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The Legal Blueprint for Developing and Regulating Carbon Markets, published by the Asian Development Bank (ADB) in July 2025, provides guidance for lawmakers and policymakers designing legal and regulatory frameworks for carbon markets and carbon crediting activities. 

The Legal Blueprint examines key legal, regulatory, and governance building blocks that support participation in carbon markets, including domestic carbon crediting schemes and engagement with international carbon crediting standards and mechanisms. By promoting legal clarity, environmental and social integrity, and alignment with international standards, it aims to support enabling frameworks for carbon finance and investment while recognizing the need for flexibility and tailoring to national circumstances. 

To support navigation of the Legal Blueprint, ADB’s Law and Policy Reform Program developed this interactive companion tool. The tabs below provide different ways to explore the Blueprint, including policy design considerations, decision pathways, core legal requirements, and legislative architecture. 

To learn more about these interactive tools, please visit the “How to Use This Tool” tab. 

For any questions, please contact carbonmarkets@adb.org. 

Legal Blueprint for Developing and Regulating Carbon Markets
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This tool provides concise, practical guidance on the key components of the Legal Blueprint for Developing and Regulating Carbon Markets, helping users navigate major concepts, legal frameworks, and policy considerations related to carbon markets. It highlights the most important sections, decisions, and building blocks in a more accessible and streamlined format. 

Please note: The Legal Blueprint focuses primarily on the supply side of carbon markets and does not address carbon credit demand mechanisms such as carbon taxes, emissions trading schemes, or compliance crediting systems. Users seeking a more comprehensive understanding are encouraged to consult the full resource. 

User tips:

Policy Design Considerations

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This interactive figure presents a high-level sequence of considerations for policymakers developing legal frameworks for carbon crediting and engagement in carbon markets. Click each step to explore why it matters, key policy questions, and related next steps.

Steps for Developing Legal Frameworks for Carbon Crediting and Engagement in Carbon Markets
Source: ADB. 2025. Legal Blueprint for Developing and Regulating Carbon Markets.
Interactive Decision Tree

This interactive tool is designed to help policymakers, regulators, and stakeholders explore possible approaches to regulating carbon crediting activities within a country. Starting from the first question, select the response that best reflects national circumstances to reveal the next relevant consideration and possible regulatory pathway.

The decision tree is intended as a practical navigation aid alongside the Legal Blueprint for Carbon Markets and should be read together with the broader legal, institutional, and policy considerations discussed throughout the publication.

🌱

Are there carbon crediting projects already taking place in the country? And/or is there emissions reduction or removal potential from carbon crediting?

NO
 
✓
The ADB DMC could choose not to regulate carbon crediting projects within its jurisdiction at this time. However, it is recommended that the ADB DMC in this situation strongly consider establishing a legal framework requiring project proponents to, at a minimum, notify the DMC of any proposed or ongoing domestic carbon crediting projects. This oversight provides valuable information for reporting on emissions sources and sinks within the country, aligning with Paris Agreement obligations.
YES
 
📘

Does the country have significant domestic mitigation needs to meet its NDC?

NO
 
📈

Is the country prioritizing scaling domestic carbon crediting activities at this time? This decision would need to be informed by policy considerations relating to the role of carbon financing in achieving the country's NDC and broader sustainable development objectives.

YES
 
✓
The ADB DMC should consider the range of decarbonization policies and incentives best suited to its economy and sources of emissions to achieve its NDC. This could include a domestic carbon pricing scheme, which may involve a flexibility measure to allow the use of carbon credits (either generated through a domestic crediting scheme or an independent standard [that is applied domestically]).
NO
 
⚖️

Do carbon crediting projects already operating require additional regulatory oversight (or, if not in existence yet, are they likely to require this oversight)? (E.g., approval requirements to ensure alignment to the country's laws and Sustainable Development Goals, additional safeguards to protect the rights of Indigenous Peoples and local communities, protection and promotion of biodiversity, and supporting sustainable livelihoods.)

YES
 
🌍

The ADB DMC should consider establishing a legal framework for regulating carbon crediting projects conducted within the country, defining in particular the processes and procedures related to participation in Article 6 of the Paris Agreement. It should carefully consider the potential benefits and risks involved in this approach, including the risk of overselling. It should also develop a national Article 6 strategy to ensure its participation contributes to the implementation of its NDC and long-term low-emission development strategy, if it has submitted one, and the long-term goals of the Paris Agreement. The type of legal framework that is chosen will likely depend on additional considerations:

Does the ADB DMC have the financial, human, and technical resources and capabilities to establish a domestic carbon crediting scheme?

NO
 
✓
The ADB DMC could choose not to regulate carbon crediting projects within its jurisdiction at this time. However, it is recommended that the ADB DMC in this situation strongly consider establishing a legal framework requiring project proponents to, at a minimum, notify the DMC of any proposed or ongoing domestic carbon crediting projects. This oversight provides valuable information for reporting on emissions sources and sinks within the country, aligning with Paris Agreement obligations.
YES
 
✓
The ADB DMC should consider establishing legal frameworks for regulating carbon crediting projects in the country. It may be most efficient, at least initially, to utilize international carbon crediting standards, rather than developing its own domestic standards.
NO
 
✓
The ADB DMC should consider establishing legal frameworks for regulating carbon crediting projects in the country. It may be most efficient, at least initially, to utilize international carbon crediting standards rather than developing its own domestic standards.
YES
 
🔎

Are international carbon crediting schemes and their methodologies unlikely to be appropriate and applicable to the ADB DMC's national context?

NO
 
✓
The ADB DMC should consider establishing legal frameworks for regulating carbon crediting projects in the country. It may be most efficient, at least initially, for the ADB DMC to utilize international carbon crediting standards, rather than developing its own domestic standards.
YES
 
✓
The ADB DMC could consider establishing a domestic carbon crediting scheme, choose to utilize international carbon crediting standards, or take a hybrid approach (as discussed in Part B, Chapter 3: Carbon Crediting Projects, Section 3.3-Key Building Block B:Methodologies and Crediting Standards of the blueprint).

Source: ADB. 2025. Legal Blueprint for Developing and Regulating Carbon Markets.

ADB Carbon Market Legislative Design Tool

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Legislative Part Likely Requirements for Both Additional Domestic Scheme Requirements Additional Requirements When Using International Standards
Part 1: Introductory Provisions Blueprint, p. 19
  • Sets the purpose and guiding rules for the legal framework, such as integrity, transparency, alignment with national climate goals, and sustainable development.
  • Defines core terms such as carbon credit, carbon crediting project, project proponent, registry, authorization, and related concepts so the rules are clear and enforceable.
 — —
Part 2: Governance Blueprint, p. 31
  • Identifies which government bodies or authorities are responsible for approving projects, managing registries, authorizing transfers, overseeing MRV, and enforcing the framework.
 — —
Part 3: Carbon Projects Blueprint, p. 41
  • Screens project developers before approval and sets ongoing conduct requirements, including capacity, good character, carbon rights, and consents from rights holders.
  • Requires projects to produce genuine climate benefits that can be measured, independently checked, and maintained over time.
  • Prevents the same emissions reduction or removal from being claimed more than once, especially by both a project buyer and the host country.
  • Creates rules for how project methodologies are written, reviewed, approved, and updated so credits are calculated consistently and credibly.
  • Sets the types of projects that may participate and establishes how the authority reviews and approves them before registration or crediting.
  • Requires projects to show that the emissions reductions or removals would not have happened without the incentive created by carbon crediting.
  • Addresses the risk that emissions are simply shifted outside the project boundary instead of actually being reduced overall.
  • Lets the government decide which international standards, registries, or methodologies may be used domestically and under what conditions.
Part 4: Carbon Credits Blueprint, p. 61
  • Sets when credits may be transferred, exported, cancelled, or retired, and any limits needed to protect national policy goals or Article 6 accounting.
  • Establishes how verified emissions reductions or removals are converted into issued carbon credits, including approval steps and required evidence.
  • Creates a national system to issue, hold, transfer, cancel, and retire credits, helping track ownership and reduce double counting risks.
  • Defines the practical steps for moving credits between accounts, cancelling them, or retiring them so they can no longer be used.
  • Ensures the country can monitor projects and credits generated domestically, especially where credits may be authorized for international transfer under Article 6.
Part 5: Article 6 Blueprint, p. 79
  • Creates the legal basis and process for the host country to authorize internationally transferred mitigation outcomes under Article 6.
  • Explains how the country adjusts its emissions accounting when an authorized mitigation outcome is transferred internationally, avoiding double claiming.
  • Sets up tracking for authorized mitigation outcomes so transfers, use, cancellations, and reporting meet Article 6 requirements.
  • Assigns who prepares Article 6 reports and how information is gathered, checked, and submitted to the UNFCCC.
 — —
Part 6: Social and Environmental Safeguards Blueprint, p. 93
  • Requires projects to avoid or manage social and environmental harm and to support positive sustainable development outcomes.
  • Protects rights and interests of Indigenous Peoples and local communities, including consultation, consent where required, participation, and benefit-sharing.
 — —
Part 7: Monitoring and Enforcement Blueprint, p. 101
  • Gives authorities clear powers to investigate, require information, suspend or revoke approvals, impose penalties, and address noncompliance.
  • Requires project data to be monitored, reported, independently verified, retained, and auditable so the integrity of credits can be checked.
  • Creates processes for reviewing the scheme over time, updating rules, checking performance, and maintaining public confidence.
 —

Source: ADB. 2025. Legal Blueprint for Developing and Regulating Carbon Markets.

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This table maps key building blocks commonly found within different parts of carbon market legal frameworks and identifies their constituent elements. Select a legislative part to explore related building blocks and click the information icons for brief explanatory text.

Carbon Market Legislative Design Tool

Legislative Parts Click to reveal key building blocks in the next column.
Key Building Blocks Click to reveal constituent elements in the next column.
Constituent Elements Click the i icon to reveal a brief explanation.
 

Source: ADB. 2025. Legal Blueprint for Developing and Regulating Carbon Markets.

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