Could Carbon Markets Become Digital Public Infrastructure?

Why the future of carbon credits may depend less on marketplaces and more on the digital infrastructure connecting them

Carbon markets are entering a new phase. The question is no longer simply whether carbon credits can be created and traded. The harder question is whether the infrastructure behind those markets can provide the scale, transparency, interoperability and trust required for a rapidly evolving global carbon economy.

Today, carbon-market participants often operate across different registries, verification systems, marketplaces and reporting processes. Data can be difficult to compare, systems may not communicate with one another, and monitoring, reporting and verification can be expensive and time-consuming.

At the same time, carbon markets are becoming increasingly important. The World Bank's 2026 State and Trends of Carbon Pricing report says direct carbon pricing now covers more than 29% of global greenhouse-gas emissions, with 87 carbon-pricing instruments in operation worldwide. This raises an interesting question:

What if the next major development in carbon markets is not another marketplace, but the digital infrastructure connecting all of them?

The infrastructure problem hiding underneath carbon markets A carbon credit may look relatively simple from the outside. Behind that credit, however, is an entire ecosystem. A project needs to be developed and measured. Its environmental claims need to be monitored and verified. Credits need to be issued and recorded. Buyers need to be able to discover and purchase them. Ownership needs to be tracked, and eventually the credit needs to be retired. That means a single carbon credit can involve:

• Project developers

• Landowners and communities

• Monitoring and verification providers

• Registries

• Exchanges and marketplaces

• Corporate buyers

• Auditors

• Regulators

The challenge is that these participants do not necessarily operate within one common digital system. IIM Bangalore's Centre for Digital Public Goods identifies fragmented registries, limited interoperability, pricing opacity and inconsistent monitoring, reporting and verification processes as important structural challenges for carbon markets.

This creates a problem that sounds technical but has very practical consequences: If the systems cannot communicate efficiently, the market cannot scale efficiently.

From platforms to protocols

There is an important difference between building another carbon-market platform and building infrastructure that allows different platforms to communicate. A conventional platform might look like this:

Buyer → Platform → Seller

The platform controls the interaction. An interoperable network could look very different:

Buyer ↔ Shared protocols ↔ Multiple platforms, registries, verifiers and applications

Individual organizations can retain their own systems while still exchanging information through common standards and protocols.

This is the basic idea behind the Open Network for Carbon Markets (ONCM) being developed through IIM Bangalore's Centre for Digital Public Goods and its partners.

Rather than replacing every existing registry or exchange with one centralized platform, the ONCM vision explores a federated digital infrastructure in which different participants can remain autonomous while becoming interoperable. The distinction is important.

The goal is not necessarily: Build one giant carbon-market platform. It is:

Make different carbon-market systems capable of working together.

Why interoperability matters

Imagine a carbon project verified through one system. Its information may subsequently need to be understood by a registry, an auditor, a buyer, a marketplace, a financial institution and potentially a regulator. If every organization uses different data structures, standards or workflows, information may need to be repeatedly transferred, reformatted and checked. That creates friction. Interoperability could allow information to move between systems using common digital standards rather than rebuilding the entire evidence trail each time. This idea is already being explored beyond ONCM. The United Nations Development Programme, for example, has developed an open-source National Carbon Registry designed to help countries issue, track, transfer and manage carbon credits. The system includes API integration and interoperability features. The larger implication is significant: The future of carbon markets may depend as much on data infrastructure as on carbon pricing itself.

Trust begins with the evidence trail

A carbon credit is only useful if market participants can trust the claim behind it. That means being able to answer questions such as:

• Where did the credit come from?

• What activity generated it?

• How was the emissions reduction measured?

• Who verified it?

• Who currently owns it?

• Has it already been transferred?

• Has it been retired?

• Could the same environmental benefit have been counted somewhere else?

This is why Monitoring, Reporting and Verification (MRV) is central to carbon-market integrity.

The World Bank identifies MRV as a critical component of credible carbon-credit markets because the environmental value of a credit depends on the underlying emissions reduction or removal being properly measured and verified. But technology is changing what MRV could look like. Instead of relying primarily on periodic, manual processes, digital MRV, or dMRV, can potentially combine:

• Satellite imagery

• IoT sensors

• Ground-level measurements

Digital records

↓

Continuous evidence

↓

Verification

↓

Carbon-credit issuance

IIM Bangalore's ONCM vision specifically explores digital MRV as part of an interoperable carbon-market infrastructure.

From a carbon credit to a digital asset with a history

A carbon credit is not simply a number. Its history matters. Consider a hypothetical credit:

Project A

↓

Measured emissions reduction

↓

Verified

↓

Credit issued

↓

Transferred to Company B

↓

Transferred to Company C

↓

Retired

Every stage needs to remain traceable. Digital registry infrastructure can make this history easier to track. The UNDP's National Carbon Registry, for example, is designed to track carbon credits throughout their lifecycle, including issuance, transfer and retirement. This creates something crucial: PROVENANCE

In simple terms: Where did this carbon credit come from, and what happened to it afterward? For carbon markets, provenance is not a luxury. It is part of market integrity.

India's carbon market makes this especially relevant. India is not approaching this as a purely theoretical exercise. The country's Carbon Credit Trading Scheme (CCTS) establishes the framework for the development of the Indian Carbon Market. Government of India updates in 2025 and 2026 have outlined the institutional architecture of the scheme, including the role of the Bureau of Energy Efficiency, Grid Controller of India and other institutions, alongside mechanisms for emissions-intensity targets, carbon-credit methodologies, monitoring, reporting and verification. At the same time, Indian institutions are exploring how digital infrastructure could support a more connected carbon market. That combination is particularly interesting. India is developing the rules of the market while simultaneously exploring the digital infrastructure that could support it.

The inclusion problem

There is another dimension of digital infrastructure that deserves attention. Who actually gets to participate in the carbon economy? Complex systems can favour organizations that already have:

• Technical expertise

• Capital

• Consultants

• Legal support

• Data infrastructure

• Access to international markets

Smaller projects can struggle when transaction and verification costs become too high. This is especially important in developing economies, where carbon projects can involve farmers, communities, small businesses and decentralized renewable-energy projects. IIM Bangalore's ONCM work explicitly considers mechanisms for broader participation, including smallholders and micro-entrepreneurs. This means digital infrastructure could potentially affect something much larger than efficiency. It could influence: Who gets to participate in the carbon economy in the first place.

But is an open network automatically better? Not necessarily. Interoperability creates opportunities. It does not magically create trust. A connected system can still contain bad data. A digital registry can still contain questionable claims. An automated process can still automate a flawed methodology. This is why technology must be treated as infrastructure for integrity, not a replacement for integrity itself.

Technology can potentially improve:

• Traceability: Knowing where information came from.

• Interoperability: Allowing different systems to communicate.

• Auditability: Creating stronger digital evidence trails.

• Efficiency: Reducing repetitive administrative processes.

• Accessibility: Making participation easier for smaller actors.

But technology alone cannot guarantee:

• Additionality

  Would the project have happened without carbon-credit revenue?

• Permanence

  Will the claimed carbon removal or reduction persist?

• Scientific validity

  Was the environmental impact measured correctly?

• Avoidance of double counting

  Has the same climate benefit been claimed more than once?

• Freedom from greenwashing

  Is the sustainability claim actually supported by evidence?

That distinction is critical.

The carbon-market stack of the future

If carbon markets continue to digitize, they may eventually resemble a technology stack. At the bottom is the infrastructure that makes everything else possible. Above it are the systems that manage carbon assets. At the top are applications used by businesses, investors, regulators and other stakeholders.

Imagine a carbon credit in 2030 Now imagine a carbon project operating in a highly connected digital carbon market.

So, could carbon markets become digital public infrastructure? The answer is not yet known.

The Open Network for Carbon Markets is still a developing initiative, not an established global standard. IIM Bangalore describes ONCM as an evolving framework and has proposed the development of a minimum viable ecosystem, with prototype readiness targeted for September 2026. But the direction is significant. Carbon markets are becoming larger and more complex. Countries are developing new carbon-pricing systems. Organizations are demanding better ESG data. Digital MRV is developing. Carbon registries are becoming increasingly sophisticated. And interoperability is becoming a central question. The next stage of the carbon economy may therefore depend on something that most people will never see: the digital infrastructure underneath the carbon credit. The future carbon market may not be defined simply by who buys and sells carbon credits. It may be defined by whether the systems behind those credits can communicate, verify, trace, integrate and ultimately, trust.

Key Takeaways

1.  Carbon markets are infrastructure problems as much as financial markets.

They involve multiple participants, systems and data exchanges.

2.  Interoperability could reduce fragmentation.

Shared protocols could allow independent registries, MRV providers, marketplaces and applications to interact.

3.  Digital MRV could strengthen the evidence trail.

Satellite imagery, IoT and other digital data sources could support more continuous monitoring and verification.

4.  Provenance matters.

A carbon credit needs a traceable history from project creation through verification, transfer and retirement.

5.  India is an important test case.

India is developing its carbon-market framework while initiatives such as ONCM explore the digital infrastructure that could support it.

6.  Technology cannot replace integrity.

Better systems can improve transparency and traceability, but scientific validity, governance and verification remain essential.

7.  The future may be bigger than carbon trading.

Interoperable infrastructure could potentially connect carbon markets with ESG reporting, auditing, regulatory systems and climate-finance applications.

The Bigger Question

Carbon markets were originally built around a simple idea:

Put a value on emissions and create mechanisms to reduce them.

The next generation may require another idea:

Build infrastructure that makes every environmental claim easier to trace, verify and use responsibly.

If that happens, the most important innovation in carbon markets may not be the next carbon-credit marketplace.

It may be the digital rails underneath the entire ecosystem.

Sources & Further Reading

IIM Bangalore — Centre for Digital Public Goods Open Network for Carbon Markets https://www.iimb.ac.in/cdpg/oncm.php

IIM Bangalore — ONCM Vision Paper https://www.iimb.ac.in/cdpg/oncm-vision-paper.php

IIM Bangalore — ONCM Video Series https://www.iimb.ac.in/cdpg/videos.php

IIM Bangalore — ONCM Roundtable, March 2026 https://www.iimb.ac.in/node/14665

Government of India — Carbon Credit Trading Scheme https://www.pib.gov.in/

World Bank — State and Trends of Carbon Pricing 2026 https://www.worldbank.org/en/publication/state-and-trends-of-carbon-pricing

UNDP — National Carbon Credit Registry https://digitalx.undp.org/carbon-credit-registry-dx3.html

IIM Bangalore CDPG – ONCM Video Series https://www.iimb.ac.in/cdpg/videos.php