Context: COP29 in Baku approved standards to establish an international carbon market by next year, aiming to curb global carbon emissions.
Relevance: GS 3 (Environmental issues)
Carbon Market Basics:
- Facilitates buying and selling of carbon credits, each equal to 1,000 kg of CO₂.
Origins:
- Evolved from the 1990s U.S. cap-and-trade system for sulphur dioxide control.
Benefits:
- Incentivizes emission reductions through financial costs.
- Technology aids in monitoring emissions effectively.
Challenges:
- Developing nations face barriers in carbon accounting.
- Corporates favor voluntary reporting over strict regulation.
Concerns:
- Governments could manipulate credit supply.
- Misuse of offsets may undermine genuine emission cuts.
