As the low-carbon transition gathers pace, voluntary carbon markets (VCMs) are growing
around the world alongside and, in some places, in lieu of compliance markets.
2. ASEAN member states have experimented with VCMs in the absence of more formalised
government-led schemes. The paper sets out policy considerations for ASEAN and
reviews the current accounting practice applied to carbon finance.
3. Together with other policies, well-designed VCMs can help reduce costs for emerging
climate technologies, increasing their chances of adoption at scale and achieving more
significant decarbonization and market efficiency across the region.
4. Transparency (credits linked to genuine emissions reductions), liquidity (adequate supply
of high-quality, standardized credits reaching the market) and pricing (sufficiently high and
transparent) are key drivers to mobilize funds through venture capital and institutional
investors and secure the integrity of VCMs.
5. The absence of a harmonized financial reporting framework for emission allowances and
voluntary offsets, and lack of discourse on the assessment of underlying assets are
hampering the growth of VCMs in ASEAN.