Voluntary Carbon Market Failing to Achieve CO2-Cutting Potential

A year after global leaders inked a pact to improve the performance of carbon credit markets, the instruments aren’t doing enough to cut emissions of climate-warming gases, according to a report from the global securities watchdog.

Dodgy projects, a lack of regulatory oversight and inflated claims about the benefits are limiting the markets’ ability to truly contribute to cutting emissions, according to the International Organization of Securities Commissions. Many of the concerns are about “market integrity,” including potentially misleading claims by buyers that drive up the risk of greenwashing.

“Voluntary carbon markets have thus far not yet scaled to ...