By Our Correspondent
ISLAMABAD: Pakistan has entered into its first-ever bilateral carbon market agreement under the Paris Agreement with Norway, marking a significant step toward attracting climate finance and advancing environmental cooperation.
The memorandum of understanding (MoU), signed through Pakistan’s Ministry of Climate Change and Environmental Coordination, will allow the country to develop carbon credit projects and transfer verified emission reductions to Norway.
Federal Minister for Climate Change Musadik Malik called the agreement a “historic milestone,” noting that it signals Pakistan’s transition from planning carbon market mechanisms to actively implementing them. He highlighted that the deal falls under Article 6.2 of the Paris Agreement, which enables countries to collaborate through carbon trading.
Under the agreement, Pakistan will be able to generate carbon credits from initiatives in renewable energy, agriculture, transport, and waste management.
These credits can then be traded internationally as emissions reductions, opening new avenues for foreign investment and climate funding.
Officials say the development comes at a crucial time, as Pakistan faces growing climate challenges such as floods and extreme heat.
The agreement is expected to help mobilize international financial support while promoting sustainable development.
Malik emphasized that carbon markets should not only reduce emissions but also contribute to economic growth by creating jobs, encouraging technology transfer, and benefiting local communities.
Pakistan had already approved national carbon trading policy guidelines in early 2025 and is currently working on building the regulatory and monitoring systems needed to operationalize the market.
At the signing ceremony, Norway’s Ambassador to Pakistan Per Albert Ilsaas described the agreement as a new chapter in environmental collaboration between the two countries.
He noted that Pakistan is among the nations most vulnerable to climate change and said the partnership could deliver both measurable emissions reductions and tangible development gains.
Norway, which aims to achieve climate neutrality by 2030, is seeking to purchase carbon credits beyond its formal climate commitments.
Through its Global Emission Reduction Initiative—launched in 2024 with a budget of $1.5 billion—the country plans to support large-scale climate projects in partner nations, including Pakistan.
The agreement is expected to pave the way for broader cooperation across sectors such as clean energy, industry, and agriculture, strengthening both environmental and economic ties between the two countries.
