While COP29 finalised the Article 6 rulebook, operationalising carbon markets under the Paris Agreement, voluntary carbon markets (VCMs) experienced a significant decline in the market value of traded carbon. At the heart of this decline are growing concerns about environmental integrity and diminished trust in carbon markets.
For over two decades, the World Bank has led results-based carbon finance, leveraging donor-funded carbon funds to incentivise emissions reductions through performance-based payments. Most of these funds were created when carbon markets were almost non-existent. Today, while carbon markets are more established, they continue to grapple with environmental and social integrity challenges that affect both demand and price volatility. This presentation seeks to reimagine the role of carbon funds — advocating for a new public-private carbon partnership to mobilise finance for low-carbon, climate-resilient development.