Eligibility interpreted as assurance and trust inflation in carbon credit markets

Tomohiro Kuwae

PLOS Climate, 2026, vol. 5, issue 7, 1-11

Abstract: Carbon credit markets rely on eligibility rules to define which units may be used for compliance, procurement, or publicly endorsed claims. Yet eligibility designations may come to be interpreted as signals of credit integrity. This study introduces the concept of “trust inflation” to describe a condition in which eligibility designations convey assurance exceeding the evidentiary and governance foundations supporting claims of credit integrity. Trust inflation is framed here as a governance concept rather than an empirically validated causal mechanism, and as a potential substitute for independent assessment that can shift attention from those foundations toward eligibility status. The analysis focuses on eligibility governance in compliance settings, where eligibility decisions carry legal and reputational consequences. It argues that, under conditions of persistent incompleteness, trust inflation in eligibility-based governance can amplify reduced scrutiny, price-centered procurement, adverse selection, and recurring integrity controversies when low-integrity supply is available. The study identifies observable implications of trust inflation and proposes governance responses, including tiered eligibility frameworks linked to differentiated claim permissions and audit-governance arrangements that strengthen verification incentives, oversight, transparency, and accountability. The analysis clarifies how eligibility governance can either reinforce or constrain trust inflation as carbon credits are increasingly embedded in public policy regimes.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pclm00:0001001

DOI: 10.1371/journal.pclm.0001001

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