Nature-based carbon offset initiatives have proliferated across the Global South through the voluntary carbon market (VCM). Although often framed as “win-win” solutions for both climate mitigation and local development, evidence from Madagascar suggests that the VCM's development potential should be ap- proached with caution due to three key constraints. The sector comprises a diverse range of actors, including governmental agen- cies, non-governmental organisations, and private sector entities. The latter often prioritise corporate profit over development outcomes for local commu- nities. Notably, dominant carbon standards remain silent on stringent bene- fit-sharing mechanisms, allowing companies to establish projects with mini- mal community engagement. There is often a significant gap between investment commitments and actual implementation, raising concerns about the scale and durability of such pro- jects, as well as their impact on local communities and territories. Even for community-based initiatives, the financial sustainability and scala- bility of projects remains uncertain due to the volatility of carbon-credit prices and structural barriers on the ground. At the same time, many rural commu- nities in Madagascar live below the international poverty line, and enabling their participation in carbon markets can serve as a valuable strategy for di- versifying income portfolios.