In its latest quarterly update of international climate policy, the Carbon Market Institute points to "nature-based" carbon projects to help with economic and social benefits.

CMI chief John Connor says these projects are playing a greater role in global carbon markets.

"Over the last five years, 42 per cent of carbon credits generated globally have been for forestry projects," he said.

"Their potential to draw down emissions from the atmosphere points to significant potential in our region alongside urgent industrial decarbonisation initiatives."

The federal government has placed an increased importance in the region through its Pacific Step-Up policy.

The region itself has long urged the Australian government to do more to reduce emissions and fight climate change.

Mr Connor says Australia should also look at how to be part of international carbon markets.

The quarterly update found that despite the economic consequences of coronavirus, many carbon markets across the world saw a firming in prices.

The EU's carbon price is at more than $47 while Australia's price is just above $16 per tonne.

Australian Associated Press