Carbon market integrity: How to move beyond the limitations and uncertainties?

Carbon markets are expanding rapidly, driven by net-zero commitments and the rise of compliance mechanisms. Yet their environmental integrity remains fragile: information asymmetries, over-crediting, and legal uncertainty undermine market confidence. This report analyses the evolving dynamics of voluntary and compliance carbon markets, their growing interconnections, and the risks linked to their integration with national climate policies and Article 6 of the Paris Agreement. It argues that the credibility of these markets depends on robust governance, a clear legal definition of carbon credits, and transparent market infrastructures. Building on institutional and market sociology perspectives, the paper calls for aligning economic incentives with environmental integrity, strengthening the role of governments and multilateral institutions, and embedding carbon markets within the broader architecture of global climate governance, where they serve not merely as trading mechanisms but as instruments for collective climate ambition.