One interesting development that came out of COP27 is that there was movement on making an Article 6 international carbon market a reality. Reuters reported there was meaningful progress but
“… talks to establish carbon offset markets to allow countries to buy credits to partly achieve their climate pledges are set to drag on beyond the COP27 summit and into next year, according to observers and a negotiator in the U.N. talks. It might still be years before countries can offset their emissions with credits based on greenhouse gas-reducing projects elsewhere…”
Even so, there was an important practical development as well according to Carboncredits.com:
“Ghana and Switzerland, along with Vanuatu, have approved at COP27 the first-ever voluntary cooperation under Article 6.2 of the Paris Agreement called the Internationally Transferred Mitigation Outcome (ITMO).”
Under this deal
“… Switzerland will reduce its GHG emissions by using ITMOs. Doing so will help the implementation of projects with development benefits. The project in Ghana will help thousands of rice farmers practice sustainable agriculture to cut methane emissions. These farmers cover about 80% of Ghana’s rice production. Via the ITMO deal, those farmers will also get extra income with carbon revenues for increased resilience and more efficient water use.”
If offset trading between countries becomes a reality, that would likely be a huge boost to the carbon markets – more fully legitimizing them and hopefully increasing the validation/quality of those offsets. Maybe those big investments in offsets will eventually pay off.
