How to Build a Trusted Voluntary Carbon Market

The voluntary carbon market, valued at $2 billion in 2021, faces significant challenges regarding trust and scarcity relative to global climate needs. RMI proposes three solutions to scale high-quality credits: reducing project development time and costs through upfront capital and technology, differentiating the credit supply via ratings and quality standards, and establishing a transparent data platform to ensure integrity.

• The voluntary carbon market is insufficient to meet global climate targets, which require reducing 420 gigatons of global emissions and removing 10-13 gigatons annually by 2050. While the market grew to $2 billion and 400 million tons in 2021, it suffers from widespread mistrust regarding credit quality and the risk of enabling continued fossil fuel emissions.
• The standard lifecycle of a carbon credit involves six stages: project design, registration under an accredited standard (such as Verra, Gold Standard, Climate Action Reserve, or American Carbon Registry), monitoring, reporting, and verification (MRV), issuance, transaction, and retirement. In 2021, the average time between issuance and retirement across the four major registries was six years.
• Project development is hindered by high costs and long timelines, often taking two to three years before credits are issued. MRV expenses alone can account for 20 to 30 percent of total credit revenue. Potential solutions include advance market commitments, long-term offtake agreements, and the use of satellites, LiDAR, and machine learning to lower verification costs.
• To scale high-quality projects, the market must differentiate the supply based on risk, performance, and externalities. Current efforts include the emergence of ratings agencies and the development of new standards, such as the Integrity Council for the Voluntary Carbon Market's draft Core Carbon Principles and the Carbon Credit Quality Initiative.
• RMI advocates for a transparency platform with strict data requirements to replace commercially oriented platforms and restore market trust. Through its Carbon Markets Initiative, RMI intends to research how blockchain, remote sensing, and machine learning can support this transparency while promoting environmental justice and social equity.

APA

RMI (2022). How to Build a Trusted Voluntary Carbon Market. https://rmi.org/resources/how-to-build-a-trusted-voluntary-carbon-market/

Chicago

RMI. How to Build a Trusted Voluntary Carbon Market. 2022. https://rmi.org/resources/how-to-build-a-trusted-voluntary-carbon-market/.

Wikipedia

{{cite report |author=RMI |title=How to Build a Trusted Voluntary Carbon Market |date=2 September 2022 |url=https://rmi.org/resources/how-to-build-a-trusted-voluntary-carbon-market/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022how, author = {{RMI}}, title = {{How to Build a Trusted Voluntary Carbon Market}}, institution = {RMI}, year = {2022}, month = sep, url = {https://rmi.org/resources/how-to-build-a-trusted-voluntary-carbon-market/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }