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
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
The apparent progress made on Article 6 carbon markets during week 1 of the COP29 climate conference conceal many problematic fundamental and technical issues that remain unresolved.
In light of the Article 6.4 negotiations at COP29 in Baku, and the possibility for the Parties to the Paris Agreement (CMA) to give further guidance on the development of
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
gilles.dufrasne[at]carbonmarketwatch.org
jonathan.crook[at]carbonmarketwatch.org
isa.mulder[at]carbonmarketwatch.org
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