GROUP OF 77
GENEVA

STATEMENT OF THE G77 AND CHINA AT THE 77TH EXECUTIVE SESSION OF THE TRADE AND DEVELOPMENT BOARD
(Geneva, 3 February 2025)

Item 3 - The Least Developed Countries Report 2024: Leveraging Carbon Markets for Development

Mr. Chair, Excellencies, Distinguished Delegates,

1. I have the honor to deliver this statement on behalf of the Group of 77 and China. Allow me first to show our appreciation for the preparation and presentation of the LDC Report 2024 which provides valuable insights into how LDCs can engage with carbon markets while addressing their structural economic challenges, development financing gaps, and climate vulnerabilities.

2. First, we must reiterate once more that while LDCs have contributed least to global emissions yet they face the highest costs of climate change. Therefore, when dealing with topics like carbon market, we need to ensure that the activities contribute to job creation, energy access, and sustainable economic diversification in LDCs. Additionally, LDCs must have a greater voice in shaping international carbon market rules, ensuring their priorities are reflected to among others, increase the value of carbon credits.

3. One of the main messages of this report is that carbon markets are a tool, not a substitute for climate finance or official development assistance. In this regard, we reiterate that developed countries must meet their climate finance commitments, particularly through grants and concessional financing, and in that way support LDCs structural transformation.

4. Additionally, while some LDCs have been early participants in carbon trading, structural barriers limit their access to fair benefits, including high transaction costs, weak institutional frameworks and limited technical capacity. The focus on transferring low-carbon technologies is imperative for facilitating green structural transformation in LDCs. Much more effective action and mechanisms ofr technology transfer are required. The Joint Crediting Mechanism, for instance, stands out as an effective tool to advance these transitions while promoting industrial growth in LDCs

5. On the side of the markets, the scenario is not better, the presence of price fluctuations and regulatory uncertainties in carbon markets pose risks for LDCs reliant on these mechanisms for finance. In that sense, we call for targeted capacity-building and technology transfer to ensure LDCs can participate on equal footing, while also advocating for the establishment of stronger governance frameworks to ensure price stability, transparency, and integrity in global carbon trading.

6. Mr. President, the G77 and China appreciate UNCTAD's continued focus on the development challenges of LDCs and urge all here to work towards an inclusive, fair, and development-oriented approach to carbon markets ensuring that they foster long-term sustainable development in LDCs.