India and South Korea have signed a bilateral agreement under Article 6.2 of the Paris Agreement, aiming to enhance global climate cooperation. The agreement, finalized during the South Korean president’s visit to India, sets the stage for cross-border carbon markets between the two major Asian economies. This deal is part of a broader package of over a dozen agreements covering clean energy, trade, and industrial collaboration, emphasizing the deepening partnership between the two nations.
The core of the Article 6.2 framework allows countries to collaborate on emissions reduction projects and trade carbon credits, offering cost-effective avenues for climate action. Through this mechanism, countries can exchange emissions reductions known as internationally transferred mitigation outcomes (ITMOs), where each ITMO represents one tonne of carbon dioxide equivalent reduced or removed. This approach enables nations to invest in emissions-cutting projects abroad and include those reductions in their own climate targets.
The bilateral agreement arrives at a time when global interest in carbon markets is on the rise. While still in its early stages, the Article 6 framework is gaining momentum, with numerous agreements signed globally and several pilot projects in progress. These mechanisms are increasingly viewed as crucial tools for reducing the expenses associated with achieving national climate objectives.
The partnership between India and South Korea aligns with the long-term climate goals of both countries. India has committed to achieving net-zero emissions by 2070, whereas South Korea aims for this target by 2050. These differing timelines create a mutually beneficial dynamic: South Korea, facing limited domestic mitigation options, can invest in cost-effective projects overseas, while India can attract climate financing to bolster its transition to clean energy.
