Papua New Guinea has been strengthening its regulatory architecture for carbon trading, pursuing international cooperation under Article 6 of the Paris Agreement and advancing a jurisdictional REDD+ programme under the ART-TREES framework.
For decades, Papua New Guinea’s economy has been defined internationally by what can be extracted from beneath its soil. Gold, copper and liquefied natural gas have dominated the country’s export story, bringing foreign investment while exposing the economy to the familiar volatility of global commodity cycles. Yet a different kind of export industry may now be taking shape above ground. Papua New Guinea’s vast rainforests, long regarded principally as ecological assets and, in some areas, as a source of timber and agricultural land, could increasingly become part of a new export economy based on carbon. If the country can establish a credible, high-integrity market, its forests may generate revenues not by being harvested, but by remaining standing.
That possibility has moved closer to reality during the past year. Papua New Guinea has been strengthening its regulatory architecture for carbon trading, pursuing international cooperation under Article 6 of the Paris Agreement and advancing a jurisdictional REDD+ programme under the ART-TREES framework. In March 2026, the Climate Change and Development Authority formally submitted Papua New Guinea’s TREES Registration Document for the 2017–2021 crediting period, marking an important step towards participation in the market for jurisdictional forest carbon credits.
The significance of this development extends well beyond environmental policy. If successful, carbon could become an additional export category, bringing overseas capital into forest conservation, community development and climate-related investment. For Papua New Guinea, the question is no longer simply whether its forests have economic value. The emerging debate is whether the country can build a system capable of converting that value into a trusted international commodity.
The basic commercial proposition is straightforward. Forests absorb and store carbon. When deforestation or forest degradation is reduced, the resulting emissions reductions can, under recognised methodologies and market frameworks, potentially be converted into carbon credits. Those credits may then be purchased by companies, governments or other entities seeking to meet climate commitments. In Papua New Guinea, however, the opportunity is more complicated and potentially more consequential because of the scale and ownership structure of the country’s forests. Much of the land is held under customary ownership, meaning that any successful carbon economy must operate through a system that recognises the rights and interests of local communities rather than treating forest carbon as a conventional state-owned resource.
The legal framework has therefore become central to the country’s strategy. Papua New Guinea’s carbon-market regulation sets out processes relating to permits, carbon rights, mitigation activities and the national register. It also embeds requirements connected to environmental integrity and stakeholder protections. The broader legislative framework gives the Government an important role in international REDD+ transactions, while requiring consideration of customary landholders, benefit-sharing arrangements and free, prior and informed consent. For investors, these details matter.
Carbon credits are not valuable simply because a forest exists. Their commercial value depends on whether buyers believe the emissions reductions are measurable, additional, properly accounted for and protected against reversal. It also depends on whether the underlying rights are sufficiently clear to prevent disputes. That makes Papua New Guinea’s regulatory progress more than a bureaucratic exercise. It is part of the infrastructure required to create an exportable product.
One of the most important strategic choices facing Papua New Guinea concerns the structure of its carbon market. The country has experience with project-level approaches, but recent policy developments indicate increasing interest in jurisdictional and national-scale systems. This matters because a jurisdictional approach could allow Papua New Guinea to market emissions reductions associated with forest protection across a much larger geographical area, rather than relying exclusively on individual projects. The ART-TREES framework is designed specifically for large-scale REDD+ programmes, with national or subnational jurisdictions accounting for reductions in deforestation and forest degradation against an established benchmark.
Papua New Guinea’s 2026 submission of its TREES Registration Document suggests that the country is seeking to position itself within this emerging market for jurisdictional forest credits. The Climate Change and Development Authority has described the process as part of a broader commitment to high-integrity REDD+ outcomes and nationally coordinated safeguards. This approach could eventually create a more substantial and predictable supply of credits. It may also help address one of the long-standing concerns surrounding fragmented carbon projects: the difficulty of ensuring that forest protection in one location does not simply push deforestation into another.
A national system does not eliminate such risks, but it changes the scale at which they are measured. Instead of assessing whether one project has protected one particular forest area, a jurisdictional programme attempts to account for forest outcomes across an entire region or country. For international buyers increasingly concerned about carbon-credit quality, that distinction could prove commercially important.
Papua New Guinea’s potential carbon export economy is also connected to the broader architecture of Article 6 of the Paris Agreement. In December 2023, Papua New Guinea and Singapore signed an implementation agreement covering carbon-credit cooperation. Singapore’s Government continues to list Papua New Guinea among its Article 6 partner countries, with the agreement providing a framework for the authorisation and transfer of internationally transferred mitigation outcomes, or ITMOs. The partnership is strategically significant because it offers Papua New Guinea a possible route into a market where governments, rather than only voluntary corporate buyers, participate in the international transfer of recognised mitigation outcomes.
Article 6 transactions are particularly demanding. Countries must establish procedures to avoid double counting and ensure that exported emissions reductions are properly reflected in national climate accounting. That complexity may slow market development, but it could also create a premium for countries capable of meeting the necessary standards. Papua New Guinea has been actively exploring participation under Article 6.2, including the potential sale of REDD+ outcomes. In 2025, the country’s climate authorities began working with development partners on the institutional requirements needed to participate in these international mechanisms.
For an economy accustomed to exporting physical commodities, this represents a striking evolution. The product being exported would not be timber, minerals or gas. It would be a verified environmental outcome, recorded through data systems, legal authorisations and international carbon-accounting rules. In effect, Papua New Guinea is attempting to build a new form of export infrastructure without a port, pipeline or mine.
The carbon market, however, is not a guaranteed source of easy money. Global carbon markets have faced repeated criticism over credit quality, exaggerated claims and disputes regarding whether projects genuinely produced the environmental benefits being sold. For Papua New Guinea, credibility will therefore be its most valuable asset.
The country’s own recent history demonstrates the difficulty of establishing a functioning market. Progress in operationalising the legal framework has been uneven. The International Monetary Fund noted in 2026 that, although the moratorium on new voluntary carbon-market projects had been lifted in 2025, implementation delays and regulatory uncertainty had limited progress, before greater clarity emerged with the Carbon Markets Regulation 2025. That experience may ultimately prove useful. A slower start gives Papua New Guinea an opportunity to avoid building a market around weak projects or unclear ownership arrangements. The long-term value of the sector may depend less on the speed of the first credit sale than on the reputation established by the first generation of transactions.
If Papua New Guinea becomes known for robust measurement, transparent registries, credible safeguards and genuine community participation, its rainforest credits could command stronger interest from buyers seeking higher-quality supply. The opposite outcome is equally possible. Disputes over land rights, benefit distribution or carbon ownership could discourage investors and damage confidence in the national market.
Perhaps the most distinctive feature of Papua New Guinea’s prospective carbon economy is that its success cannot be separated from its customary landholders. Unlike a conventional mine, where ownership and licensing can be relatively concentrated, forest carbon may involve communities whose land and forests form the foundation of the underlying asset. If these communities do not receive meaningful economic benefits, the social legitimacy of the industry could rapidly weaken.
Papua New Guinea’s legal and policy framework therefore places considerable emphasis on benefit sharing and free, prior and informed consent. Existing legislation relating to international REDD+ transactions also provides for compensation or payments for environmental services to customary landholders under approved benefit-sharing arrangements.
This could create an alternative model of rural economic participation. Rather than communities benefiting only when forests are logged or converted, they could potentially receive income from maintaining forest cover and participating in long-term conservation programmes. Yet this is also where the greatest governance challenge lies. Carbon revenue can become contentious when communities, provincial authorities, project developers and the national Government all have competing expectations.
A successful export economy will therefore require more than international demand. It will require transparent contracts, understandable payment structures and credible systems through which communities can challenge decisions. Papua New Guinea should not expect carbon to replace its mining or energy industries overnight. Carbon prices fluctuate, international rules are still developing, and demand remains sensitive to corporate climate policies and regulatory changes.
Nevertheless, the country’s forests offer something increasingly valuable in a global economy under pressure to reduce emissions: the capacity to deliver large-scale, nature-based climate outcomes. The opportunity is especially interesting because it could diversify Papua New Guinea’s export base without requiring the same type of physical extraction associated with many traditional commodities. Carbon revenue could potentially support monitoring technology, forest management, professional services, community enterprises and climate-finance institutions.
The economic ecosystem surrounding carbon may eventually become almost as important as the credits themselves. Law firms, auditors, satellite-data specialists, forest scientists, financial institutions and community organisations could all become part of an emerging climate-services economy. The result would be a new layer of economic activity built around measuring and protecting natural capital. Papua New Guinea is now approaching a decisive stage. The country has developed a stronger legal framework, is pursuing international carbon cooperation and has taken a significant step towards jurisdictional REDD+ participation.
Yet the market remains a work in progress. The next challenge will be execution. Regulations must translate into predictable approvals. Carbon rights must be sufficiently clear. Communities must see tangible benefits. Environmental claims must survive international scrutiny. Above all, the Government must ensure that the country does not trade away its climate assets cheaply in the rush to create a new revenue stream. If those conditions can be met, Papua New Guinea’s rainforests could become more than a conservation success story. They could form the foundation of a new export economy, one in which standing forests generate foreign income and climate finance becomes part of the country’s development strategy.
The real prize is not simply the creation of another carbon-credit market. It is the possibility of redefining what Papua New Guinea exports to the world. For generations, the country’s economy has depended heavily on selling what can be taken from its land. The emerging carbon market offers a different proposition: that, in a changing global economy, the most valuable resource may sometimes be the one left standing.
