Key issues in carbon markets and lessons for biodiversity conservation and financing

Voluntary carbon markets remain a controversial instrument for financing biodiversity conservation. From the perspective of credit-selling countries — especially in the Global South — carbon offsets represent both risks and hopes for aligning climate mitigation with biodiversity protection and much-needed financing of local development. Drawing on recent empirical evidence, we review the biodiversity, additionality, implementation, and equity challenges that have undermined the credibility and impact of carbon crediting, using cases from tropical forest regions. We argue that offset markets may still play a transitional role if embedded in strong regulatory frameworks, with transparent benefit-sharing and robust quality criteria. We call for a reframing of carbon markets not as ends in themselves but as transitional tools within a broader, justice-oriented biodiversity financing agenda. Our proposal to improve carbon markets combines top-down components — State-led biodiversity zoning and jurisdictional approaches — with a bottom-up approach that encourages a broader social engagement.