(Image: Tom Red/Private Media)

Carbon offsets are already big business and about to become a lot bigger. After six years of wrangling over the rules, COP26 laid the groundwork for international trading of carbon offsets.

Under the COP26 rules, 5% of offset credits will be set aside to fund developing countries' adaptation efforts and 2% will be cancelled to create upward pressure on emissions abatement. Countries will also be allowed to engage in bilateral trade in credits.

To date, the trading of carbon offsets, which companies can claim as effectively nullifying their carbon emissions, has been governed by a slack system of different voluntary rules and organisations. The COP26 agreement means that up to 200 million poor-quality "zombie" credits from the existing system will also be allowed into the new system.