Carbon credit is generated when one ton of carbon di oxide is not produced. 




Carbon credit is generated when one ton of carbon di oxide is not produced. 

Carbon credit is an emerging area which has become now mandatory globally for all the countries since December 2020.

Panama as a country can generate huge amount of carbon credits as there is an  immense potential.

 Geographically, it is strategically placed in such a manner that it can create huge carbon credit. 

These opportunity  can be considered as pathbreaking in two major areas : 



Let us understand them in a systematic and logical manner :

 Shipping industry: 

Shipping sector account for 3 percent of green house gas emissions annually.
 As the global trade flow increases to serve the growing population emissions could grow by 250% by 2050 if no action is taken. 

Hence International maritime organization has set a target to halve carbon emissions by 2050. 

On an average 15000 shipping vessels transit a year from the Panama canal which carry 300 million tonnes of goods. 

Hence there is an immense opportunity in this sector. 

Global carbon offsets market is facing watershed moment as gold standard is being standardized after Paris Convention.


1) Reducing travel distance will lead to reduced fuel consumption and hence greenhouse gas consumption. 
2) Finding fresh water resources for the canal which will do desalination of sea water. 
3) using a specific  liquid on the surface of the ship helps to emissions reduction. 


Redd+ mechanism  stands for reducing emissions for deforestation and forest degradation.

UNFCCC  the United nations arm has come up with Redd+ as a solution to create green forests belt in different parts of globe including Amazon.

Panama can earn huge amounts of carbon credits by using conserving forestry through afforestation and reforestation activities. 

As per UNFCCC  from 2020 hydropower project and sustainable forest will be able to sell carbon credit in the global market. 

As per the recent estimate carbon credit generation from the two activities put together till 2050 is USA 120 billion dollars assuming current rates of carbon credits rate as on July 2020.


In order to earn the above potential carbon credit, the government of Panama should take steps to generate it. 
As every country has to give nationally determined contributions , it is now essential to look this pathway of growth. Panama can grow in this new direction immensely.