Unprecedented action by American NGO underscores the importance of Zimbabwe’s national carbon registry

By The Zimbabwe Independent | Sep. 26, 2025

While the registry justified its action as a necessary correction, the episode exposed a fundamental flaw: in voluntary markets, property rights are fragile, and investors have little recourse when credits are voided.

Verra’s decision this September to cancel more than 15 million carbon credits from Zimbabwe’s Kariba REDD+ project has shaken investor confidence in the voluntary carbon market. While the registry justified its action as a necessary correction, the episode exposed a fundamental flaw: in voluntary markets, property rights are fragile, and investors have little recourse when credits are voided.

Yet for all its risks, the Kariba scandal also underscores why the future of carbon finance is shifting toward compliance systems under Article 6 of the Paris Agreement, and why Zimbabwe’s new national carbon framework is a step toward fixing the shortcomings investors face today.

The fragility of private registries

In voluntary markets, credits are not legally recognised assets. They exist only as entries on private registries like Verra’s, governed by contracts that give registries sweeping discretion to amend rules and cancel credits without liability. Investors cannot sue for losses, nor can they rely on enforceable property rights.

The Kariba cancellation demonstrated the consequences: millions of credits disappeared at the stroke of a press release, leaving buyers, brokers, and local stakeholders empty-handed.

How Article 6 changes the picture

Article 6 of the Paris Agreement aims to remedy these weaknesses by embedding carbon transactions in international law and domestic legal frameworks. Under Article 6.2 and 6.4 mechanisms:

National authorisation: Credits cannot be issued without host country approval, creating a sovereign guarantee rather than reliance on a private NGO.
Corresponding adjustments: Transactions are tracked in national inventories, preventing double counting and ensuring credits are recognised under the Paris Agreement.
Legal recognition: Once registered through national systems, credits become state-backed units, giving investors clearer enforceable rights.
Transparency and oversight: Reporting obligations to the UNFCCC add a layer of international scrutiny absent in voluntary registries.

For investors, this framework replaces discretionary private governance with rules anchored in international law and national sovereignty.

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Zimbabwe’s new framework

In response to both international developments and domestic scandals, Zimbabwe has recently introduced a comprehensive national carbon market framework. Key features include:

National registry: All credits must now be recorded on a government-run system, reducing dependence on third-party standards like Verra.
Revenue-sharing rules: A fixed percentage of carbon revenues must flow to local communities and the state, ensuring predictable benefit-sharing.
Approval process: Projects must obtain host country authorisation before credits can be issued or traded, aligning with Article 6 requirements.
Legal enforceability: By embedding carbon markets in domestic law, Zimbabwe provides investors with a more stable basis for ownership claims.

While the framework is still in its early stages, it represents an important shift from the discretionary, contract-based voluntary market model to one grounded in public law.

A more bankable future?

For institutional investors, the lesson from Kariba is not to avoid carbon markets altogether but to distinguish between the old and the new. Voluntary credits issued under private standards remain high-risk, with governance skewed heavily toward registries. Article 6-aligned credits, by contrast, promise:

Sovereign backing that secures property rights.
Stronger legal recourse in case of disputes.
Predictable benefit-sharing that reduces reputational risk.
Integration with global climate goals, making credits less vulnerable to charges of greenwashing.

The bottom line

Kariba’s collapse has been a wake-up call for investors: voluntary carbon credits lack the protections that would make them reliable portfolio assets. But it has also accelerated a transition. With Article 6 operational and countries like Zimbabwe building national frameworks, the next generation of carbon markets could address the very shortcomings that Verra’s cancellations exposed.

For investors seeking exposure to carbon as an asset class, the safest path forward lies not in private registries but in sovereign systems that anchor carbon finance in law. The future of bankable carbon markets will be Article 6-compliant – and Kariba may go down as the scandal that proved why.