COP29 approval of Article 6.4 is “opening the floodgates for a global carbon market that will have devastating impacts on communities in the Global South”

Carbon markets are not climate finance.

On the first day of COP29 in the petrostate of Azerbaijan, the rules for Article 6.4, the global carbon trading mechanism under the Paris Agreement have been approved. The draft decision is available here.

At a meeting in October 2024, the Article 6.4 Supervisory Body went outside of its mandate to establish the standards for the mechanism. The Supervisory Body completed standards for carbon removal and on methodologies for creating Article 6.4 carbon credits (Internationally Transferred Mitigation Outcomes or ITMOs).

Instead of making recommendations, the meeting of the Supervisory Body (SBM) converted its recommendations to internal SBM standards thus bypassing the approval process of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA).

For more detail on this and an overview of what’s wrong with Article 6, see REDD-Monitor’s interview with Tamra Gilbertson, coordinator of the climate justice programme for the Indigenous Environmental Network.

In October 2024, the Supervisory Body’s former chair and current member Olga Gassan-Zade wrote on LinkedIn that,

Personally I have huge reservations against creating a UN mechanism that can effectively evade the UN governance but it didn’t feel like the SBM as a whole was willing to risk not adopting the CMA recommendations for a third year in a row.

She admits that the rules were created “on the fly”. Buffer pool elements were drafted “during a break”. And many would find some of the text “puzzling”:

It felt surreal at times to be creating some of the most fundamental elements of the 6.4 mechanism on the fly — like drafting the buffer pool elements during a break. There are wordings in our documents that many would find puzzling as the wordsmithing got the better of us.

Following the approval at COP29, Gassan-Zade told The Guardian that,

“The criticisms of the process are fair – but it was also critically important to operationalise Article 6.4 as soon as possible to scale up the delivery of carbon finance to the developing world.”

In a press conference on 12 November 2024, Yalchin Rafiyev, COP29 Lead Negotiator, also claimed that the Paris Agreement Crediting Mechanism would provide climate finance. He said that,

“This will be a game-changing tool to direct resources to the developing world and help us save up to 250 billion dollars a year when implementing our climate plans.”

Criticism of the Article 6 deal

Lise Masson of Friends of the Earth said,

“The gavelling through of carbon markets on the first day of COP29 is unacceptable and undermines the credibility of the whole process. Further, it is opening the floodgates for a global carbon market that will have devastating impacts on communities in the Global South, on Indigenous peoples, and on small peasant farmers first and foremost. Carbon markets are not climate finance, and we cannot accept these neocolonial schemes to be propped up as a success of COP29 in lieu of paying the climate debt owed to the global south.”

Last week, UN Trade and Development (UNCTAD) published a report that found that in 2023 the market value of carbon credits generated in least developed countries was just 1% of total bilateral development aid.

Isa Mulder of Carbon Market Watch told The Guardian that “Kicking off Cop29 with a backdoor deal . . . sets a poor precedent for transparency and proper governance.”

In a statement, Erika Lennon of the Center for International Environmental Law said,

“Today, States allowed this rogue move from the Supervisory Body to prevail in the quest to start COP29 with a ‘win.’ But this is hardly a win for people or the planet. Approving these carbon market rules without discussion or debate, sets a dangerous precedent for the entire negotiation process. 

“This is very concerning from a procedural standpoint: it bypasses States’ ability to even discuss, much less revise the standards before they go into effect. States’ oversight is all the more critical as the Supervisory Body’s efforts to get this done has  resulted in risky rules that will lead to human rights violations and environmental harm.”

In a briefing written before COP29 started, CIEL highlights the problems with the standards that the Subsidiary Body rushed though in October 2024:

There are still issues with definitions of removals, handling reversals, permanence, and other technical concerns, as well as being vague on a number of topics which could all lead to human rights violations and environmental harm.

Rachel Rose Jackson of Corporate Accountability commented in a press statement:

“We were told this was the so-called ‘finance’ COP. From day one, it is clearly the ‘false solutions’ COP. To begin COP29 by gavelling through risky and loophole-ridden rules on carbon markets before the formal negotiations even begin is not only a clear departure from protocol and precedent, it sends a clear signal to the world that people and the planet are not the priority. 2024 is set to be the hottest year on record. And COP29 is preparing to roast us.

“Legitimizing a faulty mechanism that has been found time and time again to be unproven, risky, to cause harm, and simply not work is not the benchmark for a successful COP29. A successful COP must reject the carbon markets that are increasingly shown to serve only as a get-out-of-jail-free card for Big Polluters, and get serious about providing the long overdue funds to mediate the climate debt of Global North countries. Let’s be clear that this decision will have disastrous implications, beginning with the lives of those who have done the least to cause the climate crisis.”

The Climate Land Ambition and Rights Alliance (CLARA) put out a press statement condemning the Article 6.4 approval:

The standards documents are mandated to be submitted to the CMA as recommendations, However, the CMA previously rejected the SB’s work at COP27 in Sharm El-Sheikh, Egypt in 2022 and at COP28 in Dubai in 2023.

Today, Parties and the COP Presidency set a precedent that the Article 6.4 Supervisory Body can make decisions that get rubber stamped at the CMA level.

Kelly Stone, CLARA Network Coordinator and Senior Policy Analyst, ActionAid USA, said that,

“Carbon markets are not climate finance. Offsetting does not reduce emissions and allows countries and companies pay to keep polluting instead of doing their fair share of climate action.  If negotiators want this COP to be remembered for something other than greenwashing, they have a lot of work to do.”

Souparna Lahiri of the Global Forest Coalition said that,

“What has happened on the opening day of the COP29 is a clear indication of how this COP will shape up and how the UNFCCC is giving way to subversion of the UN process and procedures where even Parties do not matter. It’s the big oil and polluting corporation that rule the roost. It is unfortunate that the COP Presidency and the UNFCCC executive secretary are hand in glove in bypassing the Parties, the Subsidiary Body and the CMA to promote a carbon market driving large scale land grabbing, destruction of forests and biodiversity, and human rights abuse of Indigenous Peoples, forest and frontline communities who are defending their lands and territories. In the end, this supposedly finance COP is turning out to be the False Solutions COP.”

Greenpeace International’s An Lambrechts commented,

“Let’s be clear, carbon markets are a blatantly dangerous emissions loophole allowing polluters to continue trashing the climate. These new rules will undermine urgent climate action and are at risk of being hijacked as a false solution to close the climate finance gap. We need real finance for real climate action, not an offsets scam.”