It is also plausible that countries with problematic management and institutional environments could be effectively excluded from the market because of the costs associated with these risks and barriers. The magnitude of such costs is difficult to estimate and beyond the scope of this analysis. However, we use the World Bank index on governance effectiveness (25) to shed light on the potential impact of such considerations on the supply of carbon offsets. For illustration, we consider two cases that limit the potential supply of offsets to countries in the top 50th or 90th percentile of the governance index (SI Appendix).