In a major breakthrough for climate diplomacy and green investment, Pakistan has signed its first bilateral carbon trading agreement with Norway, enabling the country to trade emissions reductions with other nations under international climate frameworks.
The agreement was signed under Article 6.2 of the Paris Agreement, which allows countries to bilaterally exchange carbon credits through the trading of verified emissions reductions.
Speaking at the signing ceremony of a related Memorandum of Understanding, Federal Minister for Climate Change Musadik Malik said the development would strengthen Pakistan’s position in international carbon markets and open fresh opportunities for the country’s emerging green economy.
He said the agreement would allow Pakistan to develop carbon-credit generating projects in key sectors including clean energy, agriculture, transport and waste management, with the possibility of selling resulting emissions reductions to Norway.
The minister said Pakistan had already taken major policy steps by approving its first national carbon trading guidelines through the federal cabinet in January 2025. He added that work was now underway to establish regulatory rules, reporting systems and bilateral mechanisms required to operationalise the market.
Norway’s Ambassador to Pakistan Per Albert Ilsaas termed the agreement the beginning of a new era in bilateral environmental cooperation.
He said Pakistan was among the countries most vulnerable to climate change and expressed confidence that the partnership would deliver measurable emission reductions along with real development benefits.
The ambassador said Norway aims to become climate neutral by 2030 and seeks to purchase Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 to go beyond its formal climate commitments. He further said Norway’s Global Emission Reduction Initiative, launched in 2024 with a budget of USD 1.5 billion, would provide carbon finance to countries like Pakistan and help bridge climate mitigation funding gaps.
