Countries participating in the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29) have decisively approved new international standards for carbon markets, effectively enabling the trading of emission permits.
Around 200 nations on Monday, November 11, reached a significant agreement during climate negotiations organized by the United Nations on the opening day of the conference in Baku, Azerbaijan. They have established foundational rules to develop a carbon market in alignment with the frameworks outlined in Article 6.4. While further negotiations are necessary to finalize the complete framework, this early agreement sets a clear direction.
This agreement, reached on the first day of the two-week conference, signifies an important step forward. Governments are poised to delve into the specifics of a climate finance agreement as well.
According to a negotiator cited by Reuters, the deal could allow a U.N.-backed global carbon market, which has been years in the making, to start up as soon as next year.
Carbon Offset Projects
Carbon credits empower countries and companies to invest in projects that actively reduce or eliminate carbon dioxide from the atmosphere. These entities can utilize the credits generated from these initiatives to offset their own emissions.
Examples of impactful projects include reforesting efforts to sequester carbon dioxide and providing clean stoves to replace traditional, polluting cooking methods in remote communities.
This emerging market will enable U.S. companies to remain engaged in global climate initiatives, even in the event of a U.S. withdrawal from the Paris Agreement, similar to what occurred during the Trump administration. In such cases, U.S. companies will still be able to acquire credits from the UN-backed market to meet their voluntary climate goals.
World Leaders Summit at COP29
The second day of COP29 commenced on Tuesday and will continue until November 22, 2024. This marks the largest event Azerbaijan has ever organized and is the first time the conference has been hosted in this region.
A high-level summit of world leaders on climate action will take place during COP29 from November 12 to 13, underscoring the significance of this event.
Climate Finance
A primary objective of COP29 is to secure an agreement on a new collective quantified goal (NCQG) for climate finance.
Achieving this goal is imperative, as it lays the groundwork necessary for meaningful action and fulfills the commitment to limit global warming to 1.5°C through collaborative efforts.
The United Nations Framework Convention on Climate Change, established at the Earth Summit in Rio de Janeiro in June 1992, is dedicated to preventing dangerous human interference with the climate system. The acronym COP (Conference of the Parties) represents the highest legislative body overseeing the implementation of this framework.
With 198 State Parties currently involved, COP meetings are held annually unless otherwise decided. The inaugural COP took place in March 1995 in Berlin, with its secretariat located in Bonn.
