The government of Canada is coming back around on sustainability. After pausing efforts in 2024 under new trade pressures from the U.S., the country is now looking to develop a framework for international carbon market cooperation. This is reminiscent of the country’s previous interest in forming a “Green Alliance” with the EU. With Canada seeking closer ties to the EU economy, international carbon market cooperation may be an effort to more closely align the economies. The Government of Canada describes the new effort in a recent press release:
“Today, the Honourable Julie Dabrusin, Minister of the Environment, Climate Change and Nature, announced that the Government of Canada is exploring a policy framework to trade internationally transferred mitigation outcomes (ITMOs), which could allow Canadian companies to participate in international carbon markets catalyzing further investment in climate mitigation activities, including deployment of carbon removal technologies and nature‑based solutions.
Outlined under Article 6 of the Paris Agreement, countries may choose to cooperate in meeting their national climate targets through measures such as international carbon markets and the trading of ITMOs. ITMOs could mobilize investment in projects that generate high-integrity emissions reductions and removals, here in Canada and abroad, and create opportunities for deployment of Canadian technology and expertise.”
Earlier this month, I wrote about a similar Article 6 cooperation effort between Vietnam and Singapore. With more countries seeking Article 6 frameworks, international carbon markets pose economic opportunities. The business of climate change mitigation is driving new industries and innovations. Countries that position themselves to take advantage of this new sector stand to gain.
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