Until 2012, Europe was central to the global carbon market; heck, it was the only “real” market. Carbon offset project developers invested billions to earn Certified Emission Reductions (CERs) under the Clean Development Mechanism (CDM) and sold them to European companies and traders participating in the European Union Emissions Trading Scheme (EU ETS).
Projects had sprung up in almost all parts of the developing world. Countries otherwise isolated in the weird geopolitical arena, like North Korea and Iran, were also hosting CDM projects. With too much supply, the quality had to be affected.
This fairy tale, however, came to end when the EU started implementing restrictions on the offsets it considered lacking environmental integrity. Billions of dollars were at stake, and still are, as developers stopped investing in new low-carbon infrastructure and started contemplating pulling investment from old projects.