Study on the Demand Side of Carbon Markets and Policy Recommendations

The Inter-American Development Bank (IDB) invites specialized consulting firms to submit proposals to conduct a comprehensive analysis of the demand side of carbon markets relevant to Amazon countries, covering voluntary, compliance, and Article 6 mechanisms.

The primary objective is to evaluate market demand, economic viability, and key policy frameworks required for Amazon countries to supply high-integrity, premium-priced carbon credits—particularly from nature-based solutions—while assessing strategic actions the IDB can take to support these efforts.

1. Scope of Services & Key Objectives

Demand-Side Market Analysis: Assess accessible market segments across voluntary, compliance, and Article 6 government-to-government channels, establishing demand projections (in tCO₂ volumes and USD value) for 2030 and 2050 across low, medium, and high scenarios.

Quality–Price Dynamics & Integrity Premium: Identify key drivers (e.g., corresponding adjustments, methodologies, co-benefits, social safeguards, and Free, Prior and Informed Consent [FPIC]) that enable regional credits to command a price premium.

NDC Trade-Offs & Fiscal Evaluation: Analyze the fiscal and mitigation implications of authorizing credits under Article 6.2/6.4, assessing under what conditions it is advantageous to export mitigation outcomes versus retaining them for national NDC compliance.

2. Key Activities & Methodological Tasks

Stakeholder Mapping & Database: Profile corporate buyers, intermediaries, trading platforms, and sovereign buyers (e.g., Japan, Switzerland, Singapore) to identify demand drivers, purchasing criteria, and barriers.

Article 6 Alignment & Best Practices: Review existing bilateral/multilateral Article 6.2 agreements, evaluating credit authorization frameworks, corresponding adjustments, and interoperability with voluntary markets.

Stakeholder Consultations & Capacity Building: Conduct surveys and interviews with market participants, synthesize findings, and deliver capacity-building workshops and webinars for supply- and demand-side stakeholders.

3. Core Deliverables & Execution Schedule (9 Months)

Deliverable 1 — Work Plan (Day 10): Detailed methodology, execution timeline, stakeholder engagement strategy, and bi-weekly tracking schedule.

Deliverable 2 — Draft Demand Assessment (Month 6): Comprehensive profiling of market segments, buyer database, survey results, and 2030/2050 volume and value projections.

Deliverable 3 — Draft Policy & Best Practices Report (Month 8): In-depth analysis of Article 6 trade-offs, integrity drivers, quality-price mechanics, and actionable policy recommendations.

Deliverable 4 — Final Package & Knowledge Sharing (Month 9): Consolidated final reports (Word/PDF), executive PowerPoint deck, and execution of institutional workshops/webinars.

Note: Interested companies must review the requirements in the BEO Bidders Portal. TheInter-AmericanDevelopmentBank(IDB)invitesspecializedconsultingfirmstosubmitproposalstoconductacomprehensiveanalysisofthedemandsideofcarbonmarketsrelevanttoAmazoncountries,coveringvoluntary,compliance,andArticle6mechanisms.Theprimaryobjectiveistoevaluatemarketdemand,economicviability,andkeypolicyframeworksrequiredforAmazoncountriestosupplyhigh-integrity,premium-pricedcarboncredits—particularlyfromnature-basedsolutions—whileassessingstrategicactionstheIDBcantaketosupporttheseefforts.1.ScopeofServices&KeyObjectivesDemand-SideMarketAnalysis:Assessaccessiblemarketsegmentsacrossvoluntary,compliance,andArticle6government-to-governmentchannels,establishingdemandprojections(intCO₂volumesandUSDvalue)for2030and2050acrosslow,medium,andhighscenarios.Quality–PriceDynamics&IntegrityPremium:Identifykeydrivers(e.g.,correspondingadjustments,methodologies,co-benefits,socialsafeguards,andFree,PriorandInformedConsent[FPIC])thatenableregionalcreditstocommandapricepremium.NDCTrade-Offs&FiscalEvaluation:AnalyzethefiscalandmitigationimplicationsofauthorizingcreditsunderArticle6.2/6.4,assessingunderwhatconditionsitisadvantageoustoexportmitigationoutcomesversusretainingthemfornationalNDCcompliance.2.KeyActivities&MethodologicalTasksStakeholderMapping&Database:Profilecorporatebuyers,intermediaries,tradingplatforms,andsovereignbuyers(e.g.,Japan,Switzerland,Singapore)toidentifydemanddrivers,purchasingcriteria,andbarriers.Article6Alignment&BestPractices:Reviewexistingbilateral/multilateralArticle6.2agreements,evaluatingcreditauthorizationframeworks,correspondingadjustments,andinteroperabilitywithvoluntarymarkets.StakeholderConsultations&CapacityBuilding:Conductsurveysandinterviewswithmarketparticipants,synthesizefindings,anddelivercapacity-buildingworkshopsandwebinarsforsupply-anddemand-sidestakeholders.3.CoreDeliverables&ExecutionSchedule(9Months)Deliverable1—WorkPlan(Day10):Detailedmethodology,executiontimeline,stakeholderengagementstrategy,andbi-weeklytrackingschedule.Deliverable2—DraftDemandAssessment(Month6):Comprehensiveprofilingofmarketsegments,buyerdatabase,surveyresults,and2030/2050volumeandvalueprojections.Deliverable3—DraftPolicy&BestPracticesReport(Month8):In-depthanalysisofArticle6trade-offs,integritydrivers,quality-pricemechanics,andactionablepolicyrecommendations.Deliverable4—FinalPackage&KnowledgeSharing(Month9):Consolidatedfinalreports(Word/PDF),executivePowerPointdeck,andexecutionofinstitutionalworkshops/webinars.Note:InterestedcompaniesmustreviewtherequirementsintheBEOBiddersPortal.

Executing unit: Inter-American Development Bank (IDB)

IDB project: RG-T4585

Contact: rdelgado@iadb.org

Financed by the Inter-American Development Bank (IDB).