The project facilitates Lao PDR’s sustainable participation in international carbon markets, in alignment with Article 6 of the Paris Agreement. This will increase the flow of carbon finance and facilitate carbon sequestration and emissions reductions. The project is strengthening policy, institutions and systems for carbon markets, including the development of a decree on carbon credits, an international carbon trading strategy and a carbon projects registry. Additionally, the project is developing a national Article 6 project pipeline and providing technical assistance to private and community-level carbon project developers to bring their carbon projects onto the market. The project is led by the Ministry of National Resources and Environment, in collaboration with the Ministry of Energy and Mines, with technical assistance from GGGI and financing support from the Government of Australia’s Department of Foreign Affairs and Trade.

– Strengthen policy, institutions, and systems for participation in international carbon markets
– Build capacity, awareness, research and coordination among market participations
– Enhance the pipeline of carbon sequestration and emissions reduction projects

With the signing of the Paris Agreement in 2016, countries around the world agreed to new provisions for international carbon trading and cooperation. These provisions generate new obligations for countries, such as Lao PDR, who wish to sell carbon credits, as well as for buyer countries and firms. Lao PDR, with its extensive forestry and agricultural resources, has significant potential to sequester carbon and generate emissions reductions, in line with the country’s Nationally Determined Contribution (NDC), which includes conditional mitigation targets that require access to international carbon markets.

In addition, carbon markets can support Lao PDR’s transition to net-zero development by 2050 and broader sustainable development.

– While Lao PDR is not a high-emitter country, it holds significant carbon sinks that need safeguarding. In its 2020 NDC, Lao PDR’s conditional forestry target is set at 70% of the total land area (against 58% in 2020) by 2030.
– In its 2020 NDC, Lao PDR has high conditional targets for energy generation across solar, wind, and biomass, as well as domestic cooking and energy efficiency.
– More generally, Lao PDR needs increased financing in support of its development and climate objectives. Increased flows of carbon finance can help to improve the viability of a range of projects, generating sustainable development co-benefits.

To enhance the development of Lao PDR’s carbon market, and its ability to participate in international carbon transactions, this project is developing a comprehensive framework of carbon legislation, building carbon project management systems and processes, enhancing technical capacity, and stimulating the market with the development of private investment projects.

– 5 carbon policy products developed and adopted by Government of Lao PDR.
– 40 government officials engaged in technical trainings, study tours, and awareness raising.
– 2 national carbon markets forums held for market coordination and activation.
– 3 private carbon investment projects supported onto the market.
– 1 carbon project registry established and operated.