What is being negotiated about Article 6 at COP29

Today marks the eighth day of COP29, now in its second week, and I am here outside the negotiation rooms tracking the discussions on Article 6 of the Paris Agreement. Article 6 focuses on carbon markets and non-market approaches, but the primary focus is on the two key components: Articles 6.2 and 6.4, both of which pertain to carbon markets.

When the negotiations on Article 6.4 began, one of the first interventions came from the Coalition for Rainforest Nations. They criticised the approach adopted on the inaugural day, stating that they had lost trust in the Supervisory Body. A significant issue is the mandate given to the Supervisory Body and the kind of guidance party countries need to provide for it to function effectively. Key elements of this guidance include how the Supervisory Body can take scientific advice from panels of experts to further develop standards and mechanisms, as well as the steps required to establish a functional registry.

In contrast, Article 6.2 is a relatively voluntary mechanism where countries can trade directly without adhering to the stricter rules imposed by a centralised body like the UNFCCC. Developing countries, which typically host such projects, seek flexibility in the mechanism to avoid the burden of compliance costs and complex measures often introduced by developed countries—typically the buyers in these transactions. However, developed countries push for greater transparency and stricter compliance measures to ensure accountability. This divergence creates tension: too much flexibility risks compromising transparency, accountability, and market integrity, while stringent rules may discourage participation.

One potential solution lies in ensuring that the UNFCCC's review mechanism is robust enough to identify and address inconsistencies in these trades. This includes defining cooperative approaches, establishing clear rules for how countries enter agreements for trading, and setting provisions for changes to "authorisation"—the process by which countries decide whether to sell emission reduction units outside their borders.

At the heart of the discussion is whether the negotiations can deliver sufficient transparency, environmental integrity, and accountability. These elements are critical to determining whether carbon markets can live up to the expectations placed upon them by the global community.