Exploring the market for voluntary carbon offsets


N. Taiyab

Type of Document:
Research Report


International Institute for Environment and Development (IIED)

Date of Publication:

Place of Publication:
London, UK


Abstract: This paper explores the potential for financing small-scale high-benefit sustainable development projects through the voluntary and retail sector of the carbon market. Through a literature review and interviews with offset retailers and buyers from the private sector, the non-profit sector and government, the paper looks at how the voluntary and retail sectors fit into the overall carbon market; who the main buyers and sellers are; what motivates buyers to voluntarily purchase carbon offsets; and how this market can be further developed. The aim is to consolidate information on the voluntary and retail sectors in order to help potential buyers to understand the market and to provide a starting point for those on the supply side to discuss strategies for further developing the market.


1. Introduction 2. Overview of the carbon market 2.1 What are carbon offsets? 2.2 How do you trade carbon? 2.3 Why trade carbon? 2.4 The interaction between project based transactions and allowance based transactions 2.5 Existing carbon markets 2.6 The Clean Development Mechanism 3. The voluntary and retail markets 3.1 Description 3.2 Market size 3.3 Sustainable development 3.4 Project standards and verification 3.5 Some pros and cons of land-based sinks 4. Buyers and sellers in the retail market 4.1 Retailers 4.2 Brokers 4.3 Buyers 4.4 Buyer concerns and considerations 4.5 What is driving the market? 5. Looking ahead

Additional Bibliographic Information

Markets for Environmental Services 8

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