South Africa pioneers community-led carbon markets

South Africa’s vast grasslands have become the testing ground for what is being described as a global first in community-led carbon markets, as farmers and pastoral groups begin to earn tradable carbon credits through regenerative land management verified under a new international standard. The initiative centres on Verra’s recently approved methodology for Improved Agricultural Land Management, which allows greenhouse gas reductions and soil carbon gains from grazing optimisation and related practices to be formally quantified and credited.

The move places South Africa at the forefront of efforts to link climate finance with rural livelihoods, at a time when voluntary carbon markets are under pressure to demonstrate integrity, transparency and measurable impact. Under the methodology, communities managing communal and privately held grasslands can generate carbon credits by shifting from extractive grazing patterns to rotational and adaptive grazing, restoring degraded soils, improving vegetation cover and reducing methane emissions per unit of livestock output.

Grasslands cover more than a third of South Africa’s land surface and support millions of cattle, sheep and goats, many under communal tenure systems. For decades, overgrazing, erratic rainfall and weak extension services have eroded soil fertility and productivity. Proponents of the new approach argue that regenerative grazing can reverse these trends while creating a steady revenue stream tied to verified climate outcomes.

Verra’s methodology sets out how emission reductions and removals are calculated, monitored and verified. It combines field measurements, remote sensing and modelling to estimate changes in soil organic carbon stocks and nitrous oxide emissions over time. Baselines are established to reflect prevailing management practices, and credits are issued only for improvements that exceed business-as-usual scenarios. Independent auditors are required to verify data before credits can be issued on the voluntary market.

What distinguishes the South African projects is the emphasis on community ownership and benefit-sharing. Local grazing associations and cooperatives are structured as project proponents, with technical partners providing measurement expertise and access to buyers. Revenue from credit sales is typically split between participating households, communal funds for rangeland restoration, and ongoing monitoring costs.

Early pilot projects in provinces such as the Eastern Cape and Northern Cape have reported improvements in ground cover, water retention and livestock health within a few seasons of adopting planned grazing regimes. Soil tests have shown incremental increases in organic carbon, while farmers report reduced need for supplementary feed during dry spells. These outcomes form the basis of the carbon claims submitted for verification.

The timing is significant for voluntary carbon markets, which have faced criticism over overstated climate benefits and weak social safeguards. Buyers, particularly multinational companies with net-zero commitments, are demanding credits with clear co-benefits and robust methodologies. Regenerative agriculture credits have attracted growing interest because they address both emissions and adaptation, while supporting food security and biodiversity.

Market analysts note that agriculture and land-use credits still account for a minority of global voluntary carbon supply, which has been dominated by forestry and renewable energy. Methodologies that can reliably quantify soil carbon have been slow to gain acceptance due to measurement challenges and permanence concerns. Verra’s framework seeks to address these issues through conservative crediting, buffer pools to manage reversal risk, and long-term monitoring requirements.

South Africa’s experience is being closely watched by policymakers and development agencies across Africa and beyond. Many countries with extensive rangelands face similar challenges of land degradation, rural poverty and limited access to climate finance. A scalable model that channels private capital to community-led land restoration could influence how carbon markets evolve in the Global South.

Critics caution that expectations should be managed. Soil carbon accumulation rates vary widely depending on climate, soil type and management, and gains can plateau over time. There are also concerns about transaction costs, the complexity of monitoring, and the risk that carbon revenues may fluctuate with market demand. Ensuring that communities retain meaningful control and receive fair compensation remains a central test.