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The document defines essential carbon market terminology, including the distinction between cap-and-trade and compliance markets, the mechanics of carbon credits and budgets, and specific regulatory frameworks like the EU's CBAM and the ICAO's CORSIA.

The author contends that the EU's CRCF framework relies on unscientific methodologies and lacks social safeguards, potentially fueling 'green-grabbing' and land inequality. The document further criticizes the proposed next phase of the CAP for lacking a ringfenced budget for environmental action and granting member states too much autonomy, which may lead to a 'race to the bottom' regarding environmental safeguards. It concludes that carbon and nature credits are unsuitable tools for ensuring a fair standard of living for farmers.

The Nature-Based Infrastructure (NBI) transformation program in Kisumu, Kenya, integrates agroforestry, sanitation, and fisheries to restore the Lake Victoria basin. A Sustainable Asset Valuation (SAVi) assessment indicates that an integrated approach could generate USD 940 million in net benefits over 26 years, yielding approximately USD 3 for every dollar invested. Key economic drivers include USD 480 million in avoided health costs through improved sanitation and USD 62.85 million in carbon valuation, which exceeds the program's capital expenditures.

The analysis argues that Canadian industrial carbon markets are inefficient due to overly generous performance standards, inconsistent application of rules, restrictions on credit use, the exclusion of smaller emitters, and the use of revenues to offset price signals. These factors lead to credit oversupply and price crashes, particularly in Alberta, British Columbia, and Ontario, reducing the incentive for industries to decarbonize.

The analysis identifies five critical design choices in Canadian industrial carbon markets that undermine their effectiveness: overly generous performance standards, uneven playing fields for facilities, strict limits on credit use, allowing 'opt-in' facilities to exit markets, and using revenues to offset price signals. These flaws have led to credit price crashes in provinces like Alberta and reduced the overall incentive for industries to decarbonize.

The report analyzes the convergence of nature-based solutions (NbS) and adaptation and resilience (A&R) finance, highlighting a critical funding gap where annual global nature finance flows of USD 200 billion are only one-third of the amount needed by 2030. Through five case studies—including the Acumen Resilient Agriculture Fund and Wildfire Resilience Insurance—the document identifies key barriers such as the complexity of measuring outcomes in changing climates, the lack of standardized metrics, and the high upfront costs of resilience interventions. It argues that while carbon credits and regulatory standards like the EU Deforestation Regulation provide pathways, scaling requires a shift from reactive to preventive investment mindsets and the development of credible, localized impact metrics. The report concludes that reforming the development finance architecture and leveraging global frameworks like COP30 are essential to mainstreaming nature-based adaptation.

The report argues that tropical forests should be central to climate strategies, moving from being viewed as a risk to a solution. It analyzes 91 countries, categorizing them by forest cover and deforestation rates, and concludes that forest protection and restoration are compatible with economic growth. To address the funding gap for restoration, the authors propose the Reversing Deforestation Mechanism (RDM), a jurisdictional, results-based payment system for net carbon removals. RDM is designed to complement existing tools like JREDD+ and the Tropical Forest Forever Facility (TFFF). Simulations suggest that at a carbon price of US$ 50 per ton, RDM could generate significant annual revenues and remove up to 2 GtCO2 per year globally in its early stages.

The Tropical Resilience Fund (TREF) is a USD 100 million closed-ended mezzanine debt fund designed to bridge the 'missing middle' financing gap for nature-based ventures in the tropical belt. Managed by Impact Earth, the fund employs a blended finance structure—combining a junior first-loss tranche with senior commercial capital—to invest in nature projects, productive systems, and market catalysts. TREF focuses on enhancing climate resilience across high-value commodities such as coffee, cacao, and rice, primarily in Latin America and Southeast Asia. The fund targets a net internal rate of return (IRR) of 10% and utilizes a three-stage resilience approach involving risk mapping, resilient operating plans, and post-investment verification.

The report examines 'coal transition credits' as a financial tool for early coal plant closure in Southeast Asia. It finds significant expert skepticism, with only 2 out of 10 experts viewing them as effective. Major risks identified include carbon leakage, baseline inflation, and 'perverse incentives' that may reward polluters. The document concludes that CTCs are not a reliable exit strategy and emphasizes the need for systemic public policy and funding over market-based offsets.

The report examines 'coal transition credits' (CTCs) as a mechanism to accelerate the phase-out of coal-fired power plants in Southeast Asia. While proponents suggest CTCs can unlock private finance for early retirement and just transition measures, a survey of 10 experts reveals widespread skepticism. Key concerns include the risk of carbon leakage, where retired capacity is replaced by other fossil fuels, and the difficulty of establishing conservative baselines to prove additionality. Experts warn that CTCs could create perverse incentives, rewarding polluters and encouraging the delay of retirements to maximize credit issuance. Furthermore, the report highlights structural barriers in Southeast Asia, such as young coal plant fleets and rigid power purchase agreements, and notes that current methodologies, including Verra's VM0052, may have loopholes regarding 'captive' coal plants. The findings suggest that without rigorous guardrails and a focus on public finance, CTCs risk being a tool for greenwashing rather than a driver of genuine climate impact.

The report examines 'coal transition credits' (CTC)—carbon credits generated by retiring coal plants early and replacing them with renewables—as a way to fund the energy transition in Southeast Asia. Based on a survey of 10 experts, the document finds deep skepticism regarding the instrument's effectiveness. Key concerns include 'carbon leakage' (where retired capacity is replaced by other fossil fuels), the subjectivity of baseline scenarios leading to over-issuance, and the risk of 'greenwashing' or rewarding polluters. Experts highlight that only 2 out of 10 view CTCs as effective, warning that without strict safeguards, these credits could undermine genuine decarbonization and fail to provide a 'just transition' for affected workers and communities.

As of September 2025, 1,935 entities have net-zero targets, though the overall credibility of these commitments remains low, with only a small fraction of companies, regions, and cities meeting robustness criteria.

The document highlights a misalignment in climate finance, noting that less than 10% of agricultural climate finance reaches the livestock sector in LMICs. It argues that livestock are multifunctional assets providing 'triple wins'—climate mitigation, adaptation, and socio-economic benefits—but are often viewed narrowly as sources of greenhouse gas emissions. The authors identify barriers to funding, including poor data, complex measurement, reporting and verification (MRV) procedures, and institutional fragmentation. To address this, the brief recommends that the G20 promote blended finance instruments, scale carbon credit standards for rangelands, update climate fund eligibility criteria, and develop standardized climate-smart livestock indicators.

The International Organisation for Standardisation (ISO) and the Greenhouse Gas Protocol (GHG-P) announced a partnership on 9 September 2025 to merge and align their greenhouse gas accounting frameworks. The collaboration focuses on three core areas: corporate footprints, product footprints, and project-level GHG accounting. While the authors welcome the potential for a unified global framework to reduce fragmentation and reporting burdens, they warn that harmonisation must not lead to the dilution of standards. Specifically, they argue that carbon credits must not be treated as substitutes for direct emission reductions and that scope 3 accounting must not be artificially lowered through certificate trading. The authors also emphasize that the governance of the new standards must be transparent and inclusive to prevent the overrepresentation of large corporate interests, suggesting a model that combines ISO's regulatory recognition with GHG-P's transparency and stakeholder breadth.

The briefing paper advocates for a legally binding international instrument to end corporate impunity regarding environmental and human rights abuses. It highlights the insufficiency of voluntary frameworks and argues that the LBI can operationalize the right to a clean, healthy, and sustainable environment by establishing mandatory due diligence, extraterritorial jurisdiction, and strict liability for parent companies across global value chains.

ClientEarth advocates for the UK government to mandate the development, disclosure, and implementation of transition plans aligned with the Paris Agreement. The organization argues that a 'comply or explain' framework is insufficient and that mandatory requirements are necessary to prevent 'greenwashing' and 'say-do gaps'. It specifically highlights the need for pension schemes to manage systemic climate risk through Paris-aligned anchors and robust stewardship. ClientEarth further asserts that legal risks for directors are often overstated due to the 'dishonesty standard' in English law, and that alignment with the 1.5°C goal is essential for the UK to fulfill its international obligations following the 2025 ICJ Advisory Opinion.

ClientEarth critiques the European Commission's 'Roadmap towards Nature Credits', warning that a market for biodiversity credits could undermine EU environmental law if not strictly separated from regulatory obligations and offsetting. The organization argues that the biodiversity financing gap—estimated at 19 billion euros per year in the EU—should first be addressed by scaling up public funds and redirecting the 48 billion euros in annual harmful subsidies. ClientEarth recommends that any future credit system be strictly outcome-based, exclude 'business-as-usual' practices, and prohibit the use of credits for ecological compensation (offsetting) to avoid 'net loss' of biodiversity. It further highlights the scientific complexity of measuring biodiversity compared to carbon, cautioning against reductionist proxy metrics that could lead to greenwashing.

Researchers from CPI/PUC-RIO developed a dynamic economic model to evaluate the additionality of REDD projects in the Brazilian Amazon, moving beyond traditional statistical baselines. The study finds that 77% of the carbon stock in these projects is additional, meaning it would have been emitted without the projects, avoiding 0.5 Gt of CO2 equivalent. However, additionality varies by region, with significantly lower rates in forested and isolated areas, such as Portel, Pará, where low agricultural productivity makes deforestation unlikely even without carbon credits. The report argues that while some non-additionality exists, the low price of REDD credits (US$ 5 to US$ 15 per ton) limits the financial impact of these discrepancies compared to other carbon pricing mechanisms.

The report introduces a dynamic economic model to determine the additionality of REDD projects in the Brazilian Amazon, finding that 77% of the carbon traded is additional. It highlights regional variations, noting higher additionality in agribusiness-consolidated areas and lower additionality in isolated regions like Portel, while suggesting that higher carbon prices would further increase additionality rates.

The report examines the intersection of Africa's blue economy and climate change, highlighting vulnerabilities in fisheries, maritime transport, and tourism. It argues for a transition toward renewable ocean energy, the expansion of blue carbon initiatives, and the implementation of integrated, regional governance to mitigate economic risks and environmental degradation.