Carbon Finance and the Funding Gap for Municipal Solid Waste Management in Developing Countries: Opportunities and Limitations

Year Published

2025

Contributing Organizations

Rocky Mountain Institute (RMI)

Global Methane Hub

International Climate Initiative (IKI)

German Federal Ministy for Economic Affairs and Climate Action (BMWK)

German Development Cooperation (GIZ)

Catalytic Finance Foundation

Type of Resource

Guidance

Research/Insights Report

Languages

English

Relevant Topics

Core Topic

Carbon Markets & Carbon Finance

Target Audience

Technical Assistance Providers

Project Developers

MDBs/DFIs

Governments & Policymakers

Advisors & Consultants

Relevant Geography

Latin America and the Caribbean

Asia & the Pacific

Africa

Central Asia

Middle East and North Africa

Resource Description

This whitepaper analyses how carbon finance can enhance municipal solid waste (MSW) management in developing countries by leveraging international, domestic, and voluntary markets.

Why This Matters

Carbon finance can bridge funding gaps in MSW, cut methane, improve urban health, and mobilize private capital for climate and development goals.

Key Insights

MSW generates ~20% of global methane emissions but remains underfunded by climate finance
OPEX accounts for 70% of costs yet is rarely financed, weakening project sustainability
MSW carbon credits rose from 5m (2016) to 23m (2024), with added potential via Article 6
International markets offer scale but are costly; domestic markets are locally aligned but small; voluntary markets flexible yet volatile
Case studies show carbon finance improves viability, especially when combined with policy incentives and capacity building

Secondary File Resources

Secondary Resource Link(s)

Link to article from Catalytic's website

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