The Paris Agreement, the driving force behind global climate cooperation adopted in 2015, provides that a country which exceeds its objectives for reducing CO₂ emissions can sell its excess reductions to a country lagging behind its own objectives, generally a rich country.
In return, the agreement provides that a country which has not achieved its emissions reduction objectives can make up for it by financing environmental projects around the world, so-called “carbon credit” projects.
Concretely, a South Korean company will finance a program to replace open cooking stoves (wood, charcoal, etc.) with more fuel-efficient stoves in Burma, the UN Climate announced on Thursday.
Such projects are expected to reduce CO₂ emissions since less energy will be lost and therefore used by families for cooking, with an additional benefit for air quality and to protect local forests.
According to the World Health Organization, about a quarter of the world’s population cooks with open stoves that pollute indoor and outdoor air by burning fuels such as kerosene, charcoal, dried dung and agricultural waste.
But these programs have historically failed to deliver on their promises, with methodologies having overestimated emissions reductions, particularly in cases where people abandon the new systems because they find them less practical, or if they break.
Pay instead of reducing your emissions
South Korea will, by paying for this replacement program, benefit from carbon credits, which will help reduce its total carbon footprint. The UN mechanism avoids double counting of these reductions in the countries selling and purchasing credits.
“The opportunities offered by this UN carbon market across all regions are immense, particularly now that strong environmental safeguards, rigorous standards and a clear redress system are in place to ensure integrity, inclusiveness and effectiveness”welcomed the head of the UN Climate, Simon Stiell.
Beyond the counting problems, critics of the carbon credit mechanism denounce a free pass given to some to not reduce their own emissions, since they would only have to pay to say they are in line with the Paris agreement. The same argument is often used to criticize States basing their climate policy on carbon compensation, to the detriment of reducing their emissions.
This new mechanism was validated by countries around the world at COP29 in 2024, and hundreds of other projects await approval.
