Tracing the Carbon Market’s Growth: A Prelude to COP 28 in Dubai
The stage is set for COP 28 in Dubai, an event that marks a significant chapter in the carbon market’s history. This trajectory, which has been at the heart of the international response to climate change, deserves a look back as we stand on the cusp of further progress.
The Genesis of Carbon Trading: The Kyoto Protocol (1997)
The tale of carbon trading took off in 1997 with the Kyoto Protocol. This groundbreaking treaty introduced carbon credits, pioneering a system that could monetize emissions reductions.
Setting the Quality Benchmark: Gold Standard and EU ETS (2003-2005)
The Gold Standard emerged in 2003, upholding stringent criteria for carbon offsetting. Shortly after, the EU ETS, launched in 2005, became the bedrock for carbon trading within Europe, signaling the region’s commitment to climate leadership.
Ensuring Integrity: American Carbon Registry and VCS (2007-2008)
The American Carbon Registry and VCS were created in 2007 and 2008, offering trusted verification for carbon offset initiatives, integral to the market’s credibility and expansion.
Expanding Mechanisms: CDM and JI (2008)
In the same vein, 2008 saw the advent of CDM and JI mechanisms, enabling industrialized nations to support emissions reduction projects abroad, aligning international cooperation with environmental goals.
A Paradigm Shift: The Paris Agreement (2012-2015)
With the closure of the Kyoto Protocol’s first commitment period in 2012, the stage was set for the Paris Agreement in 2015. It redefined global climate objectives, propelling nations to devise their carbon pricing schemes.
Sectoral Focus: CORSIA (2020)
CORSIA came into effect in 2020, targeting emission cuts from international aviation—a sector-specific move reflecting the nuanced approach needed for different industries.
Reinforcing Partnerships: From Glasgow to Sharm El-Sheikh (2021-2022)
The COP 26 in Glasgow in 2021 was instrumental, endorsing Article 6 of the Paris Agreement, thereby formalizing the rules for global carbon trading. This baton was then passed to COP 27 in 2022, held in Egypt, where the mechanisms for Article 6 were refined, paving the way for more transparent carbon market operations.
National Strides: China, India, Canada, and Beyond
Significant national strides have bolstered the carbon market’s foundations. China’s unveiling of a national carbon market, India’s push towards a renewables-driven future, Canada’s carbon pricing policy, and the establishment of the Global Carbon Council in Qatar all exemplify the diverse but convergent paths nations are taking towards carbon neutrality.
Anticipating COP 28: The Future Awaits (2023)
Now, as we approach COP 28, the anticipation is tangible. This summit is not just another meeting; it is anticipated to be a turning point that will enhance the operationalization of Article 6 and scale carbon markets to new heights.
The carbon market’s narrative is one of pioneering, learning, and striving. From Kyoto’s initiation to Paris’s ambition, and through national endeavors across continents, each milestone has been a stepping stone to a more sustainable future. COP 28 is the next milestone ahead, and the global community watches with bated breath, ready to witness how the dialogue on carbon markets will evolve in Dubai, shaping the climate action of tomorrow.