Carbon Trade… Global Interest, Saudi Action

Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
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Carbon Trade… Global Interest, Saudi Action

Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)

Amid talk of global carbon dioxide emissions rising by about 1 percent this year, which will make climate-warming gases reach a new record level, calls are mounting to take immediate action to preserve nature, climate, health and the entire planet.

In the face of these concerns, a new commercial trend is emerging in international markets, the “carbon trade” between countries, companies, and individuals.

According to the United Nations definition, the UN Carbon Offset Platform is an e-commerce platform where a company, an organization or a regular citizen can purchase units (carbon credits) to compensate for greenhouse gas emissions or to simply support action on climate.

The UN adds that the main feature of this platform is to display UNFCCC-certified climate friendly projects that reduce, avoid or remove greenhouse gas emissions from the atmosphere. These projects are implemented in developing countries around the world and are rewarded with Certified Emission Reductions (CERs) for each ton of greenhouse gas they help reduce, avoid or remove.

A study by the International Emissions Trading Association and the University of Maryland indicated that national climate action plans, collaboratively through carbon trading, could save governments more than $300 billion annually by 2030, which has increased global interest in the carbon market.

In fact, one of the key outcomes of the 2021 UN Climate Change Conference (COP26) held in Glasgow was the establishment of Article 6 regulating carbon markets under the UNFCCC.

A “carbon market” could contribute to tougher climate action by enabling governments and entities to trade carbon credits resulting from reducing or removing greenhouse gases from the atmosphere, such as phasing out fossil fuels, switching to renewable energy, or conserving carbon stocks in ecosystems such as forests.

Carbon trade in Saudi Arabia

Recognizing the opportunities provided by carbon trading, through financing projects and activities in the Middle East and North Africa, the Regional Voluntary Carbon Market Company in Saudi Arabia, which was established by the Public Investment Fund last year, plays a major role in expanding the scope of the voluntary carbon market and encouraging sustainable business and climate practices.

In October 2022, the company oversaw the sale of more than 1.4 million tons of carbon credits, the largest share of which was purchased by the Olayan Finance Company, Aramco, and the Saudi Arabian Mining Company (Maaden).

The Regional Voluntary Carbon Market is scheduled to host a conference on Oct. 26 on carbon markets in countries of the Global South to agree on a list of actions that must be taken before the 28th Conference of the Parties (COP28).

The Carbon Markets in the Global South - Riyadh Edition will be held within the Future Investment Initiative conference to review the most prominent challenges of strengthening voluntary carbon markets at the global level to reduce carbon emissions. The conference will be held in cooperation with S&P Global Commodity Insights.



Trump Tariffs Sow Fears of Trade Wars, Recession and a $2,300 iPhone

FILE PHOTO: US President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, DC, US, April 2, 2025. REUTERS/Carlos Barria/File Photo
FILE PHOTO: US President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, DC, US, April 2, 2025. REUTERS/Carlos Barria/File Photo
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Trump Tariffs Sow Fears of Trade Wars, Recession and a $2,300 iPhone

FILE PHOTO: US President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, DC, US, April 2, 2025. REUTERS/Carlos Barria/File Photo
FILE PHOTO: US President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, DC, US, April 2, 2025. REUTERS/Carlos Barria/File Photo

Countries around the world threatened to wage a trade war with the United States as President Donald Trump's sweeping tariffs fed expectations for a global downturn and sharp price hikes for swathes of goods in the world's biggest consumer market.

The penalties announced by Trump on Wednesday triggered a plunge in world financial markets and drew condemnation from other leaders reckoning with the end of a decades-long era of trade liberalization.

In Japan, one of United States' top trading partners, Prime Minister Shigeru Ishiba said that the tariffs had created a "national crisis" as a plunge in banking shares on Friday set Tokyo's stock market on course for its worst week in years.

Investment bank JP Morgan said it now sees a 60% chance of the global economy entering recession by year end, up from 40% previously.

But there were conflicting messages from the White House about whether the tariffs were meant to be permanent or were a tactic to win concessions, with Trump saying they "give us great power to negotiate."

The US tariffs would amount to the highest trade barriers in more than a century: a 10% baseline tariff on all imports and higher targeted duties on dozens of countries.

That could jack up the price for US shoppers of everything from cannabis to running shoes to Apple's iPhone. A high-end iPhone could cost nearly $2,300 if Apple passes the costs on to consumers, based on projections from Rosenblatt Securities.

Businesses raced to adjust. Automaker Stellantis said it would temporarily lay off US workers and close plants in Canada and Mexico, while General Motors said it would increase US production.

Canadian Prime Minister Mark Carney said the United States had abandoned its historic role as a champion of international economic cooperation.

"The global economy is fundamentally different today than it was yesterday," he said as he announced several countermeasures.

Elsewhere, China vowed retaliation for Trump's 54% tariffs on imports from the world's No. 2 economy, as did the European Union, which faces a 20% duty.

French President Emmanuel Macron called for European countries to suspend investment in the United States.

Other trading partners, including Japan, South Korea, Mexico and India, said they would hold off on any retaliation for now as they seek concessions. Britain's foreign minister said it was working to strike an economic deal with the United States.

But Washington's allies and rivals alike warned of a devastating blow to global trade.

The tariffs "clearly represent a significant risk to the global outlook at a time of sluggish growth," said IMF Managing Director Kristalina Georgieva, calling on Washington to work to resolve trade tensions with its partners and reduce uncertainty.

US Commerce Secretary Howard Lutnick and senior trade adviser Peter Navarro both told cable news programs on Thursday the president would not back off, and that the tariff increases were not a negotiation.

Trump then appeared to contradict them, telling reporters, "The tariffs give us great power to negotiate. Always have. I used it very well in the first administration, as you saw, but now we're taking it to a whole new level."

Stocks suffered a global meltdown, the US dollar crumbled and oil prices were set for their worst week in months as analysts warned the tariffs could dent demand, upend supply chains and hurt corporate profits.

The Dow fell nearly 4%, its biggest one-day percentage loss since June 2020. The S&P 500 lost nearly 5% and the tech-heavy Nasdaq declined nearly 6%, its worst day in percentage terms since the pandemic era of March 2020.

American companies with significant overseas production took a hit. Nike shares lost 14% and Apple fell 9%.

The pain for markets continued into Friday, with Japan's Nikkei set for its biggest weekly drop in five years in a rout led by stocks in Japanese banks, some of the biggest lenders in the world by assets.

Japanese bond yields, meanwhile, fell sharply as investors bet the Bank of Japan may be forced to rethink its plans to raise interest rates.

Trump says the "reciprocal" tariffs are a response to barriers put on US goods, while administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, although they cautioned it would take time to see results.

Vice President JD Vance in an interview with Newsmax faulted critics for taking a short-term view.

"That's fundamentally what this is about, the national security of manufacturing and making the things that we need, from steel to pharmaceuticals," Vance said.

Since returning to the White House in January, Trump's on-again, off-again tariff threats have rattled consumer and business confidence. Trump could step back again, as the reciprocal tariffs are not due to take effect until April 9.

"The tariff plan does not appear to be well thought-out. Trade negotiations are a highly technical discipline, and in our view these proposals do not offer a serious basis for negotiations with any country," said James Lucier, founding partner at Capital Alpha.

Economists say the tariffs could reignite inflation, raise the risk of a US recession and boost costs for the average US family by thousands of dollars.

Analysts said the tariffs could also alienate allies in Asia and undercut strategic efforts to contain China.

Trump has slapped a 24% tariff on Japan and a 25% tariff on South Korea, both home to major US military bases. He also hit Taiwan with a 32% tariff as the island faces increased military pressure from China.

Canada and Mexico, the largest US trading partners, were not hit with targeted tariffs on Wednesday, but they already face 25% tariffs on many goods and now face a separate set of tariffs on auto imports.