After four years of protracted negotiations, COP29 has achieved a groundbreaking advancement on Article 6 of the Paris Agreement. This significant agreement represents a practical and reasoned stride forward, poised to harness the full capabilities of carbon markets to facilitate substantial emissions reductions and yield tangible benefits for both communities and the environment.
“The endorsement of Article 6 marks a historic milestone in fostering international carbon market cooperation aimed at enhancing ambition and mobilizing urgent climate finance. Nonetheless, critical adjustments are essential regarding Article 6.4 standards to ensure that nature-based solutions and the communities safeguarding these vital resources are not overlooked. The Article 6.4 Supervisory Board must refine these standards diligently, which may necessitate additional modifications in 2025. Ensuring robust engagement with Indigenous Peoples and local communities is paramount. Climate justice and social safeguards can’t be afterthoughts; they are fundamental to the success and equity of these mechanisms,” stated Pedro Martins Barata, Associate Vice President for Carbon Markets and Private Sector Decarbonization at the Environmental Defense Fund.
What has been decided, and what’s next
Under Article 6 of the Paris Agreement, countries can engage in trading mitigation units among themselves. This trade is projected to yield an impressive $250 billion in savings for nations striving to meet their climate targets, with potential to nearly double the ambition of various countries.
Under Article 6.2 – a framework enabling countries to conduct bilateral transfers of emissions reductions – nations can now have their carbon credit trades from domestic systems or interconnected emissions markets officially recognized by the UN. This acknowledgment allows these trades to be incorporated formally into their climate commitments. While the UN will not monitor the quality of environmental outcomes directly, the agreement contains clauses aimed at ensuring transparency to uphold environmental integrity. In the absence of a central regulatory authority, civil society’s role in scrutinizing these mechanisms will be vital, with “naming and shaming” expected to become a primary enforcement tactic for quality assurance.
Progressing on standards for high-integrity carbon credits under Article 6.2 will be crucial. Initiatives such as the Carbon Credit Quality Initiative (CCQI) and the Integrity Council for the Voluntary Carbon Market (ICVCM) will play pivotal roles in this effort. Under the centralized mechanism of Article 6.4, the decision reached now facilitates the transition of substantial volumes of aging credits from the Clean Development Mechanism (CDM) into the new Paris Agreement Crediting Mechanism (PACM). Over time, CDM units have lost credibility as assessed across various evaluations. EDF strongly advises nations against utilizing these credits in fulfilling any commitments.
Significant work remains ahead for Article 6.4. We implore Parties to reconsider standards that presently define emission removals in a manner that renders certain projects, such as afforestation and reforestation initiatives, nearly unfeasible.
A notable positive development was the inclusion of language acknowledging the vital role of Indigenous Peoples’ representatives and experts in the array of processes the Article 6 supervisory body will now implement.
Together, these two mechanisms hold the promise of significantly enhancing carbon markets under the UNFCCC. However, their success hinges on two critical factors: progress in establishing various standards under Article 6.4 and diligent scrutiny of the standards and methodologies employed under Article 6.2.
While its true impact will rely on robust implementation that yields measurable benefits for people and the planet, this Article 6 agreement embodies a historic opportunity to position carbon markets as a powerful tool for substantive climate action.
What key features of Article 6 are considered essential for effective international carbon market cooperation?
**Interview with Pedro Martins Barata on COP29 and Article 6 of the Paris Agreement**
**Interviewer:** Thank you for joining us, Pedro. After four years of negotiations, COP29 has reached a significant advancement regarding Article 6 of the Paris Agreement. Can you explain why this is considered a groundbreaking achievement?
**Pedro Martins Barata:** Thank you for having me. The endorsement of Article 6 is indeed a historic milestone for global climate governance. It establishes a framework for international cooperation on carbon markets, allowing countries to trade mitigation units. This has the potential to enhance ambition and mobilize essential climate finance, contributing to substantial emissions reductions. Our projections suggest this could yield about $250 billion in savings for nations striving to meet their climate targets, effectively doubling their capacity to achieve these goals.
**Interviewer:** That’s a substantial figure. However, you mentioned that critical adjustments are still necessary, particularly regarding Article 6.4 standards. What specific concerns do you have?
**Pedro Martins Barata:** It’s true that while we celebrate this progress, we also need to ensure that nature-based solutions and the communities that protect these resources are prioritized. The Article 6.4 Supervisory Board must revise the standards to safeguard these interests. For instance, we need to make sure there’s robust engagement with Indigenous peoples and local communities. Climate justice and social safeguards cannot be an afterthought; they are fundamental for the equity and success of these carbon market mechanisms. We may also require further modifications during the next review in 2025.
**Interviewer:** How does Article 6 enable countries to trade emissions reductions?
**Pedro Martins Barata:** Article 6 provides a framework where countries can engage in trading mitigation units directly. Under Article 6.2, countries can conduct bilateral transfers of emissions reductions and have these trades recognized by the UN. This official recognition means that these carbon credit trades can be integrated into their national climate commitments. While the UN may not monitor the quality of these environmental outcomes directly, the agreement includes transparency provisions to uphold environmental integrity. Civil society will play a crucial role in reviewing these mechanisms, with pressure tactics like “naming and shaming” expected to ensure accountability.
**Interviewer:** It sounds like civil society will have a significant role to play in this process. How do you foresee their involvement impacting the effectiveness of Article 6?
**Pedro Martins Barata:** Civil society’s role is vital in ensuring that the implementation of Article 6 remains accountable and transparent. Their engagement can help highlight any shortcomings and push for compliance with high-integrity standards. We need independent scrutiny to prevent greenwashing and protect the rights of local communities who are essential to the success of these initiatives. The effectiveness of the carbon markets will largely depend on how well stakeholders—governments, businesses, and civil society—collaborate to uphold these standards.
**Interviewer:** Thank you for your insights, Pedro. It seems that while we have made significant progress with Article 6, there are still important steps to ensure its successful and equitable implementation.
**Pedro Martins Barata:** Absolutely, it’s a collaborative journey. Continued dialog and vigilance will be crucial as we move forward to fulfill our climate commitments and ensure the benefits reach all communities involved.
**Interviewer:** Thank you for your time today.
**Pedro Martins Barata:** Thank you for having me.