COP29: More policy alignment needed in S-E Asia to unlock potential from new carbon trading rules
Gradual convergence towards global standards said to help foster trust, strengthen market integrity, and prevent further fragmentation of carbon-crediting ecosystem
WHILE the adoption of global carbon trading rules by countries at the United Nations’ (UN) COP29 climate change conference – nine years after talks began – has been described by carbon market players as a watershed moment for South-east Asia, it could take some time before significant carbon financing starts flowing into the region.
The standards governing international carbon trading set out by the UN – which is covered under Article 6.4 of the Paris Agreement – would have to be tested out through a few pilot projects first, before the market will have enough confidence in a sector that has been plagued by greenwashing scandals, noted Sharad Somani, who heads the infrastructure advisory practice in Asia-Pacific at KPMG in Singapore.
Carbon market participants also said that the policy landscape around carbon trading across South-east Asia is currently fragmented, and there needs to be a gradual convergence towards Article 6.4 standards.
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