COP29 & Article 6

Article 6 of the Paris Agreement establishes mechanisms to enhance international cooperation in achieving climate targets. With the agreements reached at COP29, Article 6 is now fully operational, marking a critical step forward in global climate governance. This operationalisation includes frameworks under Article 6.2 and Article 6.4, which aim to integrate compliance and voluntary markets while maintaining environmental integrity.

Article 6.2 enables bilateral and multilateral cooperation through Internationally Transferred Mitigation Outcomes (ITMOs), which allows nations to collaborate on their Nationally Determined Contributions (NDCs). The mechanism is more flexible, offering a streamlined process that can draw heavily from the innovation and agility of the Voluntary Carbon Market (VCM).

The VCM will be essential in scaling ITMOs, particularly by developing and testing methodologies that can align with Article 6.2’s requirements, bridging the gap between compliance and voluntary markets.In contrast, Article 6.4 creates a centralised, UN-governed carbon crediting mechanism. While this offers rigorous governance and a high standard of environmental integrity, the time required to approve methodologies could slow progress. It is widely recognised that a range of Carbon Dioxide Removal (CDR) technologies are needed in order to meet Paris Agreement goals, however, the delays in creating and certifying new methodologies under 6.4 may hinder immediate action and innovation.

This is where the VCM will remain indispensable in the short term, as it can rapidly develop and scale innovative solutions, paving the way for eventual integration into Article 6.4 frameworks.Although the full operationalisation of Article 6 is a landmark achievement, the VCM will continue to play a critical role in the evolution of carbon markets.

To address these challenges, a unified system that combines the flexibility of Article 6.2 with the robust governance of Article 6.4 is essential.

Developing a streamlined approach to methodology approvals would accelerate action while maintaining environmental and procedural integrity. The VCM will continue to be pivotal in this process, not only by driving innovation but also by ensuring methodologies are developed in alignment with Article 6.2 and 6.4 frameworks.

A combined and efficient system will be vital to scaling the carbon market and achieving the global ambition of limiting warming to 1.5°C.