#Carbon emissions trading serial number#
#Carbon emissions trading update#

The total sequestration potential is then compared with the agricultural rent of the different ecosystems and the cost of typical carbon project activities (for example, project development and carbon credit monetization costs). It combines geospatial data on ecosystems and their degradation status with carbon sequestration potential per ecosystem type. According to McKinsey Nature Analytics, 4 Our analysis covers eight different natural-climate and NBS activities: reforestation, avoided deforestation, coastal restoration, avoided coastal degradation, peatland restoration, avoided peatland degradation, trees in cropland, and cover crops. Malaysia has more than 18 million hectares of forest cover, which could be managed to ensure permanent carbon sequestration. The impact of a carbon credit can only be claimed once the credit has been retired (canceled in a registry), after which it can no longer be sold onward.Ī robust carbon market-including demand for carbon credits, a strong ecosystem to supply carbon credits, and a rules-based marketplace for trading-could be a key enabler of Malaysia’s climate ambitions.

#Carbon emissions trading serial number#

3 A carbon credit (often called a carbon offset) is a certificate with a unique serial number on a carbon registry, representing one metric ton of carbon dioxide equivalent that is either prevented from being emitted (emissions avoidance or reduction) or removed from the atmosphere by carbon-reduction projects through activities that are “additional.” A carbon credit is considered additional if the prevention or removal of one ton of CO 2e would not have been achieved without the carbon project, and the carbon project itself would not have happened without the proceeds from the sale of carbon credits.

Projects receive carbon credits commensurate to the amount of emissions either removed from the environment or prevented from being emitted into the environment when executed in line with methodologies prescribed by carbon standards. Nature-based solutions (NBS)-projects that aim to increase carbon sequestration in the natural environment-could be a key element of this effort. These include restoring degraded forests, mangroves, and peatlands and increasing the amount of carbon sequestered per hectare of land through better land management practices. Malaysia could expand carbon sequestration in forests and the natural environment beyond current levels through an array of measures. Learn more The potential of carbon markets Given the importance of forest-based sequestration in Malaysia, the country would need to maximize efforts to avoid deforestation and sustainably manage land use to meet its climate goals.

Malaysia’s forests play a significant role in mitigating climate impact, sequestering an estimated 259 MtCO 2e a year through measures such as legally designating reserved forests and protected areas including national parks and wildlife sanctuaries. the country’s annual emissions in 2020 amounted to 334 metric megatons of CO 2 equivalent (MtCO2e).

#Carbon emissions trading update#

According to Malaysia’s Third biennial update report to the UNFCCC, 2 Malaysia: Third biennial update report to the UNFCCC, Ministry of Environment and Water, Malaysia, December 2020. and to cut greenhouse-gas (GHG) intensity against GDP by 45 percent by 2030 compared with 2005 levels.

Malaysia has committed to achieving climate neutrality 1 Twelfth Malaysia plan, 2021-2025, Economic Planning Unit, Prime Minister’s Department, Malaysia, 2021. This article is a collaborative effort by Vishal Agarwal, Juan Carlos Arredondo, Li-Kai Chen, Vaibhav Dua, Stuart Evans, and Rohan Jain, representing views from McKinsey’s Sustainability Practice.