Exploring governments’ efforts to shape carbon credit markets: Possible actions to enhance integrity

Klas Wetterberg, Elisa Lanzi and Natali Gómez

No 263, OECD Environment Working Papers from OECD Publishing

Abstract: Carbon credit markets are a tool that can support greenhouse gas mitigation. However, to effectively support climate action, they must operate with environmental integrity. In the last decade, government influence receded in carbon credit markets, but several governments are now exploring how to increase their engagement with such markets. This paper explores governments’ efforts to shape carbon credit markets, with a focus on opportunities to enhance integrity. The paper highlights that governments can play an important role in enhancing environmental integrity, by promoting carbon credit quality improvements and clarifying the conditions under which credits can be used. For instance, governments could support ambitious quality standards or encourage the responsible use of carbon credits. To enhance integrity, governments can leverage new frameworks, notably provisions under Article 6 of the Paris Agreement. Governments can promote harmonisation to prevent integrity framework differences from negatively impacting carbon credit markets.

Keywords: Article 6; carbon credits; climate change; compliance carbon market; crediting mechanisms; demand; environmental integrity; greenhouse gas emissions; mitigation; net zero; Paris Agreement; standards; supply; voluntary carbon market (search for similar items in EconPapers)
JEL-codes: F55 H23 L15 Q52 Q54 (search for similar items in EconPapers)
Date: 2025-06-25
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Persistent link: https://EconPapers.repec.org/RePEc:oec:envaaa:263-en

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