Overview

• Countries reached a long-awaited agreement at COP29 to establish a framework for global carbon credit trading under the Paris Agreement's Article 6.
• The deal includes both a UN-administered market and bilateral trading systems, with rules designed to direct investment into emissions reduction projects in developing nations.
• Critics warn that weak oversight and inconsistent standards could lead to greenwashing, undermining global climate goals and the credibility of carbon markets.
• Indigenous communities and local populations have raised concerns about human rights abuses and exploitation linked to carbon offset projects on their lands.
• The market is projected to grow significantly, with potential to mobilize billions in climate financing, but experts emphasize the need for robust safeguards and higher integrity in traded credits.