UNCTAD’s Least Developed Countries Report 2024 highlighted on Monday that the group of 45 least developed countries (LDCs) may use carbon market initiatives to reinforce local weather motion by offsetting the patrons’ emissions at improved charges which can enable extra funding.
LDCs had been among the many first to affix carbon markets – the place carbon credit are purchased and bought – however they face distinctive challenges in accessing the market as a consequence of their measurement and difficulties in attracting overseas funding.
Geographic and financing limitations
In line with UNCTAD, six LDCs account for over 75 per cent of all carbon credit issued in voluntary markets and 80 per cent of these beneath the Clean Development Mechanism (CDM) which permits nations to fund emissions-reducing initiatives in different nations and declare the saved emissions as a part of their very own efforts to fulfill worldwide targets. Although LDCs take part, they signify just one.5 per cent of world CDM initiatives, highlighting the potential for extra inclusive participation.
In 2023, the worth of carbon credit from the poorest nations reached round $403 million, only a small fraction of the $1 trillion in annual funding wanted for these nations to fulfill the Sustainable Development Goals by 2030.
This displays the necessity for a stronger framework to make carbon markets a viable supply of funding.
Alternatives abound
UNCTAD famous that land-based sectors like forestry and agriculture, the place LDCs have appreciable untapped potential, may present vital carbon credit. The report estimates that emissions reductions from these sectors may equal 70 per cent of these from the worldwide aviation trade in 2019, or round 2 per cent of world emissions.
Nonetheless, this chance requires viable carbon costs and accessible initiatives. A fee of $100 per ton is required to make such initiatives worthwhile. Presently, LDCs are utilising simply 2 per cent of their land-based mitigation potential, and with out increased carbon costs, as much as 97 per cent could stay untapped by 2050.
Forging a path ahead
UNCTAD’s report requires focused actions to assist LDCs profit extra absolutely from carbon markets. It recommends bolstering home frameworks with stronger regulatory capability and programs for monitoring and reporting to make sure that communities instantly profit from the initiatives.
The report additionally urges expanded worldwide partnerships. Regional cooperation and South-South partnerships may assist LDCs cut back prices and enhance their positioning in carbon markets.
Lastly, capacity-building is vital, with the report calling on improvement companions to supply sources to assist least developed nations align carbon market initiatives with broader financial targets.
These efforts may assist least developed nations unlock vital local weather potential, creating financial alternatives whereas advancing their local weather targets, UNCTAD stated.
