At the COP29 climate conference in Baku, negotiators need to fix Article 6 carbon markets but, most importantly, they need to fix the world’s failure to slash emissions.

As the world glides perilously close to the 1.5°C temperature rise limit set down by the Paris Agreement and the UN warns that the world is on track for catastrophic heating of 3.1°C by the end of the century if it doesn’t change course, humanity is spewing out more planet-heating gases than ever before. These alarming signals make it abundantly clear that we need to slash our collective carbon footprint massively, yet most of the world’s governments are dragging their feet. 

At the previous climate conference, COP28, governments took a historic pledge to transition away from fossil fuels but failed to translate this into additional action or ambition. In addition, they have also failed to deliver on the voluntary carbon market pledges they announced in Dubai. 

With another petrostate, Azerbaijan, deepening its commitment to and investments in fossil fuels at the helm of COP29 and with other countries either increasing their emissions or not reducing them fast enough, the outlook appears unpromising for COP29. However, it is imperative that governments take on their collective responsibility to arrest our spiralling descent towards climate catastrophe.

“While current government plans to fight climate change head us for a 3°C warmer world by the end of the century and the prospect of crossing planetary tipping points, COP29 is not tipped to be a game changer,” says CMW Executive Director Sabine Frank. “But as it is the key global game, we appeal to all participants to play for the good of the climate and do what will actually make a difference.”

Not by carbon markets alone

UN carbon markets under Article 6 of the Paris Agreement will be a central focus of negotiations at COP29, while numerous governments will attempt to sell carbon markets as a solution both to rising temperatures and to the shortfall in climate finance.

However, while it is essential that negotiators get it right on Article 6 and make it as effective a tool as it can be, rich countries must avoid developing an overreliance on carbon credit markets, thereby shifting the burden of emission cuts to developing countries. As for developing countries, carbon markets pose significant risks and may only offer limited financial rewards while incurring additional unseen costs. Selling countries, which will predominantly be developing ones, may risk their future NDC achievement and be inequitably tasked with exclusive liability to ensure the long-term existence of carbon credit projects while heavy polluters are left off the hook.

“The stakes are high. COP29 will determine whether Article 6 carbon markets enshrine transparent governance with decent safeguards or fast-track implementation at the expense of quality and accountability,” says Isa Mulder, expert on global carbon markets and part of CMW’s COP29 delegation. “In Baku, leaders must ensure that Article 6 upholds our Paris Agreement commitments, and that it sets an example for the voluntary carbon market.”

Blueprint to minimise footprint

At last year’s COP28, deadlocked negotiators failed to clinch a deal to put in place additional needed rules for Article 6 carbon markets. Although problematic, this outcome was better than locking in a faulty rulebook that would hobble climate ambition, enable questionable emissions trading and facilitate greenwashing.

This year, countries should again ensure that only a deal with robust rules to govern Article 6 carbon markets can be accepted.  This should complement climate action by placing the primary emphasis on ambitious and immediate emissions reductions. 

This means that rich governments and large corporations must stop relying on carbon offsets, thereby reneging on their responsibilities and opening the door to unfairly burdening  those less well off and future generations. In addition, if used to transact emission reductions that are counted towards mitigation targets, carbon markets must not be regarded as a source of climate finance for vulnerable countries.

Negotiators must ensure that Article 6 is totally transparent, benefits the climate, causes no harm to indigenous peoples and local communities and is founded on a deep respect for human rights. “In Baku, the time for action has arrived,” urges Jonathan Crook, expert on global carbon markets who follows Article 6 negotiations closely. “It’s time to fix Article 6.”