World Economic Forum

The Voluntary Carbon Market: Climate Finance at an Inflection Point

A briefing paper by Bain and the World Economic Forum discusses the actions necessary to create a well-functioning voluntary carbon market.

By Claudia Brechenmacher, Dale Hardcastle, Henning Huenteler, Ann Siml, Antonia Gawel, and Nasim Pour

First published on enero 17, 2023
min read


Nature offers one of the most effective near-term means of reducing emissions, and the IPCC has clearly stated in their Sixth Assessment Report’s Summary for Policymakers that carbon removal will be critical to achieving this objective. Essential for the success of natural carbon sinks will be investments in offsets. Whether through a voluntary or compliance market structure that evolves over time, many companies will need to use limited offset solutions to balance their unavoidable residual emissions. Carbon credits are the essential “net” in net zero to balance carbon accounts between emissions and reductions. Bottom-up analysis of 2,000 leading global companies by Bain & Company suggests the voluntary carbon market could provide demand for up to 2.6 gigatons (Gt) of carbon credits by 2030, about 13 times more than the market in 2021. However, to bring the market to its full potential and accelerate climate action, urgent interventions are needed, including market reforms and corporate commitments to ensure significant and credible participation in carbon markets. The necessary market reforms include increasing the credibility of supply and demand and creating greater transparency of the market connecting the two. Waiting until 2030 is not an option, and the global price of inaction is high. Market participants will need to find ways to work together to address these challenges. This briefing paper by Bain & Company and the World Economic Forum takes an in-depth look at voluntary carbon markets and the actions needed to scale the market to its full potential. Read the full report at World Economic Forum. Antonia Gawel is head of Climate Change at the World Economic Forum and serves on WEF's Executive Committee. Nasim Pour is Lead for Carbon Removals and Market Innovation at the World Economic Forum.

Nature offers one of the most effective near-term means of reducing emissions, and the IPCC has clearly stated in their Sixth Assessment Report’s Summary for Policymakers that carbon removal will be critical to achieving this objective.

Essential for the success of natural carbon sinks will be investments in offsets. Whether through a voluntary or compliance market structure that evolves over time, many companies will need to use limited offset solutions to balance their unavoidable residual emissions. Carbon credits are the essential “net” in net zero to balance carbon accounts between emissions and reductions.

Bottom-up analysis of 2,000 leading global companies by Bain & Company suggests the voluntary carbon market could provide demand for up to 2.6 gigatons (Gt) of carbon credits by 2030, about 13 times more than the market in 2021.

However, to bring the market to its full potential and accelerate climate action, urgent interventions are needed, including market reforms and corporate commitments to ensure significant and credible participation in carbon markets. The necessary market reforms include increasing the credibility of supply and demand and creating greater transparency of the market connecting the two.

Waiting until 2030 is not an option, and the global price of inaction is high. Market participants will need to find ways to work together to address these challenges.

This briefing paper by Bain & Company and the World Economic Forum takes an in-depth look at voluntary carbon markets and the actions needed to scale the market to its full potential.

Read the full report at World Economic Forum.

Antonia Gawel is head of Climate Change at the World Economic Forum and serves on WEF's Executive Committee. Nasim Pour is Lead for Carbon Removals and Market Innovation at the World Economic Forum.