Who Really Profits from the Carbon Market? Let’s Not Reward Countries That Still Owe Us.

As Singapore takes steps to formalise its voluntary carbon market framework through the draft “Annex A – Guidance on the Voluntary Market,” we commend the government for its clear commitment to environmental integrity and market transparency. This is a necessary and timely move, especially as global scrutiny increases over the credibility of carbon offsetting.

Read our submission here.

Singapore’s efforts to shape a credible voluntary carbon market are commendable. As a project developer based in Singapore with operations across Southeast Asia, we support the draft guidance’s focus on integrity and transparency. But to be truly fair, the framework must ask a harder question: Who gets to profit - and who still owes a debt?

At COP29 in Baku, developed countries finally agreed that the old US $100 billion climate finance pledge was insufficient. They endorsed a new target: mobilising US $300 billion per year by 2030, rising to US $1.3 trillion annually by 2035. These are not generous donations. They are overdue obligations to help developing countries mitigate and adapt to climate change.

Yet here is the paradox: many of the same countries that failed to deliver on past climate finance promises now dominate project development in the Global South. Their financiers and asset managers control forest and renewable energy projects across Asia, Africa, and Latin America. They package and sell the credits - often at a premium - back to the voluntary carbon market. 

And they profit. A lot.

Should a country that owes billions in unmet climate finance commitments be allowed to control carbon projects in the very regions they’ve underfunded? The current system allows for the following contradiction:

• A project in Southeast Asia is managed and financed by a firm in a developed country.

• That same country imposes carbon border taxes, such as the EU’s CBAM, on goods exported from Southeast Asia. Let’s face it: CBAM is a trade barrier disguised as a climate policy. 

• Meanwhile, the promised climate finance to support those same developing countries remains delayed, insufficient or delivered as loans. 

In the end, the climate burden stays local, while the financial upside is exported abroad.

To close this loophole, Singapore should take the lead:

• Red-flag countries that have consistently underdelivered on climate finance, while still dominating project pipelines. The US has contributed US$1.5 billion, but the fair share is around US$35–40 billion. Should a financier or project developer from the US be allowed to reap the benefits of a forest project in ASEAN?  

• Require disclosure of project ownership, financiers and ultimate beneficiaries. 

• Establish a principle that carbon market access must reflect climate finance responsibility. If you haven’t paid your dues, you shouldn’t be first in line to profit. France has contributed a lot but in the form of loans. Should a project developer/financier from France be allowed to develop carbon credit projects in ASEAN and then sell it back to ASEAN countries?

Singapore has a rare opportunity to shape the voluntary carbon market into a tool not just for climate mitigation, but for climate justice. Let’s not let the market reward those who owe - while punishing those who’ve already paid the price.