Dubai December 2 2023: The World Bank announced on Friday ambitious plans for the growth of high-integrity global carbon markets, with 15 countries set to earn income from the sale of carbon credits generated from preserving their forests.
By next year, these countries will have produced over 24 million credits and as many as 126 million by 2028. These credits could earn up to $2.5 billion in the right market conditions, much of that going back to communities and countries. Thriving carbon markets have the potential to do the same for other countries in the long-term.
The 15 countries—Chile, Costa Rica, Cote d’Ivoire, Democratic Republic of Congo, Dominican Republic, Fiji, Ghana, Guatemala, Indonesia, Lao PDR, Madagascar, Mozambique, Nepal, Republic of Congo, and Vietnam—are part of the World Bank’s Forest Carbon Partnership Facility (FCPF), which has supported pilot programmes since 2018 to establish efficient systems for carbon-crediting initiatives.
Supporting five countries in 2024, the World Bank will work with governments and local communities to access carbon markets. By 2028, it is expected all 15 FCPF countries will be in a position to interact with carbon markets.
The World Bank carbon credits are unique and of high integrity because of the environmental integrity—ensuring credits are unique, real, additional, permanent, and measurable; and social integrity—making sure that communities, especially Indigenous Peoples and Local Communities, benefit most from these programs.
Each carbon credit is monitored, reported, and verified by a third party against the World Bank-managed FCPF Standard and World Bank Environmental and Social Standards. The 15 programmes use cutting-edge technology to ensure that carbon credits are accurately measured and accounted for. The programmes cover entire jurisdictions, meaning that the reforestation and conservation efforts are not undermined by deforestation elsewhere.
The Bank supports countries in deciding how to use their carbon credits—either monetising them through carbon markets, using them for their own Nationally Determined Contributions, or other transactions to raise additional finance.
“Blessed with natural resources, these countries are set to benefit from carbon markets by earning income from protecting forests and using their land more sustainably,” World Bank Group President Ajay Banga said. “With the World Bank Engagement Roadmap for High-Integrity Carbon Markets, we will collaborate with partners to scale effective global carbon markets. Our experience with the FCPF and other initiatives has resulted in a formula that can catalyse effective carbon markets and make good on their promise for people and planet.”
The Roadmap outlines the Bank’s ambition to work with others to deliver solutions to expand liquid and transparent carbon markets. This includes working with private and public sector partners to implement integrity principles for buyers and sellers of credits and introducing common frameworks for organisations validating and verifying credits, such as independent credit rating agencies.
The announcement results from two decades of work to build sound, transparent carbon markets that pay developing countries for their climate efforts that benefit us all. The Bank’s ambition is to go farther, so it is scaling its support to countries to reduce emissions in other sectors—including energy access and coal transition, soil organic carbon, and mangroves—to help generate carbon credits that can be paid for or purchased through Bank programmes or sold through markets.
