Carbon finance for the forest sector to achieve the Goals of the Paris Agreement: A training & dialogue with Indigenous Peoples


The achievement of the Paris Agreement goals will rely on a combination of financial and policy mechanisms and action from both public and private actors and all sectors of the economy to urgently reduce global emissions. Carbon markets can play a key role in the transition process, incentivizing the development of low-carbon initiatives and forest conservation, by creating an economic incentive for reducing emissions as cost-effectively as possible. This role is recognized and facilitated through Article 6 of the Paris Agreement and the associated Paris Rulebook, adopted in Glasgow at COP26.  

The role of carbon markets in climate finance is growing as transactions continue to increase, particularly in the Voluntary Carbon Markets (VCM). According to Forest Trends, as of 2016, offsets equivalent to 1.1 billion metric tonnes of carbon dioxide emissions (BtCO2e) have been transacted voluntarily. Accelerating ambition and implementation of climate action in forests, as part of countries’ goals in their Nationally Determined Contributions (NDCs) is necessary to reach net-zero emissions. Carbon markets may serve as one mechanism to drive the investment needed at the regional, national, and local levels to achieve these goals. If designed and implemented well, carbon markets represent a potential opportunity to access critically needed finance to support forest conservation and restoration efforts. However, integrity in carbon markets is essential to ensure that the use of carbon credits strengthens – rather than undermines – global action towards achieving the goals of the Paris Agreement.

High-integrity in carbon markets must ensure the application of robust environmental and social safeguards and respect the rights of Indigenous peoples and local communities.  Indigenous Peoples and local communities (IPLCs) are recognized as the most effective forest stewards and, therefore, should have access to more finance for their continued efforts to protect and restore forests. They have expressed a need for further capacity building on carbon markets to facilitate their informed engagement to participate in standard-setting; access finance, and exercise their rights.  

If Indigenous Peoples, countries, and other stakeholders accessing carbon markets are going to be able to meet demand from private sector buyers, market-based standards, NGOs, and local stakeholders alike for higher quality units with demonstrated additional sustainable development impacts, there needs to be a greater upfront investment in capacities to build robust and integrated systems to be able to effectively implement in line with expectations. This includes establishing participatory processes, ensuring appropriate community engagement from design to implementation; ensuring consistency with the rights and interests of affected Indigenous peoples and local communities; and developing processes for ensuring just and equitable benefit sharing arrangements for Indigenous and local communities.  
This recorded webinar, hosted by the Forest Declaration Platform and the UN-REDD Programme, aimed to provide the space for capacity building on these topics, by convening Indigenous peoples and local communities with technical experts from partners of the Forest Declaration Platform during the UN Permanent Forum on Indigenous Issues. 

Forest Declaration Platform & the UN-REDD Programme
Publication Date
Thursday, 02 June 2022
Applicable location
Climate change
Learning materials