Between Promise and Practice: The Role of Carbon Standards in Community Engagement in Land-Based Offset Projects in Indonesia and Madagascar

Working Paper WP26CK1; Issue September 2025

Land-intensive, nature-based solutions are central to the voluntary carbon market (VCM), raising concerns about adverse impacts on vulnerable communities. This research examines the regulatory scope of leading carbon standards and their implementation in offset projects in Indonesia and Madagascar, focusing on community engagement. We find that dominant standards accommodate diverse business models but lack robust requirements for benefit-sharing, consultation, and consent. Consequently, local outcomes vary widely, often left to project developers’ discretion. In Indonesia, private-sector projects delivered community benefits ranging from substantial to negligible, with engagement frequently limited to minimal compliance. By contrast, a farmer-led project in Madagascar integrated benefit-sharing and participation as core elements, exceeding the basic standard requirements. These findings highlight the urgent need for stronger regulation that reflects the diversity of actors involved. We recommend more comprehensive standards for all land-based VCM projects to ensure meaningful community engagement and more equitable outcomes.