decisions will be published publicly on the Klima Protocol forum.
* Submissions may be anonymised at the request of the participant.


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