Global Carbon Market Takes Shape at COP29

Countries gathered in Baku for the annual climate conference, COP29, have finally agreed on a framework for a global carbon market, a crucial step towards implementing the Paris Agreement’s Article 6. This market will allow countries to trade carbon credits, representing certified reductions in emissions, with the goal of incentivizing climate action and directing resources to developing nations. While the agreement addresses concerns about the authenticity and transparency of carbon credits, key issues remain regarding accounting for emissions reductions across borders and the eligibility of various projects for credit generation. The successful implementation of this market is expected to reduce the cost of national climate plans by $250 billion annually, but its effectiveness hinges on the finalization of methodologies and the establishment of a new global climate finance goal, which is also a major focus of COP29.