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

In 2021, at COP26 in Glasgow, negotiators finally agreed on rules that had been stuck for six years. The dispute was simple to state and hard to fix: if one country sells its carbon-cutting effort to another country, who actually gets to count it? Article 6 of the Paris Agreement answers that question. It sets up three separate tracks for countries to cooperate on climate targets — one for direct trading, one for a UN-run credit market, and one for cooperation with no trading at all.

COP26 World Leaders’ Summit opening plenary, Glasgow, Nov 2021 — where the Article 6 rulebook was finalized. Photo: PMO Barbados / Wikimedia Commons (Public Domain Mark).

📑 Contents

1Must Know
2Good to Know
3Test Yourself
4Great to Know
5Current Affairs

Article 6 at a Glance

cooperation tracks under Article 6 — 6.2, 6.4, and 6.8

COP26 Glasgow
rulebook finalized

COP29 Baku
PACM made operational

CDM fully
winds down

6.2 — bilateral ITMO trading, corresponding adjustment

6.4 — PACM, UN-supervised crediting, successor to CDM

6.8 — non-market cooperation, no credits traded

✊ Must Know

1. What Article 6 does

Core idea Article 6 lets countries work together to meet their climate targets, instead of acting alone.
These targets are called NDCs, or Nationally Determined Contributions.
Article 6 offers three separate cooperation tracks, each with its own rules.

2. Article 6.2 — bilateral trading

Track 1 Article 6.2 lets two countries trade climate outcomes directly, government to government.
What gets traded is called an ITMO — an Internationally Transferred Mitigation Outcome.
One country cuts emissions. It sells that cut to another country, which counts it toward its own target.

3. Article 6.4 — the UN crediting mechanism

Track 2 Article 6.4 sets up a centralized carbon credit market, run under UN supervision.
This mechanism is now called PACM — the Paris Agreement Crediting Mechanism.
PACM replaces the Kyoto Protocol's old Clean Development Mechanism, or CDM.

4. Article 6.8 — non-market cooperation

Track 3 Article 6.8 covers cooperation that involves no buying or selling of credits at all.
This includes joint finance, technology transfer, and capacity-building between countries.
It is called the Non-Market Approaches, or NMA, framework.

🌍 Good to Know

1. The rulebook and why it took so long

The full Article 6 rulebook was finalized at COP26 in Glasgow, in 2021.
Negotiators had been stuck since 2015 on one core problem: double-counting.
Double-counting meant both a buyer and a seller country claiming credit for the same emission cut.

2. The fix: corresponding adjustment

The rulebook's fix is called a "corresponding adjustment."
The moment a country sells an ITMO, it subtracts that amount from its own emissions tally.
This stops the same emission cut from being counted twice, by two different countries.

3. PACM versus the old CDM

PACM improves on CDM in two key ways.
It applies stricter rules to prove a project's emission cuts are genuinely additional.
It also requires corresponding adjustments whenever credits are used internationally — CDM never did.

4. COP29 made PACM operational

COP29 in Baku, in November 2024, adopted the technical standards PACM needed to start working.
These standards covered methodology requirements and rules for carbon-removal projects.
This step is what let PACM move from paper rules to an actual functioning market.

5. India's own carbon market is separate

India runs its own domestic system, the Carbon Credit Trading Scheme, or CCTS.
CCTS is a national compliance market — it is not the same as Article 6's international trading.
See EnvEco0078 for a full breakdown of how India's CCTS works.

Test Yourself

🎓 Great to Know

1. Who supervises Article 6.4

A body called the Article 6.4 Supervisory Body oversees PACM's day-to-day rules.
This Supervisory Body reports up to the CMA — the Paris Agreement's own governing meeting.

2. The first-ever ITMO trade

Switzerland and Thailand completed the first fully finished Article 6.2 transfer, in January 2024.
The deal covered a Bangkok electric-bus programme.
It set the working template other Article 6.2 deals have followed since.

3. What happens to the old CDM

The Kyoto-era CDM is being formally wound down by the end of 2026.
Its remaining funds, held in the CDM Trust Fund, are being transferred to Article 6.4 instead.

4. What is still unresolved

Some tough technical issues remain open: permanence, reversals, and full transparency of trades.
These were pushed forward to COP31, set for Antalya, Turkey, in 2026.

📰 Current Affairs

1. COP30 Belém — CDM funds transferred, wind-down confirmed (Nov 2025)

Mains FodderAt COP30 in Belém, the CDM Trust Fund transferred $26.8 million to Article 6.4. Source: Morgan Lewis.
Parties confirmed CDM will fully cease operating by the end of 2026.
New baseline and additionality standards for PACM were also adopted at this COP.

2. First PACM methodology approved (Oct 2025)

DataThe Article 6.4 Supervisory Body approved PACM's first methodology (flaring/use of landfill gas) at its 29-30 October 2025 meeting. Source: UNFCCC.
This was a genuine operational milestone — the market's first working rulebook for actual projects.

3. PACM's interim registry launches (Feb 2025)

FirstThe Supervisory Body launched an interim PACM registry at its 15th meeting, Thimphu, Bhutan, 11-14 February 2025. Source: Carbon Pulse.
The same registry began approving the first requests to transition old CDM projects into PACM.

Related reading: For India's own domestic carbon market, see EnvEco0078 — Carbon Markets. For the broader international climate-framework landscape, see EnvEco0018 — International Initiatives on Climate. For India's negotiating position and diplomatic angle on climate cooperation, see IntlRel0013 — India's Climate Diplomacy and Development Partnership Administration.

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