Investor-Grade Tools To Aid the Global Carbon Market

From Kyoto to Paris, the emergence of corporate transition efforts and the creation of new standards and governance bodies, the global carbon credit market has been continually reshaped and improved. All these efforts share the common aim of creating a market capable of delivering cost-effective emissions reductions at scale.

To support this growth, MSCI has launched 13 global carbon price indexes¹ to benchmark a range of transactions, from specific project types like REDD+ (Reduced Emissions from Deforestation and Degradation) and Nature Restoration to varying credit qualities and compliance credits such as those under CORSIA.

Reliable reference prices are critical for the funding of long-term carbon projects, and especially for nature-based projects in which carbon can accumulate over several decades. To support these projects, we have developed specific price indexes for REDD+ and Nature Restoration, including ARR, Blue and Coastal Carbon and Improved Forest Management (IFM).   

The price trends in these markets have differed depending on the project type. The MSCI Global ARR Index, for example, has followed a general upward trajectory, reaching USD 21.3/tCO2e in June 2025, its highest level since inception in January 2021. This contrasts with the MSCI Global Carbon Credit Index which covers all project types and lost around 43% in 2023 before stabilizing in 2024. 

Prices for other credit types have seen more mixed movements. The MSCI Global Energy Efficiency Index, which is strongly influenced by cookstove credits, rose to nearly USD 9/tCO2e in 2022 but fell to around half this level in Q1 2025, reflecting a relatively large supply and concerns over credit quantification methods. The MSCI Global Renewable Energy Index has also seen a price decrease, averaging USD 1.6/tCO2e in Q1 2025 down from USD 2/tCO2e in 2024 and well below 2022 highs of over USD 7/tCO2e. Again, this trend reflects questions over the integrity of credits from this project type. As of June 2025, only six out of some 2,000 Renewable Energy projects covered by MSCI Carbon Project Ratings achieved a rating of BBB or higher.² This contrasts with Nature Restoration projects where half of the rated projects achieved BBB or above. 

Data as of June 2025. Source: MSCI Carbon Credit Price Indexes

The importance of project quality in determining credit prices is highlighted by the performance of the MSCI Carbon Credit Price Indexes by integrity rating, as assessed by MSCI Carbon Project Ratings.

The MSCI Global Rated BBB and Above Index, which tracks prices for credits rated BBB and higher, averaged USD 5.8/tCO2e in Q1 2025, compared to USD 2.1/tCO2e for the MSCI Global Rated BB and Below Index over the same period.

The premium for credits rated BBB and above reached a record high of over 300% in May 2025. The effect of ratings was even more pronounced for specific project types, such as ARR. Our regression analysis showed a USD 8/tCO2e premium for ARR credits rated BBB and above compared to credits below that level.

Data as of June 2025. Source: MSCI Carbon Credit Price Indexes

While some commodity markets operate nearly exclusively through exchanges, the global carbon credit market transacts through many channels — on exchanges, via brokers and consultants, buying clubs and bilateral agreements. This variability can have an impact on pricing. 

For example, alternative trading routes have grown in popularity in recent years, with the proportion of market activity recorded by MSCI on exchanges in 2024 falling to around half of 2023 levels. In Q1 2025, nearly 90% of trades seen by MSCI were over-the-counter (OTC) and bilateral deals.⁴

The move toward OTC trades increases options for buyers but also increases price variability. Our analysis showed that in 2025, prices for credits from the same project — and with the same vintage — saw an average variation of 11% and sellers adjusting their offer prices less frequently. Between 2023 and 2025, the proportion of newly listed or updated prices less than 14 days old fell from around 75% to less than 66%, while listings 15 to 50 days old became more prevalent. 

While each credit represents one tonne of CO2e emissions avoided or removed, pricing is far from standardized. MSCI price data for 2025 to date shows a wide range, from below USD 1/tCO2e to nearly USD 50/tCO2e, excluding engineered carbon removal, which can fetch prices exceeding USD 1,000 per tonne.  

The most important drivers of price are project type, quality rating, region and vintage.  

North American credits continue to trade at a premium — particularly for nature-based project types like ARR and IFM — with spreads of up to USD 15 per tonne relative to East Asian projects. Clean Cooking prices, while generally lower and more balanced, still show regional variance, with Latin America maintaining a USD 2–3/tCO2e premium over Sub-Saharan Africa.  

Vintage also remains a key differentiator with around 18% price uplift per year for newer vintages. This trend is driven by a widening gap between post-2019 credits and older vintages, particularly lower-rated vintage 2012–2018 REDD+ projects. 

As carbon markets evolve, MSCI’s Carbon Credit Indexes aim to deliver the transparency, precision and standardization essential to scaling voluntary carbon markets and empowering investors and developers to price risk, unlock finance and accelerate decarbonization. 

The authors would like to thank Colin Ward and Patrick Clancy for their contributions to this blog post.