Fixing the Carbon Market: Is technology the Answer?
Introduction: The Rise of Tech in Carbon Markets
The carbon market is evolving, and a new wave of startups is bringing artificial intelligence (AI), digital Measurement, Reporting, and Verification (MRV), and remote sensing technology to the forefront. These innovations promise to enhance the accuracy, transparency, and efficiency of carbon credit validation, particularly in Nature-Based Solutions (NBS) such as reforestation and soil carbon projects. By leveraging real-time satellite data, machine learning models, and automated monitoring, these companies aim to replace outdated, manual processes with a data-driven approach.
The Problem with the Actual Integrity Systems
In the last two years, we have seen rapid growth in rating agencies and new carbon market integrity initiatives. All of them aim to bring transparency, quality, and integrity to the carbon market. When I first entered the sector almost 20 years ago, third-party verification through a trusted Carbon Standard was considered sufficient—this is no longer the case. Rather than focusing on technological improvements to the MRV system, for many years, the industry relied on traditional methods while the adoption of new technology lagged. Meanwhile, outside of the carbon market, technology has advanced at an exponential pace, making many of our legacy systems obsolete. Only now are we witnessing an accelerated integration of technology within the carbon market.
I still remember my first carbon project in 2007 and the reliance on Excel spreadsheets—remarkably, little has changed in how we collect and manage data. Much of the project certification and evaluation process still depends on spreadsheets, manual data collection, and subjective assessments. This approach is slow, costly, and sometimes inconsistent.
On the other hand, rating agencies need to evaluate projects that often suffer from data problems, errors, and inconsistencies. In addition, their evaluation methodologies differ significantly, further complicating the standardization of integrity assessments.
To be clear, I am not against rating agencies or carbon standard. They have an important role in creating a more standardized and liquid market. However, we must ask whether access to real-time, verifiable data and AI will change the way we develop and evaluate projects in the future.
How Tech Can Improve Integrity
Digital MRV, remote sensing, and AI can revolutionize carbon credit validation by providing:
Real-Time Monitoring – Continuous tracking of project performance instead of relying on infrequent site visits.
Objective Data Accuracy – AI models and satellite imagery reduce human bias and ensure consistency.
Cost Efficiency – Automated verification lowers the costs associated with traditional validation and rating systems.
Scalability – The ability to monitor thousands of projects simultaneously, something impractical with manual audits.
Do We Still Need Standards & Ratings in the future?
If projects can be monitored in real-time with accurate, transparent data, the role of traditional rating systems and integrity frameworks will need to adapt.
Many current methodologies attempt to assess additionality or over-crediting using fragmented datasets and subjective judgments. These tools were vital in early market development—but with access to high-quality, machine-readable data, their future purpose may shift.
Instead of acting as data interpreters and gatekeepers, standards and rating agencies could evolve into system stewards, validators, and architects of digital trust. If digital MRV can offer transparent, verifiable data, investors and buyers may prefer to engage directly with the information, rather than filtered interpretations.
The rise of digital infrastructure is not a threat—it’s an opportunity. Standards bodies and rating agencies can work with tech providers to co-create a more trusted, efficient, and scalable carbon market.
Future Outlook: A Trust System Built on Data
I envision a future where technology—particularly AI, remote sensing, and digital data platforms—helps resolve many of the carbon market’s most persistent issues, from baseline definitions to additionally, leakage, and over-crediting in carbon credits issuance.
We’re at a pivotal moment. Standards and rating agencies won’t disappear, but their role will likely evolve—from acting as subjective evaluators to guiding the governance and implementation of real-time, data-driven infrastructure.
The shift from Excel-based systems to dynamic, tech-enabled platforms is already underway. The real question is: how fast will the market embrace this transformation—and who will lead it?
AI and real-time data have the potential to significantly enhance transparency and efficiency across the entire project cycle. They can empower project developers to adapt and optimize continuously, not just retrospectively. The technology exists—what’s needed now is broader adoption and quick updated of the existing carbon methodologies and standards.
With growing skepticism around carbon markets, we must accelerate the deployment of intelligent digital infrastructure. Rather than multiply overlapping initiatives or rely on selective integrity measures, we need bold leadership, technical clarity, and collaboration. The next chapter of the carbon market must be powered by data, enabled by AI, and driven by integrity at scale.