The proposal was introduced by the nation’s minister for Pure Assets and Environmental Sustainability, Nik Nazmi Nik Ahmad, throughout a fireplace chat with Eco-Enterprise founder and managing director Jessica Cheam on the Unlocking capital for sustainability 2024 convention in Kuala Lumpur final week.
The minister mentioned an Asean framework for carbon initiatives is critical to make sure the credibility of carbon credit. Since a free market can result in points similar to fraud or overclaiming, regulation is required to take care of excessive requirements for carbon credit, he mentioned.
“We have to work on our requirements. We don’t have to start out from zero. We will have a look at what Thailand has performed with T-VER [Thailand’s voluntary emissions reduction programme]. I met my counterpart and we’re making an attempt to result in an Asean framework for the carbon market, so we have now an ordinary that’s recognised,” he mentioned.
His feedback have been made as regards to the Kuamut Rainforest Conservation Venture, Malaysia’s first nature-based carbon credit scheme, which took 10 years to return to fruition, from inception to public sale.
The Kuamut mission, verified underneath the Verra Verified Carbon Commonplace (VCS) and the Local weather, Neighborhood & Biodiversity (CCB) Requirements, protects 83,381 hectares of tropical rainforests in Sabah.
It was auctioned on BCX at a flooring worth of fifty Malaysian ringgit (US$10.79) on 25 July – the day after the summit – and was given a excessive rating for improved forest administration practices by carbon mission scores agency BeZero.
Nik Nazmi mentioned the mission took a very long time to see the sunshine of day and to make sure quicker scaling of profitable carbon initiatives a regional framework is essential.
The minister didn’t elaborate on how an Asean commonplace may work alongside internationally recognised carbon requirements.
“If it’s simply Malaysia and even Thailand [implementing carbon projects], we are able to solely go to date. We’d like that measurement, that scale of 670 million individuals [the population of Southeast Asia],” he mentioned, highlighting Asean’s potential to develop into the fourth largest economic system on the planet by 2030.
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I’m at all times very cynical about any absolute free market place, however I undoubtedly suppose there must be regulation as a result of we’ve seen that there’s a tendency for what they name sham carbon credit being marketed.
Nik Nazmi Nik Ahmad, Pure Assets and Environmental Sustainability Minister, Malaysia
Business observers commenting on Nik Nazmi’s remarks mentioned that establishing a regional commonplace for carbon markets will not be attainable with out mutual agreements and authorized alignment between member states.
Marc Allen, co-founder and chief sustainability officer of Unravel Carbon, an AI-powered decarbonisation platform, mentioned discussions round Article 6 of the Paris Settlement have to occur amongst Asean governments to assist set the framework for buying and selling carbon credit between international locations.
“There must be alignment amongst international locations on corresponding changes between international locations [to avoid double counting], and the minimal necessities of constant methodologies, measurement and verification of initiatives.”
“This can guarantee everlasting and extra emissions abatement,” he mentioned.
Article 6 of the Paris Settlement outlines mechanisms for international locations to cooperate in reaching their local weather targets.
It supplies a framework for worldwide cooperation by means of carbon markets and different mechanisms to advertise sustainable improvement and cut back greenhouse fuel emissions.
Singapore has been main the cost for carbon markets in Asean by signing bilateral agreements with international locations similar to Laos and the Philippines this 12 months.
Allen added that reaching a regional commonplace for Asean additionally requires addressing challenges similar to nationalistic views and consistency in the way in which carbon credit are perceived.
He mentioned Asean should collectively recognise the legitimacy of carbon credit and work collectively as a bloc to realize frequent decarbonisation targets.
“There must be constant consideration within the position of carbon credit in assembly nationally decided contributions (NDC) targets.”
“The chance of nationalistic views and every nation pursuing their very own NDCs [Nationally Determined Contributions to the Paris climate accord] on the expense of Asean’s frequent purpose is, in our view, the most important threat,” he mentioned.
Asean has not set a single decarbonisation goal for the area, nonetheless 9 out 10 Asean international locations have set internet zero emissions targets for 2050.
In the meantime, Nik Nazmi additionally identified that Malaysia’s potential for high-quality nature-based carbon credit and unlocking worth within the native carbon markets may have necessary repercussions for the nation’s insurance policies past local weather change.
Forward of Malaysia’s upcoming Asean chairmanship in 2025, it’s anticipated that the nation may lead the formation of the regional commonplace for carbon markets.
Renard Siew, president of business physique Malaysia Carbon Market Affiliation (MCMA) informed Eco-Enterprise that Malaysia is in talks with Thailand and Indonesia with a view to organising an Asean affiliation for carbon markets.
“There may be Thai Carbon Market Affiliation and Indonesia Carbon Buying and selling Affiliation and likewise an Asean Alliance on Carbon Markets (AACM). What we are attempting to do deliver all of them collectively,” he mentioned.
“We [Malaysia] intend to push for Asean Widespread Carbon Framework however the particulars of it is going to have to be labored out collectively.”
Unlocking capital for sustainability is an annual flagship occasion on sustainable finance organised by Eco-Enterprise in partnership with UN Surroundings Programme (UNEP). The following regional version might be held in Manila, Philippines, on 14 August 2024. Register right here.
