MIT Study Finds Carbon Credit Prices Depend More on Buyers Than Climate Impact
Carbon credit prices are being driven more by the identity of buyers than by the actual climate impact of the credits, according to new research from MIT Sloan School of Management, highlighting major transparency challenges in the voluntary carbon market.
The study, led by MIT Sloan principal research scientist Florian Berg, analysed more than 7,200 real carbon credit transactions between 2018 and 2024, covering around 11% of the global secondary carbon credit market by value. The research examined purchases made by 1,200 companies across 400 carbon projects, including businesses from finance, manufacturing, energy, consumer goods and transport sectors.
Researchers found that buyer identity alone explained 62% of the variation in carbon credit prices, showing that the same carbon credit can command significantly different values depending on who purchases it.
While carbon credits are intended to function as a commodity market where one tonne of emissions reduction has a comparable value regardless of the buyer, the study found prices ranged from a few cents to more than $100 per tonne of COâ‚‚ for credits representing similar climate outcomes.
The research showed that the largest carbon credit buyers benefited from lower prices, with the 20 biggest purchasers paying 16–23% less than other market participants. Meanwhile, companies in the financial services and consumer goods sectors paid 9–22% more than industrial manufacturers, while buyers from wealthier countries generally paid higher prices.
The study also highlighted that higher prices did not always correspond with stronger climate performance. Some projects with weaker records for delivering measurable emissions reductions achieved premium pricing because of additional benefits such as social impact, community development or stronger sustainability narratives.
Forest protection projects and clean cooking initiatives, despite receiving criticism from climate effectiveness assessors, often sold for two to more than four times the price of solutions such as industrial efficiency improvements and waste management projects.
Researchers noted that companies with public climate commitments, including science-based emissions targets, did not necessarily pay more for carbon credits compared with companies without such commitments. This challenges the assumption that climate-focused companies consistently prioritise higher-quality credits.
The findings were verified using additional transaction data from Xpansiv CBL, a major carbon credit trading exchange, and S&P Platts across a further 3,900 transactions.
MIT researchers said greater transparency is needed to improve market confidence, including publicly available carbon credit price benchmarks and improved reporting of transaction data. Such measures could help ensure price differences reflect genuine climate value rather than differences in buyer willingness to pay.
As companies continue to rely on carbon credits to address residual emissions and meet net zero commitments, the study highlights the need for a more transparent and efficient voluntary carbon market where prices better reflect the quality and impact of climate solutions.
