Martin Hession is Chair of the Article 6.4 Supervisory Body, which oversees the rules for the UN carbon market under the Paris Agreement, and Maria AlJishi is the body’s Vice Chair.
The recent adoption of new standards for the UN’s carbon market marks a key step for international climate cooperation, finally aligning offset crediting with the Paris Agreement and providing a benchmark for countries and investors in a world where all nations are expected to continuously raise their climate ambition.
As Chair and Vice-Chair of the Supervisory Body developing these rules, we are acutely aware that we serve a diverse set of actors. Our task is to steer a path that delivers climate ambition, supports country priorities, safeguards social and environmental integrity, and offers a reliable framework for investment.
At the core is a persistent question: are the rules effective in delivering real results and fair in balancing the interests of all those involved in the market?
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In the past two years, we’ve made important progress. We’ve adopted broad standards for how to calculate both emission reductions and emissions removals, established a system to manage the risk of emissions reversals, and introduced mandatory environmental and human rights safeguards and an independent grievance and appeals process. However, without a steady flow of investment, this progress will remain largely on paper.
Laying the foundation for greater ambition
With the adoption of the new baseline standard in May, we’ve entered a new phase, enabling more ambitious credits. We now have a clear and rigorous standard to guide the implementation of stronger crediting benchmarks. In today’s context, it offers a more realistic starting point for measuring credible emissions reductions and removals.
Under this benchmark, credits can only be claimed for reductions compared to conservative estimates of what would have occurred without the project. Projects can no longer earn credits for minor improvements over business-as-usual; they must use more conservative baselines that reflect growing climate ambition.
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For example, a mechanism methodology may require crediting levels to be set at least 10% below historical emissions or benchmarked against best-in-class performance and then require a decline by at least 1% per year. This steady tightening ensures alignment with a net zero pathway, reduces the risk of over-crediting, and helps host countries retain more emission reductions, supporting future ambition.
The leakage standard is another important step, though more work remains to address emissions impacts at the national or sectoral level. Its goal is to make sure that projects reducing emissions in one place don’t cause emissions elsewhere. For example, if a reforestation project protects one area but displaces logging to a nearby region, the overall benefit could be lost. The standard requires projects to identify and track such indirect impacts and subtract them from the emissions cuts they claim.
Avoiding past mistakes
These technical standards are essential to ensuring environmental integrity. But their success also depends on trust and participation, particularly from countries hosting the carbon credit projects. As they weigh whether to approve credits and crediting programmes, they will understandably want to retain a share of the emissions reduction benefits from the investments. The new standards help address this, but more is needed.
The Paris Agreement Crediting Mechanism (PACM) already hardwires the roles and responsibilities of host countries into its processes. At our last meeting, we discussed how to strengthen communication and deepen engagement with host countries to ensure national policies and climate ambition are respected, and where requested, supported and enhanced.
Carbon credits have long faced scrutiny for overpromising and underdelivering. We are well aware of the need to avoid repeating past mistakes. From the outset, we’ve worked to improve on previous models, applying lessons learned.
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The context for crediting has changed significantly since the early days of the Clean Development Mechanism (CDM), a benchmark for many voluntary programmes. While we will continue to build on CDM methodologies and experience, we must adapt them to a more ambitious framework, one that responds to host country expectations the CDM was never designed to meet.
We now move forward with renewed confidence. Our new rules allow for top-down updates to old carbon credit methodologies – meaning we can revise them centrally for key sectors. We’ve also received the first proposal for a brand-new methodology through the bottom-up process, where ideas come directly from project developers or local actors. And the first PACM credits could be issued later this year.
Scrutiny welcome
We’ve been criticised for moving slowly and for the complexity of our process. It has taken time to reach political agreement on the implementation framework for the new UN carbon market. But the positive reception of the framework we presented at the COP29 climate summit in Baku helped accelerate our progress. Thanks to the excellent work of our expert panels, we adopted detailed standards quickly. We believe these are both ambitious and clear.
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Of course, there is more to do. Later this year, we’ll consider detailed rules to assess and insure against the risk of emissions reversals. We aim to see the full framework in action by early next year.
We are taking a practical, agile approach to implementation. The general standards set the direction; individual methodologies will be detailed but designed to evolve. Implementation will be phased, with space for continuous feedback and improvement.
We welcome scrutiny, not just for accountability, but as essential to our mission of fair and effective implementation for a high-integrity UN carbon market.
