UNFCCC The Clean Development Mechanism (CDM) is a system that helps advanced countries utilize the results accomplished by performing greenhouse gas reduction projects in developing countries to achieve the reduction goals of advanced countries. Credit generated via the CDMs is called Certified Emission Reduction (CER) and is traded via the carbon market.
The Emission Trading system is a system that allocates emissions to each dedicated company and sector to accomplish greenhouse gas reduction obligations allotted to each country and helps companies to purchase quotas from other countries or other companies in case they fail to accomplish their allotted greenhouse gas reduction obligations.
The Korean Government introduced a carbon emission trading system in 2015. What is important is that the carbon emission trading system was introduced early even though it was not a mandatory reduction country. We are able to find the meaning of enacting the bill in that we will also play a leading role in reducing greenhouse gases, developing renewable energy, and green technology based on this system.
The EU Commission announced a policy package recently at the "Fit for 55" on July 14th, 2021, to accomplish its 2050 carbon neutral practice and its 61% reduction obligation by 2030 (compared to 2005). The 'Fit for 55' specifically calls for the establishment of a Social Climate Fund to allot 30% of the Multiannual Financial Framework and Next Generation EU to climate support to ensure effectiveness as a means of supporting conversion to support targets, inequality, and energy poverty.
This paper emphasized the importance of sustainable finance as an economic strategy against carbon neutrality and Long-COVID based on the above discussions and backgrounds. A number of countries consider sustainable finance, including renewable energy and related infrastructure projects, as their primary policy means for post-COVID-19 economic recovery.
The government, in other words, should try to provide a clear direction and accomplish its goals to reduce carbon with carbon taxes and energy efficiency criteria. Financial institutions should be provided with enough time to prepare for risks of climate changes in the financial system. The conclusion argued that the carbon reduction policy of governments should be predictable, and that the corporate disclosure system needs to be revised to cope with crises including Green Swan.