Norway on Tuesday launched a new initiative to buy carbon credits from developing nations under the Paris climate agreement, which will help it meet its emissions goals while financing decarbonization in other countries.
The Norwegian Global Emission Reduction Initiative, with initial funding of $740mn, will use Article 6.2 agreements — bilateral agreements on carbon mitigation projects — to support emissions mitigation actions in developing countries. This is in turn will generate Paris agreement carbon credits known as internationally transferred mitigation outcomes (Itmos).
Norway can use the Itmos toward its Paris emissions targets. In addition, the country believes its use of the agreements will help close the financing gap for emissions reductions in developing countries.
"By working together, we can raise our collective climate ambition and increase the speed of green growth", Norwegian environment minister Tore Sandvik said at the programme's launch at the UN Cop 29 climate talks in Baku, Azerbaijan.
The first agreements under the initiative are with Benin, Jordan, Senegal and Zambia.
Zambian officials said the country will use the money it receives to support a plan it launched earlier this year to build more renewables such as wind and solar, lessening its dependence on hydropower, which accounts for more than 80pc of its electricity generation.
"Our anticipation for Article 6 is that it will be concluded and operationalised at this Cop 29 so that it becomes part of our core financing for grid connected renewable power generation", said Douty Chibamba, permanent secretary of the country's ministry of green economy and environment. Article 6 of the Paris accord aims to help set rules on global carbon trade.
A number of final issues for implementing Articles 6.2 and 6.4 still need to be finalised in Baku, but countries are allowed already to enter into bilateral agreements. Zambia signed one with Sweden in August.
Norway said the credits will help support its goal of becoming carbon neutral by 2030. The credits could also be used to cover any shortfall in the country's nationally determined contribution (NDC), or emissions reduction pledge, under the Paris Agreement in the event the EU does not meet its 55pc by 2030 reduction target. Norway is not a member of EU but is counting on cooperation between the two to achieve its NDC.
Under Article 6.2 of the Paris agreement, an exported Itmo can no longer be put towards the project host country's NDC.
Sandvik said the program will set strict requirements to ensure the integrity of projects "and includes strong safeguards against corruption and human rights violations."
Funding for the program could increase beyond $740mn as early as next year, if Norway's parliament agrees to the government's budget request.
Norway also pledged up to $100mn to a fund in collaboration with the Global Green Growth Institute (GGGI) that will help the country develop programs and manage payments when emissions reductions are achieved.
