COP29 in Azerbaijan is off to quite a start. According to remarks from Yalchin Rafiyev, COP29 Lead Negotiator:
“Parties reached consensus on the standards for Article 6.4 and a dynamic mechanism to update them… 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.”
Article 6 of the Paris Agreement established principles for nations to reduce their carbon emissions, including through offset trading. The current voluntary carbon market (VCM) operates in alignment with Article 6.2, whereby companies and nations can trade offsets directly. Article 6.4 creates a centralized UN-managed system through which countries and companies can trade offsets. This is illustrated in a blog last week.
There is a tremendous amount of work remaining to operationalize the agreement and progress will be measured in years, not months. Even so, the concept should bring an element of needed legitimization to the carbon markets.
Members can learn more about carbon offsets here.
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