Voluntary carbon markets can mobilise climate finance for low-income countries through nature-based solutions like agroforestry, which combines carbon sequestration with farmer resilience. Yet existing projects exhibit very low tree survival rates, reflecting two key failures in standard contracting models: adverse selection, as low-commitment landowners self-select into programmes, and moral hazard, as farmer distrust of developers depresses maintenance effort.

We study how contract design can mitigate these information asymmetries to improve market performance and strengthen climate adaptation. Partnering with a large agroforestry project developer in India, we implement a 2×2 cross-randomised controlled trial across 250 village clusters and 2,500 farmers. Each dimension of the factorial design targets a distinct information asymmetry: one varies contract features that screen on farmer commitment to address adverse selection, while the other varies developer-side investments that build relational trust to address moral hazard.

We evaluate impacts on four outcome families: selection; tree survival and carbon sequestration measured via drone-based digital MRV; income diversification and consumption smoothing under climate shocks; and environmental co-benefits including soil health and groundwater recharge.