With the United States formally withdrawing from the Paris Agreement under the current administration, the role of the private sector in advancing climate action has never been more critical. 

Governments were once expected to take the lead on carbon reductions. Now, as compliance incentives wane and political commitments waver, companies making a positive impact are facing intense amounts of uncertainty on what their futures look like. While compliance markets may have become volatile and uncertain, a rare opportunity for voluntary carbon markets to stepping in to fill the void has surfaced. But it won’t matter how many projects pour in if prices remain near rock bottom and quality takes a backseat.

We’ve seen far too often how cheap credits that no one trusts drive good projects off the market. That’s exactly what could happen unless we do one thing: reward projects that actually deliver impact at a credit value that incentivizes them to scale that impact and not just tread water for the next two decades.

So, how do we move from “clearance-rack offsets” to a true marketplace that funds legitimate climate solutions? 

A functioning market does one thing well: it sends clear signals that drive action. That means efficient resource allocation, trustworthy transactions, and prices that reflect reality. Not fantasy. To get there, you need seven core attributes.

1. Radical Transparency - Participants must see the same scoreboard.
- Real-time access to accurate, verified data.
- No room for misinformation, manipulation, or selective visibility.
- Prices reflect facts, not hype.

2. Deep, Consistent Liquidity - No bottlenecks. No dry spells.
- Buyers and sellers can move in and out without blowing up price signals.
- Liquidity drives confidence. Confidence drives growth.

3. Minimal Friction - If it’s clunky, it’s broken.
- Fast, efficient trades.
- Clear pricing.
- Seamless settlement.
- No hidden costs that penalize participation or punish innovation.

4. Fair Access, Real Competition - Gatekeeping kills innovation.
- No monopolies, no backdoors, no inside tracks.
- Every qualified participant plays by the same rules, with the same tools.

5. Strong Rules. Stronger Enforcement. - A market without rules is a scam.
- Governance must be clear, consistent, and enforced.
- Fraud, greenwashing, and manipulation get shut down fast.
- Trust isn’t assumed. It’s earned. Daily.

6. True Price Discovery - The market tells the truth. Or it fails.
- Prices should reflect actual costs, verified impact, and future risk.
- Incentives (subsidies, penalties, rewards) should guide the right behaviors without distorting fundamentals.

7. Risk Management That Works - Volatility is natural. Collapse isn’t.
- Give participants tools to hedge, insure, and manage exposure.
- Structured risk mitigation is a safety net, not a crutch.

Now, let’s translate that into climate finance and carbon markets where the stakes are existential. A well-functioning carbon market must:

1. Price environmental value, not paperwork. Real credits, from real impact.

2. Reward integrity. High-quality credits trade at a premium. Weak credits get weeded out.

3. Enable liquidity. Buyers shouldn’t be stuck. Sellers shouldn’t be stranded.

4. Maintain tight verification. Auditable, traceable, verifiable data flows. No fluff.

5. Be backed by rules that work across borders. Markets don’t stop at country lines. Neither should governance.

The goal? A market that’s fast, fair, and rooted in truth. One that helps humanity and the planet to thrive together, not one that just works the spreadsheets. 

If we get these fundamentals right, high-impact areas like putting a value on Nature Based Solutions as an asset class, scaling Biogas, Sustainable Fuels, Oils and Lubricants, Biochar, and accelerating the transition to low-carbon minerals and materials like cement, steel and aluminum. They’re not pie in the sky; they have measurable benefits and real applications. But they also require rigorous verification, large amounts of finance, and clear value chains. When buyers step up with real price signals, we’ll see these projects multiply instead of being pushed aside by the usual bargain-basement credits.

As compliance markets contract, the voluntary sector can either rise to the challenge or become another race to the bottom. The deciding factor is whether we set and enforce meaningful standards, uphold rigorous monitoring, and match prices to true impact. If we do, we’ll attract serious buyers tired of window dressing and ready to invest in offsets and fund joint ventures that stand up to scrutiny for the positive impact they make.

The path is right in front of us. It's clear as day what we need to do to move markets forward and create a well functioning market. The question is whether we seize this chance to build a marketplace that values genuine impact, or keep perpetuating a cycle of cheap, hollow credits. Our window to act is closing fast, but with the right structures and incentives, voluntary markets can become a powerful catalyst for meaningful climate progress that's economical and effective.