Unlocking Climate Finance: Key Pillars for Robust Carbon Market Design in Amazonian Countries

This technical note provides a comprehensive framework for developing effective carbon markets in the countries in the Amazon region, aiming to support greenhouse gas mitigation and mobilize climate finance. It highlights the Amazons unique potential to supply high-quality nature-based carbon credits, which can attract investment and deliver broader benefits to local communities. The note identifies three foundational pillars for robust carbon markets: (i) legal certainty in the definition and treatment of carbon credits, (ii) resilient market infrastructure including registries, exchanges, and data security and (iii) standardization of contractual arrangements to reduce complexity and transaction costs. It discusses both voluntary and compliance carbon markets, the role of the Paris Agreements Article 6, and the importance of aligning domestic and international systems. Key challenges addressed include market fragmentation, inconsistent standards, technical capacity gaps, and the need for harmonized governance. The note does not advocate for a regional Amazon carbon market but offers options for policymakers to strengthen domestic frameworks and foster regional collaboration.