Opportunities and Challenges for Malawi’s Carbon Markets

This briefing by the South African Institute of International Affairs examines the potential for carbon markets to provide climate finance to Malawi. It discusses the transition toward a regulated framework following the finalisation of Article 6 rules at COP29, the role of the Malawi Carbon Markets Initiative, and the importance of community-led projects like the Kulera Landscape REDD+ Program in ensuring equitable benefit-sharing.

• Malawi is highly vulnerable to climate change, ranking 167 out of 185 countries on the 2022 Notre Dame Global Adaptation Initiative Index, and faces significant climate finance gaps despite the establishment of a New Collective Quantified Goal at COP29.
• The Malawian government is implementing new regulatory measures to address previous lacks of transparency and policy, including the development of a Carbon Trading Regulatory Framework and the launch of the Malawi Carbon Markets Initiative. The country's forest reserves and wildlife conservation parks, totaling over 2 million hectares, could potentially generate $600 million annually.
• The Kulera Landscape REDD+ Program serves as a model for inclusive carbon projects by using a tri-party agreement between the Department of National Parks and Wildlife, local community associations (NVA and NAWIRA), and Terra Global. The program covers over 700,000 hectares and aims to conserve 162,632 hectares of forest over 30 years, reducing carbon emissions by more than 7.2 million tonnes.
• Smallholder farmers, who make up most of Malawi's employment, face barriers to carbon market entry due to high transaction costs, limited access to finance for project certification, and a preference among investors for large-scale projects. Aggregation and cooperative models are proposed as a solution to reduce these costs.
• A significant capacity gap exists within government departments regarding the technical skills required to measure, report, and design carbon projects, such as establishing baselines and data archiving. This has historically led to a reliance on external experts and a loss of negotiating power.
• Gender equity is a critical concern as most smallholder farmers in Malawi are women, yet they are underrepresented in leadership. The document recommends targeted gender training and robust transparency mechanisms to ensure women receive equitable shares of carbon credit sales.
• Article 6 of the Paris Agreement, finalised at COP29, provides the rulebook for cross-border carbon credit trading to meet Nationally Determined Contributions (NDCs). It is estimated that Article 6 could reduce NDC implementation costs by $250 billion by 2030 and facilitate 50% more emission removals at no extra cost.

APA

SACK, H. (2025). Opportunities and Challenges for Malawi’s Carbon Markets. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2025/05/SAIIA_PI-162_MalawiCarbonMarket.pdf

Chicago

SACK, HANNAH. Opportunities and Challenges for Malawi’s Carbon Markets. South African Institute of International Affairs, 2025. https://saiia.org.za/wp-content/uploads/2025/05/SAIIA_PI-162_MalawiCarbonMarket.pdf.

Wikipedia

{{cite report |last1=SACK |first1=HANNAH |title=Opportunities and Challenges for Malawi’s Carbon Markets |publisher=South African Institute of International Affairs |date=May 2025 |url=https://saiia.org.za/wp-content/uploads/2025/05/SAIIA_PI-162_MalawiCarbonMarket.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sack2025opportunities, author = {SACK, HANNAH}, title = {{Opportunities and Challenges for Malawi’s Carbon Markets}}, institution = {South African Institute of International Affairs}, year = {2025}, month = may, url = {https://saiia.org.za/wp-content/uploads/2025/05/SAIIA_PI-162_MalawiCarbonMarket.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }