Advancing Policy Foundations: Ethiopia has advanced the policy groundwork for carbon market participation by completing a legal-gaps analysis and pushing forward an overarching climate law. This law is designed to anchor both Article 6 cooperation and voluntary market activity. Following this, the government has developed a strategy that serves as an overall roadmap to guide the country’s planning for and eventual use of carbon market mechanisms to finance the country’s climate goals.

Building Institutional and Accounting Rails: The focus is on institutional strengthening to build governance and accounting systems, including registry-grade tracking and standardized approval procedures, before scaling market transactions. This ensures a robust framework is in place to maintain integrity and oversight. 

Positioning for Programmatic Opportunities: In parallel, Ethiopia is positioning itself for programmatic opportunities in sectors with substantial mitigation potential, notably land restoration, renewable energy, and climate resilience. While current voluntary market activity remains limited and exploratory, the government’s clear preference is for rules-based engagement that safeguards national priorities and environmental integrity. 

Blending Finance for Scalable Impact: On the finance side, multilateral and bilateral partners are supporting policy and pipeline preparation, with a focus on nature-based solutions. As the legislative architecture matures, carbon market revenues are expected to complement concessional flows, creating blended finance models that can sustain large-scale programs. 

Ethiopia is deliberately sequencing its carbon market journey: institutions first, then high-impact programs, ensuring participation is credible, accountable, and aligned with long-term development strategies. Country Carbon Profiles