The World Will Profit from the Carbon Market

The World Will Profit from the Carbon Market
In the ongoing climate talks in Dubai, a significant decision on carbon trading has been made, implementing a key provision of the Paris Agreement.

During the climate talks in Dubai, crucial decisions have been made to establish a global carbon market to help control greenhouse gas emissions. This decision is seen as a historic step in the climate negotiations. Under Article 6.4 of the Paris Agreement, countries can now buy and sell carbon credits, enabling them to contribute to their emission reduction targets while generating economic benefits.
Experts believe that India can significantly benefit from this carbon trading market. As India ramps up its renewable energy capacity with projects like solar, wind, and other sustainable energy initiatives, it has the potential to become a leading exporter of carbon credits. This would open a new avenue of income for India while contributing to global emission reductions.

System of Selling and Buying Credits
1.    Entities (companies, states, countries) can sell surplus credits: Those who achieve more reductions than required can sell the extra credits, contributing to a greener economy.
2.    Entities can also buy credits: Entities that find it challenging to meet their emission targets can purchase credits from others to offset their shortfall.
This setup is beneficial as countries that struggle to meet their targets can use this system to stay on track by purchasing credits.

Price Determination of Credits
In the guidelines provided by the host country, the price of credits is based on the supply and demand in the market. This market-driven mechanism allows countries to either earn revenue by selling credits or meet their climate commitments by purchasing credits as required.

Immediate Benefit for Europe
Many European countries have already established carbon markets and will likely benefit from the immediate implementation of this system. With this decision, the carbon market system is expected to gradually expand, allowing developing countries to benefit economically by trading in carbon credits.