Carbon Markets are Not Climate Finance

This policy brief by the Center for International Environmental Law (CIEL) argues that carbon markets and the purchase of carbon offsets do not constitute legitimate climate finance. The document asserts that relying on these markets allows Global North countries and polluters to avoid their legal obligations to fund mitigation and adaptation in the Global South while perpetuating the fossil fuel economy.

• The document defines climate finance as funds provided primarily by Global North countries, which have the highest cumulative greenhouse gas emissions, to Global South countries for adaptation, mitigation, or addressing loss and damage. It argues that for funds to be considered legitimate climate finance, they must pay for "real climate action" rather than simply having a climate connection.
• Carbon markets are described as fundamentally flawed because land-based removals cannot offset CO2 emitted from burning fossil fuels. The brief notes that fossil carbon stored for millennia is not equivalent to carbon stored in trees, and that emissions from fossil fuels cause some irreversible impacts even if CO2 is later removed.
• The brief identifies three primary problems with using carbon markets as climate finance: they disincentivize direct emission reductions by allowing buyers to substitute offsets for action; the financial benefits often go to middlemen and project developers rather than frontline communities; and they enable buyers in the Global North to "greenwash" and continue polluting.
• Carbon credit projects can increase the cost of climate mitigation for host countries in the Global South. Because credits are sold, the host country cannot count those reductions toward its own climate goals to avoid "double-counting," forcing them to implement additional and potentially more expensive measures to meet commitments.
• The document concludes that carbon markets should be rejected as a source of finance for the new goal expected at COP29, asserting that paying to pollute cannot replace the legal obligations of Global North countries under the UNFCCC and the Paris Agreement.

APA

Lennon, E. (2024). Carbon Markets are Not Climate Finance. Center for International Environmental Law. https://ciel.org/wp-content/uploads/2024/11/Carbon-Market-Not-Climate-Finance.pdf

Chicago

Lennon, Erika. Carbon Markets are Not Climate Finance. Center for International Environmental Law, 2024. https://ciel.org/wp-content/uploads/2024/11/Carbon-Market-Not-Climate-Finance.pdf.

Wikipedia

{{cite report |last1=Lennon |first1=Erika |title=Carbon Markets are Not Climate Finance |publisher=Center for International Environmental Law |date=November 2024 |url=https://ciel.org/wp-content/uploads/2024/11/Carbon-Market-Not-Climate-Finance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lennon2024carbon, author = {Lennon, Erika}, title = {{Carbon Markets are Not Climate Finance}}, institution = {Center for International Environmental Law}, year = {2024}, month = nov, url = {https://ciel.org/wp-content/uploads/2024/11/Carbon-Market-Not-Climate-Finance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }