The Next Chapter for the Carbon Markets

In this second of a two-part series, Verra CEO Mandy Rambharos looks ahead to what awaits the carbon markets in 2025 and beyond. Read the first installment.

There was one moment in Baku at COP29 that really stayed with me.

Following a panel at the Pakistan Pavilion in which I participated, we watched a video about the Indus Delta Mangrove Restoration Project, which is registered with Verra’s Verified Carbon Standard (VCS) Program.

The video showed how this initiative is restoring vital mangrove ecosystems while transforming the lives of local communities. For one, the project reduces emissions; after all, this is the reason we have the carbon markets.

But it did not stop there. This was also a story about resilience, biodiversity, and the people whose lives are deeply intertwined with the land and sea.

The video showed families who had struggled for years to make ends meet, now finding opportunity and stability through this project that exists because of the carbon market.

It was a powerful reminder of why carbon markets matter, because projects don’t just solve for decarbonization—they also solve for interconnected challenges: environmental degradation, social inequities, and the urgent need for sustainable livelihoods.

This has been a central tenet of the voluntary carbon market (VCM) from its inception: to address more than just the numbers in a greenhouse gas inventory.

The VCM emerged as a way to address the funding gaps that governments and traditional mechanisms were unable to fill, creating opportunities to support projects that deliver the required emission reductions.

But at the same time, it can deliver multiple co-benefits: protecting biodiversity, creating economic opportunities, and ensuring that communities on the frontlines of climate change are not left behind.

In other words, the VCM is able to drive value creation in the places that are key to global decarbonization goals.

These are the reasons we want the carbon market to scale, and why it is important for us to collectively drive this growth.

Looking ahead, I believe the scaling of carbon markets depends on four key pillars: alignment with global frameworks, collaboration and partnerships within this ecosystem to increase accessibility, the operationalization of quality and integrity, and a commitment to delivering credible decarbonization coupled with real co-benefits.

One of the most transformative shifts on the horizon is the integration of voluntary carbon markets with Article 6 of the Paris Agreement.

In Baku, countries made the historic decision to pass Article 6, which now provides a new framework for utilizing independent crediting programs (ICPs), like Verra’s VCS Program, to support national climate ambitions.

This decision will open avenues for governments to engage with established crediting programs.

However, there’s no need to re-invent the wheel, as organizations like Verra understand the essential role of ICPs in expediting climate progress without compromising national sovereignty or ambition.

Therefore, Verra, together with the Singapore Government and Gold Standard, has already developed a protocol to support countries in using Article 6.2 to achieve their Nationally Determined Contributions (NDCs).

By harmonizing voluntary and compliance markets, we can create a system that is more efficient, transparent, and impactful.

A thriving and impactful carbon market depends on robust collaboration and strategic partnerships.

Consistency and clarity are essential to building trust with our stakeholders and driving efficiency in carbon markets. Verra is working to standardize nomenclature, methodologies, data transparency, traceability, and accessibility wherever possible to ensure that participants across the market are operating on a foundation of shared understanding, and to enhance confidence in the system.

Verra is also actively working with partners to reform the market and adapt to new scientific insights, shifting policy landscapes, and the urgent demands of the climate crisis. This includes refining methodologies and frameworks so they remain credible and adaptable.

As carbon markets grow, so must the mechanisms that uphold their credibility. Scaling with integrity also means continuing to refine our methodologies and collaborating with stakeholders to address emerging challenges. We do better when we know better.

At Verra, we are committed to setting the benchmark for integrity. From the Verra Project Hub, which offers real-time access to project data, to our other ongoing digital transformation efforts, we are ensuring that every credit we issue represents genuine, measurable climate benefits.

The broader effort to enhance market integrity is pivotal as well. The Integrity Council for the Voluntary Carbon Market (ICVCM) (external), for example, has already made significant strides with its Core Carbon Principles (CCPs), which establish clear standards for quality and transparency. Verra has submitted most of our methodologies to the ICVCM for assessment against the rigorous CCPs (with several having already received approval), underscoring the credibility and quality of the credits we issue.

The Voluntary Carbon Markets Integrity Initiative (VCMI) (external) is also playing a critical role by setting guidance for how companies and other buyers can credibly use carbon credits in their net-zero or climate claims.

VCMI’s work complements the ICVCM’s efforts by focusing on the demand side of the market, ensuring that credits are used transparently and meaningfully to drive climate action. Together, these initiatives are shaping a more cohesive and trusted ecosystem for the VCM.

We can never say this enough: the most successful projects in the carbon market don’t just reduce emissions. They also contribute to addressing other systemic issues: providing clean energy to underserved communities, restoring critical ecosystems, and creating pathways for sustainable livelihoods.

By 2025, we expect to see even greater emphasis on these co-benefits. New and revised methodologies will enable us to certify outcomes such as biodiversity protection, plastic waste removal, and improved climate resilience.

This broader focus positions the carbon market as a vital tool for solving the interconnected crises of our time.

Carbon markets were created out of necessity to address an immediate need, but their evolution has shown they are so much more than a stopgap solution.

They are a mechanism for innovation, collaboration, and impact at scale.

As we look to 2025 and beyond, Verra is committed to advancing the voluntary carbon market, not just by meeting today’s demands, but by anticipating tomorrow’s challenges.

We need to ensure that carbon markets deliver on their promise to drive global climate action and create a more sustainable and equitable future.

As outlined in the points above, there are already indications that market stakeholders are excited about what’s in store and that the market is ready to deliver.

The challenges ahead are indeed great, but so are the opportunities.

At Verra, we’re ready to do our part.