ISLAMABAD (MNN); Pakistan and Norway on Wednesday signed Pakistan’s first-ever carbon market agreement under Article 6.2 of the Paris Agreement, marking a major step towards climate cooperation and green investment.
According to an official statement, the agreement opens avenues for international carbon trading, climate financing, and investment in key sectors such as clean energy and climate-smart agriculture. The memorandum of understanding was signed in Islamabad under the Ministry of Climate Change and Environmental Coordination, signaling Pakistan’s formal entry into the global carbon market.
The Paris Agreement, adopted during the COP21 in 2015, commits countries to reducing emissions and adapting to climate change impacts through international cooperation.
Under the new deal, Pakistan will develop carbon-credit projects across sectors including renewable energy, agriculture, transport, and waste management, with the potential to sell verified emission reductions to Norway.
Minister for Climate Change Musadik Malik termed the agreement a “historic milestone,” stating that it moves Pakistan from preparation to implementation in carbon markets and creates new opportunities for investment, job creation, and technology transfer. He emphasized that carbon markets should support real economic and environmental benefits rather than serve as an end goal.
Malik also highlighted that Pakistan had already approved its first national carbon trading policy guidelines in January 2025 and is now working to establish regulatory frameworks and reporting systems to operationalise the market.
Speaking at the ceremony, Norway’s Ambassador Per Albert Ilsaas described the agreement as the beginning of a new phase in environmental cooperation. He noted that Norway aims to achieve climate neutrality by 2030 and is seeking to purchase Internationally Transferred Mitigation Outcomes (ITMOs) beyond its formal climate commitments.
Ilsaas added that Norway’s Global Emission Reduction Initiative, launched in 2024 with a budget of $1.5 billion, would help channel climate finance to countries like Pakistan. He said Norway is interested in large-scale sectoral cooperation, particularly in renewable energy, industry, and agriculture.
The ambassador also pointed to potential collaboration on projects such as the Zhenfa 100-megawatt solar initiative and the Indus wind energy project, inviting Pakistan to present a broader pipeline of initiatives.
Officials said the agreement is expected to significantly boost Pakistan’s access to climate finance and private investment while supporting its transition towards low-carbon growth and fulfillment of international climate commitments.
