Nature-Based Carbon-Credit Prices Grow Apart
Between 2021 and 2024, the three regional REDD+1 carbon-credit indexes we track moved closely together, with prices rising and falling in tandem. Statistical analysis showed a very high positive correlation between all three indexes. That relationship broke down in 2025.
The divergence was mainly from East Asia where strong demand for selected high-rated projects, such as the Katingan project (rated A by MSCI Carbon Markets), combined with curtailed supply from Indonesian export restrictions, has pushed the MSCI East Asia and Pacific REDD+ Index to its highest level since early 2023, averaging USD 8.90 in Q3 2025. In contrast, the MSCI Latin America REDD+ Index averaged USD 2.80, up modestly from USD 2.70 in Q2.
Geography matters in the evolving carbon marketEfforts to create a unified global carbon-credit system continue, but in practice regional markets are already taking shape with distinct dynamics. Buyers often prefer credits from certain geographies to show local impact or alignment with their operations, while compliance and tax schemes can encourage differentiation by allowing credits only from specific locations.
These markets are also shaped by perceptions of credit quality and risk. Some regions are viewed as less risky beyond project-level concerns over environmental integrity, with buyers conscious of shifting regulations, safeguards, legal uncertainty and reputational risk if projects fail to deliver not only carbon but the expected social and environmental co-benefits. Some regions contain a greater number of highly rated projects with established reputations in the market. Differences in cost divide demand, with some buyers prioritizing affordability and thus looking for projects in lower-cost regions, while others are willing to pay premiums targeting high-integrity projects in less risky locations.
This divergence may shift again in the coming months as Indonesian export restrictions are eased, new supply enters the market under updated methodologies and remaining legacy credits are absorbed. For investors, these evolving regional dynamics underscore the importance of understanding how geography, quality and policy intersect to influence pricing and risk. MSCI’s new suite of regional carbon-credit price indexes for afforestation/reforestation/revegetation (ARR), improved forest management (IFM) and REDD+ projects will provide a benchmark for tracking these dynamics as they evolve.
Source: MSCI Carbon Credit Price Indexes, data as of October 2025
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1 REDD+ stands for Reducing Emissions from Deforestation and forest Degradation and related activities in developing countries. It is an international framework under the United Nations Framework Convention on Climate Change (UNFCCC) that creates incentives for these countries to conserve forests, reduce emissions and enhance forest carbon stocks. Developing countries receive results-based payments for verified emission reductions, with the "plus" (+) signifying additional activities like sustainable forest management and the conservation of existing forest carbon stocks.
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