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The long-awaited Article 6 of the Paris Agreement, designed to facilitate carbon credit trading between countries, has finally been agreed upon at the COP29 climate conference in Baku. Article 6, which has been under negotiation for nearly a decade, aims to establish a system where countries can buy and sell emissions reductions, allowing them to offset their own carbon footprint by funding projects in other nations that reduce greenhouse gas emissions. This system, although touted as a way to incentivize climate action and make achieving climate goals more efficient, has faced significant criticism from environmental groups and climate justice advocates.
Article 6 allows for two primary methods of carbon credit trading. Firstly, countries can agree on their own bilateral agreements, setting specific rules and standards for carbon credit trades. This model has already seen several partnerships formed, including agreements between Singapore and the Philippines, Costa Rica and Sri Lanka, as well as Switzerland with Ghana, Peru, and Ukraine. Secondly, Article 6 facilitates the establishment of an international, UN-governed market where any participant can purchase credits. The idea behind this system is that countries can find the most cost-effective way to reduce emissions globally by trading credits, making the process more efficient and potentially driving down the overall cost of climate action.
Despite the potential benefits of Article 6, it has faced criticism regarding its effectiveness, transparency, and potential for exploitation. Critics argue that carbon markets could lead to “greenwashing,” where companies can appear to be environmentally responsible by purchasing credits without genuinely reducing their own emissions. They also express concern that the system could allow for the displacement of emissions, meaning polluting industries could simply shift their operations to countries with less stringent regulations, rather than truly reducing their overall impact. Further concerns surround the potential for land grabbing and human rights abuses, particularly when carbon credits are generated through afforestation projects that could displace indigenous communities or violate their land rights.
The COP29 presidency has acknowledged the need for strong safeguards to prevent abuses and ensure transparency within Article 6. However, many critics remain skeptical, particularly regarding the effectiveness of carbon markets in achieving significant emission reductions. They argue that the focus should be on transitioning away from fossil fuels altogether, rather than relying on complex systems that could be easily manipulated. While Article 6 may offer a potential mechanism for collaboration and resource mobilization, its ultimate impact remains uncertain and subject to ongoing scrutiny and debate.
Source: For nearly decade, climate talks have been hashing out so-called Article 6. But what is it?