Getting paid to cut carbon with sustainable projects. Paying a price if you still pollute. That’s the basic idea behind carbon credits. An instrument to scale climate action – and to provide additional benefits for the communities on the ground.

For nearly three decades, scientists, entrepreneurs, and regulators have worked to develop markets for carbon credits. While many of these markets saw rapid early growth, they soon collapsed just as dramatically.

Why did this happen? And will carbon credits scale again?

To answer that, we need to understand the carbon credit system’s core paradoxes and find the courage to address them.