COP26: Five reasons why carbon markets (Article 6) matter

The document outlines five primary concerns regarding Article 6 of the Paris Agreement: the lack of buyer demand compared to sellers, the prevalence of unregulated private sector greenwashing, the oversupply of low-quality credits, the struggle to find high-integrity removal credits, and the risk of legacy credits from the Clean Development Mechanism (CDM) undermining new climate targets.

• Article 6 of the Paris Agreement allows countries to exchange emission reductions through "cooperative approaches," enabling one country to pay for and count emission cuts achieved in another. Despite ongoing negotiations, some countries are already implementing these plans; Switzerland has partnerships with Peru, Ghana, Senegal, and Georgia, while Japan works with 17 partner countries and South Korea is in talks with Vietnam, Peru, Sri Lanka, and Myanmar.
• There is a significant imbalance in the UN-regulated carbon market, as approximately 120 countries have included carbon markets in their nationally determined contributions (NDCs)—representing about a third of global emissions—but there are very few potential buyer countries.
• The voluntary carbon market is dominated by the private sector and is largely unregulated, which facilitates large-scale greenwashing. While many demand that Article 6 provide guidance for this sector, it is unlikely that these rules will directly apply to voluntary offsetting, although an agreement could send a political signal regarding acceptable practices.
• Carbon markets suffer from a paradox of oversupply of low-quality credits and a scarcity of high-integrity credits. Both UN and voluntary markets have a surplus of low-quality credits, while companies seeking integrity struggle to find credits that correspond to real, accurately quantified CO2e reductions or quality emission removal credits.
• A major point of contention in Article 6 negotiations is the treatment of legacy credits from the Kyoto protocol's Clean Development Mechanism (CDM). There is a risk that billions of old credits could enter the new market, which would undermine future climate targets and potentially increase overall greenhouse gas emissions.

APA

Dufrasne, G. (2021). COP26: Five reasons why carbon markets (Article 6) matter. Carbon Market Watch. https://carbonmarketwatch.org/2021/10/28/cop26-five-reasons-why-carbon-markets-article-6-matter/

Chicago

Dufrasne, Gilles. COP26: Five reasons why carbon markets (Article 6) matter. Carbon Market Watch, 2021. https://carbonmarketwatch.org/2021/10/28/cop26-five-reasons-why-carbon-markets-article-6-matter/.

Wikipedia

{{cite report |last1=Dufrasne |first1=Gilles |title=COP26: Five reasons why carbon markets (Article 6) matter |publisher=Carbon Market Watch |date=28 October 2021 |url=https://carbonmarketwatch.org/2021/10/28/cop26-five-reasons-why-carbon-markets-article-6-matter/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dufrasne2021cop26, author = {Dufrasne, Gilles}, title = {{COP26: Five reasons why carbon markets (Article 6) matter}}, institution = {Carbon Market Watch}, year = {2021}, month = oct, url = {https://carbonmarketwatch.org/2021/10/28/cop26-five-reasons-why-carbon-markets-article-6-matter/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }