Signal MIT Study Finds Carbon Credit Prices Reflect Buyers' Preferences Far More Than Climate Impact

Summary

The study, led by MIT Sloan principal research scientist Florian Berg with co-authors from VU Amsterdam, the Leibniz Institute for Financial Research SAFE and the Tinbergen Institute, analysed more than 7,200 real transactions from 2018 to 2024, covering roughly 11% of the global secondary voluntary carbon market by dollar value. Who buys a carbon credit explains 62% of price differences, with identical credits selling for anywhere from cents to more than $100 per ton — a level of buyer-driven price variance essentially absent in traditional financial markets such as corporate bonds. The 20 largest purchasers paid 16-23% lower prices, while financial services and consumer goods companies often paid significant premiums. Higher prices did not track higher quality: forest protection and clean cookstove projects, both rated poorly by independent assessors for climate effectiveness, sold at two to four times the price of more reliably rated waste-management and industrial-efficiency projects, and the premium persisted even after investigative reporting exposed problems with forest-protection credits. Berg said "the carbon credits market is very opaque when it comes to pricing" and that "what we see is that buyers aren't just paying for carbon," with the researchers suggesting the market would benefit from publicly available price benchmarks or mandatory transaction disclosure.