COP29 Adopts New Standards for Global Carbon Market

On 11th November 2024, on the opening day of COP29, climate leaders agreed on operational standards under Article 6 of the Paris Agreement, creating a framework for an international carbon market after years of negotiation deadlock.

Key Points

Introduction of Article 6.4 Standards: COP29 delegates adopted operational standards for the Article 6.4 mechanism, enabling a UN-managed, centralized carbon market.
Carbon Market Pathways: Article 6 offers two trading pathways:
- Article 6.2: Bilateral carbon trading agreements between countries, governed by each country’s terms.
- Article 6.4: A UN-administered market for trading carbon offsets involving both countries and companies.
Early Adoption and Controversy: The swift adoption of standards at COP29 raised procedural concerns, with some delegates questioning whether the move bypassed traditional
Technical Standards and Challenges: The Article 6.4 Supervisory Body established foundational standards, covering carbon removal projects and assessment methodologies.
Remaining Challenges in Bilateral Trades: Article 6.2, which governs bilateral carbon trades, remains a point of contention. Differences between the EU and the U.S. over transparency requirements are unresolved, with negotiations expected to continue throughout COP29.