Global carbon market gets green signal at COP29

Global carbon market gets green signal at COP29

Countries assembled in Baku for the annual climate conference, COP29, voted to clear a much-delayed agreement to finalise a global carbon market.

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Such a market would allow countries to trade carbon credits – certified reductions of carbon emissions – among themselves and whose prices are determined as a consequence of emission caps imposed by countries.

The market itself follows from a section in the Paris Agreement, called Article 6. Sub sections with the Article spell out how countries can bilaterally trade carbon among themselves (Art 6.2) and participate in a global carbon market (6.4).

Though most of the necessary nuts and bolts to make operational such a carbon market supervised by a United Nations body have been in place since 2022, there were several niggles, particularly on ensuring that the carbon credits generated are genuine and its antecedents are transparent.

There have been several rounds of talks involving the Parties (country signatories to the Paris Agreement) on these outstanding concerns that are raised. Last month, a supervisory body of the United Nations, which would be the ultimate arbitrator of the market, set out a draft text that laid out the standards for carbon removal and assessing projects.

A senior official who is part of the Indian delegation told The Hindu days before the COP 29 commenced, that even this version was not “entirely acceptable” but was something that could be ironed out.