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Voluntary Carbon Markets in 2023: A Bumpy Road Behind, Crossroads Ahead | Bain & Company

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If 2021 elevated optimism in voluntary carbon markets (VCMs), then 2022 brought some of those expectations down to earth. The markets’ explosive growth between 2019 and 2021 as well as the rapid acceleration of corporate net-zero commitments led companies to make big bets on its eventual size. But by 2022, participants were confronting new levels of complexity about the markets and the role of credits in their broader sustainability strategies. Carbon markets are at an inflection point: Either the uncertainties will be resolved through cooperation by participants and regulators, leading to yet more growth, or markets will become bogged down by poor alignment and confusion. The latter course could cause many potential buyers to wait for greater clarity, thus slowing the growth of VCMs and limiting the potential of this important tool in the fight against the climate crisis. A look at the market dynamics of 2022 and the outlook for 2023 provides some insight to corporates navigating the

Voluntary Carbon Markets in 2023: A Bumpy Road Behind, Crossroads Ahead The markets for carbon credits will either rationalize or be stifled by uncertainty and complexity.

 By Brad Denig, Allister Furey, Dale Hardcastle, Cate Hight, and Henning Huenteler Copy link Email LinkedIn X Facebook '> Progress: en At a Glance Voluntary carbon markets grew rapidly over the past five years, but that growth has begun to slow over the past year. The uncertainty roused by shifting policies and concerns about the eligibility of some credits may have led some potential purchasers to adopt a wait-and-

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