A new report reveals that Southeast Asia could become a global leader in carbon markets, generating $3 trillion in value and creating 13.7 million jobs by 2050.
The study, conducted by Abatable, the ASEAN Alliance on Carbon Markets (AACM), and Equatorise, highlights the region's abundant natural resources and rising demand for carbon credits as critical growth factors. By mid-century, ASEAN could reduce or remove 1.1 gigatonnes of CO2 annually, significantly advancing global climate efforts.
Major opportunities include REDD+ projects valued at $27 billion annually, blue carbon initiatives worth $96 billion, and biochar markets projected at $144 billion per year by 2050.
Currently, ASEAN contributes 7% of global voluntary carbon credits, led by Indonesia and Cambodia. However, the region holds untapped potential, with 15% of the world’s tropical forests and 35% of mangrove ecosystems, essential for carbon sequestration.
To fully unlock this potential, the report recommends key policy actions, including clear carbon market regulations, alignment with international standards, and strengthened institutional capacity. Compliance mechanisms such as carbon taxes and emissions trading systems are also vital to ensure consistent demand for carbon credits.
Public awareness campaigns and streamlined Article 6 processes could further enhance participation and foster international cooperation. Nevertheless, challenges such as regulatory uncertainty, limited market awareness, and weak monitoring frameworks must be addressed to sustain growth.
With hundreds of projects in the pipeline, ASEAN is uniquely positioned to lead the carbon market revolution. Closing policy gaps and enhancing operational readiness could turn the region into a powerhouse for climate solutions, creating substantial environmental and economic benefits.