International Carbon Markets
International carbon markets are primarily used for voluntary carbon credit purchases and remain a critical pathway for climate finance to reach EMDEs. Future scale likely hinges on the development of Article 6 of the Paris Agreement to standardize carbon markets.
2030 Goals
- Carbon markets operate internationally with clear guidelines, standards, and accountability mechanisms on both the supply and demand sides, and are able to mobilize significant finance for adaptation and mitigation projects reducing, avoiding, or removing emissions in EMDEs
- Bilateral donors and MDBs support African Carbon Markets Initiative for advanced market commitment for high integrity (ICVCM approved) projects from governments and private sector ($100m) for voluntary and Article 6 use.
- There will be continuous assessment and improvement of standards and guidelines operationalizing Article 6 in upcoming COP negotiations
StatusModerate progress
Moderate progress
- Although there is considerable focus on international voluntary carbon markets, a lack of trust in integrity of credits has limited buyer growth, shrinking the size of the market by 50% compared to 2021
- Under Article 6 of the Paris Agreement, the trade of carbon credits could generate savings of up to USD 250 billion in meeting climate targets and nearly double the level of ambition among countries.
- COP29 achieved a breakthrough as participants reached a consensus on operationalizing Article 6, agreeing on a set of standards and guidelines to unlock voluntary international carbon markets under the Paris Agreement through both market and non-market mechanisms. However, many details remain to be ironed out.
Relevant Actors & Audiences
Public FIs
Japan Bank for International Cooperation, Joint Crediting Mechanism (JCM)
Multilateral Development Banks
Asian Development Bank (ADB)
Governments
Japanese Ministry of Foreign Affairs, Japanese Ministry of the Environment, Swiss Federal Office for the Environment, New Zealand Government
Leading Countries and Alliances
Spain, Nigeria, Kenya, Brazil
Supportive Stakeholders
Voluntary Carbon Markets Integrity Initiative, Voluntary Carbon Markets Integrity Initiative, Africa Carbon Markets Initiative, Integrity Council for the Voluntary Carbon Market, Climate Market Club, International Carbon Action Partnership, Taskforce for International Carbon Pricing and Markets
Collaboration between the above actors with ad hoc taskforce, International Carbon Action Partnership, Carbon Market Watch
International Organizations
OECD, CORISA
Milestones
The below events contain milestones related to International Carbon Markets.
June
I4C conference
Milestones
International Carbon Markets
Advance understanding of Article 6 through a series of high-level and technical plenaries featuring public and private sector leaders.
Launch of the 2025 State and Trends of Carbon Pricing Report
June UN Climate Meetings 2025
Milestones
International Carbon Markets
Parties work on refining Article 6 rules, including key operational elements such as corresponding adjustments, registries, and accounting mechanisms.
Countries work on setting up national approval processes for carbon crediting and aligning with the new Article 6 framework.
October
WBG/IMF Annual Meetings 2025
Milestones
International Carbon Markets
At least 2 countries pilot transactions under Article 6.
November
UNFCCC COP30
Milestones
International Carbon Markets
Integrity Council for the Voluntary Carbon Market (ICVCM) enhances the Core Carbon Principles Assessment Framework.
Resources
The below resources all pertain to the topic of International Carbon Markets.
State and Trends of Carbon Pricing: International Carbon Pricing 2024
Carbon Markets, International Carbon Markets
Well-designed, high integrity carbon markets can play a pivotal role in financing climate action in developing countries. However, several critical bottlenecks impede the growth of these markets. The 2024 State and Trends of International Carbon Markets report evaluates the progress made in addressing these bottlenecks, highlights the urgency of these issues, and proposes recommendations to ensure that carbon markets reach their full potential.
Carbon Market Regulations Tracker
Carbon Markets, International Carbon Markets
The Carbon Market Regulations Tracker is developed to enhance the understanding and transparency of carbon market regulations, and support governments, project developers, investors, and other market participants in navigating the evolving regulatory landscape.
World Bank Climate Warehouse
Carbon Markets, International Carbon Markets
Vision of the World Bank's Climate Warehouse