The eight-year-old United Nations climate agreement marked a significant turning point when a Thai electric bus operator announced on Monday that it had sold the first carbon offsets under a new system established by the Paris Agreement to a Swiss fossil fuel group.
Governments and businesses can use the 2015 Paris Agreement to partially offset their greenhouse gas emissions by funding initiatives to reduce climate pollutants in other areas. These offsets are bundled into credits, each of which is worth one metric ton less in emissions of carbon dioxide (CO2).
Carbon offsets are criticized by some environmentalists, though, who contend that the priority should be on eliminating pollution rather than allowing it to persist.
The KliK Foundation, a Swiss organization that advocates for fuel importers, announced on Monday that it had finished the first purchase of 1,916 carbon credits from Energy Absolute in Thailand in December.
According to a representative from Energy Absolute overseeing the project, Chatrapon Sripratum, they are leading the way and this market is expected to grow rapidly in the years to come.
Energy Absolute is producing the credits by replacing gasoline-powered vehicles with an electric bus fleet of up to 4,000 units in Bangkok.
While he wouldn't disclose the precise amount of the transaction, Sripratum stated that the sales price per credit was more than $30.
The standards for offsets were agreed upon by climate negotiators over a protracted period of time, and many of the specifics are still being ironed out in the yearly U.N. climate talks, which were held in Dubai most recently.
This implies that if the final U.N. regulations follow their example, Energy Absolute and KliK, as well as the regulators in both nations who have to approve the agreement under the Paris Agreement, will have the ability to impact a developing market. However, there is a chance that they will have to change their deal in retrospect.
