Kim Sung-woo

The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) held last November in Baku, Azerbaijan, addressed various topics such as “new collective quantified goal on climate finance,” creating a foundation for operation of the international carbon market, “mitigation work program,” “a global stocktake,” “a global goal on adaptation” and “transparency.”

Among them, agreement on detailed implementation rules for the international carbon market (Article 6 of the Paris Agreement) is a significant outcome that serves as the basis for international mitigation of carbon emissions. The implementation projects and relevant investments are expected to take off in full swing this year.

While details are quite complicated, here is the gist of the international mitigation: Country A invests in a mitigation project in Country B.

The project invested secures mitigation outcome, which can be internationally transferred as carbon credits. Countries A and B then share the carbon credits to apply them toward their own respective Nationally Determined Contributions (NDCs). For example, let’s say that Korea invests in and operates a small hydroelectric power plant in Cambodia. Mitigation outcome from this project will be shared by Korea and Cambodia in the form of carbon credits so that both countries can utilize this project in boosting their NDCs. Such a joint project essentially requires an internationally accepted standard........

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