Opportunities and Challenges for Malawi’s Carbon Markets

Malawi is leveraging carbon markets to attract climate finance, protect ecosystems, and support its 2063 Vision. While the country has historically faced transparency issues and a lack of regulation, the government is now implementing a Carbon Trading Regulatory Framework and the Malawi Carbon Markets Initiative to oversee trade and ensure benefit-sharing. The Kulera Landscape REDD+ Program serves as a model for integrating local communities as partners rather than just beneficiaries. However, significant barriers remain, including technical capacity gaps in government, limited finance for smallholder farmers, and gender inequality in leadership.

• Malawi is implementing new regulatory measures to address previous transparency issues and a lack of legal frameworks that resulted in profits rarely reaching the government or local communities. These include the Malawi Carbon Markets Initiative and a Carbon Trading Regulatory Framework designed to oversee the design, monitoring, and management of both Article 6 and Voluntary Carbon Market (VCM) projects.
• The government identifies significant untapped financial potential in Malawi's forest cover, including over 1 million hectares of forest reserves and 1 million hectares of wildlife conservation parks and reserves, which could potentially generate $600 million annually.
• The Kulera Landscape REDD+ Program demonstrates a successful 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, resulting in over 7.2 million tonnes of carbon emission reductions.
• Smallholder farmers, who constitute the majority of employment in Malawi, face high barriers to carbon market entry due to a lack of finance for project design and certification, as well as a preference among investors for large-scale projects. Aggregation and cooperative models are proposed to reduce transaction costs and facilitate their participation.
• There is a critical lack of technical capacity within government departments regarding the operationalization, measurement, and reporting of carbon projects. This has forced a reliance on external experts, leading to significant earning losses due to a lack of negotiating power.
• Gender inequality persists in the agricultural sector; while most smallholder farmers are women, they are underrepresented in leadership. The document argues for targeted gender training and robust transparency mechanisms to ensure women receive equitable shares of carbon credit sales.

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} }