Driving local engagement in the carbon credit market

Building capacity for developing the forest carbon market in four potential provinces

As Viet Nam's commitment to achieving Net-Zero emissions by 2050 moves into practical implementation, the forest carbon credit market is seen as a new gateway that helps localities both protect forest resources and generate sustainable income.

However, to join this global playground, provinces need more than forests. They must possess the capacity for quantification, governance, and market connectivity, which are the very elements that the project is building to implement climate change impact mitigation plans and mobilize sustainable financing for forest protection and development, including a high-quality forest carbon market Carbon for Good (C4G), recently launched in Lai Chau, is gradually supporting.

Viet Nam currently has about 14.8 million hectares of forests, including more than 4.7 million hectares of planted forests. Experts estimate that the carbon sequestration potential of Vietnamese forests could reach tens of millions of tonnes of CO2 each year, equivalent to hundreds of millions of USD if converted into internationally certified carbon credits. However, the biggest challenge for many localities is the lack of capacity in measurement, reporting, and verification (MRV), which are critical factors for credits to be recognized and traded.

In this context, the C4G project is considered an important starting point. The project is jointly implemented by CARE, the Center for International Forestry Research (CIFOR), and the University of British Columbia (UBC, Canada), running until March 2028, with the goal of helping Viet Nam establish scientific, technical, and institutional foundations to develop a high-quality forest carbon market.

According to Le Kim Dung, Country Director of CARE International Viet Nam, C4G does not focus solely on technical aspects but also aims to ensure equity and social inclusion. She said, "We want to combine local knowledge with innovative solutions, so that the voices of communities, especially ethnic minority women, are heard in decisions related to forest resources".

The project is implemented in four localities Tuyen Quang, Lai Chau, Son La, and Can Tho, which have diverse forest ecosystems and are preparing to participate in the international carbon credit market. The overarching goal of C4G is to enhance climate governance toward nature-positive adaptation and mitigation of climate change through developing the forest carbon market and expanding private sector participation.

To achieve this goal, C4G sets out four specific groups of outcomes. These include assessing the carbon absorption and storage potential of forests in each province, creating baseline data for future carbon credit quantification; evaluating greenhouse gas emission reduction potential to help localities identify their actual contributions to national targets.

In addition, the project develops market readiness data profiles to help provinces quickly participate in trading once the legal framework is completed. Finally, it provides intensive training for local officials and businesses, covering valuation methods, project development, risk assessment, and market opportunities.

Strengthening the role of the private sector

CIFOR and UBC agree that Viet Nam has major advantages in forest area and strong political commitments. However, to enter the global carbon market, Viet Nam needs stronger technical capacity. With their network of international experts and experience in forestry management, CIFOR and UBC will support the establishment of MRV systems, monitoring technologies, and the development of sustainable forest management projects, while strengthening institutional capacity at the local level.

In Viet Nam, the government has issued multiple policy documents guiding carbon market development, including Decree 06/2022/NDCP and the Proposal on Establishing and Developing the Carbon Market. Provinces such as Lai Chau, Tuyen Quang, and Son La are considered potential addresses for pilot projects thanks to high forest cover and proactive local leadership in resource conservation.

Another noteworthy aspect of the project is the strengthened role of the private sector. When the national carbon market mechanism becomes operational, enterprises will be able to invest, develop, and trade credits to offset their emissions. Therefore, the project focuses on establishing networks connecting authorities, enterprises, and communities to ensure a transparent, sustainable, and beneficial market for forest keepers.

C4G also opens new opportunities for cooperation between Viet Nam and Canada in related fields such as forest monitoring technology, carbon neutral wood value chains, green finance, and credit certification. Canada is currently among the pioneering countries in climate finance mechanisms, and the transfer of experience to Viet Nam is considered timely as the country builds its domestic carbon market framework.

The combination of local knowledge and international expertise is expected to help Viet Nam become ready not only in technical aspects but also in institutional, financial, and social dimensions as it enters the carbon credit market.

CARE commits that project activities over the next three years will be designed to closely link science, policy, and practice. Experts from CIFOR and UBC will work directly with authorities and local communities to co develop sustainable forest management models, reforestation adapted to climate change, and alternative livelihoods for local people.