Negotiators at COP29 have reached an agreement on carbon credit standards under Article 6.4 of the Paris Agreement, establishing a regulated international carbon market. This consensus comes nearly a decade after negotiations began, focusing on ensuring the system’s credibility to reliably reduce greenhouse gas emissions driving climate change.
The agreement is particularly significant for African nations, which need an estimated $2.8 trillion between 2020 and 2030 to implement their Nationally Determined Contributions (NDCs).
The new framework offers the African continent a stronger position in global climate negotiations and access to international carbon markets, enabling it to harness their natural resources for economic and environmental benefits.
What is Article 6?
Article 6, introduced during COP21 in 2015, facilitates international collaboration to meet climate goals via carbon markets.
It includes two key mechanisms, Article 6.2 which facilitates international cooperation by allowing countries to engage in bilateral or multilateral agreements to trade Internationally Transferred Mitigation Outcomes (ITMOs). These agreements enable nations to share mitigation efforts, promoting flexibility and efficiency in achieving global climate goals.
Meanwhile, Article 6.4 establishes a centralized framework regulated by the United Nations to ensure transparency and integrity in carbon trading. This mechanism requires that emission reduction projects be thoroughly verified and validated, providing a strong system to guarantee credible and measurable environmental benefits.
The operationalization of Article 6.4 provides African nations with a critical tool for leveraging their biodiversity and natural resources in exchange for financial flows and technology transfers from developed countries. This shift empowers African nations to push for equitable solutions in climate finance and achieve sustainable development goals.
Read: African Development Bank Launches the CAW Facility to Boost Climate Resilience in Vulnerable African Regions
Despite its potential, implementing the framework poses significant challenges, including disagreements over methodologies, financial barriers for developing countries, and concerns about market stability.
Africa received only $44 billion in climate finance in 2021/2022, far short of the required funding.
Moreover, past controversies involving fraudulent offsets and the complex administrative demands of participating in the global carbon market have raised skepticism.
Civil society groups have also criticized carbon trading as a “license to pollute,” arguing it allows high-emitting nations to avoid meaningful emissions cuts.
