Evaluating the Effectiveness of Carbon Credit Systems in Driving Corporate Climate Action and Green Finance

DOI

10.2991/978-94-6463-978-0_11How to use a DOI?

Keywords

Carbon Markets; Green Finance; Governance–Finance Integrity Framework; Corporate Climate Action; Sustainability Verification word

Abstract

The increasing of climate change bring carbon credit schemes as crucial Instruments for mitigating greenhouse gas emissions and enabling sustainable finance. This paper investigates to what extent such institutions foster business climate action and green financial flows.

Adopting a qualitative and exploratory manner, this study will synthetically review secondary information from the peer-reviewed literatures, corporate sustainability report and international regulation from 2019 to 2025.

The study compliance-based tools—which include the European Union Emissions Trading System and the Chinese national ETS—against voluntary carbon markets, where firms can offset emissions regardless of regulation.

Results show that reductions in regulated compliance markets have worked, yet voluntary markets still suffer from concerns about credibility including double counting, weak verification and over-crediting of projects.

To mitigate some of these issues, the paper puts forward a Governance–Finance Integrity Framework that links transparency and accountability in carbon markets with confidence levels attached to green financial instruments (e.g., green bonds and sustainability linked loans). This framework provides a useful tool for evaluating the credibility of carbon credits as environmental and financial instruments. Creating clear rules, standardizing disclosures, and ensuring green finance is genuine will help create a fairer system for transitioning to low-carbon solutions.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Saba khan
AU  - B. M. Sahil
AU  - M. K. Ziyad Mohammed
AU  - L. S. Shilpashree
AU  - N. Nanditha
AU  - M. R. Manasa
AU  - R. Veekshitha
AU  - M. Gowramma
PY  - 2025
DA  - 2025/12/31
TI  - Evaluating the Effectiveness of Carbon Credit Systems in Driving Corporate Climate Action and Green Finance
BT  - Proceedings of the 1st Engineering Data Analytics and Management Conference (EAMCON 2025)
PB  - Atlantis Press
SP  - 108
EP  - 119
SN  - 2352-5401
UR  - https://doi.org/10.2991/978-94-6463-978-0_11
DO  - 10.2991/978-94-6463-978-0_11
ID  - khan2025
ER  -