Baku: In a pivotal move on the opening day of global climate talks at COP29, new operational standards for a mechanism under Article 6 of the Paris Agreement were officially adopted, laying the groundwork for a global carbon market. This breakthrough, under Article 6.4, marks a significant step forward after years of gridlock.

Adoption of these standards by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) now enables operationalization of Article 6, a framework designed to foster international cooperation in reducing carbon emissions. Article 6 facilitates two main avenues for carbon trading: the first, Article 6.2, allows two countries to set up bilateral trading agreements, while Article 6.4 aims to establish a centralized UN-regulated system for countries and companies to trade and offset emissions. The Article 6.4 Supervisory Body finalized essential standards for carbon removal projects and methodologies, creating guidance on how these projects should be developed and assessed. Though implementation had been delayed by conflicting views on transparency and quality, early adoption of these standards is expected to streamline global carbon market operations.

The decision’s swift adoption, however, stirred debate among delegates. Some argued that the Presidency’s rapid action might have sidestepped usual governance processes, raising concerns about transparency. Diverging perspectives on the permanence and reliability of carbon credits had been points of contention, leading some stakeholders to worry that this quick adoption might signal a shift toward bypassing more thorough scrutiny.

Despite these concerns, environmental groups greeted the decision with cautious optimism. John Verdieck, Global Climate Policy Lead at The Nature Conservancy, remarked, "The Art 6.4 decision is a helpful start to COP29. We need every financial mechanism we can get to solve the climate crisis." Florence Laloe, Senior Director of Climate Policy at Conservation International, highlighted that the Article 6.4 standards move the market closer to full functionality, overcoming a procedural barrier and allowing for focus on other urgent matters at COP29.

Experts also stressed the importance of continuous improvement. Dhruba Purkayastha from the Council on Energy, Environment, and Water (CEEW) commended the robust methodological standards, particularly provisions for “downward adjustment” to maintain credible baselines. However, he pointed out unresolved issues, such as the need for standards around post-credit monitoring and reversal risk assessments, which are essential for the long-term stability of the carbon market.

Article 6.4 is viewed as a crucial tool to bridge the climate finance gap, helping channel funds to carbon-rich ecosystems and supporting both environmental integrity and fair access to financing. As Laloe observed, "Science shows that it is mathematically impossible to meet global climate goals without nature." However, unresolved issues remain under Article 6, especially for Article 6.2, which covers bilateral trades. The U.S. and EU continue to disagree on transparency requirements, and these discussions are expected to extend throughout COP29.

Additional standards for Article 6.4, including policies on insurance, stress testing for the Reversal Risk Buffer Pool, and monitoring frameworks, are also needed to ensure rigor and investor confidence. As negotiations progress, stakeholders emphasize the need for a global carbon market that is transparent, equitable, and effective, calling for bold action and strong oversight in the face of the climate crisis.