This study aims to critically evaluate the legality and impact of carbon trading from the perspective of property (mal) in Islamic law and maqasid al-sharīʿah.
The study follows a qualitative approach, using focus group discussions to collect primary data. It explores the theory of property and the concept of maqasid in Islamic law, drawing on classical fiqh sources and using a qualitative inductive approach. In addition, the study uses a thematic analysis technique to examine the qualitative data.
The study finds that carbon credits comply with the requirements of a property in Islamic law. In shariah, the sold object should be a valuable, desired and lawful asset recognised in custom. In addition, it should be owned, possessed and provide a halal benefit. Carbon credits meet all these criteria since they are issued and registered with a unique identifier, allowing them to be traded, transferred, owned and controlled by individuals. They are valuable and desired, as companies with unavoidable emissions are willing to pay the offset value of their emissions. In addition, carbon credits help reduce emissions, prevent deforestation, mitigate pollution and promote environmental sustainability. The study posits that carbon trading aligns with maqasid al-shariah because it contributes to environmental protection, thereby safeguarding all five essential maqasid of shariah. Carbon credits are not inherently harmful. Thus, it is not a valid argument to claim that carbon trading harms the environment, as any harm it may cause is insignificant compared to the benefits it provides. An Islamic legal maxim says, “A greater harm should be removed by tolerating a lesser harm.” The alleged harms of carbon offsetting are considered acceptable in the fight against climate change. Nonetheless, to prevent misuse and speculation in carbon trading, actions must be taken to curb greenwashing.
Carbon trading not only reduces emissions but also benefits broader society. It motivates towards sustainability and climate-friendly actions, including green investments, the development of green technology, increased renewable energy, the prevention of deforestation, and other carbon-absorbing projects.
This study is among the pioneering efforts to examine carbon trading from the perspectives of shariah and maqasid. It supports shariah scholars and other professionals in making decisions regarding projects that contribute to combating climate change. The study would encourage collaboration among shariah scholars, environmental experts and policymakers to create a sustainable atmosphere that aligns with Islamic values.
