By Virginia Furness and Kate Abnett

BAKU (Reuters) – Countries attending the two-week COP29 climate summit gave the green light on Monday to quality standards for carbon credits, key to launching a sustained global carbon market by the UN and which would finance projects aimed at reducing greenhouse gas emissions.

The green light was an early agreement on the first day of the United Nations conference in Baku, Azerbaijan. Governments are also expected to reach a deal on climate finance, although expectations have been dampened by Donald Trump’s election victory in the United States.

President-elect Trump said he would once again withdraw the United States from the global Paris climate accord, which lays the groundwork for the proposed U.N.-backed carbon market.

However, Juan Carlos Arredondo Brun, a former climate negotiator for Mexico who now works for carbon market data and abatement company Abatable, said the approval “will bring us closer to operationalizing the carbon market before only one party can decide to move away from the Paris agreement.” Agreement”.

Monday’s deal could allow a U.N.-backed global carbon market, years in the making, to get underway as early as next year, a negotiator said.

Carbon credits theoretically allow countries or companies to finance projects anywhere on the planet that reduce CO2 emissions or remove them from the atmosphere and use the credits generated by these projects to offset their own emissions.

Example projects could include growing CO2-absorbing mangroves or distributing clean stoves to replace polluting cooking methods in poor rural communities.

The market could be a way for U.S. companies to continue participating in global efforts to combat climate change, even if Trump abandons the Paris agreement. If that happened, U.S. companies could still buy credits on the U.N.-backed market to meet their voluntary climate goals.

While the standards approved in Baku were intended to allay concerns that many projects are not delivering expected climate benefits, activists said they fell short in areas such as protecting human rights communities affected by the projects.

“Many donors are concerned that the markets are not stable and credible enough to invest more in them,” Rebecca Iwerks, co-director of the non-profit group Namati, told Reuters.

“It could actually hinder market development if you don’t have strong standards,” she said of Monday’s agreement.

Some negotiators also criticized the way the deal was reached. The standards were agreed by a small group of technical experts, with some countries saying they had no say in the final rules.

Kevin Conrad, executive director of the Coalition for Rainforest Nations and a former climate envoy to Papua New Guinea, said the oversight board had overstepped its mandate.

“We approve of what they did, not how they did it,” he said.

Countries at COP29 will also try to end other rules aimed at creating a robust market.

The International Emissions Trading Association, a business group that supports global carbon markets, said total trading in the U.N.-backed market could generate $250 billion a year by 2030 and reduce the annual production of 5 billion tonnes of carbon.

(Reporting by Virginia Furness; editing by Alexander Smith)