ARTICLE 6 PARIS AGREEMENT CARBON MARKETS

Why In News?

Over 130 civil society organisations urged the UN to suspend the first-ever carbon credits issued under Article 6.4 of the Paris Agreement over severe environmental integrity, human rights, and military junta linkage concerns in Myanmar.

What Is The Paris Agreement?

The Paris Agreement is a legally binding international treaty on climate change adopted under the United Nations Framework Convention on Climate Change (UNFCCC) in 2015 at COP21.

• Primary Objective: Limit global warming to well below 2°C, preferably to 1.5°C, above pre-industrial levels through country-driven climate action plans known as Nationally Determined Contributions (NDCs).

• Cooperative Ambition: Article 6 of the agreement enables countries to voluntarily cooperate internationally to achieve higher climate mitigation and adaptation targets while promoting sustainable development and environmental integrity.

What Are Carbon Credits?

A carbon credit is a tradeable permit or certificate representing the verified reduction, avoidance, or removal of one metric tonne of carbon dioxide equivalent (tCO2e) from the atmosphere.

Mechanism of Operation:

• Generation: Entities earn credits by undertaking activities that reduce emissions (e.g., efficient cookstoves, renewable energy) or remove greenhouse gases (e.g., afforestation).

• Trading: Credits are bought by governments, compliance entities, or corporations in carbon markets to offset their own emissions or meet legal compliance obligations.

• Unit Distinction: While a mitigation outcome represents the physical emissions reduction, a carbon credit acts as the standardized market unit issued by a recognized crediting registry.

What Are Carbon Markets Under The Paris Agreement?

Article 6 of the Paris Agreement outlines three voluntary cooperative pathways for international carbon trading and climate collaboration:

Carbon Credit Framework In India

To fulfill the requirements under Article 6 of the Paris Agreement, the Ministry of Environment, Forest and Climate Change (MoEFCC) established the National Designated Authority (NDA).

• Composition: The NDA is a 21-member committee chaired by the Environment Secretary, featuring representatives from the Ministry of External Affairs, Ministry of New & Renewable Energy, Ministry of Steel, and NITI Aayog.

• Core Functions of India's NDA:

• Identifies and recommends domestic project activities eligible for international credit trading.

• Evaluates, approves, and authorizes projects generating Emission Reduction Units (ERUs).

• Regulates the usage and export of carbon credits to ensure domestic targets under India's NDC are safeguarded.

What Are The Concerns Over Carbon Markets Under The Paris Agreement?

Remote Verification Failures in Conflict Zones: Active armed conflict prevents independent physical site visits, forcing oversight bodies to grant exceptional remote inspection waivers that jeopardize monitoring data authenticity.

• Example: PoA 10471 Myanmar Cookstove Project Verification Failure, where auditors conducted remote Zoom interviews with only 22 end-users (including just 2 women) out of nearly 1,000,000 distributed cookstoves due to violent conflict in the Dry Zone, relying entirely on data gathered by military-controlled authorities.

Severe Methodological Over-Crediting: Flawed baseline assumptions regarding household wood usage and non-renewable biomass ratios generate millions of phantom carbon credits that lack actual atmospheric mitigation.

• Example: Carbon Market Watch & Plan 1.5 Joint Empirical Assessment (2026), demonstrating that the first Article 6.4 issuance was over-credited by a factor of 7 under Article 6.4 rules.

Complicity in Human Rights Violations and Regime Financing: Implementing carbon projects through state institutions in conflict-affected regions risks channeling financial benefits or international legitimacy to repressive regimes.

Dilution of Permanence and Reversal Rules: Nature-based carbon storage risks releasing sequestered carbon back into the atmosphere via wildfires, droughts, or land-use changes if long-term monitoring and buffer remediation are curtailed.

• Example: Article 6.4 Supervisory Body SBM 018 Permanence Decision (October 2025), where the body rejected its Methodological Expert Panel (MEP) recommendations for continuous post-crediting monitoring and capped monitoring durations following aggressive commercial lobbying.

Absence of an Operational Independent Grievance Redress Body: Issuing carbon credits before establishing an accessible, fee-free grievance redress body deprives local communities of legal recourse against human rights breaches or land grabbing.

Gender Marginalization: Neglecting gender-disaggregated health metrics or failing to consult female household members violates the UNFCCC Gender Action Plan.

• Example: Global Forest Coalition Gender Impact Assessment (2026), showing that 80% of monitored household surveys for PoA 10471 were conducted with male household heads (231 households surveyed), despite women performing unpaid stove maintenance and suffering primary indoor air pollution impacts

Way Forward

Mandatory Operationalization of Independent Grievance Mechanisms: Establish a fee-free, accessible, multi-lingual independent grievance redress body under Article 6 to investigate human rights and safeguard complaints prior to credit approvals.

Strict Universal Application of Corresponding Adjustments: Ensure all Article 6.2 and Article 6.4 credit transfers execute immediate corresponding adjustments recorded in the Centralized Accounting and Reporting Platform (CARP) to eliminate double claiming.

Dynamic Conservative Baselines & Science-Based Additionality: Replace static historical baselines with conservative, performance-based scientific benchmarks to guarantee that credited units represent genuine atmospheric reductions.

Strengthening Domestic Regulatory Oversight: Empower national bodies like India's National Designated Authority (NDA) to screen project additionality, enforce social safeguards, and restrict low-integrity credit exports.

Enforcing Human Rights, Conflict Sensitivity, and FPIC: Embed Free, Prior, and Informed Consent (FPIC) for local communities, conflict-sensitivity assessments, and adherence to the UN Guiding Principles on Business and Human Rights into all carbon crediting standard tools.

Conclusion

Article 6 carbon markets require conservative accounting, mandatory corresponding adjustments, and enforced human rights safeguards to ensure international climate trading generates genuine emission cuts instead of greenwashing.

Source: DOWNTOEARTH