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A Summer in the World of Carbon Markets

For those in the climate space, carbon markets experienced a surge of interest this past year that took many by surprise, myself included. In early 2021, I was first introduced to carbon markets during my coursework at MIT in the MIT Sloan Sustainability Initiative’s Sustainability Lab; I was partnered with Cargill’s carbon team with the goal of helping the Cargill team understand the potential to drive up the value of carbon credits procured from their farmers by incorporating additional spillover benefits of soil sequestration projects aside from just carbon removal. While fascinated by carbon markets, I left the project feeling discouraged. The idea of a carbon market, while theoretically instrumental to achieving global climate targets, seemed too chaotic, too nascent, and too complex to reach scale in a meaningful way. Realizing a large-scale carbon market seemed nothing short of Sisyphean.


In conversations with the Microsoft sustainability team, one of Cargill’s collaborators, several overarching concerns were raised:

  1. While Microsoft had capital at their disposal to purchase offsets, the quality of carbon credits in the market were not up to par with their criteria for purchase; of the 55 million mtCO2 available for purchase, only 2 million mtCO2 met Microsoft’s Critera (see report linked below). The company struggled to reach its climate targets and nearly every corporation that has made climate commitments to date more than likely faces this issue.

  2. There is little appetite for premium benefits, such as community impact, biodiversity, pollutants reductions; these are not metrics the team was concerned with in comparison to quantifiable emissions reductions. Of utmost importance are the criteria of additionality, durability, leakage avoidance, and avoidance of harm.

  3. Navigating the verification and validation process and system for carbon removal is extremely complicated and esoteric. The world of carbon credits was not originally built for carbon removal; it was built for emissions reduction and avoidance. Ultimately, the system-level dynamics of this newly emerging market are not structured in a way to drive efficiency and trust that is required.


Read more in Microsoft’s excellent carbon removal report here.


In just this past year, significant steps forward reinvigorated enthusiasm for a potentially high-impact climate solution so desperately needed:

  1. COP26 led the formalization of Article 6 to lay a foundation of rules and standards with which governments and private-sector players can participate in market-based mechanisms in order to achieve their climate commitments.

  2. Voluntary Carbon Markets broke the $1 billion market threshold, a three-fold increase in the amount of capital in the market in the previous year.

  3. The Taskforce for Scaling Voluntary Carbon Markets launched during COP26, spearheaded by Mark Carney, Breakthrough Energy and McKinsey along with 250 prominent corporations and institutions; the TSVCM is a private-sector led initiative to establish standards in voluntary carbon markets and improve the integrity of the system across the value chain.

  4. The Integrity Council for Voluntary Carbon Markets launched its Core Carbon Principles and Assessment Framework to set new thresholds and standards for high-quality carbon credits.

  5. A record-setting 3,134 companies have now joined the Science Based Targets Initiative (SBTi); of those 1,442 have set science-based targets, and 1,111 have made net-zero commitments.

  6. Stripe Climate has made waves in the market with the establishment of the Frontier Fund in collaboration with McKinsey, Alphabet, Shopify, Meta to establish a $925 million Advanced Market Commitment (AMC) to purchase technology-based carbon removal credits.

  7. And even the crypto bros have found their way into the world of carbon markets, raising concerns about a shift of focus away from the more pressing challenges of improving carbon credit quality and market integrity.


The market is making a lot of noise––it’s like the Wild, Wild West out there. While this rapid progress is exciting, the goal of establishing a large-scale carbon market remains a Sisyphean task; but now there’s a tailwind driving progress, attention, and talent into the industry. That said, unpacking the signal from the noise will be critical to harnessing this momentum and driving real climate impact in the years to come.


Fortunately, I have some time to do some unpacking: I have the lucky privilege of being funded by the Harvard Climate Internship Program to explore the world of carbon markets in depth this summer. I will be exploring the world of carbon markets in a few phases and I’ve even teamed up with the crew at FootPrint Coalition Ventures to get some writing out there beyond my personal blog. The plan is as follows: first, I will be diving into the system, structure, and market dynamics to understand the current problems and the desired state of carbon markets. Next, I’ll be visiting some exciting nature-based carbon sequestration and biodiversity projects in India, Kenya, Pakistan, and Indonesia to better understand these opportunities and to suspend my own inherent biases toward technology-based carbon removal solutions. Finally, I will return to the US, to spend time between New York, San Francisco and Boston, and revisit my familiar comfort zone of climate tech and innovation, hopefully with more dots to connect and a more nuanced lens with which to understand how this space will evolve, or should evolve, in the critical years to come leading into 2030 and beyond. Returning to the Harvard Kennedy School in the fall, I hope to bring these experiences and important lessons learned home with me to inform my research and add value to the industry as I wrap up my final year in my dual-degree MBA/MPA program between MIT and Harvard.


Please join along as you can and feel free to ask questions or get in touch with me via LinkedIn!

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