Voluntary carbon market design shapes outcomes under Article 6

Voluntary carbon markets (VCMs) and Article 6 compliance mechanisms draw from overlapping mitigation supply, yet their interactions remain poorly understood. Using a global integrated assessment model, we examine how VCM design choices affect prices, resource transfers to the Global South, and mitigation distribution when voluntary and compliance markets coexist. We find that VCMs can transfer substantial near-term resources to the Global South ($3–161 billion annually depending on market configuration), but this role diminishes as NDC targets tighten. Design choices matter materially: market sequencing drives a 10–20× price differential, with VCM prices ranging from $2–18/tCO2 when VCMs clear first to $30–287/tCO2 when compliance markets clear first. This “low-hanging fruit” dynamic, where early purchases deplete low-cost mitigation, is real but design-contingent. Authorization rules and market architecture determine whether VCM transactions create additional mitigation or risk double-counting. Our results are illustrative rather than predictive. They suggest that the voluntary-compliance interface deserves deliberate policy attention from host country governments, corporate buyers, and Article 6 negotiators.