Carbon Market Watch input to SBSTA on matters related to article 6 of the Paris Agreement

Views on enabling ambition in article 6 and transition of CDM activities to article 6.4

– June 2021

This submission is part of a series responding to the monthly calls from the SBSTA chair covering several aspects of Article 6. Carbon Market Watch’s overall perspective on Article 6 is accessible here. In previous submissions in this series, CMW has expressed its view on share of proceeds for adaptation and avoiding double use of A6.4 ERs as well as the rapid operationalisation of Article 6.


All CDM activities should be reassessed before any transition, and CDM credits should not be used towards Paris Agreement goals:

● The CDM largely failed to reduce overall emissions and has even undermined environmental integrity.
● Carrying over CDM credits could flood the market with as many as 4 billion “hot air” credits to the detriment of the climate as well as project developers.
● The CDM Executive Board de facto halted CDM projects from continuing to generate credits for reductions post-2020. Parties should formalise this at COP26/CMP16 and ensure that only projects reliant on CDM revenue can continue to benefit from carbon market finance.
● If CDM activities were to transition, they would need to abide by strict quality criteria to ensure emission reductions are real, measurable, additional, verifiable, permanent, and do no harm to local communities. At a minimum, activities must comply with Article 6.4 rules, modalities and procedures.

Enabling ambition in Article 6 requires mechanisms to not undermine climate action:

● Carbon markets are a means to an end — they should be used to disburse results-based climate finance and there is no place for zero-sum game offsets.
● Provisions must be established to exclude double counting and to set conservative baselines well below BAU.
● An automatic partial cancellation rate of credits should be implemented to guarantee “extra” emission reductions.
● Strict limits on credit transfers are needed to limit the risk of trading “hot air”.


Art6 UNFCCC submission CDM and ambition