Carbon markets are emerging as an essential financial mechanism in the global effort to combat climate change. By assigning a monetary value to carbon emissions, these markets incentivise emission reductions while supporting sustainable development goals through compliance and voluntary frameworks.
As a cornerstone of the Paris Agreement’s objectives, they mobilise resources for initiatives like reforestation and clean energy projects, contributing to poverty alleviation and environmental integrity. Although this market instrument is being widely used, the rising problem with this market is equitability, particularly gender equity.
According to the UN, women comprise 80% of those displaced by climate change, yet they receive less than 10% of climate finance, a stark gap. This will further deteriorate if gender-responsive climate finance instruments are not mainstreamed, particularly for the Global South.
One of these instruments is gender-responsive carbon markets. These markets go beyond traditional carbon trading by intentionally empowering women and marginalised groups as leaders, beneficiaries, and decision-makers in climate projects.
Far from being a mere moral imperative, this approach boosts project success carbon credits with gender equity certifications selling for 78% more than standard offsets, proving that inclusion drives both impact and profit.
What are gender-inclusive carbon markets? These innovative markets embed principles of gender equity into their frameworks, ensuring marginalised groups — especially women — actively participate and benefit from climate initiatives. Women disproportionately affected by climate change play significant roles in environmental stewardship and resource management. Integrating gender equity into carbon projects amplifies effectiveness by fostering women’s leadership, improving adaptive capacities, and creating economic opportunities through projects like clean cookstoves and reforestation.
South Asia is progressively integrating gender-inclusive financial services within climate and carbon projects to address systemic barriers faced by women and enhance their participation in sustainable development. Women, who disproportionately bear the impacts of climate change, often face limited access to financial resources and decision-making roles. Innovative strategies across the region have demonstrated measurable success in bridging these gaps, fostering both economic empowerment and climate resilience.
One notable example is India’s Kashi Hills REDD+ initiative, Village Savings and Loan Associations (VSLAs) enable 5,000+ women to access microloans for sustainable livelihoods like agroforestry. By pooling small savings ($1/month), they invest in forest-friendly businesses, boosting incomes by 30% while reducing deforestation by 15%.
Another project operates in several developing countries, including Ethiopia, India and South Africa, under the Fair Climate Fund initiative. This programme utilises blockchain-based payments to directly transfer carbon revenues to women’s mobile wallets, improving transparency. In Andhra Pradesh, this cut payment delays by 90%, while in Ethiopia, it increased women’s participation in clean cookstove projects by 50%.
These initiatives not only enhance women’s financial independence but also contribute to broader climate goals by encouraging sustainable practices.
While countries like India have made strides in gender-responsive climate finance, Pakistan has significant potential to adopt similar approaches. Clean cooking initiatives and renewable energy projects could serve as entry points for empowering women to participate actively in climate-smart solutions.
For example, introducing micro-loans for clean energy entrepreneurship or agroforestry projects could provide Pakistani women with opportunities to engage in sustainable livelihoods while addressing systemic barriers such as restricted financial access.
Digital payment systems could also be leveraged to ensure transparent benefit-sharing mechanisms that allow women to control earnings securely. These measures align with Pakistan’s climate goals while advancing broader social objectives like poverty alleviation, gender equality (SDG 5), and climate action (SDG 13).
By adopting gender-inclusive strategies inspired by neighbouring countries, Pakistan can unlock co-benefits that strengthen community resilience, promote sustainable development, and accelerate progress toward global climate targets.
South Asia’s gender-inclusive approaches differ from other regions like Africa or Latin America by emphasising community-led solutions tied directly to financial inclusion. For instance, carbon credits with gender co-benefits sell for significantly higher prices — up to $12/ton compared to $7 per ton for standard credits, highlighting the economic value of inclusion.
South Asia attracts three times more private investment for gender-focused carbon projects than conventional ones. By learning from regional successes, Pakistan can craft tailored strategies that address its unique challenges while fostering transformative change.
Women face significant challenges in participating equitably in carbon markets, particularly in South Asia, where deep-rooted gender inequalities intersect with climate vulnerabilities. According to the World Bank report, limited land rights and decision-making power are among the most pressing barriers, as only 12% of women in South Asia own land. This exclusion locks women out of agroforestry and renewable energy projects that require land ownership.
Inadequate access to information and capacity-building opportunities further restrict women’s involvement. Rural women spend 5–8 hours per day on unpaid care work, leaving little time for training or engagement in carbon projects.
A survey in Bangladesh revealed that 80% of women living in carbon project areas had never heard of carbon credits, highlighting the information gap that prevents them from fully understanding or contributing to market mechanisms. Coupled with time poverty due to traditional gender roles, these limitations perpetuate exclusion from climate action and decision-making processes.
Financial exclusion is another critical barrier. The IFC Gender Finance Gap Report states that women are 28% less likely than men to access formal credit for climate projects.
This disparity limits their ability to invest in climate-smart initiatives such as clean energy or reforestation efforts. Discriminatory norms further exacerbate this exclusion by marginalising women’s voices in project design and implementation. For instance, women farmers plant trees but men sign the carbon contracts, underscoring the systemic design blind spots that render women’s contributions invisible.
Gender inclusion strengthens both the environmental and economic impact of carbon markets. Projects with active female participation consistently outperform others — women-led forest conservation initiatives see 64% higher success rates, while clean cookstove programs with women trainers achieve 40% greater adoption. This shows how empowering women enhances project effectiveness while advancing climate goals.
Policy frameworks are beginning to recognise these benefits. Pakistan’s National Climate Gender Action Plan (2023) mandates at least 30% of women’s participation in climate finance programmes, setting a precedent for integrating gender equity into national strategies.
Innovative solutions are also emerging across South Asia to address systemic barriers and amplify women’s roles in carbon markets. For example, the W+ Standard quantifies gender impacts by measuring outcomes such as hours saved via clean cookstoves and translating them into economic value. Blockchain traceability systems have increased women’s benefit shares from carbon projects in Kenya from 18% to 52%.
Pakistan's first carbon market policy, introduced during COP29 in Baku, represents a significant step in the country's climate action strategy. The policy aims to achieve climate targets, promote green investments, and foster a low-carbon economy through mechanisms like cap-and-trade and voluntary carbon markets.
It focuses on sectors with high emissions reduction potential, such as energy, agriculture, waste management, and forestry, while attracting both domestic and international investments. This policy aims to ensure environmental integrity, drive economic development and promote equitable benefit-sharing. By establishing a transparent regulatory framework, the policy seeks to incentivise businesses to adopt eco-friendly technologies and monetise emissions reductions.
Despite its comprehensive approach to climate action, the policy lacks explicit integration of gender perspectives. While it emphasises social equity and community benefits broadly, there is no mention of specific measures to address gender disparities or promote women's participation in carbon market initiatives.
This omission risks overlooking the unique vulnerabilities and contributions of women in climate adaptation and mitigation efforts. A gender-sensitive approach could enhance the policy's inclusivity by ensuring equitable access to resources, decision-making roles, and benefits for women in affected sectors like agriculture, energy, and forestry.
To fully unlock the potential of gender-inclusive carbon markets in the country, policymakers must mandate gender quotas in project staffing and benefit-sharing mechanisms while developing SDG-aligned pricing models that reward co-benefits like those certified by the W+ Standard. Investing in mobile-friendly carbon literacy programmes for rural women can further bridge information gaps and foster inclusive participation. Women-led carbon projects could be the triple wins – for climate, communities and credit buyers.
By addressing systemic barriers and scaling innovative solutions, Pakistan can transform its carbon markets into powerful tools for advancing both environmental sustainability and social equity.
The recently issued Pakistan policy guidelines for trading in carbon markets include gender equality as one of the co-benefits of carbon credits but future iterations of the policy should have a dedicated gender lens for carbon trading to harness the benefits of gender-inclusive carbon markets.
The writer is a gender and climate specialist at the Sustainable Development Policy Institute (SDPI), Islamabad. She can be reached at: Sadiasattisdpi.org
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