COP29 Carbon Market Deal Could Boost Investment In Low-Income Countries

(MENAFN- Trend News Agency)
BAKU, Azerbaijan, June 12. The recent agreement
on international carbon markets at the 2024 Conference of the
Parties of the United Nations Framework Convention on Climate
Change (COP29) in Baku, Azerbaijan, could help advance market
participation and has the potential to stimulate greater investment
flows to low-income countries, said the World Bank.

“This agreement provides clarity on the rules for cross-border
transfers of carbon credits under Article 6 of the Paris Agreement.
With the agreement in place, focus will transition to
operationalization, which will require building countries’
capacities-from setting up institutional and regulatory frameworks
to deploying market infrastructure, such as registries,” reads the
latest report issued by the Bank.

The WB analysts note that the confirmation of UN-administered
carbon markets has opened an alternative avenue for market
participation, which is significant given the increased scrutiny
over the integrity of voluntary carbon markets in recent years.

In November 2024, COP29 Presidency announced the end of the
decade-long wait for the conclusion of negotiations on high
integrity carbon markets under Article 6 of the Paris Agreement.
This was one of the Presidency’s top priorities for the year and it
drove Parties towards this milestone achievement through intensive
dual-track technical and political negotiations. This strategy
broke through years of stalemate and finalized the last outstanding
item in the Paris Agreement.

Article 6 provides trusted and transparent carbon markets for
countries as they collaborate to reach their climate goals. This
cross-border cooperation is expected to reduce the cost of
implementing countries’ national climate plans (NDCs) by up to $250
billion per year.

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