Diskussionspapiere
Innovation and Entrepreneurship Research
Innovation and Entrepreneurship Research
Roadmap to Net-Zero Aligned Carbon Market Regulation
(2025). Roadmap to Net-Zero Aligned Carbon Market Regulation. Oxford: University of Oxford.
Carbon markets are currently at a critical juncture. With over 80 emergent carbon pricing schemes around the globe and 106 carbon crediting policies, interest is growing in carbon market activities that can help reduce or remove emissions. There remains, however, uncertainty as to how countries can effectively manage the growing complexity and breadth of carbon credit transactions whilst ensuring they help rather than hinder the Paris Agreement goals. To date, carbon market regulation has emerged in an ad hoc manner, largely responding to integrity challenges, typically lacking harmonisation and integration with the wider regulatory and financial ecosystems it exists within. Similar to carbon markets themselves, such regulation is not net-zero aligned by default. If the system does not robustly differentiate between emissions reductions and removals, and the different incentives to develop them, carbon markets risk being blunt tools to deliver net-zero. To address these concerns and unlock the full potential of carbon markets in catalysing climate action, governments can design and implement robust regulatory frameworks to support both broader domestic climate and economic goals. To enable governments to effectively design and operationalise such regulatory frameworks, this working paper offers a “Roadmap to Net-Zero Aligned Carbon Market Regulation”. To build this Roadmap, we first categorise existing types of carbon market regulation, highlighting existing trends and gaps. We then conceptualise six key pillars undergirding effective carbon market regulation, including (i) efficient and effective financing; (ii) end state of net-zero; (iii) ecosystem integrity; (iv) equitable responsibilities and outcomes; (v) enforcement and oversight; and (vi) ease of use. We further recognise that whereas these principles can be universally applicable, their implementation will differ across jurisdictional contexts and specifically explore the pillars’ application across advanced, emerging, and developing economies. This illustrates that despite their different capacities and responsibilities for climate action, all jurisdictions seeking to engage with carbon markets can use the Roadmap to help to unlock the full climate and economic potential of net-zero aligned carbon markets in line with national priorities and realities.