The World Federation of Exchanges (WFE) has published a research paper providing transaction-level evidence on how prices form in the voluntary carbon market (VCM), finding persistent price inequalities between advanced economies and emerging markets and developing economies (EMDEs). The analysis links the observed premium for advanced-economy credits primarily to the rule of law and governance quality in the project host jurisdiction, rather than investor home bias. Using more than 250,000 carbon credit transactions spanning 2,200 projects between 2017 and 2024, the paper finds nature-based credits (such as forestry and land use) trade at prices 67% higher than technology-based credits (such as renewable energy). Older vintages trade at 9–23% discounts, larger available inventories are associated with lower future returns, and past returns alongside prior inventory levels are the strongest predictors of near-term price movements. Even after adjusting for project characteristics, credits from advanced economies are priced 28% higher on average than those from EMDEs, and credit retirements peak in December in line with corporate sustainability reporting cycles and offset deadlines.
World Federation of Exchanges 2025-12-04
World Federation of Exchanges publishes transaction-level research showing a 28% price premium for voluntary carbon credits in advanced economies
The World Federation of Exchanges published a research paper analyzing over 250,000 carbon credit transactions, revealing persistent price disparities between advanced economies and emerging markets and developing economies (EMDEs) in the voluntary carbon market. The study attributes the premium for advanced-economy credits to governance quality and finds nature-based credits trade at higher prices than technology-based ones, with older vintages and larger inventories linked to lower returns.