While the adoption of Article 6 has been looked at as a step forward, experts have expressed concerns over equity, enforcement, and the effectiveness of mechanisms like carbon removal projects and Internationally Transferred Mitigation Outcomes (ITMOs)
Amidst all the chaos and disagreements over the New Collective Quantified Goal (NCQG), the closing plenary at COP29 also saw the gavelling of Article 6, which has been almost a decade in the making. Countries finalised the operational framework for Article 6, which includes mechanisms to foster and enhance global collaboration on climate mitigation.
Article 6 was proposed in the Paris Agreement as a way to bring countries to work together on climate change through carbon markets. While this has been a long time coming, concerns have been raised about the hurried manner in which Article 6.4 was first passed on the first day of COP29 followed by the passing of Article 6.2 along with additional guidance on Article 6.4 on November 23.
While the adoption has been looked at as a step forward, issues such as equity, enforcement, and the effectiveness of mechanisms like carbon removal projects and Internationally Transferred Mitigation Outcomes (ITMOs) still persist. Weak baselines, inadequate safeguards, and the inclusion of carbon removal mechanisms in the text have also been pointed out by experts. “The flaws of Article 6 have, unfortunately, not been fixed,” said Isa Mulder, policy expert, Carbon Market Watch. “It seems countries were more willing to adopt insufficient rules and deal with the consequences later, rather than prevent those consequences in the first place.”
As questions about transparency and funding deficits grow, the adoption of Article 6 gives the world a glimpse into both the promise and pitfalls of collaborative climate solutions.
The significance of Article 6
The main aim of Article 6 was to facilitate voluntary cooperation between developed and developing countries to achieve their climate goals. Mechanisms under Article 6.2 such as Internationally Transferred Mitigation Outcomes (ITMOs) and a global carbon credit market under Article 6.4 aim to help countries meet their Nationally Determined Contributions (NDCs).
At COP29, new rules were agreed upon for the implementation of these mechanisms. The agreed text mentions engaging in carbon trading through transparent accounting systems. It allows credits generated under the Kyoto Protocol’s Clean Development Mechanism (CDM) to transition into the Article 6 framework as well, but under certain conditions. This has raised questions about whether these older projects under CDM meet the updated standards for environmental and social safeguards under the Paris Agreement because the adopted text doesn’t call for any extra checks.
Least Developed Countries (LDCs) and Small Island Developing States (SIDS) have been exempted from making contributions towards the adaptation fund. It had been previously decided that a percentage of proceeds from activities under Article 6.4 will be allocated to the Adaptation Fund. CarbonCopy had reported on the tussle between developed and developing countries on contribution towards this fund.
Some of the key provisions that have been adopted at COP29 under Article 6 include the establishment of centralised and national registries that will track ITMOs, including their issuance, transfer and cancellation. This has been done with a view to address the transparency and accountability issues that have plagued carbon markets. Further, the text provides guidance on developing baselines to calculate emission reductions, and gives provisions for additionality, leakage and reversals. The text further acknowledges the role Indigenous populations can play in designing and implementing projects under Article 6.4.
A good start, but more clarity needed
Some experts have pointed out that the reliance on baselines and additionality to check if emission reductions are genuine has been problematic in the past. “On setting project baselines, the introduction of stricter limits, called ‘downward adjustments’ is a good measure. It prevents inflated claims by ensuring projects only earn credits for real, additional reductions in emissions. However, we need to be careful about any exceptions that allow using less effective technology to set baselines—these exceptions must be well-monitored and rigorous,” said Dhruba Purkayastha, Director – Growth & Institutional Advancement, Council for Energy Environment and Water (CEEW). Weak baselines could lead to inflated claims, where reductions on paper do not translate into real-world impacts, according to experts.
Double counting is another concern that has not been adequately addressed in the adopted text. While the agreement provides guidelines to prevent double counting, where multiple parties claim credit for the same emissions reduction, enforcement mechanisms remain unclear. The transparency measures still rely heavily on self-reporting by countries, raising questions about the credibility of the data submitted.
Essential standards were finalised for guidance on carbon removal projects and methodologies. These include detailed instructions for developing and assessing methodologies, as well as specific requirements for carbon removal activities. The document provides nature-based solutions (like afforestation) as well as technological approaches. “It‘s very worrying that under the agreement reached here on the Article 6.4 carbon market mechanism, carbon markets have been expanded to include carbon removals, such as dangerous geoengineering proposals for removing carbon dioxide from the atmosphere. These as-yet-unproven technologies come with large-scale risks for people and ecosystems,” said Linda Schneider, Senior Programme Officer International Climate and Energy Policy.
Moreover, experts have pointed to the lack of clarity in the language. “A tool to help project developers assess the risk of their carbon removals being undone (reversed) still needs to be developed,” said Purkayastha.
“There is also no clear rule on how long projects must continue to be monitored after they’ve received credit, which could make investors hesitant. More clarity on this would help,” he added.
While the text includes exemptions for LDCs and SIDS, host countries have been given significant administrative responsibilities that can act as burdens. This is because host countries are usually developing nations and giving them tasks such as authorising mitigation activities and ensuring compliance with Article 6 rule would only work to exacerbate inequalities between the developed and developing world.
In the adopted text, the Supervisory Body for Article 6.4 identifies a $3.1 million deficit in funding for the mechanism in 2025, which triggers doubts about how effectively essential activities can be carried out. Developing nations are likely to be most impacted by this because they require extensive help to build capacity to participate in carbon markets and report ITMOs accurately. While the text does include provisions for capacity building, these rely on voluntary contributions, which could lead to financial instability.
“It is not a coincidence that carbon markets were delivered at what was supposed to be the climate finance COP. When you talk to developed countries about climate finance, they throw up their hands and point to carbon markets and anything other than what’s needed and owed: public finance. Carbon markets and other greenwashed tactics will not deliver the climate action that is desperately needed right now. And they certainly do not fulfil the climate finance obligations of rich and developed countries with huge emissions,” said Kelly Stone, CLARA Coordinator and Senior Policy Analyst with ActionAid USA.
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