Next phase for Article 6 Carbon Finance in Pakistan

Through the Supporting Preparedness for Article 6 Cooperation (SPAR6C) programme, UNEP Copenhagen Climate Centre and consortium partners are assisting Pakistan to access much needed climate finance through the carbon market established under Article 6 of the Paris Agreement. Setting the stage for future Article 6 activities in Pakistan, an expert team from SPAR6C visited Islamabad, Karachi, and Lahore to assess the opportunities for Article 6 participation, and various stakeholders’ readiness and needs for international capacity building and technical support. This assessment will describe national needs in terms of emissions planning, governance frameworks and mitigation activities and outlines specific activities of support under the SPAR6C programme. During the mission, the project team had over 30 consultation meetings with representatives from ministries and government departments, private sector, finance institutions and relevant UN organizations. The visits and meeting in Pakistan also showed that there is ample interest in Article 6 in Pakistan, but outspoken needs for further understanding and capacity building. There is a strong interest among Pakistani stakeholders to move ahead with projects despite and also because of the current economic situation, in large parts influenced by the catastrophic floodings of 2022. UNEP Copenhagen Climate Centre leads implementation of the SPAR6C programme in Pakistan, supported by GFA Consulting Group. The programme aims to enhance readiness of Colombia, Pakistan, Thailand and Zambia to participate in the international carbon market under Article 6 of the Paris Agreement. To achieve this, SPAR6C works to increase private sector engagement in NDC implementation and supports raising climate ambition in partner countries.

The way forward for Pakistan

Concluding the meetings and visits in Pakistan, a common understanding of the way forward was reached with the Ministry of Climate Change, and consulting company PITCO was introduced to assist implementation. Most importantly, the Readiness and Needs Assessment, laying the basis for SPAR6C work in Pakistan, was discussed, and is now set to be finalized in June 2023. This will be followed by capacity building for national stakeholders later the same year. Simultaneously, analyses on the need for investment, and support to establish domestic rules and procedures for Article 6 activity will be carried out. The SPAR6C programme will also support the development of 2-3 Article 6 activities in Pakistan, advising on financing and business plans, and helping find buyers and negotiate ITMO purchase agreements. Furthermore, there will be specific capacity building focused on the development of a pipeline of additional Article 6 projects.

Carbon Markets and social needs

Parallel to the work on readiness and needs, the Community of Practice for Article 6 Implementing Countries (CoP-ASIC) kicked off in Pakistan reaching six universities across three cities: Islamabad, Lahore, and Karachi. This included seminar presentations with Q&As for students on carbon markets as well as a meeting with faculty to discuss the possibility of creating an informal network of academic researchers. Through the CoP-ASIC, UNEP Copenhagen Climate Centre will work with academia in Pakistan to assess how the SPAR6C programme can help address needs and build capacity on cooperative approaches under Article 6. Through the meetings and dialogues with students and researchers, it became clear that these would only be successful and effective if they could meet local social needs at the same time.