CCA Highlights Policy Recommendations to Strengthen Carbon Market Regulations
WASHINGTON, D.C., April 7, 2025 – Today, the Clean Cooking Alliance (CCA) published a policy brief entitled, Financial Regulatory Pathways for Scaling Carbon Markets. The brief, which maintains a special focus on clean cooking carbon projects, outlines how financial regulators can create the enabling conditions to increase the recognition and use of carbon credits within financial systems. Strengthening regulatory interventions will bring more transparency, liquidity, and investibility to carbon markets, helping to unlock critical climate financing for clean cooking and other sustainability priorities.
While carbon markets hold significant potential to mobilize investment for climate action in developing countries, the lack of supportive regulatory infrastructure remains an obstacle to scaling up. To address this, the new policy brief identifies 15 targeted interventions, organized under three priority areas:
- Establishing a stable carbon market infrastructure.
- Expanding market participation and financial integration.
- Ensuring financial stability and risk mitigation.
As an immediate next step, the brief recommends setting up a regulatory sandbox – a controlled environment where financial regulators, banks, and investors can test and refine policy approaches. This approach provides regulators with a flexible environment to assess carbon credit-backed lending, securitization models, insurance solutions, and collateralization practices – based on real-world risk and market behavior rather than just predefined regulations.
“Financial regulators have a unique opportunity to shape the growth and maturity of carbon markets,” said Feisal Hussain, Senior Director of Innovative Finance at CCA. “By providing strong oversight and integrating carbon credits into financial systems, regulators can help scale markets that deliver immediate and measurable climate impact and real benefits to people’s wellbeing – particularly by enhancing access to clean cooking.”
The policy brief draws on research conducted by Climate Focus, commissioned by CCA. The brief, prepared by CCA, further develops those research findings.
Download the brief here.
Interested entities can find out more by emailing carbon@cleancooking.org.
