At COP29 in Baku, significant progress was achieved on Article 6 of the Paris Agreement, which aims to increase climate ambition through carbon credit trading between countries (Article 6.2) and between countries and companies (Article 6.4). A major outcome of the conference was the adoption of rules to operationalize bothmechanisms, establishing a UN-led global carbon trading framework. This framework is designed to channel resources to developing nations and standardize methods for implementing carbon reduction projects. The resolution marks a breakthrough afteryears of negotiations..

The newly adopted rules have the potential to significantly enhance the effectiveness of carbon markets under the UNFCCC. However, their success will depend heavily on “proper scrutiny of the standards and approaches used under Article 6.2 and further refinement of several standards under Article 6.4,” as stated the NGO Environmental Defense Fund (EDF). The EDF emphasized also that “critical fixes are needed for Article 6.4 standards to ensure nature-based solutions —and the communities protecting these resources— are not sidelined.”

For further details, see Environmental Defense Fund’s statement and Explainer: COP29 “breakthrough” on UN carbon market decision.