Global carbon markets and rural development in Madagascar

Nature-based carbon offset initiatives have proliferated across the Global South through the voluntary carbon market (VCM). This article, authored by the Land Matrix's Quentin Grislain and Christoph Kubitza, points out that although often framed as “win-win” solutions for both climate mitigation and local development, evidence from Madagascar suggests that the VCM’s development potential should be approached with caution due to three key constraints.

• The sector comprises a diverse range of actors, including governmental agencies, non-governmental organisations, and private sector entities. The latter often prioritise corporate profit over development outcomes for local communities. Notably, dominant carbon standards remain silent on stringent benefit-sharing mechanisms, allowing companies to establish projects with minimal community engagement.
• There is often a significant gap between investment commitments and actual implementation, raising concerns about the scale and durability of such projects, as well as their impact on local communities and territories.
• Even for community-based initiatives, the financial sustainability and scalability of projects remains uncertain due to the volatility of carbon-credit prices and structural barriers on the ground. At the same time, many rural communities in Madagascar live below the international poverty line, and enabling their participation in carbon markets can serve as a valuable strategy for diversifying income portfolios.

To read the full article, visit our partner GIGA's website here.

Authors: Quentin Grislain and Christoph Kubitza
Published: 2025
Source: German Institute for Global and Area Studies (GIGA)