India, South Korea Sign Landmark Carbon Market Pact Under Paris Agreement

The deal, finalised during the South Korean president's visit to India, lays the groundwork for cross-border carbon markets between the two major Asian economies, as per Carbon Credits report.

The agreement is part of a broader set of more than a dozen pacts covering clean energy, trade, and industrial collaboration -- reflecting a deepening partnership that links economic growth with sustainability.

At its core, the Article 6.2 framework allows countries to collaborate on emissions reduction projects and trade carbon credits, creating new pathways for cost-effective climate action, the report stated.

Under this mechanism, emissions reductions -- known as internationally transferred mitigation outcomes (ITMOs) -- can be exchanged between countries.

Each ITMO represents one tonne of carbon dioxide equivalent reduced or removed. This enables countries to invest in emissions-cutting initiatives abroad and count those reductions toward their own climate targets.

A key safeguard in the system is the requirement for "corresponding adjustments," ensuring that emission reductions are not double-counted and that transparency is maintained, the report said.

The bilateral deal comes at a time when global interest in carbon markets is accelerating. While still in its early stages, the Article 6 framework is gaining traction, with dozens of agreements already signed worldwide and many pilot projects under development.

These mechanisms are increasingly seen as essential tools for lowering the cost of achieving national climate goals, as per the report.

The partnership aligns closely with the long-term climate ambitions of both nations. India has pledged to reach net-zero emissions by 2070, while South Korea is targeting 2050.

These differing timelines create a complementary dynamic: South Korea, with limited domestic mitigation options, can invest in cost-effective projects abroad, while India can attract climate finance to scale up its clean energy transition, the report stated.

- IANS