1. Regulation for REDD+ carbon
markets: Lessons from Peru
Pablo Peña
Lecturer, Faculty of Law, Pontificia Universidad Católica del Perú
PhD candidate, Centre for Socio-Legal Studies, University of Oxford

2. Clear laws and regulations are important for
carbon markets
1. To ensure environmental integrity
• i.e., additionality, permanence, sound reference levels,
managing leakage and uncertainties, avoid double-
counting
• Improve market trust in emissions reductions for
trading
• And ensure best possible price $
2. That are perceived as fair and legitimate
3. That align with the country’s climate (and
development) goals
• Keep in mind that REDD+ / carbon markets are means
to an end!

3. Regulating what? Some examples
• Carbon rights, what do they include, and what conditions apply
• Who owns carbon and how do they get these rights (e.g., as part of an already existing right or through an
additional administrative process)
• What can they do with them (e.g., be part / implement REDD+ initiatives, to sell carbon credits directly, or to
receive results-based payments)
• Mandates of agencies / role of government
• Clarifying purviews of ministries or subnational governments, etc.
• Rules about MRV
• Reference levels (how to construct them, who approves them, mandatory or recommended, updates,
complementarity with standards, etc.)
• Nesting (who/when needs to nest, under what rules, what happens if they don’t nest, etc.)
• Registries (mandatory or voluntary, who can access them, what/when initiatives need to register, what
information to include, complementarities with private registries, incentives, sanctions)
• Safeguards (existing safeguards in the law or additional ones, rules on how to comply with them and to
communicate them and when, ad-hoc complaint mechanisms or use of existing mechanisms, etc.)
• Financial regulations
• For private actors (e.g., need to disclose funding, or results-based payments, or price of carbon credits)
• For government (e.g., can they engage in the sale of carbon credits, what rules do they use to appraise carbon
credits, do they create special financial mechanism to manage results-based payments or do they use regular
public budget system with its constraints, can government distribute payments directly to individuals or can they
only investment through public projects, etc.)

4. Regulating how? Process matters
• Take stock of / make a (rough) plan of regulatory needs
• Amendments, new regulations or repeals
• Level (Congress, executive, subnational)
• (Tentative) timeline of approval (and of implementation/rollout)
• Participatory processes
• Free, prior and informed consultation/consent with indigenous peoples
• Participation with other key actors on the ground (e.g., non-indigenous
farmers), in the market (investors, , and within government (e.g.,
subnational governments)
• Beware of tradeoffs!
• Short engagement but (too) fast
• Lack of legitimacy, need to update regulations soon
• Plenty of engagement but (too) slow
• Losses the market’s appetite
• But no need to have every piece of the regulatory puzzle to begin, either!
NGOs, academia or
cooperation agencies
can support the
government
 Provide information
on other countries’
experiences
 Promote exchanges
with other
governments
 Conduct impact
analyses of proposed
regulations
 Provide financial
support for
participatory
processes

5. More
information:
https://www.cifor-
icraf.org/knowledge/publication/8876/
https://www.cifor.org/knowledge/publicatio
n/8750

6. Thank you!
Pablo Peña
ppenaa@pucp.edu.pe