Onome Amuge
A new toolkit, developed by the Voluntary Carbon Markets Integrity Initiative (VCMI) in partnership with Climate Focus and the United Nations Development Programme (UNDP), seeks to unlock the vast potential of carbon markets for emerging economies, which currently receive only a fraction of global climate finance.
The new carbon markets access toolkit is designed to address this challenge head-on by equipping policymakers with the specialised knowledge and resources required to tap into a market projected to be worth up to $35 billion by 2030.
According to reports, developing countries require an estimated $2.7 trillion annually by 2030 to fund their climate and nature-related goals, with $1.3 trillion of that needing to come from international support. Despite this immense need, only 15 per cent of global climate finance reached these nations in 2022, excluding China. This shortfall poses a major barrier to climate-positive growth and the global transition to net-zero.
According to the World Bank, carbon markets have the potential to halve the cost of implementing national climate strategies. The voluntary carbon market alone is projected to grow to $1.5 trillion in Africa by 2050. However, the complexity of these markets, coupled with the need for robust policy and institutional infrastructure, has historically presented a major barrier for emerging markets and developing economies (EMDEs).
Mark Kenber, executive Director of VCMI, emphasised the urgency of the situation. “Emerging markets and developing economies urgently need finance to support climate-positive growth and drive the global transition to net zero. Carbon markets provide significant opportunities for governments to channel international private sector finance towards national and global climate goals by leveraging new sources of capital, technology and skills. However, their complexity often presents a major barrier to participation and reduces the potentially transformative impact they can have,” he said.
The toolkit provides a step-by-step guide for governments, outlining key decision points for engaging with both regulated and voluntary carbon markets, as well as those facilitated under Article 6 of the Paris Agreement. It offers guidance on if and when to enter the market, how to use it to finance national climate and development strategies, and how to address legal and institutional considerations to host high-quality carbon projects.
Leticia Guimarães, head of carbon markets at UNDP, noted that navigating these markets is a complex and constantly evolving process. “Informed policymakers are better positioned to make strategic decisions. Resources like the Carbon Markets Access Toolkit provide the clarity and support needed to guide these decisions in alignment with national priorities,” she said.
The toolkit, available in multiple languages including English, French, Spanish, and Portuguese, is part of VCMI’s broader Access Strategies Programme, which has been providing tailored technical assistance since 2021. An independent evaluation of the programme highlighted its success in supporting governments across the Global South, with a total of 20 national initiatives launched in countries such as Benin, Brazil, India, Kenya, Mexico, Pakistan, Panama, and Peru.
For instance, the programme has shown tangible results on the ground. In Mexico, VCMI worked with the government of Yucatán to address concerns over the fair treatment of local communities in voluntary carbon market projects. Through direct engagement with Indigenous communities, the programme developed a state roadmap and a best practice guide for engaging with carbon markets, accompanied by a series of workshops for local communities, policymakers, and project developers.
In Benin, the toolkit’s approach has been integrated to support the development of a decision matrix tool. This tool will guide the government’s evaluation and approval of carbon projects for both Article 6 and voluntary carbon markets. This is particularly critical for Benin, which has identified an investment gap of approximately €10 billion ($11.3 billion) by 2030 to fund its climate goals.
Mohamed Nasheed, secretary-general of the Climate Vulnerable Forum and former President of Maldives, hailed the initiative’s potential to provide debt-free finance. He described carbon finance as an immense building block to advance national economic resilience, social equity, climate action, and biodiversity prosperity, all while unlocking new capital for countries facing the deepest climate funding gaps.
Modeling suggests that beyond the direct financial gains, global carbon credit markets could generate up to seven times as much impact in terms of additional investment, technology transfer, and community benefits. By focusing on high-integrity carbon markets and aligning with the principles set forth by the Integrity Council for the Voluntary Carbon Market (ICVCM), the toolkit aims to ensure that these activities deliver truly transformational outcomes for sustainable development and climate action.
