Carbon credit markets have developed during the last 30 years as a major method of funding climate change mitigation activities that avoid or remove greenhouse gases from the atmosphere.

However, the system presents considerable challenges. These markets often fail to lead to actual additional, accurately quantified or permanent mitigation. They also suffer from a lack of transparency, weak crediting standards and public doubts about their efficacy or whether they perhaps detract from more effective mitigation priorities.

In this detailed assessment of project-based carbon markets and the research on their performance, the authors point to their strengths and weaknesses. They discuss key areas where they can be developed into a robust, credible means of contributing to governments’ and businesses’ climate goals and meeting the Paris Agreement.