Cambridge, MA, July 20, 2026 (GLOBE NEWSWIRE) -- Carbon credits — the tool companies rely on to neutralize residual emissions in pursuit of net-zero commitments, underpinning billions of dollars in net-zero claims — are supposed to work the same way as any healthy commodity market: one ton of carbon removed is priced the same no matter who’s buying. New research from MIT Sloan School of Management refutes this; who buys a carbon credit turns out to matter more to its price than what the credit actually does for the climate, the research found, and prices swing wildly as a result.
In the study, MIT Sloan School of Management principal research scientist Florian Berg focused on the voluntary carbon market, examining transaction-level records from one of the world’s largest carbon credit brokers that serves as the middleman in selling carbon offsets to companies. Typically, past research in this area has relied on estimated or averaged prices. Study co-authors are Marco Ceccarelli and Alexey Ivashchenko from VU Amsterdam, Florian Heeb from the Leibniz Institute for Financial Research SAFE, professor Roberto Rigobon from MIT Sloan, and Remco C.J. Zwinkels from the Tinbergen Institute.
“The carbon credits market is very opaque when it comes to pricing — prices are all over the place,” Berg said. “And what we see is that buyers aren’t just paying for carbon. They’re also placing value on other characteristics of the projects, which helps to explain the wide differences in the prices that we see across the market.”
Why Do Companies Pay Different Prices for the Same Carbon Credits?
The researchers examined over 7,200 real transactions in the voluntary carbon market made between 2018 and 2024, data covering roughly 11% of the entire global secondary carbon credit market by dollar value to determine what factors were driving the prices that 1,200 companies paid for carbon credits across 400 projects. Companies spanned industries including finance, manufacturing, energy, consumer goods, and transport.
If carbon credits worked like a commodity market, such as oil or wheat, one ton of carbon reduction would cost roughly the same regardless of where or how it was achieved. But that’s not what happened. The researchers found that instead of one ton of carbon reduction carrying a single market price, buyers paid dramatically different prices, with many paying a premium. Prices consistently ranged from a few cents to over $100 per ton for credits that represented the same amount of emissions reductions.
Buyer identity alone explained 62% of price variation, a remarkably high share, and one without parallel in comparable financial markets. But in U.S. corporate bond markets — a well-studied example of opaque over-the-counter trading-buyer identity explains almost nothing about price once standard bond characteristics are accounted for.
The 20 biggest carbon credit buyers got better deals, paying 16%-23% less than everyone else. Meanwhile, financial sector and consumer goods companies paid 9%-22% more than industrial manufacturers, while buyers from wealthier countries consistently paid more.
For example, the researchers found that the projects with the worst track records for delivering real emission reductions were often the most expensive ones, and vice versa. “For example, super pollutants are traded for much less,” Berg said, “because the story is not as nice. Buyer preferences explain much of this price variation.”
Meanwhile, forest protection initiatives and projects distributing cleaner cooking stoves in low-income countries, both rated poorly by independent climate effectiveness assessors, sold for two to more than four times the price of more reliable technologies like waste management or industrial efficiency projects. The premium persisted even after a major investigative journalism piece exposed serious quality problems with forest protection credits. Buyers kept paying the premium anyway.
Notably, companies that had made public climate pledges — including science-based emissions targets — did not pay more for carbon credits than companies without such commitments. The finding runs counter to the expectation that companies with ambitious climate goals would be more selective about the credits they buy and therefore willing to pay a premium for those they view as higher quality.
The researchers used data from Xpansiv CBL, a major carbon credit trading exchange, and S&P Platts to verify their findings across a further 3,900 transactions.
How Could Greater Transparency Improve Carbon Credit Markets?
The study’s findings suggest the voluntary carbon market isn’t giving buyers a clear sense of what carbon reductions are worth. One possible explanation is that buyers are willing to pay more for projects they view as offering benefits beyond carbon reductions alone, such as a compelling story that aligns with their mission and sustainability goals.
Another explanation is that carbon credit buyers often have little visibility into what other companies are paying, Berg said, allowing similar credits to be sold at different prices by different brokers and contributing to the wide variation in prices.
Berg noted that wide price differences aren’t inherently problematic. But when buyers pay dramatically different amounts for similar credits, it raises questions about how information flows through the market and whether prices accurately reflect credits’ underlying value, he said.
Past attempts to create a standardized market failed when exchanges including the Chicago Mercantile Exchange tried to create standardized carbon credit contracts, but by 2024, trading in the contracts collapsed. It turned out that buyers who cared about projects’ specific story and attributes weren’t interested in a generic basket of credits.
What the market needs, said Berg, is better information about prevailing prices so that buyers can make more informed decisions. “It’s okay to pay for co-benefits,” he said. “But it’s odd that two different actors paid vastly different prices for the exact same product. To really make the market function well, it’s very important that we create a mechanism to make it more transparent.”
The market, the researchers argued, would benefit from publicly available carbon credit price benchmarks. One approach would be for a regulator like the U.S. Commodity Futures Trading Commission to require market participants to report transaction prices after a delay, such as six months. Creating a public record of what similar credits have sold for would help to ensure brokers don’t charge dramatically different prices to different customers. The goal, Berg said, is not to eliminate price differences but to ensure they reflect genuine value rather than the buyer’s willingness to pay.
“Done right, these fixes would preserve the voluntary carbon market’s core appeal—a flexible, private-sector tool that moves money across borders toward climate projects — while improving how prices are set in practice,” said Berg.
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Matthew Aliberti MIT Sloan School of Management 7815583436 malib@mit.edu
