“The System Should Always Evolve.”

This spring the North American Carbon World (NACW) event celebrated its 25th anniversary, a small milestone in the evolution of carbon markets. In honor of the celebration, Katherine Hamilton, Ecosystem Marketplace Advisory Board member and co-author of Voluntary Carbon Markets: A Business Guide sat down with Alexia Kelly, market veteran and Managing Director of the Carbon Policy and Markets Initiative at High Tide Foundation. 

Katherine: This isn’t your first decade in the carbon market. We’re here at NACW, where Climate Action Reserve is celebrating 25 years. How did you get into this field? What drew you to it?

Alexia: I joined the High Tide Foundation, which is a family office focused exclusively on the climate crisis, full-time about three years ago to focus on creating high-integrity “rules of the road” for environmental markets as we move through this critical decade of climate action.

I was a hippie kid who grew up in a logging town in rural Oregon, and really saw first-hand the tension between natural resource protection, management, and livelihoods. After graduate school, I lucked out getting a job in Portland with the Climate Trust in 2006.

At that time, there was real momentum around climate policy. California’s AB 32 had just passed, RGGI was getting underway, and many of us believed federal cap-and-trade legislation was on the horizon.

The Climate Trust had been created under one of the first greenhouse gas regulations in the United States: Oregon’s carbon dioxide standard, passed in 1997. The state tasked us with investing in projects that would offset emissions from new power plants built in Oregon.

We were literally going out and identifying emissions-reduction projects, funding them, and figuring out how to measure their impact. We wrote some of the earliest methodologies and helped build the architecture that would eventually support a more formal market—which, frankly, is still a work in progress twenty years later.

Katherine: I started at Ecosystem Marketplace in 2006, so the same era. Why were these projects needed in the first place? Can you explain how offsets emerged and what you were working on?

Alexia: At the time, the concept was still relatively new.

Oregon required new power plants built in the state to mitigate a portion of their projected lifetime CO2 emissions. One compliance option was to make a lump-sum payment to a qualified nonprofit, which invested in mitigation projects. 

And so we were tasked to look at everything: anaerobic digesters, truck electrification, forest protection, methane reduction, and more. It was the early stage of asking big questions: Where are emissions-reduction opportunities across the economy? How do we find them? How do we price them? What are the rules around quantification?

There were almost no systems in place. We literally started with a spreadsheet on a computer. This was even before Verra existed. We helped stand up what became the Voluntary Carbon Standard because it became clear that if the market was going to be credible, everyone couldn’t write their own rules. We needed standardization, transparency, and oversight.

It was also the era when the first greenhouse gas accounting protocols were being developed. It was this period where we were moving really quickly on the regulatory front and learning by doing and hashing it out on the ground in real time.

Katherine: And you were working adjacent to the voluntary carbon market but on a compliance program?

Alexia: Correct. It was a compliance market. At the time, most of us assumed the future would be regulatory markets. We were focused on the Western Climate Initiative, California’s AB 32 implementation, and the lead-up to Waxman-Markey climate legislation at the federal level. The voluntary market, as we think of it today, really wasn’t the center of attention then.

Most of my own career was actually in compliance markets. After the Climate Trust, I went to the World Resources Institute and worked on Waxman-Markey. Then I joined the U.S. State Department and worked on Article 6 of the Paris Agreement—the international rules for emissions trading.

But after Paris in 2015, there was a lull. It became clear the U.S. was unlikely to pass federal climate legislation anytime soon. Meanwhile, it took nearly a decade to negotiate the implementation rulebook for Article 6. 

During that gap, companies were increasingly were saying: Well, we know climate change is a problem. Our investors and customers expect action. We don’t really know what to do. So let’s start thinking about voluntary markets more seriously.

That coincided with the launch of the Science Based Targets Initiative. So the conversation shifted toward standards for voluntary corporate climate action. And without a meaningful conversation on national GHG regulations that’s been a major focus in the U.S. certainly for the last decade. 

Katherine: Both compliance and voluntary markets have evolved through learning by doing. What breakthroughs or lessons stand out to you?

Alexia: The system should always evolve. We’re never going to reach a point where we say, ‘The rules are perfect. We’re done.’ That’s not how markets work, and it’s not how science works. And so really thinking about the evolution of the market as far as continuous improvement and learning is critical. You’re going to know more tomorrow than you did today in almost all circumstances.

Another major breakthrough is remote sensing and digital monitoring, reporting, and verification, or dMRV.

Those technologies helped expose weaknesses in some parts of the market, but they also created an opportunity to improve it. Now we can ask: What data standards should exist? How should new technologies be used? Where are they appropriate, or not? What privacy concerns need to be addressed? That’s an enormous step forward. 

Katherine: You’ve been focused on integrity. Where do you think the market is headed next?

Alexia: The next few years are about building on the progress we’ve made in defining integrity. There’s no perfect answer. Integrity is more like art than math. There are better and worse answers, but not one universally correct one.

What matters now is convergence around best practices. Greater comparability and fungibility across markets—including voluntary and compliance systems—is incredibly valuable.

We’re also focused on strengthening social safeguards around benefit sharing, equity, and community protections, such as free, prior, and informed consent.

Historically, many standards simply said, ‘Do no harm.’ That’s no longer enough. We can do better. 

Another major frontier is integration with financial markets. If carbon markets can connect with mainstream capital-market infrastructure—registries, legal systems, interoperability—then we move from an artisanal experiment to a fully integrated global asset class.

That work is still underway.

Katherine: That was the dream twenty years ago too, right? To change how the system values carbon.

Alexia: Exactly. That’s always been the ambition.

Katherine: When you talk about pricing carbon, are you thinking only about markets,or also carbon taxes?

Alexia: I describe myself as price-agnostic. I like taxes. I like allowances. I like offsets. I like emissions trading systems. Whatever gets a meaningful price on carbon in place: That’s what I support. Ideally, it would be legally binding, rising over time, and strong enough to drive real change. 

What history shows is that once a price exists—even a low one—it often ratchets upward over time. This is a massive challenge. We are asking the global economy to price in an externality that touches nearly every part of society.

That isn’t a small task. It will take generations.But it will be worth it.

Katherine: For someone entering this field now, what advice would you give?

Alexia: I’m twenty years in, and I still find the idea deeply compelling: pricing the externality and integrating it into the economy. Every so often I question the whole approach, go for a long walk, and think it through from every angle. I always come back to the same conclusion.

We cannot solve climate change without strong systems for measuring whether what we’re doing is working. That’s what carbon markets help provide. They help us price carbon, yes. But they also help us evaluate impact.

What excites me most right now is the influx of younger talent, especially people who are digitally native and bringing new tools—AI, dMRV, advanced analytics—into the field.

It’s a fascinating moment of innovation and growth, and it’s a great time to get involved. 

Katherine: Thank you for the work you’ve done.

Alexia: Thank you!