The UN-run market allows companies and countries to offset their excess emissions by financing projects that cut greenhouse gases in other nations. The new initiative involves a clean cooking project in Myanmar, which distributes efficient cookstoves that reduce pressure on local forests. Implemented in partnership with a South Korean company, the project will generate credits that will count towards the climate targets of South Korea and Myanmar.
Carbon markets are simultaneously promoted as an essential climate financing tool, and criticized as a license to pollute. A carbon market puts a price on greenhouse gas emissions via carbon credits that get bought and sold, almost like stocks. A credit represents one metric ton of CO 2 that has been avoided or removed through a specific project. A project could target emissions through agricultural practices, CO 2 capture or reforestation.
The plan to reduce net greenhouse gas emissions by 90% compared to 1990 levels by 2040 now allows EU member states to outsource 5% of that target to countries outside the bloc via so-called carbon credits. These involve paying third parties for their reduction of harmful emissions rather than reducing them in-house. Scientific advisers to the EU had said reductions of 90% without offsets were necessary to limit global warming to 1.5 degrees Celsius.
Mirova, the French climate-focused investment firm backed by Kering and other corporate heavyweights, has invested $30.5 million (€26.4 million) in Indian climate tech startup Varaha. This investment will help to expand the startup's regenerative farming program, supporting hundreds of thousands of smallholder farmers in northern India. The deal marks Mirova's first carbon investment in India, but its structure is unusual. Rather than taking equity, the Paris-based firm is investing cash, and will get a share of the carbon credits generated in return over time.
