Historic Article 6 Decision at COP29 – After Much Debate, a Reasoned Solution

After four years of stalled negotiations, COP29 has delivered a breakthrough on Article 6. This is a practical, reasoned step forward - and if well implemented, can unlock the potential of carbon markets to drive deeper emissions cuts and deliver real benefits for people and nature.

"Adoption of Article 6 is a historic milestone in establishing carbon market cooperation to boost ambition and mobilize urgent climate finance. However, we need critical fixes on Article 6.4 standards to ensure nature-based solutions - and the communities protecting these resources - aren't sidelined. The Article 6.4 Supervisory Board must get these standards right, and that may require further refinements in 2025. These standards must prioritize robust engagement with Indigenous Peoples and local communities. Climate justice and social safeguards can't be afterthoughts - they are fundamental to the success and fairness of these mechanisms," said Pedro Martins Barata, Associate Vice President for Carbon Markets and Private Sector Decarbonization, at the Environmental Defense Fund.

What has been decided, and what's next

Under Article 6 of the Paris Agreement, countries can trade mitigation units among themselves. It is estimated that this trade could yield $250 billion in savings in meeting climate targets and could nearly double ambition across countries.

Under Article 6.2 - a structure for countries to bilaterally transfer emissions reductions - countries can now have carbon credit trades from domestic systems or linked emissions markets officially recognized by the UN, with these trades reflected in their climate commitments. While the UN will not oversee the quality of environmental outcomes, the agreement includes provisions for transparency to help ensure environmental integrity. In the absence of a central authority, civil society scrutiny will be critical, with "naming and shaming" likely serving as the primary enforcement tool for quality.

Work to provide standards for high-integrity carbon credits for use under Article 6.2 will be important. Integrity initiatives like the Carbon Credit Quality Initiative (CCQI) and the Integrity Council for the Voluntary Carbon Market (ICVCM) will be central to this role.
Under the centralized mechanism under Article 6.4., the decision taken now allows for the transition of large volumes of old credits from the Clean Development Mechanism (CDM) to the new Paris Agreement Crediting Mechanism (PACM). CDM units have been discredited over time and through various assessments. EDF urges countries not to use these credits towards any commitments.
Much work remains to be done on Article 6.4. We urge Parties to revisit standards that currently define emission removals in such way as to make certain projects, such as afforestation or reforestation project activities, virtually impractical.

A notable positive step was the inclusion of language on recognizing the role of Indigenous Peoples' representatives and experts in the various processes that the Article 6 supervisory body will now undertake.

Altogether these two mechanisms have the potential to lead to a marked improvement in carbon markets under the UNFCCC. However, much depends on two factors: progress on defining further several standards under Article 6.4., and the proper scrutiny of standards and approaches used under Article 6.2.

While its true impact will hinge on strong implementation that delivers measurable benefits for people and nature, this Article 6 agreement represents a historic opportunity to elevate carbon markets as a tool for meaningful climate action.