BAKU, Azerbaijan, January 7. An agreement on
international carbon markets reached at the Conference of the
Parties to the UN Framework Convention on Climate Change (COP29),
held in Azerbaijan in November 2024, can expand the participation
of low-income countries in the market and stimulate the growth of
investment flows, Trend reports via the World Bank (WB).


WB noted that carbon credit markets play an important role in
attracting private capital.


“They have the potential to serve as a mechanism for channeling
private investment into development projects that reduce or remove
emissions from the atmosphere. These include, for example, planting
new forests and deploying technologies in low-income countries,
such as the use of environmentally friendly cooking stoves.


Thus, it's estimated that from the first to the third quarter of
2024, about $14 billion was mobilized for the development of new
carbon credit projects worldwide, with the largest share directed
toward carbon removal projects using nature-based solutions,” the
bank said.


According to the bank, the recent agreement on international
carbon markets at the COP29 can help expand market participation
and stimulate the growth of investment flows to low-income
countries.


WB emphasized that this agreement provides clarity on the rules
for cross-border trading of carbon credits under Article 6 of the
Paris Agreement.


"Once the amendments to the agreement come into effect, focus
will shift to their practical implementation. This will necessitate
capacity-building efforts across countries, ranging from the
establishment of institutional and regulatory frameworks to the
development of market infrastructure, such as registries. The
validation of UN-governed carbon markets has created an alternative
pathway for market participation, a development that is
particularly significant in light of the growing scrutiny of
transparency in voluntary carbon markets in recent years," the bank
remarked.







The COP29 conference, held in Azerbaijan last November, was
marked by several pivotal decisions:


- A new annual funding mobilization target of $300 billion was
established, tripling the previous goal of $100 billion;


- The Loss and Damage Fund was successfully operationalized.


- Negotiations concerning the creation of robust carbon markets
under Article 6 of the Paris Agreement were concluded.


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