The first carbon trading agreement under Article 6 of the Paris Agreement was signed this week by Peru and Switzerland. After two years of negotiations, the South American country will receive financing for sustainable development projects while providing carbon credits to Switzerland to track emissions reductions.
While there are still differing views within the UN on how global carbon pricing should be implemented, countries are free to strike bilateral deals. Peru’s Environment Minister Kirla Echegarry said the deal was “an example of how cooperation between countries can facilitate the achievement of our climate goals while also bringing prosperity and well-being to our citizens.”
CEBDS believes that Brazil can also be a pioneer in carbon pricing, by creating a market for this new commodity. For Marina Grossi, president of the board, “carbon will be the new commodity “The global carbon market will soon be global and Brazil has important competitive advantages in this market.” The creation and development of a carbon market with the right design and incentives can lead to increased investments linked to clean technologies in Brazil. The result will be the creation of new jobs, the reduction of pollution and the strengthening of the Brazilian economy – in addition, of course, to technological innovation itself.
How the planet will deal with emissions, the transition to a cleaner economy and the price of carbon are the backdrop to changes in the Chinese economy, the €1.8 trillion European Green Deal and also the US presidential election. The global economy is gearing up to move onto a new path.
In the case of the first deal under the rules of the Paris Agreement, transactions between Peru and Switzerland will be managed by the Klik foundation, which was created by Swiss CO2 law to find carbon offsets of 35 to 54 million tons by 2030. The Swiss and Peruvian governments will determine which activities are eligible to generate carbon credits.
The transition to clean energy is part of Switzerland's concerns, according to Mischa Classen, the institution's international co-head. In an interview with Climate Home, he said that the Swiss government has ruled out investments in nuclear power plants and stressed that it has no interest in modernizing coal mines or in prolonging the participation of minerals and oil and gas in the energy matrix.
According to Classen, the Swiss government is in talks and may sign new agreements with other countries. In addition to Ghana, which is in first place, there are also talks with Argentina, Chile, Mexico, Morocco and Thailand.
