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COP29 negotiators in Azerbaijan approved a global carbon credits market to accelerate emissions reductions, but critics warn it could impose costs on consumers while benefiting “green billionaires.”
By yourNEWS Media Newsroom
COP29 negotiators in Azerbaijan reached a landmark agreement on Nov. 12 to establish a centralized carbon credits market, advancing the decade-old goals of the Paris Agreement’s Article 6.4 Supervisory Body. The United Nations (UN) claims this system will expedite emissions reductions and unlock billions in climate financing for developing nations, but detractors argue it may burden consumers while serving elite financial interests.
The agreement sets stringent standards for the market, which is expected to begin operation in 2025. The UN defines carbon credits as tradable units representing one tonne of CO₂ equivalent. These credits can be purchased to offset emissions or support environmental projects.
“This will be a game-changing tool to direct resources to the developing world and help us save up to $250 billion a year when implementing our climate plans,” said Yalchin Rafiyev, the lead negotiator at COP29, in a statement.
UN Climate Change Executive Secretary Simon Stiell praised the agreement as a product of over a decade of negotiations. “When operational, these carbon markets will help countries implement their climate plans faster and cheaper, driving down emissions,” Stiell said in remarks.
However, critics argue the initiative will create economic inefficiencies and additional costs for consumers. “What we’ll end up with is just another cost for consumers on top of all the others,” said Craig Pile of the Global Warming Policy Foundation, emphasizing the lack of measures to address existing renewable energy subsidies and other market distortions.
The agreement coincides with broader financial discussions at COP29. Leaders have proposed reforming the global financial system to raise $1 trillion annually for developing nations, far surpassing the previous $100 billion climate finance goal. The UN projects $6 trillion will be required by 2030 to support climate action plans in developing countries.
Rebecca Iwerks of nonprofit group Namati noted the challenges of attracting investment without a credible framework. “It could actually hinder the development of the market if you don’t have a strong standard,” Iwerks said in an interview with Reuters.
The International Emissions Trading Association welcomed the initiative, stating in a release that the agreement could channel substantial climate finance to nations most in need.
Still, the summit has seen notable absences, including President Joe Biden, Chinese leader Xi Jinping, and European Commission President Ursula von der Leyen, fueling skepticism about global commitment levels.
As the global carbon credits market prepares for launch, debates continue over its economic, environmental, and equity implications. The system’s success will likely hinge on balancing emissions reduction goals with affordability and fair access for all stakeholders.
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