How carbon markets systematically undervalue tropical forests’ climate benefits
November 6, 2023In light of the critical role of tropical forests in stabilizing the global climate system through both carbon and noncarbon pathways, maintaining and increasing incentives for large-scale forest conservation is an essential component of climate action. Demand for carbon credits, one of the most promising mechanisms for funding large-scale forest conservation, has grown rapidly in recent years, with the voluntary carbon market seeing transactions worth almost US$2 billion in 2021. In 2022, however, the volume of transactions leveled off, at least in part due to concerns about reputational risk from corporate buyers afraid of greenwashing accusations.