Pakistan publishes carbon market guidelines

The Government of Pakistan has approved the country’s Policy Guidelines for Trading in Carbon Markets, establishing the framework for leveraging carbon market finance to advance its climate commitments under the Paris Agreement.

The new guidelines aim to establish a clear regulatory framework for governing both voluntary and compliance carbon market activities in Pakistan, following international best practices.

Read the new Carbon Market Policy Guidelines here.

The guidelines were developed through an effort led by the Ministry of Climate Change and Environmental Coordination (MoCC&EC), with engagement from other federal ministries, provincial governments, national and provincial institutions, private sector stakeholders, and international experts.

UNEP Copenhagen Climate Centre has assisted the Government of Pakistan in the development of the guidelines with expertise, capacity building, and technical reviews through the Supporting Preparedness for Article 6 Cooperation (SPAR6C) programme. The program is led by the Global Green Growth Institute (GGGI), with implementation in Pakistan led by UNEP Copenhagen Climate Centre and supported by GFA Consulting Group.

Ensuring high environmental integrity of carbon market activities  

The Carbon Market Policy Guidelines outline a cohesive strategy and authorization criteria. They establish a clear fee structure for national authorization and corresponding adjustments, including a one percent administrative fee, reserving five percent of the Mitigation Outcomes for Pakistan’s NDC achievement, and sharing the twelve percent corresponding adjustment fees equally between the federal and provincial governments.

The guidelines were announced during COP29 in an event supported by SPAR6C. At the event announcing the upcoming guidelines, Aisha Humaira, Secretary of MoCC&EC, shared Pakistan’s aims to use Article 6 to accelerate clean technology deployment and attract investment in energy, agriculture, waste management, and forestry.

“Adopting this policy is only part of the many ongoing carbon market readiness efforts. With the support from the USAID, World Bank, the German government, the UN Environment Program, and Global Green Growth Institute, we are developing carbon market regulations, integrating carbon markets in our new NDC, assessing new sector-specific potential, and developing a pipeline of carbon market projects,” she said in her opening remarks.

The Policy Guidelines are a major milestone for Pakistan’s participation in international carbon markets. They remove uncertainties for carbon market project development. SPAR6C is further supporting the Government of Pakistan in meeting international reporting requirements, establishing further detailed rules and regulations, carbon project identification and development, as well as capacity building for public and private stakeholders.