Climate BLUD Opens Regional Financing Opportunities, Carbon Rights Are Not Automatically Attached

The scope of the service does not mean that local governments can directly manage or trade all carbon potential in their area. Each activity must still meet sectoral requirements, have legal certainty regarding carbon rights, and maintain independent validation and verification.

Recording climate actions and carbon units through the Carbon Unit Registry System is also needed to maintain traceability and prevent double counting.

In its implementation, governance needs to clarify rights to the results of activities, responsibilities of each party, mechanisms for sharing benefits, and protection of the community.

Revenue opportunities come with costs and risks

Sources of income for Climate Management BLUDs can come from services, grants or funding support, performance-based payments, and carbon unit transactions. Each must be in accordance with the legal basis and the right to receive it.

Therefore, BLUD development requires financial planning that takes into account costs from the preparation stage to implementation. Components include activity development, monitoring, and certification.

The risk of changes in carbon prices and the possibility of revenues being lower than projections also need to be taken into account. These financing opportunities cannot yet be treated as certainty of regional income.