Carbon market initiative: TIP outlines legislative roadmap for parliament

ISLAMABAD: The Transparency International Pakistan outlined its legislative roadmap for Parliament at a high level consultative meeting of parliamentarians and national experts on advancing governance and legislative readiness for carbon markets in Pakistan, held at Islamabad.

The consultation highlighted that Pakistan’s Policy Guidelines for Trading in Carbon Markets approved in December 2024 mark an important policy milestone. However, international experience and domestic analysis confirm that guidelines alone are insufficient.

Carbon markets function on legal certainty, data integrity, and enforceable safeguards. Parliament has a central role in providing this statutory backbone.

The road map focuses on four key areas including legal recognition of carbon credits as legal assets. This requires Parliament enacting a Carbon Markets Framework Act that legally defines carbon credits, Internationally Transmitted Mitigation Outcomes (ITMOs), and Verified Emission Reduction as intangible assets. The law should clearly establish ownership rules, distinguish public, private, and community-generated credits, and clarify their treatment in contracts, taxation, and dispute resolution.

READ MORE: Pakistan ‘can generate’ 40-75mn tons of carbon credits annually worth $400mn-2.25bn: report

The roadmaps and consultation also highlighted the need for the establishment of a national Monitoring Reporting and Verification (MRV) and emissions baseline system aligned with Article 6, as well as the codification of benefit sharing and community safeguards, mandating benefit-sharing provisions for projects on public or communal land, with requirement for Free, Prior and Informed Consent, and grievance redress mechanisms aligned with international standards. Experts emphasized that clear legislative backing would reduce investor risk, strengthen Pakistan’s NDC achievement, and position the country as a credible host for international carbon market cooperation. Kashif Ali, Executive Director TI Pakistan emphasized that Pakistan holds enormous potential for Carbon projects.

By translating our policy intent into enforceable law, Parliament can unlock significant climate finance, strengthen Pakistan’s climate ambition, and position the country as a high-integrity carbon market leader.

Closing the consultation, Munaza Hassan, Chairperson of the National Assembly Standing Committee on Climate Change and Environmental Coordination emphasized Parliament’s central role in providing the statutory backbone for carbon markets and ensuring that climate finance contributes to national and community priorities.

She thanked Transparency International Pakistan for engaging parliamentarians on the important topics of carbon markets and climate governance in Pakistan.

Copyright Business Recorder, 2026