Carbon Market Framework

Carbon Market Section

Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.

Pakistan Carbon Markets Policy

Pakistan’s first ever Policy Guidelines for Trading in Carbon Markets have been notified after due approval from the Federal Cabinet on 27th December, 2024. The policy will revolutionize the very spirit of trading carbon with transparency and integrity and in the long run will meet the goals of mitigation. Steps underway for operationalization of carbon markets are as under:

  1. Rules and Regulations for both Voluntary and Compliance Carbon Markets
  2. Carbon Market registry development
  3. Strengthning carbon market projects pipeline
  4. Capacity building, awareness and outreach strategy

Article 6 of Paris Agreement and Pakistan

  1. Bilateral Cooperation (6.2): Countries can trade Internationally Transferred Mitigation Outcomes (ITMOs).
  2. Promotes cross-border carbon credit transactions to meet Nationally Determined Contributions (NDCs).
  3. Establishes a global carbon market mechanism for public and private sectors. Overseen by a UN-supervised framework, similar to the Clean Development Mechanism (CDM).(6.4)
  4. Focuses on non-market approaches like technology transfer and capacity building.(6.8)

Outcomes of Bilateral Negotiations during COP29

Pakistan will capitalize its carbon markets in collaboration with international financial entities and countries. Countries like Sweden, Norway, Denmark, South Korea and Singapore have shown their keen interest to invest in the carbon markets of Pakistan. MoCC&EC is constantly engaged with the countries and financial entities to bring climate finance in the country in order to meet the climate goals as committed internationally. Bilateral agreement under Article 6.2 of Paris agreement has been signed with Norway.