What role do carbon markets play in international climate change agreements ?
In international climate change agreements, carbon markets are a crucial component. They provide a mechanism for countries to meet their greenhouse gas (GHG) emission reduction targets in a cost-effective manner by trading carbon credits. Carbon markets encourage businesses and governments to invest in cleaner technologies and practices. They offer flexibility to countries in meeting their emission reduction commitments, provide incentives for innovation, facilitate international cooperation, and can be integrated with other environmental and economic policies. Examples of carbon markets in international agreements include the Kyoto Protocol and the Paris Agreement.