Mohieldin: Carbon Markets Are Important, Effective for Financing Climate and Development Action

Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt, UN Special Envoy on Financing 2030 Sustainable Development Agenda and IMF Executive Director, confirmed the importance of the effective use of carbon credits as an important source of climate and development finance.

This came during his participation in a session entitled “Carbon pricing, carbon markets, and the next generation of climate finance”, within the events of the High-level Policy Roundtable of “Climate Finance to achieve Sustainable Transformation”, organized by the Arab Monetary Fund (AMF) in cooperation with the Arab Fund for Economic and Social Development (AFESD), the International Monetary Fund (IMF) and the World Bank Group (WBG), with the participation of Rami El-Dokani, Executive Chairman of the Egyptian Exchange, Nadir Mohammed, Regional Director of the World Bank, and Martin Maloney, Secretary General of the IOSCO, beside a number of international officials of finance bodies and economists.

Mohieldin said that developing countries do not have the luxury of excluding any of financing climate action methods, which emphasizes the importance of activating trade in carbon credits with specific standards and regulations for operating the markets and pricing carbon credits, stressing that carbon and emissions should be traded on a path that achieves the goal of mitigating emissions and not just transfer them from seller to buyer.

Mohieldin added that the Arab region is among the low-emission regions and has significant trade dealings with EU countries, which requires Arab countries to prepare to deal with European standards and regulations for carbon emissions trading by setting their own standards with regard to carbon trading mechanisms and clear controls for pricing, with systems to monitor pricing and trading processes and ensure transparency.

Mohieldin stated that carbon trading can take place at the international level, at the local level within each individual country, or through intermediary bodies, as well as through voluntary and compulsory markets, and in all cases it needs specific standards and regulations. He pointed out that there is a great horizon for cooperation between countries and international financing organizations such as the International Monetary Fund and development finance banks with regard to setting standards and controls that regulate the work of carbon markets, promote investment in them and encourage the participation of the private sector in this activity.

In this regard, Mohieldin pointed out the importance of the UN report issued during COP27 in Sharm El Sheikh last November, on standards for controlling the social and environmental practices of companies and the private sector, stressing the importance of working with these standards to prevent green washing.

Mohieldin noted the existence of effective Arab initiatives to launch, operate and monitor carbon markets in Jordan, Saudi Arabia and Egypt, adding, In this context, that the carbon credits platform launched by Egypt has local and regional orientations and is interested in activating carbon trade at the Arab and African levels in a way that contributes to financing development and climate action in Arab and African countries.