At the COP30 climate conference, countries that have cooled on climate action are set to exploit carbon markets to take the heat to act off themselves. But carbon markets are no substitutes for real emissions cuts and no replacement for climate finance.

This year’s climate conference will take place in Belém, Brazil, from 10 to 21 November 2025. COP30 comes at a moment when the climate crisis is heating up to unprecedented levels, while the commitment to climate action is cooling down in many parts of the world.

The United States, for example, has officially pulled out of the Paris Agreement, though this withdrawal will not officially take effect until next year. In addition, the Trump administration has been busy dismantling and defunding US support for environmental protection and climate action, both domestic and global, since taking office in January.

On the other side of the Atlantic, though the situation is not as dire, the EU is also in the throes of a major deregulatory drive and has repeatedly missed the deadline for submitting its climate goals to the United Nations Framework Convention on Climate Change.

Carbon panacea

Despite the escalating nature of the climate crisis, emissions continue to rise while commitment to serious climate action falters. This is reflected, for example, in the fact that only 64 countries, representing just 30% of global emissions, submitted updated climate goals in their national determined contributions to the UNFCCC.

Amid this waning commitment, big polluters, whether countries or companies, are looking to prescribe carbon markets as a cure-all for the world’s climate ills. Before COP30 has even started, enthusiasts are touting carbon markets both as a tool for drawing down emissions and as a financial lifeline for the countries of the Global South.

The rule book for Article 6 carbon markets was completed last year, at COP29 in Baku, and a long queue is forming to take advantage of this inadequate and problematic architecture. The EU, for example, is considering plans to rely on Article 6 carbon credits to meet a portion of its domestic 2040 target, despite the fact the bloc’s own Climate Law stipulates that this target should be met with domestic emissions reductions.

In addition, COP30 host Brazil has indicated its intention to launch a voluntary initiative to integrate carbon markets around the world, which has been light on details but carries quite significant risks. The private sector has also been pushing carbon markets hard. For example, in an open letter to climate ministers ahead of COP30, the International Chamber of Commerce called them “essential tools to mobilise investment and innovation for both mitigation and adaptation”.

We expect more announcements and deals to be unveiled during COP30, both relating to Article 6 and to voluntary carbon markets.

Carbon bubbles

This enthusiasm for carbon crediting markets is unwarranted. Not only are carbon markets no substitute for deep and steep emissions cuts, but a growing body of scientific evidence also reveals that these mechanisms, especially when used for offsetting, are riddled with systemic flaws that undermine even the marginal role they can play in tackling the climate crisis. 

Carbon markets also often carry a hidden human toll. They not only tend to shift the burden of action to those least responsible for the climate crisis, but carbon crediting projects also often fail to bring equitable benefits to indigenous people and local communities and have been found to  violate their human rights. A case in point is the situation of the Maasai of northern Tanzania, who have seen their traditional way of life disrupted and access to their land compromised.

Given the opaque nature of carbon markets, it is also unclear how much of the capital tied up in carbon markets actually goes to climate action and local communities and how much goes into the pockets of intermediaries and project developers in rich countries.

Funny money

When it comes to carbon markets as a climate finance tool that can make up the shortfall in adaptation and loss and damage funding to developing countries, this is a non-starter. On the practical front, the entire estimated value of the voluntary carbon market stood at $2 billion at its highest and is currently valued at just over $500 million, which is a drop in the ocean compared with the $300 billion a year by 2035 pledged at COP29, which itself is insufficient to meet the scale of the challenge.

More fundamentally, climate finance is not a gift from heavily polluting rich countries but a debt they owe poorer countries for the climate crisis they played an oversized role in creating. Moreover, carbon markets are, as their name suggests, commercial marketplaces in which the buyer already receives something in return for their money: carbon credits that enable them to sidestep internal decarbonisation. This represents the avoidance rather than recognition of climate responsibility.

Suggesting that carbon markets are a form of climate finance is like buying yourself a birthday cake and then pretending the money you paid for it is actually a gift to the baker.

Wanted: real action

A Carbon Market Watch delegation will be at COP30 in Belém. There, we will be loud and clear in our advocacy for real climate action, in the form of rapid and substantial emissions cuts, where there can be no room for the dulling of ambition with misleading distractions.

Carbon credit markets must not be used for offsetting purposes – their main use to date. If companies or countries buy carbon credits, it must only come over and above ambitious climate action, like the cherry on the cake.

Ultimately, the only show in town is to shrink humanity’s collective carbon footprint by slashing pollution. And the burden for this lies with those most responsible for creating the climate crisis: rich industrialised countries, wealthy corporations and the (super-)rich.