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.
