The next generation of these global carbon markets has its foundation in Article 6 of the 2015 Paris Agreement. At COP 26 in Glasgow in 2021, countries finally agreed on a package of rules to govern and implement two international carbon market mechanisms based on Article 6. Article 6.2 allows countries to trade emission reductions and removals with one another through bilateral or multilateral agreements. Article 6.4 will create a global carbon market where businesses can directly purchase credits.
These new markets replace the Kyoto Protocol’s controversial Clean Development Mechanism (CDM), which is now being phased out. The idea underpinning the CDM was that rich countries could finance climate projects in developing countries to compensate for some of their continued pollution at home. These unstable foundations resulted in a CDM riddled with problems. It has not reduced emissions globally and some projects funded under it have been linked to human rights violations and environmental destruction.
As opposed to the Kyoto Protocol that required emissions reductions only from rich countries, the Paris Agreement markets must function in a world where all countries contribute towards the overall goal of limiting global warming to 1.5℃.
While the overall frameworks for these markets were hammered out at Glasgow, many important technical details and rules remain to be finalised. As an official observer at UNFCCC negotiations, Carbon Market Watch campaigns for full transparency in these markets and strong social and environmental safeguards to ensure that any climate project not only protects the environment but also upholds human rights and benefits local communities.
At the UNFCCC, Carbon Market Watch focuses on:
“People should care about Article 6 of the Paris Agreement because it will have real-world consequences on climate action and ambition.”
Jonathan Crook
Policy expert on global carbon markets
“People should care about Article 6 of the Paris Agreement because it will have real-world consequences on climate action and ambition.”
Jonathan Crook
Policy expert on global carbon markets
Focusing global efforts primarily on slashing real emissions rapidly enough to achieve the goals of the Paris Agreement
Designing and implementing the architecture of Article 6 carbon markets to ensure that they fulfil their role as a supplementary climate tool
The inclusion of flawed carbon credits in any compliance or voluntary market – particularly within the EU’s 2040 climate architecture – would pose a serious risk to environmental integrity. If
A new Carbon Market Watch analysis, based on currently available project data, has uncovered that the first project transitioning from the CDM to the Article 6.4 market is poised to
Analysis of the available documents has found that PoA 10415, over the monitoring periods 5, 6 and 7, is likely set to issue 27.4 more credits than it should have
Despite the best efforts of activists and some climate negotiators, the agreement reached on Article 6 carbon markets at COP29 in Baku risks facilitating cowboy carbon markets at a time when the world needs a sheriff.
Article 6 of the Paris Agreement sets out the principles for carbon markets. At COP29, governments must fix all the outstanding issues so as to ensure that Article 6 advances, rather than sets back, the climate agenda. This detailed guide explains what is at stake.
A minimum of 2% of carbon credits under Article 6.4 must be cancelled without being used
A minimum of 5% of carbon credits under Article 6.4 must be used to support climate adaptation
jonathan.crook[at]carbonmarketwatch.org
isa.mulder[at]carbonmarketwatch.org
federica.dossi[at]carbonmarketwatch.org
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