{"id":20064340,"date":"2021-01-28T12:30:00","date_gmt":"2021-01-28T07:00:00","guid":{"rendered":"https:\/\/www.thethirdpole.net\/?p=64340"},"modified":"2022-07-11T15:50:38","modified_gmt":"2022-07-11T10:20:38","slug":"chinas-carbon-markets-offer-pakistan-a-big-opportunity","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/climate\/chinas-carbon-markets-offer-pakistan-a-big-opportunity\/","title":{"rendered":"Comment: China\u2019s carbon markets offer Pakistan a big opportunity"},"content":{"rendered":"\n

China is all set to launch its carbon emissions trading scheme<\/a> next month. If successful, it is set to be the largest such system in the world. Carbon trading schemes have been on several countries\u2019 agendas, but their execution has been limited due to fiduciary, technical and implementation challenges. Pakistan has abundant potential carbon mitigation and adaptation options and could benefit greatly from collaboration with China\u2019s emission trading scheme.<\/p>\n\n\n\n

What is a carbon market?<\/h2>\n\n\n\n

A carbon market is one where you can buy and sell carbon credits, which have been validated by an independent expert source. Policy makers are once again advocating carbon markets to efficiently address global climate change and decrease carbon emissions. Within a carbon trading framework, entities generate credits representing emissions cuts and sell them to other nations or companies seeking to offset their own pollution. In theory, carbon markets help steer investment toward projects that deliver emissions cuts most efficiently. In practice, it is an efficient tool to transfer capital from developed to developing economies.<\/p>\n\n\n\n

The EU ETS (European Union Emissions Trading System<\/a>) is the most famous carbon trading system. Established in 2005, the price of carbon emissions in the EU ETS has been volatile, making it difficult to base firm projections on a price for carbon emissions. However, it now accounts for over USD 175 billion a year, a sizeable increase since it was established when 362 million tons of CO2<\/sub> were traded on the market for a sum of USD 8.85 billion.<\/p>\n\n\n\n

An opportunity for Pakistan<\/h2>\n\n\n\n

Pakistan\u2019s history with carbon markets has been uneven. In 2005, Pakistan ratified the Kyoto Protocol under which \u201ccertified emissions reductions\u201d generated by Clean Development Mechanism (CDM) project activities in developing countries could be used by developed countries credits to meet their emissions targets. In 2010, the Pakistan government allocated funds for carbon trading in its annual budget. However, by 2012, Pakistan\u2019s share of CDM projects was less than 1%<\/a> while China and India accounted for 60 percent and 30 percent of global CDM projects respectively. In the budget<\/a> for fiscal year 2015-16, the Pakistani finance ministry allocated PKR 34 million (approximately USD 340,000) for carbon neutral projects to help the industrial sectors sell and buy carbon credits in a local market. In the same year, the government wrapped up the CDM cell in the Climate Change Division due to its poor performance.<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

The Pakistan Climate Change Act, 2017<\/a> provides the legal and institutional framework for climate policy in Pakistan. The Act envisioned delegating responsibility to the Ministry of Climate Change (MoCC) for designing and establishing a national registry and database on GHG emissions. It seemed to work on paper but not in reality. In 2018, the National Committee on the Establishment of Carbon Markets (NCEC) was formed to assess the country\u2019s potential for implementing domestic and participating in international carbon markets. The MoCC published <\/a>a draft report on the introduction of carbon pricing instruments in Pakistan. The report recommends implementing a domestic emissions trading scheme (ETS) in Pakistan that would initially cover large emitters from the power and industry sectors accounting for 168 Mt of CO2<\/sub> equivalent emissions.<\/p>\n\n\n\n

Read: Locals urge Pakistani government to drop CPEC coal mining plans<\/a><\/p>\n\n\n\n

Collaboration with China<\/h2>\n\n\n\n

Pakistan has a ripe opportunity to link up with China\u2019s programme by developing carbon offsets locally and selling these to China. In its 14th five-year plan, China prioritised carbon trading, including online trading, and Pakistan can benefit from that in the following ways:<\/p>\n\n\n\n