How to Build a Trusted Voluntary Carbon Market

This guide by RMI examines the voluntary carbon market, detailing the six-stage lifecycle of a carbon credit and proposing three 'unlocks'—reducing development costs, differentiating supply, and increasing transparency—to address scarcity and widespread mistrust in the market.

• The voluntary carbon market faces a significant scale gap; while it reached a value of $2 billion and 400 million tons in 2021, global climate goals require the reduction of 420 gigatons of emissions by 2050 and annual removals of 10-13 gigatons by that same date.
• Carbon credits typically progress through 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 of credits (1 ton of CO2e per credit), transaction via offtake agreements, brokers, or exchanges, and finally retirement.
• High time and capital requirements hinder the supply of credits, with issuance often taking two to three years and MRV expenses potentially consuming 20 to 30 percent of total credit revenue. Potential solutions include upfront capital via advance market commitments and the use of technologies like LiDAR, satellites, and machine learning to lower verification costs.
• To improve market quality and trust, RMI suggests differentiating the carbon credit supply based on risk, performance, and externalities—such as biodiversity conservation, water quality, and social equity—and establishing a transparency platform with complete data integrity to move beyond commercially oriented platforms.

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} }