Global carbon markets have now entered a new phase. In 2021, Article 6 of the Paris Agreement was adopted at COP26. This provision provided clear guidance for countries to cooperate on carbon trading, including Internationally Transferred Mitigation Outcomes (ITMOs) and mechanisms under Article 6.4 of the Paris Agreement. These mechanisms offer important opportunities to mobilize financial resources, technical assistance and low-emission technology transfer, while promoting sustainable development.

To ensure effective implementation, the Department of Environment, Ministry of Agriculture and Environment has worked closely with other state agencies, development partners and the private sector, particularly Global Green Growth Institute (GGGI) to develop the Glossary for Carbon Markets in Lao PDR. Its objectives are to:

• Define technical terms: Provide accurate translation and standardized Lao definitions consistent with the key concepts of carbon markets, ensuring alignment with international standards and facilitating the development and implementation of the Decree in Carbon Credits;
• Strengthen institutional and technical capacities: Serve as a tool and reference for policymakers, administrators, technical experts, private sector and civil society organizations;
• Promote transparency and reliability: Build investor confidence and support coherence across environmental instruments for GHG emission reduction by providing clear explanations of technical terminology;
• Promote inclusion: Enable communities, local administrations and the private sector to engage effectively in carbon market development by simplifying complex concepts and frameworks for broader accessibility.

This glossary is an important component of Lao PDR’s efforts to improve understanding of technical terms that are often difficult to interpret and complex. It supports alignment with national regulations, capacity building and clear coordination among all stakeholders.