Abstract:
On the opening day of COP29 in Baku, Azerbaijan, world leaders celebrated a major milestone: the adoption of Article 6.4 of the Paris Agreement. This move opens the door to a UN-supervised global carbon market, where countries can trade carbon credits to help meet climate targets. While some see this as a “game-changer,” many experts remain cautious, raising questions about transparency and the real impact of carbon credits. Here’s a closer look at what this means for the future of climate action:
Key Highlights:
- A Global Carbon Market Begins: Article 6.4 establishes a UN-backed market where countries can trade carbon credits starting in 2025, potentially saving $250 billion annually by making climate goals more achievable.
- Hope for Big Savings—but Challenges Remain: Lead negotiator Yalchin Rafiyev believes this market will be a “game-changing tool,” but others caution that it must deliver real reductions, not just financial gains.
- Concerns About ‘Phantom Credits’: Critics warn that carbon credits may fail to truly offset emissions, with unreliable measurements leading to “phantom credits” that undermine real progress.
- Transparency Needs Improvement: Experts say that fast-tracking Article 6.4 without thorough debate risks transparency and could erode trust in the UN’s role in climate policy.
- NDCs Still Fall Short: Nationally Determined Contributions (NDCs) are not yet strong enough to meet 1.5°C targets, and experts worry carbon offsets may allow countries to appear climate-positive without real impact.
- Next Steps for Success: The Article 6.4 Supervisory Body will develop guidelines to ensure that carbon credits have real accountability and impact, focusing on clear standards as this new market takes shape.