CARBON MARKETS

What is a carbon market?

Carbon markets allow for the selling and buying of carbon emissions with the objective of reduction of global emissions of green house gases.

They can potentially deliver emission reduction over and above what countries are doing on their own.

For example , technology and emission reduction in a brick clin in India can be  achieved in two ways;

1. A developed country which is unable to meet it's reduction target can provide money or technology to the brick clin in India ,and thus claim the reduction of emissions as it's own.
2. Alternatively the clin can make the investment ,and then offer on sale the emission reduction, called carbon credits, another party struggling to meet it's own targets can buy these credits and show these as their own.

Carbon markets under Paris Agreement

• Th provisions relating to setting up a new carbon market are described in article 6 of Paris agreement.
• Article 6.2 enables bi lateral arrangements  for transfer of emission reduction.
• Article 6.4 talks about a wider carbon market in which reductions can be bought and sold by anyone
• Article 6.8 provides making non market operations available to countries to achieve targets.