The status of forest carbon markets in Latin America

Background:

Latin America (LATAM) hosts some of the world’s largest tropical forests, which provide significant carbon sequestration and a major share of global forest carbon credits. Despite these benefits, deforestation and forest degradation remain critical issues. Forest carbon markets, both compliance and voluntary, have emerged as key mechanisms to finance conservation, reduce emissions, and enhance climate resilience.

Goals and Methods:

This review analysed 299 peer-reviewed and gray literature sources (2010–2023) to assess the evolution, structure, and governance of LATAM’s forest carbon markets. The study categorized findings into five themes: (i) market status and trends, (ii) stakeholder roles, (iii) measurement, reporting, and verification (MRV) systems, (iv) challenges, and (v) benefits and future opportunities.

Conclusions and Takeaways:

LATAM’s carbon markets, dominated by REDD+ projects, are expanding, led by Mexico, Colombia, Chile, Brazil, and Peru. Remote sensing and digital MRV tools are improving market transparency and verification. Key challenges include governance gaps, inequitable benefit sharing, and low credit integrity. Strengthening institutional frameworks, ensuring Indigenous peoples’ participation, and standardizing MRV systems are essential for credibility and scalability. Enhanced governance and technology integration could position LATAM as a global leader in high-integrity forest carbon markets.