Carbon markets alone won’t keep Southeast Asia’s forests standing: report | News | Eco-Business | Asia Pacific

Nature & Climate Perspective

**Unabated deforestation across 42 million hectares of concessions poses a critical threat to regional biodiversity and carbon sinks if market mechanisms fail to match agricultural commodity yields. **

• Over 42 million hectares of highly biodiverse tropical rainforests in Southeast Asia remain vulnerable to conversion for palm oil, rubber, and timber concessions.
• The carbon sequestration potential of these ecosystems is severely diminished when carbon credit valuations fail to outcompete traditional land-use revenue models.
• Failure to protect these core concessions undermines long-term environmental stability and compromises critical LULUCF carbon reservoirs across the region.

Market & Policy Outlook

**Current carbon pricing structures fail to meet ICVCM additionality benchmarks or match land-use opportunity costs without supplementary regulatory and financial interventions. **

• National policy frameworks must look beyond voluntary markets to integrate compliance mandates, sovereign bilateral agreements, or Article 6.2 ITMO transfers to bridge the financial gap.
• Market pricing and financial liquidity for REDD+ projects will remain constrained until carbon prices rise sufficiently to offset the opportunity costs of timber and oil palm production.
• Corporations seeking Scope 3 supply chain mitigation or SBTi-aligned targets face increased reputational risk if relying on low-cost forest credits that lack ICVCM Core Carbon Principles (CCP) high-integrity backing.