An autopsy of the Voluntary Carbon Market

To Reduce Emissions, the Carbon Offsets Market Needs One Crucial Fix

A new study co-authored by Yale SOM’s Vahideh Manshadi and Faidra Monachou and Ilan Morgenstern of UC Berkeley lays out a framework to study the market for carbon offsets and their climate value.

An autopsy of the Voluntary Carbon Market

The Voluntary Carbon Market (VCM) rests on the premise that one carbon credit compensates for one tonne of emissions. While a growing body of evidence questions the integrity of many credits, much less is known about whether the ability to offset affects firms' incentives to reduce their own emissions. Using a buyer-linked dataset covering the near-universe of offset retirements, we exploit the 2023 carbon-market scandals as a quasi-natural expe…