Financial speculation and environmental valuation in carbon price formation in forest carbon markets: a systematic review

Abstract

The emergence of carbon markets can be interpreted both as a techno-economic innovation and as a climate governance mechanism that has gradually evolved into a speculative arena—where carbon credits are increasingly traded for risk and profitability rather than for their genuine environmental performance. The socio-environmental complexity of these markets demands a multidisciplinary analytical lens, given the high degree of economic myopia that speculation induces in price formation. This detachment between the ecological foundation of credits and their market equilibrium value highlights structural fragilities in valuation. Following the PRISMA protocol and the PICO framework, this study addresses the research question: how does financial speculation influence equilibrium price formation in forest carbon markets? A systematic review, based on searches in the Scopus and Web of Science databases (conducted on 7 October 2025), was carried out after a consolidated sample of 180 documents, published in 97 journals, and revealed a strong representation in the fields of energy economics, finance, and environmental policy. The findings indicate that regulatory shocks, liquidity conditions, and integrity narratives—both in Emissions Trading Systems (ETS) and in Voluntary Carbon Markets (VCM)—amplify volatility and speculative cycles, rendering prices highly sensitive to political and macroeconomic expectations (e.g., oil prices, exchange rates, derivatives, and indices linked to climate and policy events). These dynamics unfold unevenly across territories, reflecting spatial asymmetries in governance capacity, regulatory enforcement, and the geographic distribution of mitigation potential. This speculation-oriented perspective exposes the implications of weak regulatory standardization and underscores the sensitivity of carbon prices to short-term interests, emphasizing the urgent need for market integrity and strengthened MRV+ mechanisms to realign price with ecological value.