Thursday May 30, 2024

Bid to capture global carbon market: Pakistan partners with greenhouse gas crediting programme

By Aimen Siddiqui
July 02, 2023

KARACHI: In an attempt to help Pakistan capture the global carbon market and set up verified carbon offset initiatives that can attract foreign investors, the Ministry of Climate Change and Environmental Coordination (MoCC&EC) has partnered with VerraStandards – the world’s most widely used greenhouse gas (GHG) crediting programme.

On Saturday (July 1), Minister for Climate Change Sherry Rehman took to Twitter and shared the development: “Exciting news! Pakistan’s Ministry of Climate Change and Environmental Coordination, in partnership with VerraStandards, is set to unlock Pakistan’s carbon market potential!”

She added: “This strategic collaboration aims to empower private project proponents and investors with the expertise needed to thrive in the voluntary carbon market.” Rehman has termed this achievement a “major milestone in boosting Pakistan’s green growth!”

Verra operates the Verified Carbon Standard (VCS) Programme, as well as other standards in environmental and social markets. According to the press release posted on its official site, Pakistan’s MoCC&EC and Verra announced on June 29 “that they will work together to share knowledge and educate stakeholders on carbon markets”.

It adds, “Verra and the Ministry will emphasize capacity building for the voluntary carbon market and net zero (VCM/NZ) committee of Pakistan about the VCS programme and the Verra registry. Future training topics will likely include VCS agriculture, forestry, and other land use methodologies, which are highly applicable in Pakistan.”

The press release quotes Rehman: “Pakistan has real potential to host carbon market projects, and this collaboration is strategically designed to directly benefit private project proponents and investors by equipping them with the necessary technical and administrative knowledge required to navigate and participate in VCM.”

Talking to The News about this development, macroeconomist Ammar Habib Khan says: “Pakistan is one of the more vulnerable countries to climate change. Despite the vulnerability, it never had any carbon market....the development of a carbon market would greatly assist in enabling Pakistan to raise financing by selling carbon credits, and utilizing the financing raised to support renewable energy projects. If executed well, it can be a great initiative to tackle funding required for climate change.”

Dr Abid Qaiyum Suleri, head of the Sustainable Development Policy Institute (SDPI), says that the VCS “defines the standards and processes that all projects must follow in order to be certified,” and by “partnering with Verra, Pakistan can be part of the Verra registry -- which is the cornerstone for the implementation of Verra’s standards and programmes.”

He adds that in the presence of the verified carbon standard (VCS) programme, “individual projects and jurisdictional programmes can be registered conveniently. Verra facilitates the transparent listing of information on registered projects and projects pursuing registration, issued and retired units, and enables the trading of units.”

“It is the central repository for all information and documentation relating to Verra projects and credits. The Verra registry also ensures the uniqueness of projects and credits in the system.”

So far, only Sindh-based Delta Blue Carbon -- a mangrove restoration project -- has been verified by Verra. This verification has enabled the project to list its carbon credits on the Singapore-based carbon exchange Climate Impact X (CIX). Last month, the project sold 50,000 tons of carbon-removal credits at $29.72 per ton through an auction organized by CIX.

In November 2022, the auction, which was oversubscribed, sold 250,000 tons of credits at $27.8 per ton (30 per cent of bids were priced at $35). The recent auction sees a 6.9 per cent increase in the per-ton price, with some bids going as high as $50 a ton (42.8 per cent higher than what companies offered last time).