The on going COP29 climate summit has yielded a significant breakthrough: the approval of carbon credit quality standards. This crucial step paves the way for the launch of a UN-backed global carbon market, designed to fund projects that mitigate greenhouse gas emissions.
Despite the uncertainty surrounding the US’s commitment to the Paris Agreement under the Trump administration, this early win signals progress. Experts believe a carbon market could launch next year, enabling global climate action, even if the US withdraws.
The carbon market functions by allowing countries or companies to offset their emissions by purchasing credits generated from projects that reduce or remove CO2. These projects range from mangrove conservation to the distribution of clean cooking stoves in rural communities.
Approved standards aim to ensure carbon credit integrity, but concerns remain about human rights impacts and market stability. Critics argue that the standards may not be sufficiently stringent to guarantee real climate benefits.
Furthermore, the process of negotiating and approving these standards has been criticized for its lack of transparency and inclusivity. Some countries expressed dissatisfaction with the limited involvement in shaping the final rules.
As COP29 progresses, negotiators will continue to work on other market-related rules, aiming to establish a robust and effective global carbon market.
The International Emissions Trading Association, a business group that backs global carbon markets, has said total trading in the U.N.-backed market could by 2030 generate $250 billion a year and cut 5 billion metric tons of carbon output annually.
Reference- Reuters, The Hindu, UFCCC website release, Mercom India, Business Standard