Article 6 of the Paris Agreement: Carbon Markets and Cooperative Approaches

Article 6 lets countries work together to cut emissions across borders. It has three tracks. Each track works in a different way.

What are the three tracks?

• Article 6.2: two countries trade emission cuts directly. The trade is bilateral. The cuts are called ITMOs (internationally transferred mitigation outcomes).
• Article 6.4: a central United Nations (UN) mechanism trades credits from specific projects. Its credits come from a UN-run body.
• Article 6.8: countries cooperate without trading anything. This is called a non-market approach.

What does each track look like?

• Article 6.2 is a deal between two governments.
• Article 6.4 is a UN-run market that any buyer can use.
• Article 6.8 is a work programme. Taxes that discourage emissions are one example.

What is the common misconception?

• Some students think all three tracks trade credits. Only 6.2 and 6.4 involve tradeable units.
• Article 6.8 produces no credits to buy or sell.

A rule called the corresponding adjustment stops two countries claiming the same cut. The seller removes the sold cut from its own emissions figures. Only the buyer then counts it.

What is the problem?

• Country A cuts emissions and sells the cut to Country B.
• If both claim the cut towards their own targets, it is counted twice.
• The Paris Agreement says double counting must be avoided under Article 6.

How does the fix work?

• The seller adjusts its own emissions figures to match the sale.
• The buyer adds the cut to its own tally.
• The world total stays honest.

What is a simple example?

• A farmer sells a kilo of rice to a shop. The rice cannot also stay in the farmer’s store.
• This is only an illustration.

Countries agreed it in two steps. They reached the deal at COP26 in Glasgow in 2021. COP29 in Baku then endorsed the Article 6.4 standards in 2024. COP stands for Conference of the Parties, the yearly UN climate meeting.

What did COP26 settle?

• Negotiators from almost 200 countries agreed the final rules on 13 November 2021.
• The rules were part of the Glasgow Climate Pact. They ended six years of talks.
• They require corresponding adjustments, so one credit is not counted towards two countries’ targets.
• Only credits from the old CDM registered after 1 January 2013 may count towards a country’s target.
• A Supervisory Body was set up to build the methods, registration and monitoring.

What did COP29 add?

• The Supervisory Body adopted standards on methodologies and removals in October 2024.
• The COP29 opening plenary then formally endorsed them.
• These standards had been the centre of its work from 2022 to 2024.

What is the memory hook?

• Think “Glasgow agreed the deal, Baku endorsed the standards”.

Thailand and Switzerland were the first countries to transfer ITMOs for use towards a national climate target, in December 2023. The deal covers electric buses in Bangkok.

What happened?

• Switzerland’s buyer was the KliK Foundation.
• The seller was Energy Absolute, which owns the Thai activity.
• The programme converts private buses in the Bangkok area from combustion engines to electric ones.
• KliK says its carbon payments make the conversion affordable.

What came later?

• On 2 April 2026, Thailand and Switzerland approved new transfers.
• These covered 49,717 ITMOs for the 2023 and 2024 cuts.
• The ITMOs sit in the Swiss Emissions Trading Registry.

What is the exam trap?

• A signed agreement is not a completed trade.
• Check whether any units have actually moved.

The Paris Agreement Crediting Mechanism (PACM) replaces the Clean Development Mechanism (CDM). The CDM was the Kyoto Protocol’s carbon-credit scheme. COP30 in Belém, Brazil, in 2025 agreed to close it.

What is PACM?

• PACM is the Article 6.4 mechanism, run under UN supervision.
• It is open to every project type that meets its rules.
• The CDM excluded projects that avoid emissions. PACM does not.

How does the CDM close?

• The CDM is being wound down through 2026.
• Its leftover money goes to support the new mechanism.
• Host countries got six more months to decide which CDM projects can move across. The new deadline was 30 June 2026.

What is the memory hook?

• Think “PACM is the CDM’s successor, built on Paris rules”.

Critics said the Myanmar project could not be checked properly. So a smaller credit number did not settle the row. The first PACM credits came from that project.

What happened?

• On 26 February 2026 the Article 6.4 Supervisory Body approved the first PACM issuance.
• The project is a cookstove programme in Myanmar that moved over from the CDM.
• It was approved for 648,783 tonnes of carbon dioxide equivalent, for 1 January 2021 to 31 May 2022.
• That is 41.5% less than the 1,108,379 tonnes estimated under the CDM.
• The approval stayed open to appeal for 14 days.

What did critics say?

• Auditors could not make site visits because of security risks. They used remote interviews.
• Civil society groups said the credits were over-counted.
• Plan 1.5 and others earlier put the over-crediting at more than 14 times. A later Carbon Market Watch assessment said a factor of seven.

Does a lower estimate make a credit trustworthy?

• No. Counting and checking are two separate questions.
• A smaller number from a weak check is not automatically reliable.

India has moved from watching to taking part. It signed a Joint Crediting Mechanism (JCM) with Japan under Article 6.2. It also runs its own domestic carbon market, which is a separate system.

What is the India-Japan JCM?

• The Ministry of Environment, Forest and Climate Change signed a Memorandum of Cooperation (MoC) with Japan in August 2025.
• The MoC lets projects trade carbon credits under Article 6.2 without hurting India’s own climate pledge.
• On 8 June 2026 the two governments adopted the Rule of Implementation.
• The rule sets up a Joint Committee, project approval steps, third-party checks, safeguards and national registries.

What is India’s domestic market?

• India notified the Carbon Credit Trading Scheme (CCTS) in 2023.
• The Bureau of Energy Efficiency runs it.
• Each credit certificate stands for one tonne of carbon dioxide equivalent.

What is the trap?

• The CCTS trades credits inside India.
• Article 6.2 deals trade credits between countries.

UPSC asked about Article 6 in the 2025 Prelims. It tested whether you know that Article 6 covers both carbon markets and non-market cooperation.

What did UPSC ask?

The correct choice is (a). Article 6 covers carbon markets in 6.2 and 6.4. It covers non-market cooperation in 6.8.

Which traps should you avoid?

• Which track trades? Only 6.2 and 6.4 trade units.
• COP26 or COP29? Glasgow agreed the deal. Baku endorsed the 6.4 standards.
• CDM or PACM? PACM is the successor to the CDM.
• Lower number or better credit? A lower estimate does not prove a credit is sound.

How do you remember it?

• Use this line: 6.2 pairs, 6.4 pools, 6.8 shares.