Among the many issues on the climate agenda, one in particular deserves closer attention and has attracted significant academic interest: the need to establish common rules for the carbon credit market. The goal is to standardize a system that remains highly fragmented, poorly regulated, and of questionable credibility.

Carbon credits are a fundamental tool in the low-carbon transition, especially given the lack of public funding for North–South transfers within global climate finance. Most carbon credit projects are located in the Global South, but similar mechanisms are also being developed in industrialized countries, for instance through the forthcoming European Carbon Farming regulation. The principle is straightforward: a project developer who can demonstrate verified emissions reductions or carbon sequestration relative to a baseline scenario receives certified credits, which can then be sold to companies, governments, or individuals wishing to offset part of their emissions.

On paper, the system sounds efficient. In practice, it rarely is. A series of controversies [1] has cast serious doubt on the credibility and actual impact of these mechanisms [2]. Do they truly reduce greenhouse gas emissions? Several academic studies [3,4] have shown that real emissions reductions and carbon sequestration are often far lower than reported. In particular, avoided deforestation projects, improved forest management and regeneration, and efficient cookstove programs tend to overstate their effectiveness. This overestimation conveniently serves the interests of all parties involved — and that’s where suspicion begins. Projects are audited by third parties appointed by certifiers, using complex and often inconsistent methodologies, while governance questions persist in a market that remains largely unregulated.

The remaining implementation rules for Article 6.4 of the Paris Agreement are important topics on the international climate agenda. Adopted back in 2015, this article establishes the Paris Agreement Crediting Mechanism (PACM) — a “younger sibling” to the Kyoto Protocol’s Clean Development Mechanism. The stakes are high: this would be the first regulated global carbon market, a trading system for UN-certified credits. The Supervisory Body has already met several times between COPs to lay the groundwork for the mechanism. But, as ever, the devil is in the details. Key safeguards are still needed to ensure its environmental integrity.

In this context, we recommend two main improvements. First, transparency is essential [5]. This requirement is already mentioned in the methodological provisions of Article 6.4 agreed at COP29, which encourage transparency in data sources, calculations, and monitoring procedures used to estimate emissions reductions — including baseline scenarios, project additionality, and potential carbon leakages. It is the Supervisory Body’s role to ensure that certification methodologies meet these transparency standards. But more is needed. Companies’ carbon credit transactions and the distribution of revenues along the value chain must also be disclosed. Such transparency would make it possible to assess the true impact of offset projects and respond to accusations of greenwashing. It would also ensure that local communities directly benefit — as in Kenya, which since 2024 has required that at least 40% of net revenues from land-based carbon projects be returned to local populations. Digital platforms, clear reporting regulations, and public price disclosure could all help meet this essential demand for transparency.

Second, the reliability of baseline scenarios must be strengthened [6]. Academic research has shown that robust statistical methods can be used to assess project impacts more accurately. So-called quasi-experimental approaches compare treated areas to control areas selected for their similarity. For example, satellite data can be used to track changes in deforestation before and after a project’s implementation and compare them with similar untreated areas over the same period. This allows analysts to isolate the causal effect of projects on deforestation reduction. Widespread adoption of this approach would have significant implications for risk-sharing and value distribution within the carbon credit chain. While adapting to such methods will require effort, the growing importance of carbon markets in international negotiations demands a high level of methodological rigor.

In conclusion, the credibility crisis of carbon credits is not incurable. Solutions exist — but they require substantial commitment. Discussions and decisions undertaken at the next COPs will be decisive. Strengthening transparency requirements and reforming evaluation methods in depth are essential steps to restore the legitimacy and credibility of carbon credit mechanisms, both in markets and in international climate negotiations.