Why the Carbon Market Is Stuck, And What We Can Do About It

Today we’re releasing The Reconstruction of Carbon Outcomes, a paper that reframes one of the voluntary carbon market’s deepest challenges: the buyers’ paradox.

For more than a decade, market participants have been caught between two unappealing choices. On one side, there are lower-cost credits that often come with questions about baselines, durability, or long-term impact. On the other side, there are high-cost credits perceived as more trustworthy but difficult to purchase at meaningful scale.

This tension isn’t an accident. It comes from a design assumption that has shaped the market from the beginning:

We expect a single activity to both create climate benefit and preserve it for the long term.

When the entire carbon outcome depends on one activity doing both jobs, the market inevitably sorts into two categories: cheap but questionable, or credible but expensive.

1. Activities that are good at “creating” climate benefit aren’t always good at “preserving” it

Creation and preservation are different skills.

Some activities excel at creating new climate benefit — they generate a real difference between the project and its baseline. But those same activities may struggle to maintain that benefit for long periods or protect it against disturbances, economic pressures, or natural dynamics.

Other activities are excellent at preserving carbon over time. But they don’t, on their own, generate new climate benefit relative to the baseline.

By forcing the market to treat creation and preservation as a single function, we ask each project to do both the thing it’s naturally suited for and the thing it isn’t. This pushes costs up and reliability down.

2. Buyers notice this mismatch — and rationally sort credits by price

Because every credit today bundles creation and preservation together, buyers end up comparing “bundles,” not attributes.

This means:

• Lower-cost projects often look risky because they struggle with permanence or have complicated baselines.
• Higher-cost projects look credible because they include measures that strengthen durability or simplify baselines.

From the outside, it looks like buyers are choosing between “cheap/low-trust” and “expensive/high-trust.” But buyers aren’t being irrational — they’re responding to the only menu the market offers.

Bundling forces all attributes into a single price point, so price becomes a proxy for trust. That’s the buyers’ paradox.

3. Bundling forces two different cost structures into one product

Creating climate benefit has one cost structure. Preserving that benefit for decades has another.

When both are bundled into a single activity:

• The project must fund both creation and long-term protection.
• The buyer must pay for both, even if one function is far more expensive.
• The market loses the ability to price each function according to its true economics.

This makes genuinely credible credits inherently expensive — not because credibility must be expensive, but because the market insists on building two different functions into one supply chain.

Meanwhile, the only way a credit can be inexpensive is by quietly taking on less of the long-term protection burden.

This structural tension creates a market that can only deliver two types of outcomes — and neither scales well.

A new architecture

The Reconstruction of Carbon Outcomes proposes an alternative: separate creation and preservation into two independent activities, each optimized for its specific role.

• One activity creates climate benefit.
• Another preserves it over time.
• Buyers pair one of each to create a complete, credible outcome.

This simple change dissolves the buyers’ paradox by letting each function develop on its own terms, with its own cost structure, and with clearer accountability.

Credibility stops being expensive. Affordability stops signaling risk. And climate outcomes finally become scalable by design.

Download The Reconstruction of Carbon Outcomes to explore the full framework.