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Forests for Finance: How NBS Can Boost Carbon Markets in Asia – Academia

Vaseline 2 months ago

As the world grapples with climate change, Asia stands at a crossroads. Home to rapidly developing economies and enormous environmental wealth, the region faces a major challenge: balancing economic growth with environmental sustainability.

Nature-based solutions (NBS), which protect and restore natural ecosystems such as forests and mangroves, offer a promising path forward. But can these solutions really flourish without robust carbon markets and, crucially, strong regional cooperation in Southeast Asia?

NBS have a unique advantage because they provide a natural way to mitigate climate change. For example, forests act as carbon sinks, absorbing and storing carbon dioxide in the atmosphere. Mangroves provide crucial coastal protection, while wetlands filter pollutants and regulate water flow.

By investing in NBS, Asian countries and companies can not only reduce emissions, but also strengthen biodiversity, improve water security and improve the livelihoods of local communities.

Carbon markets, where companies can offset their emissions by purchasing carbon credits generated from NBS projects, can encourage investment in these natural solutions. While Europe and the United States remain the largest regions where most of the carbon trading takes place, many foreign players are looking to Asia to tap into initiatives that facilitate the buying and selling of voluntary carbon credits and to capture the growing investments in the region .

However, questions remain over the ability to scale up carbon markets in the region, despite the market structure, which currently consists of a variety of private and public systems.

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A thriving Asian carbon market would create a financial reward for protecting and restoring ecosystems, attracting investment and scaling up NBS projects such as afforestation, regenerative agriculture and mangrove conservation. This could unlock significant potential: Southeast Asia alone is estimated to hold 30 percent of the global potential for carbon offsets through NBS by 2050.