Project-based carbon credits have significant potential as they can channel investment towards climate mitigation activities, while lowering the cost for companies to meet voluntary climate commitments and regulatory targets. But this potential hinges on the quality of the credit markets, which frequently suffer from persistent challenges. The Center on Regulation and Markets (CRM) at the Brookings Institution launched a major workstream examining how project-based carbon credit markets can be improved through regulatory and market reforms.
The paper by Derik Broekhoff, Aidan Conley, and Sanjay Patnaik opens the collection, mapping the current landscape of project-based carbon credits in the U.S. and abroad. Three policy reports follow, each offering concrete proposals for how to address persistent challenges with carbon credit markets. On May 28, 2026, CRM hosted a public event discussing our ideas and the work still ahead.
Authors:
- Derik Broekhoff Senior Scientist – Stockholm Environment Institute
- Aidan Conley Research Assistant – Center on Regulation and Markets, Economic Studies, Brookings
- Sanjay Patnaik Director – Center on Regulation and Markets, Economic Studies, Brookings
In “Project-based carbon credit markets: Overview, issues, and future directions,” Derik Broekhoff of the Stockholm Environment Institute, and Aidan Conley and Sanjay Patnaik of the Brookings Institution explore how project-based carbon credits are used across voluntary and compliance markets, the issues these markets face, and the emerging responses being employed to address them.
Authors:
- Derik Broekhoff Senior Scientist – Stockholm Environment Institute
- Sanjay Patnaik Director – Center on Regulation and Markets, Economic Studies, Brookings
- Aidan Conley Research Assistant – Center on Regulation and Markets, Economic Studies, Brookings
Compliance and voluntary carbon credit markets are currently fragmented and less integrated than they could be. In “Integrating North American carbon credit markets: Prospects and recommendations,” authors Broekhoff, Patnaik, and Conley recommend steps to build shared infrastructure, standards, and governance mechanisms to improve market efficiency across both market types.
Authors:
- Erin Shortell Legal Fellow – Institute for Policy Integrity, New York University School of Law
- Don Goodson Executive Director – Institute for Policy Integrity, New York University School of Law
- Sanjay Patnaik Director – Center on Regulation and Markets, Economic Studies, Brookings
- Aidan T. Kane Research Analyst – Center on Regulation and Markets, Economic Studies, Brookings
In “Which agency should regulate carbon credits in the US?”, Shortell, Goodson, Patnaik, and Kane examine which federal agency would be best suited to oversee project-based carbon credit markets in the U.S. to make them more efficient. Their report suggests that ultimately the Environmental Protection Agency or the Department of Energy are the strongest candidates for such a regulatory role.
Authors:
- Philippe Delacote Senior Researcher – INRAE and Climate Economics Chair
- Tara L’Horty PhD Candidate – INRAE
- Sanjay Patnaik Director – Center on Regulation and Markets, Economic Studies, Brookings
- Aidan Conley Research Assistant – Center on Regulation and Markets, Economic Studies, Brookings
For carbon credit markets to operate more efficiently, information on credit quality should be readily available, and credits that claim to represent the same outcomes should be fungible. In “Improving carbon credit markets: Transparency, quality, and fungibility,” authors Delacote, L’Horty, Patnaik, and Conley explore solutions to improve fungibility, including a novel portfolio approach for buyers to balance underlying carbon credit risk.
Project-based carbon credits: Regulatory and market reforms
Thursday, May 28, 2026 1:00 PM – 2:30 PM EDT
Speakers:
- Annette L. Nazareth Chair, Governing Board – The Integrity Council for the Voluntary Carbon Market (Integrity Council)
- Derik Broekhoff Senior Scientist – Stockholm Environment Institute
- Philippe Delacote Senior Researcher – INRAE and Climate Economics Chair
- Sanjay Patnaik Director – Center on Regulation and Markets, Economic Studies, Brookings
- Erin Shortell Legal Fellow – Institute for Policy Integrity, New York University School of Law
On Thursday, May 28, Brookings CRM hosted a public event examining the challenges facing project-based carbon markets and proposals for their reform. The event kicked off with a keynote and fireside chat from Annette Nazareth, chair of the governing board for the Integrity Council for the Voluntary Carbon Market, who assessed the current state of carbon credit markets and offered a vision for the path forward. Nellie Liang, senior fellow at the Hutchins Center on Fiscal and Monetary Policy at Brookings, moderated the conversation. Following the keynote, a panel of distinguished experts—including Derik Broekhoff (Stockholm Environment Institute), Sanjay Patnaik (Brookings), Erin Shortell (Institute for Policy Integrity), and Philippe Delacote (INRAE)—discussed specific policy proposals drawn from their recent research, exploring how carbon markets might be strengthened, better regulated, and more effectively designed. The panel was moderated by David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at Brookings.