Climate Foresight 2025

To promote more effective incentives and transparency from VCMs, it is necessary to overcome path dependence through virtuous inflection points. Such inflection points can shift traditional hindrances for VCMs, such as questionable transparency and perverse incentives that lead to greenwashing and carbon credit portfolio mismanagement (Christensen et al. 2021; Berg et al.2021). VCMs are still largely captured by established market actors, leaving out low-infl uence s takeholders as defined by Cains and Wright (2018). Despite the growth of VCMs, carbon credit verification methods are mixed and frequently lackluster, often overlooking the nuanced biodiversity and carbon abatement characteristics of emissions reduction projects (Christensen et al. 2021; Kim et al. 2024). Remedying these verification methodologies necessitates a disruption to the status quo, resulting in new verification methods that become “Entrenche d” a nd“Expanded” as common practice, as per the argument of Levin et al. (2012, 135-136). This should result in a virtuous inflection point for disrupting verification processes for VCMs. Next, the article explores the development of the VCMs in Brazil through a detailed case study of how to transform VCMs through the four levers for transformative change. Case Study: Brazil and the Voluntary Carbon Markets Introduction To explore the pathways for step change to transform VC Ms, we will investigate Brazil, using Lux Carbon Standard (LuxCS), Brazil’s first carbon credit issuer, as an example in real-world innovation. We will investigate the levers for transformative change, including how LuxCS is democratizing, legitimizing, and scaling a higher-quality carbon credit market. Its activities intend to change attitudes - and eventually worldviews - towards carbon credits from a variety of interconnected stakeholders. LuxCS applie s c limate foresight through demonstrating a distinct level of systems thinking and long-termism in its carbon credit verification processes. This supports transformative change, which is increasingly important in an era of dangerous climate change, the mainstreaming of net-zero, and scrutiny towards ESG (Kim et al. 2024). Climate Foresight: Transforming the Voluntary Carbon Markets, by Roger Spitz & James Balzer 23 © Disruptive Futures Institute, March 2025