Wealthy nations to offset emissions with new "carbon credit" pact
During the COP29 climate conference held in Baku, an agreement was reached on Saturday concerning the possibility for wealthier countries to use an emission-balancing mechanism by making payments to nations that exceed their planned reduction goals. This decision legalizes "carbon credits," a concept that has been debated for years.
7:02 AM EST, November 24, 2024
The proceedings of the Conference of the Parties to the United Nations Framework Convention in Baku, focused on climate change, were scheduled to conclude on Friday. However, participants continued negotiations in Azerbaijan's capital until Saturday.
The main discussion centered on the amount of funds that developed countries will allocate annually to support developing countries until 2035. Island nations, which are most in need of this aid, proposed an amount of $1.3 trillion annually. In response, developed countries initially proposed €250 billion ($260 billion), which was later negotiated to €300 billion ($313 billion).
The current aid of $100 billion per year is set to expire in 2025, necessitating a new agreement in Baku.
"The beginning of a new era"
- I would like to add now is that, in my view, COP29 will be remembered as the start of a new era for climate finance. The EU and its Member States will continue to play a leading role, - stated Wopke Hoekstra, the EU commissioner participating in the talks. He emphasized that an ambitious and realistic goal was achieved and that the circle of donors was expanded.
- With these funds and this structure, we are confident we will reach the 1,3 trillion [USD] objective, - added Hoekstra.
"Carbon credits" come into effect
Though it was still unclear whether an agreement on the value of support would be reached, the rules for trading "carbon credits" were agreed upon. According to the new arrangements, wealthy countries can now meet their climate commitments by financing emission reductions in African or Asian countries, rather than reducing emissions within their own borders.
The decision to legalize "carbon credits" was made after prolonged disputes - noted the AP agency.
Also known as "offsetting," these credits have been used by businesses to balance their own emissions, which was intended to prove their carbon neutrality. Previously, this market was uncontrolled and often associated with accusations of greenwashing.
Now, under the Paris Agreement from 2015, richer countries can purchase so-called carbon credits by making agreements with countries that achieve higher results in reducing CO2 emissions.
