Art. 6 Explainer: What to Expect in COP 29

When the Paris Agreement was established, a new foundation for carbon trading was created through Article 6 to aid Parties in the implementation of their mitigation targets and provide avenues for collaboration. Article 6 promises a way for countries to invest in climate actions in other countries and increase global climate ambition to achieve the long-term goals of the Paris Agreement. However, clear, inclusive, and transparent accounting rules and regulations are needed to avoid double counting and ensure that projects abide by the principles that guide the implementation of the Paris Agreement such as ecological integrity, respect for human rights, and climate justice.

Unfortunately, Art. 6 has been relatively behind in coming up with the rules and framework for this system. The framework of international carbon trading was agreed upon in 2021 while the additional reporting rules, registries, and governing bodies were further clarified in 2022. At COP 29, Parties need to agree on common nomenclatures for reporting, modalities for reviewing confidential information, and a verification system for adjustments, among others. Disappointingly, social and environmental safeguards for 6.4- a set of policies, standards, and guidelines that ensure protection from social and environmental risks - will not even be considered until 2028.

Despite the lack of progress in the negotiations, the Article 6.2 mechanism has taken off with numerous bilateral agreements signed. The Art. 6.4 mechanism has also started, albeit more conservatively, with one transfer having been concluded between Switzerland and Thailand. In August 2024, A Memorandum of Agreement was signed between Singapore and the Philippines to collaborate on Article 6, specifically on carbon credits aligned with Art. 6.2. As we move closer to COP 29, it is imperative that we clarify what rules are necessary in order to incentivize more countries to utilize Art. 6 towards achieving the goals of the Paris Agreement.