Improved management of natural resources is a potentially valuable approach for climate change mitigation and carbon sequestration and can be encouraged through the use of financial instruments. This publication summarises the results of preliminary scoping study to provide an initial assessment of carbon finance opportunities in the HKH region. The study notes that, within the region, adaptation and mitigation must be considered as complementary approaches. It concludes that the REDD mechanism alone (reducing emissions from deforestation and forest degradation) will provide relatively less benefits within the region, whereas the more comprehensive ‘agriculture, forestry, and other land uses’ (AFOLU), approach is more promising. The biophysical mitigation potential in the region is substantial but highly dispersed so that a holistic landscape approach is likely be most appropriate. There is an urgent need to reduce scientific uncertainty and for regional institutional capacity building in carbon finance, and appropriate policy and implementation mechanisms