Carbon credit deal

Despite the poor choice of date, the April 1 carbon credit agreement inked between Pakistan and Norway in Islamabad is no joke. The deal could end up benefiting Pakistan several times over, as it would put money in state coffers for investing in green solutions.

The deal is Islamabad's first bilateral carbon market agreement under the COP21 Paris Agreement and establishes a framework for Pakistan to develop carbon-credit projects in renewable energy, agriculture, transport and waste management, with Norway as the buyer. On paper, it offers something for everyone: climate finance for a nation on the front lines of global warming and progress toward Norway's ambitious 2030 climate-neutrality target. However, there can be many a slip between the cup and the lip, and effective implementation will be the key. Pakistan already has national carbon-trading guidelines in place, but it is debatable whether we have the regulatory architecture to ensure that emission reductions are real, measurable and long-lasting.

Meanwhile, Norway has literal billions available for its Global Emission Reduction Initiative, which includes purchasing 15 million carbon credits by 2030 and a focus on "large-scale programmes" rather than small or piecemeal efforts. Given that Pakistan actually needs significant large-scale infrastructure upgradation, the availability of significant financial assistance could guide us closer to a point where our economy can finally transition towards a viable, sustainable growth model with an abundance of good-paying jobs and positive socioeconomic indicators. But there is just as much chance that this will turn into an example of throwing good money after bad. Fortunately, though it may take a few years, we are optimistic that in a few years, we will be able to look back on this deal without any worry that the joke was on us.