From Project Development to Market Traction: Two Perspectives on Carbon Market Transparency

AJ Bird and Rosendo Pérez Antonio

Transparency and integrity are essential to the voluntary carbon market, but their practical application can look different depending on where participants engage with the market.

In this co-authored piece, Rosendo Pérez Antonio and AJ Bird explore transparency through two distinct but complementary perspectives. Rosendo draws on his experience in community-based carbon project development, examining transparency, understanding, and integrity from the earliest stages of project formation.

AJ considers where and how projects meet the broader carbon market, focusing on market architecture and the things that influence buyer participation, transactions, and credit retirements.

Together, these perspectives illustrate how transparency matters across the carbon market, from project development through to final credit retirement.

Rosendo Pérez Antonio – Transparency & Integrity in Carbon Project Development

Based on my experience working with diverse communities, I can safely say that transparency might mean different things to different actors in carbon markets. For the sake of simplicity, I will refer specifically to the work we do in educating both buyers and forest/land owners transparently and what that means for everyone we work with.

At the community level, as an organization, we work to explain the many aspects of carbon projects before even talking about project development. This approach emerged from a trial and error process that took the organization around eight years to develop, during which the people leading the organization realized that they needed to develop a process for determining whether carbon projects were suitable for the communities we were engaging with.

Taking those lessons from the past, we came to one big realization that has become an integral part of the pre-development workshops and assessments we conduct with the communities that approach the organization: carbon is not for everyone, nor is it a universal solution for the development, financial, or conservation challenges communities may have before ICICO enters the landscape. ICICO (Integrator of Campesino and Indigenous Communities of Oaxaca) is a Mexican community-owned non-profit focused on bridging indigenous forest owners in Oaxaca to the international voluntary carbon market. ICICO would rather step away from developing a project if doing so prevents the community from taking a wrong turn in their conservation strategy, or if we foresee that the project could become a financial burden in the years to come.

As a general rule, we avoid leading with the organization’s carbon project development expertise, because we learned from a series of mishaps that there is a lot of discussion that needs to happen before introducing potential financial returns into the conversation with inhabitants, legal representatives, and stakeholders at the community-level. One key aspect that we try to communicate is the “what”, specifically, “What are they selling?” If the community doesn’t understand all the nuances behind this simple question, or if the community is interested in a carbon offset project primarily for the potential financial gain without being willing to  engage with the broader implications for its conservation goals, governance, and long-term wellbeing, we move away from those conversations and focus on strengthening the projects we already have. Some project developers might think this is financial suicide; we are comfortable with that tradeoff.

Our approach is heavily based on the fact that ICICO exists because of the communities we work with. In that regard, the technical team as well as the board of directors, composed of members of the associated communities, prioritizes the wellbeing of the communities we work with before pursuing financial gain.

This has proven to be difficult to put into practice, since not all project developers recognize that successful projects require integrity for both the forest/land owner and the people behind the project’s completion.

This is especially relevant in Mexico; there are a number of reports from both reputable newspapers and freelance reporters documenting the high number of unfavorable deals taken by the communities, including cases in which they were not engaged correctly and Free, Previous Informed Consent (FPIC) requirements were not followed by project developers. FPIC  is crucial for communities to fully understand and engage with the first steps of project development. During this stage most of the information regarding benefits and financing has to be explained and fully understood by all parties involved.

One crucial question rises to the forefront: are we providing enough transparency, and does everyone involved understand what that “transparency” means for them?

Transparency, from our perspective, needs to extend to the forest owner, but also to the buyers and financial enablers. In conversations with AJ Bird, ICICO concluded that the market needs to look more deeply at the people behind the projects. Too often, the market focuses on maximizing the value of a carbon credit, with significant attention placed on the financials of a project, while giving less attention to the people making these projects possible.

One reality that the market needs to understand is that high-integrity credits are possible, however they come with greater costs, which are not always taken into consideration when a possible buyer is assessing a project. That high-integrity will come, whether we like it or not, from the conservation efforts and ethics of the people working, literally and figuratively, on the ground to realize these projects.

In most cases, what the buyer is looking for in a particular project can be achieved, but will not magically emerge. In order to generate specific co-benefits, the buyer and the forest owner need to communicate.  This communication can help co-create a project that advances the community’s visions for conservation and recognizes community members as stewards of their own ecosystems and not just as partners in a business, while also fulfilling the buyer’s conservation, communications, or social responsibility goals. 

If this can be achieved, our experience suggests that projects can become more resilient to shifts or changes in trends across carbon markets.

There is still a lot to be done and we, across the carbon market, need to understand that nature-based solutions are not just numbers in a spreadsheet, but the intersection of people and nature, resulting not just in carbon credits but also in a huge assortment of ecosystem services that we are not yet pricing accordingly.

AJ Bird – Transparency & Market Architecture: From Buyer Participation to Retirement

Rosendo’s work shows why transparency must begin well before a carbon project reaches the market. My focus picks up as projects and buyers meet, identifying the market mechanisms that can make that process more efficient, transparent, and repeatable.

I believe one reason carbon markets have struggled to mature is that too little attention has been paid to buyer uptake. Buyers are already in the market, but considerable attention continues to focus on project development, methodologies, registries, standards, and supply, while comparatively less attention is paid to how buyers define what they need, make purchasing decisions, assess risk, navigate internal approvals, retire the credits they acquire, and return to the market predictably.

More supply alone will not mature the carbon market. We need better-prepared buyers, fewer transaction barriers, greater transparency, and a clearer path from purchase to retirement. Those are the conditions that can create stronger and more repeatable market traction.

Buyer discovery should precede market discovery. I propose that buyer education and profiling take place before the search for carbon credits begins. A buyer first needs to understand both the market and its own goals: the type of project or credit it is seeking, the environmental and social attributes that matter, relevant governance and rights considerations, intended claims, available budget, acceptable terms, and any other conditions it requires.

Buyers also need to understand their limits. Purchasing a carbon credit does not necessarily give a buyer authority over project governance, community priorities, or decisions about how project revenues are used.

Consider this example: a buyer may approach a community-based carbon project with assumptions about what project revenues should support. The community may already have identified very different priorities, such as essential infrastructure. The issue is not whether the buyer’s idea is well intentioned. It is whether the buyer understood enough about the project, its governance, and its own role before that project was presented as a potential fit.

Where a buyer purchases directly, more of its corporate purchasing power can be directed toward the credits themselves rather than intermediary fees. Where an intermediary is used, buyer discovery should happen first so the intermediary can source against clearly defined buyer requirements, rather than starting with available inventory and trying to find a buyer for it.

Intermediaries are often the ones sourcing credits for buyers. That can be a valuable role, but the intermediary should be adding informed screening, buyer preparation, and transaction expertise—not simply moving volume, reselling inventory, or relying on the spread between acquisition and resale.

That said, many intermediaries do provide substantial buyer education, screening, market intelligence, due diligence support, and transaction preparation. The challenge is that the market does not have widely normalized expectations for what those services should include, what level of buyer readiness should exist before sourcing begins, or what deliverables should accompany the fees being charged. Those fees can also be opaque and embedded within the carbon credit purchase price rather than disclosed separately, making it difficult for buyers and sellers to distinguish the underlying asset price from the cost of intermediation. That is different from many more mature markets, where intermediary fees or commissions are more visible as part of the transaction.

This is not an argument against intermediaries or their ability to earn fees. Intermediary fees are a normal feature of many mature markets; the issue is whether those fees are transparent and tied to a clear value proposition. Sellers should understand the economics of the transaction. Buyers should understand what they are paying for, both in the carbon asset and in the services surrounding the transaction. Intermediaries should be able to demonstrate the expertise, preparation, screening, and support they provide.

That is transparency in practice, and it is also part of what helps markets mature. More mature markets tend to make roles, costs, expectations, and transaction pathways visible. In carbon markets, which remain difficult for many buyers to navigate, better-prepared buyers should be easier to match with projects and credits that meet their requirements.

This is how we can trigger carbon market traction.

Market discipline should not stop at purchase. A defined retirement expectation can turn final-use sales into clearer demand signals and help trigger the next cycle of carbon market activity.

Clearer, repeatable demand signals and a more predictable market cycle can also help projects demonstrate a more credible pathway to future revenue, strengthening the conditions for investment and financing without suggesting that buyer demand alone makes a project financeable.

My work is increasingly focused on the market mechanisms around the project-to-buyer interface: how buyers are prepared, how credits are sourced, how transactions are structured, how value and fees are made visible, and how final-use sales can feed a more predictable cycle of retirement and renewed demand. 

This co-authored Fellowship piece brings together complementary project and market-level perspectives. From the earliest conversations with communities to the final retirement of carbon credits, transparency depends on more than the availability of information. It requires participants to understand their roles, responsibilities, and the implications of their decisions. Strengthening that understanding on both sides of the market can help ensure that carbon projects reflect community priorities while enabling buyers to participate with greater clarity and confidence.