Using carbon markets to drive equitable climate action: COP29 highlights

The potential of Paris Agreement-aligned carbon markets to finance urgent climate action while ensuring equitable outcomes were in focus during a high-level side event at COP29. Discussions centered on Article 6’s transformative potential in mobilizing climate finance for ambitious climate commitments.

Critical aspects of climate finance, such as accessibility, empowering country-driven solutions and strengthening platforms for collaboration were highlighted with the clear aim of enhancing stakeholder synergies and climate finance flows.

Financing a just and ambitious climate future 

The event emphasized the disparity between those most affected by the climate crisis and those responsible for its impacts. Vulnerable communities across the globe bear the brunt of rising temperatures, extreme weather, and resource scarcity. With the objective to inspire concrete commitments and partnerships to accelerate climate action and meet the 1.5 °C goal, the constructive and dynamic discussions aimed to ultimately facilitate better coordinated and increased channeling of climate finance.

A highlight of the event was UNEP Copenhagen Climate Centre’s Integrated Assessment for Article 6 (IAA6) project, which supports Peru, Tanzania, and Sri Lanka leverage Article 6 mechanisms to enhance climate ambition and sustainable development. The IAA6 Approach provides a comprehensive framework guiding countries through the complexities of Article 6 by building on their existing progress..

Martin Hession, negotiator for international carbon markets for the European Commission and Vice-Chair of the Article 6.4 Supervisory Body, praised the IAA6 project after the event, noting its critical role in enabling countries to develop effective Article 6 strategies. “IAA6 enables countries to assess the benefits of participating in carbon markets. It’s different because most capacity building focuses on setting up institutions. This initiative brings together information and analytical capacity within countries to develop long-term strategies for carbon markets through South-South cooperation. It’s an enabling project, and we're very positive about the initial results, hoping for broader success.”

IAA6: Unlocking the potential of Article 6 

Supported by funding from the European Union, the IAA6 project offers tailored solutions for countries to engage with Article 6 in a robust and ambitious manner. It builds capacity for evidence-based policymaking and fosters South-South collaboration, ensuring that lessons and practices are shared between countries.

By addressing policy, governance, and implementation challenges, the IAA6 project provides a systemic and data-driven analysis to enable countries to develop informed strategies for how to use Article 6, balancing sustainable development priorities and decarbonization pathways. For instance, it helps host countries to build modelling capacities and create robust frameworks for entering any trading agreements, ensuring that it benefits the countries and communities as well as the environment.

Looking ahead: From commitments to action 

As COP29 progresses, the dialogue around Article 6 and climate finance continues to gain momentum. Upcoming events, like UNEP’s session on “Paris-aligned crediting markets offering support to host countries”, taking place on the 20^th of November, will further explore strategies for scaling equitable carbon markets.