Close this search box.

Penetrating the technical fog clouding Article 6 carbon markets

Following the technical deadlock and glacial pace of progress at the Bonn climate conference, negotiators need to get their act together before COP28. Climate commitments should shape the further development of carbon markets under Article 6 of the Paris Agreement, otherwise the environment and society will lose out.

The 58th UN climate change conference intersessional meeting, which took place in Bonn between 5 and 15 June, is behind us. Overall, there is a clear divide between countries who want a system under Article 6.2 with more accountability and supervision, and those who want the bare minimum in place with as few questions asked as possible. How negotiators will bridge this gap is unclear, raising concerns about what kind of horse trading will take place at COP28. The technical work planned for the coming months may help countries to better unpack the many issues at stake before COP and, hopefully, to realise that Article 6.2 needs a lot more guardrails and safeguards in place, not fewer. 

Moreover, it seems the negotiations on the market mechanisms of Article 6 left everyone with more questions than answers. 

Is more reporting better or a burden? 

What is the relationship between Article 6.2 and 6.4? 

And what is a cooperative approach exactly? 

As one of the co-facilitators said during the first week of negotiations: “I’m not sure anyone outside of this room understands what we are talking about.” 

While this may be true, it is also a worrying fact. The level of technicality will leave many without the capacity to follow, let alone understand, as indicated by negotiators and observers alike.

Lost in technicality

Abstraction in the Article 6 discussions can also become a smoke screen obscuring or even undermining the underlying rationale for these markets: the Paris Agreement mandates countries to meet climate goals, including by staying below the 1.5ºC temperature limit and creating a society that is fair and sustainable. If the 6.2 and 6.4 markets are to have any role in this context – which is not a given – they must lead to real, additional, permanent, verifiable emissions reductions and must not weaken ambition. 

Major decisions on Article 6 weren’t expected at the conference but, at the same time, countries did not make clear progress on finding consensus on several key topics, as can be seen in the 32-page note summarising their views on Article 6.2 topics. The main outcomes – here for 6.2, and here for 6.4 – are rather procedural, asking the UNFCCC secretariat to write technical papers on elusive concepts, and organising workshops. Since Article 6.4 is mainly overseen by a standalone Supervisory Body which convenes separately, this conference primarily focused on the system for country-to-country trades under Article 6.2.

Many questions, few answers

The fact is, countries are grappling with how to actually implement the extremely complex carbon market framework they agreed to at COP26 in Glasgow. The more one unpacks these topics, the more questions arise. 

Some countries have a clear view and even support several of CMW’s priority areas, such as pushing for there to be consequences if any country refuses to address questions or problems identified by the review team about their carbon credit trade deals. Other countries are still mulling over the possible implications of market design questions and remain on the fence on key points. And for some countries, transparency and effective climate action simply do not appear to be guiding principles, with some going as far as to try and block observer input, seemingly scared of our dangerous and powerful vision on registry interoperability.

Meanwhile, in the outside world, temperatures continue to rise and the climate continues to break down. These effects will continue as long as immediate and rapid emissions reductions don’t take place. The main beneficiary of Article 6 must be the environment and society, otherwise we all lose, even if a few may profit.


Related posts

Not banking on carbon markets

The banking sector’s anticipated upswing in investment in the voluntary carbon market has failed to materialise, new research reveals.

Join our mailing list

Stay in touch and receive our monthly newsletter, campaign updates, event invites and more.