June 15, 2025 | Global Transitions |
Introduction: A study from the Sasin School of Management at Chulalongkorn University in Thailand examines systemic weaknesses in voluntary carbon markets (VCMs) by synthesizing academic evidence, regulatory reports and project-level assessments, noting that credibility concerns have intensified as recent analyses suggest that up to 94% of REDD+ credits may be overestimated, resulting in large volumes of climate finance that do not reflect real mitigation outcomes. The paper investigates why scandals such as inflated baselines, unverifiable claims and governance failures recur across countries and uses this evidence to propose a structured framework for strengthening market integrity.
Key findings: The review identifies weak MRV systems and inconsistent standards as central causes of integrity problems in voluntary carbon markets. It details recurring issues such as fraudulent crediting, overstated baselines, lack of additionality and unverifiable climate claims, noting that these patterns often emerge when oversight is limited or information is uneven. The study also highlights serious social and human-rights concerns, including cases of community displacement and inadequate consultation in countries such as the Congo, Brazil and Kenya. These examples demonstrate that carbon market failures extend beyond technical shortcomings and reflect deeper governance and equity challenges that must be addressed.
The paper proposes a reform framework focused on stronger verification integrity, transparent registries, accountability mechanisms and robust social and environmental safeguards. It discusses the potential of tools such as blockchain registries and AI-assisted monitoring to support transparency, while emphasizing that technology cannot compensate for weak governance or solve challenges like permanence and additionality. The review also stresses that future reforms need to align with the international rules emerging under Article 6 of the Paris Agreement in order to improve transparency, prevent double counting and establish clearer global trading rules. High-integrity carbon markets will require coherent governance structures, rights-based standards and stronger links to national mitigation pathways to ensure credible and equitable outcomes.
