The voluntary carbon market (VCM) facilitates the trading of carbon credits, which represent verified emission reductions that firms may use to offset their carbon footprints by investing in sustainable projects. This study quantifies the determinants of carbon credit prices. It finds that prices are generally higher for nature-based projects than for technology-based ones and are significantly affected by credit age and total supply. A complementary machine learning analysis confirms these relationships, identifying past returns and prior credit inventory as two key drivers of price variation. Moreover, carbon credits from advanced economies command a substantial premium, with average prices approximately 28% higher than those from emerging markets and developing economies. This disparity cannot be explained by credit characteristics or investor home bias; rather, it is closely linked to differences in governance quality across project jurisdictions, particularly the rule of law. These findings highlight regional price inequalities and the need for improved pricing transparency.


sustainability voluntary carbon markets