In a recent one-day workshop organized by the Sustainable Development Policy Institute (SDPI) and the Embassy of Denmark, Ambassador Jakob Linulf emphasized the potential of carbon markets for Pakistan to enhance its economic situation and combat climate change.
The workshop was held on May 2, 2024, at the SDPI office in Islamabad.
Linulf underscored the importance of transitioning to sustainable and environmentally friendly practices, citing Denmark’s success in transforming its energy sector. “Denmark has faced a lot of challenges along the way and that’s why it wants to share its lessons learned with Pakistan so that it does not repeat the same mistakes,” he said.
According to Linulf, carbon markets offer Pakistan an opportunity to address both its economic challenges and climate crisis. He stressed the need for collaboration between Denmark and Pakistan to share knowledge and experiences in sustainable development strategies.
The workshop aimed to bridge knowledge gaps and leverage international practices, with Executive Director of SDPI, Dr. Abid Qaiyum Suleri, highlighting the crucial role of journalists in shaping public opinion and guiding policymakers on efficient carbon market adoption.
“It is important to highlight the urgency of climate change and the critical nature of the transformative power of carbon markets as South Asia is suffering from many environmental crises,” he said. He added that journalists should act as facilitators of cooperation between stakeholders to reap the maximum benefits of the new concept of carbon markets.
Nadeem Nawaz, Special Advisor and Country Manager at Danish Energy Agency, emphasized the importance of long-term energy planning strategies towards 2050 to attract investors in carbon credits trading.
Dr. Khalid Waleed, Senior Economist and Energy Expert at SDPI, stressed the link between carbon markets and the economy, highlighting the role of media in creating awareness to mitigate the potential impacts of the Carbon Border Adjustment Mechanism (CBAM) on exports.
The workshop also featured group activities and presentations by SDPI’s energy experts, Engineer Ubaid-Ur-Rehman and Saleha Qureshi, on various aspects of CBAM and carbon markets. The workshop provided valuable insights into the potential of carbon markets for Pakistan’s sustainable development and underscored the importance of collaborative efforts to address the dual challenges of economic growth and climate change.
What are carbon markets and why are they important?
Carbon markets serve as essential carbon pricing mechanisms that allow governments and non-state actors to trade greenhouse gas emission credits, thereby facilitating the achievement of climate targets and the implementation of cost-effective climate actions.
By providing financial incentives for emissions reduction or removal activities globally, carbon markets play a crucial role in accelerating climate action and advancing global climate ambition, ultimately contributing to the realization of the goals set out in the Paris Agreement.
Carbon markets offer various co-benefits to local communities hosting such projects, including the creation of green jobs, promotion of sustainable energy, protection of the environment and biodiversity, and enhancement of climate adaptation and resilience efforts.

The global carbon credit market was estimated to be worth $414.8 billion in terms of revenue in 2023 and is poised to reach $1602.7 billion by 2028, according to Markets & Market
Soren Lutken, Chief Carbon Market Specialist at UNEP Copenhagen, cautioned that while carbon markets are important, they alone cannot solve the climate crisis. He urged Pakistan to develop a clear policy framework to enter compliance carbon markets and explore global cooperation opportunities.
“There are cooperations available globally that are interested to buy carbon credits that need to be explored efficiently with clear policy direction and leadership,” he said, adding that Pakistan government needs to come up with a clear policy framework to decide its moment to enter the compliance carbon markets.
How many types of carbon markets are there?
There are broadly two types of carbon markets: compliance and voluntary.
Compliance markets, such as national or regional emissions trading schemes, operate under regulatory obligations established by governing bodies. In contrast, voluntary carbon markets involve participants, such as companies, cities, or regions, who voluntarily seek to offset their emissions without formal regulatory requirements. These voluntary actions enable non-state actors to contribute to mitigation targets, such as achieving climate neutrality or net-zero emissions.