The complete execution of Article 6 could potentially reduce countries’ spending on Nationally Determined Contributions (NDCs) by approximately $250 billion annually, Founding Director of the Center for Sustainability and Climate at Prince Sultan University in Saudi Arabia, academic visitor at the St Antony’s College, University of Oxford, Professor Dr. Mohammad Nurunnabi told Report.
According to Nurunnabi, 2024 is not an easy year as lots of issues and challenges in the economy and tensions in many parts of the world:
“However, the UN Climate Change Conference (COP29) in Baku, Azerbaijan made a significant effort to close a new financial goal to help countries to protect their people and economies against climate disasters, and benefits of the clean energy. Thanks to the COP29 Presidency for making hope alive for this important agenda which we all care for our generations and planet.”
Nurunnabi recalled that at COP29, the final version of the proposed climate change agreement was approved, which provides for the allocation of at least $300 billion annually by 2035, and special attention was paid to Articles 6.2 and 6.4 of the Paris Agreement, which regulate carbon emissions trading.
In his opinion, the new finance goal at COP29 builds on significant strides forward on global climate action at COP27, which agreed on a historic Loss and Damage Fund, and COP28, which delivered a global agreement to transition away from all fossil fuels in energy systems swiftly and fairly, triple renewable energy and boost climate resilience.
“The finance agreement at COP29 comes as stronger national climate plans (Nationally Determined Contributions, or NDCs) become due from all countries next year – 2025. These new climate plans must cover all greenhouse gases and all sectors, to keep the 1.5°C warming limit within reach. COP29 saw two G20 countries – the UK and Brazil – signal clearly that they plan to ramp up climate action in their NDC 3.0, because they are entirely in the interests of their economies and peoples,” Nurunnabi said.
According to him, on country-to-country trading (Article 6.2), the decision out of COP29 provides clarity on how countries will authorize the trade of carbon credits and how registries tracking this will operate. “And there is now reassurance that environmental integrity will be ensured upfront through technical reviews in a transparent process. At COP29, countries agreed on standards for a centralized carbon market under the UN (Article 6.4 mechanism).”
“This is good news for developing countries, who will benefit from new flows of finance. And it is particularly good news for least developed countries, who will get the capacity-building support they need to get a foothold in the market.”
This mechanism, known as the Paris Agreement Crediting Mechanism, is underpinned by mandatory checks for projects against strong environmental and human rights protections, including safeguards that ensure a project can’t go ahead without explicit, informed agreement from Indigenous Peoples, the professor said. “It also allows anyone affected by a project to appeal a decision or file a complaint.”
“Under Article 6.4 of the Paris Agreement, COP29 agreed that there is a clear mandate for the UN carbon market to align with science. It tasks the Body (Article 6.4 Supervisory Body) getting this market up and running to consider the best available science across all work going forward,” he said.
“COP29 also adopted a significant decision concerning the work program for non-market approaches, as outlined in paragraph 6.8 of the Paris Agreement. Article 6.8 enables Parties to implement national climate plans, including mitigation and adaptation strategies while promoting sustainable development through these approaches. The COP29 Presidency highlighted the full implementation of Article 6 as a key priority, emphasizing its role in ensuring reliable and transparent carbon markets. These markets are crucial for facilitating cooperation between countries to meet their climate targets, and they serve as an important tool for channelling more investment into developing nations,” Nurunnabi said.
