The world has taken a major step forward in climate cooperation. The United Nations has approved the first official method for trading carbon credits under Article 6.4 of the Paris Agreement also called Paris Agreement Crediting Mechanism (PACM). This decision creates a unified global system for buying and selling credits backed by real and verified reductions in GHG emissions. It marks the transition from years of planning to real-world action in carbon markets. Article 6.4 upgrades earlier systems such as the Clean Development Mechanism (CDM), which supported thousands of clean energy projects since 2006 but struggled with transparency and quality concerns. The new mechanism promises stronger oversight and better confidence for countries and businesses working to cut emissions.
Article 6.4
Article 6.4 is a market mechanism that allows one country or project developer to support climate-friendly projects in another country and count the achieved emission cuts toward its own climate goals. These projects can include renewable energy, reforestation, methane reduction, and more. The goal is simple: encourage cooperation so that emissions fall faster and in the most cost-effective locations. To guarantee trust, the UN system requires detailed monitoring, independent audits, and digital tracking of each credit. This avoids “double counting,” where two parties claim the same reduction. With more than 160 nations committed to net-zero targets, a reliable crediting system strengthens confidence and drives real progress.
Clean Energy for Emerging Economies
The first approved methodology focuses on small solar and wind projects in developing countries. These projects play a vital role in bringing affordable electricity to communities and cutting reliance on fossil fuels. According to the International Energy Agency (IEA), renewable energy generation in developing economies must triple by 2030 to achieve global climate goals. Expanding access to clean energy also delivers local benefits. The International Renewable Energy Agency (IREA) reports that renewable energy created over 13.7 million jobs in 2024, many in emerging markets. New revenues from carbon credit sales can help governments and communities invest in schools, healthcare, and further clean energy expansion. Africa, for example, is estimated to hold the potential to supply up to 30 percent of the world’s highest-quality carbon credits by 2030. That represents significant new funding for sustainable growth across the continent.
Boost for Climate Finance
Carbon markets are quickly becoming a key tool to unlock global climate funding. The World Bank estimates that cooperation through Article 6 could reduce emissions by as much as five billion tonnes each year by 2030 and channel about 250 billion dollars annually into climate solutions. This aligns with a major agreement at COP29 in Baku, where nations set an ambitious new goal: at least 1.3 trillion dollars per year in international climate finance by 2035. Developed countries will lead by mobilizing 300 billion dollars annually, while all countries can contribute voluntarily through public and private investments.
As climate finance expands, demand for high-quality carbon credits is expected to surge. Market forecast suggest the voluntary carbon market, valued at about 2 billion dollars in 2023, could exceed 100 billion dollars by 2030. Credits validated through Article 6.4 are expected to trade at premium prices due to stronger environmental safeguards.
Fairness and Real Impact
The UN’s new system responds directly to concerns that earlier carbon markets sometimes failed to deliver proven emission cuts. One review in 2024 suggested that as many as 40 percent of older offsets lacked verifiable climate benefit. To correct this, Article 6.4 provides strict rules for how projects must calculate and confirm emissions reductions over time. Digitally recorded credits will allow buyers to track exactly where each credit came from and what environmental and social benefits it provided. This strengthens accountability, supports fairer pricing, and reduces the risk of “greenwashing,” where climate claims are overstated or misleading. Some negotiators still caution that trading should not become an excuse for delaying domestic action on climate change. The UN emphasizes that Article 6.4 is designed to complement national efforts, not replace them. Countries will continue to set their own climate strategies while using the market to achieve deeper cuts.
Fair Carbon Future
Approving the first methodology is only the beginning. More rules are needed to expand the system into other fields such as forestry, land restoration, agriculture, and industrial efficiency. These sectors are more complex but essential for reaching global net-zero goals. As the UN supervisory body updates the framework ahead of COP30 in Belem, the world will be watching. If designed and implemented well, Article 6.4 can become a trusted foundation for climate cooperation. It offers countries and companies a clear way to support real emission cuts while improving lives in communities most affected by climate change. The hope is that this global system will build confidence, stabilize prices, and ensure that every carbon credit sold truly helps protect people and the planet.